Document:

EXECUTION COPY

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                                December 19, 2005

                            SHARE PURCHASE AGREEMENT

                                     between

                           EUROWEB INTERNATIONAL CORP.
                                   (as Seller)

                                       and

                       INVITEL TAVKOZLESI SZOLGALTATO RT.
                                 (as Purchaser)

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                                  WHITE & CASE

<PAGE>

THIS SHARE PURCHASE AGREEMENT is made on December 19, 2005
BETWEEN

(1)   EUROWEB  INTERNATIONAL  CORP.,  a  Delaware,  U.S.  corporation,  with its
      principal  place  of  business  at 1138  Budapest,  Vaci ut 141,  Hungary,
      represented by Csaba Toro, its Chief Executive Officer (the "Seller"); and

(2)   INVITEL  TAVKOZLESI  SZOLGALTATO  RT., a Hungarian  joint  stock  company,
      registration number Cg.  13-10-040575,  with its registered office located
      at 2040 Budaors,  Puskas Tivadar utca 8-10, represented by Martin Lea, its
      Chief Executive Officer (the "Purchaser").

                                R E C I T A L S:

(A)   Seller is the registered and beneficial  owner and holder of 19,996 series
      A common shares,  and 3 series B preference  shares (the "EuroWeb  Hungary
      Shares"),  all of  which  have a  nominal  value  of 1000 HUF each and are
      credited and fully paid, in EuroWeb Internet  Szolgaltato Rt., a Hungarian
      joint  stock  company  whose  details  are set out in Schedule 1 ("EuroWeb
      Hungary").

(B)   The EuroWeb  Hungary  Shares  represent 100% minus one share of the issued
      share capital and voting rights in EuroWeb Hungary.

(C)   Seller is also the registered and beneficial owner and holder of 6,411,968
      common shares (the "EuroWeb Romania Shares" and, together with the EuroWeb
      Hungary Shares, the "Purchased Shares"), all of which have a nominal value
      of 5,000 ROL each and are credited and fully paid, in S.C. EuroWeb Romania
      S.A., a Romanian joint stock company whose details are set out in Schedule
      1  ("EuroWeb  Romania"  and  together  with  EuroWeb  Hungary,  the "Group
      Companies").

(D)   The EuroWeb Romania Shares represent  99.9564% of the issued share capital
      and voting rights in EuroWeb Romania.

(E)   Seller has  agreed to sell,  and  Purchaser  has  agreed to  purchase  the
      Purchased  Shares,  on the terms and subject to the  conditions set out in
      this Agreement (the "Transaction").

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<PAGE>

                               A G R E E M E N T:

NOW, THEREFORE, IT IS AGREED:

1.   DEFINITIONS AND INTERPRETATION

1.1  In this Agreement:

     "Affiliate"        of any  person  shall  mean  any  person  directly  or o
                        indirectly  controlling,  controlled by, or under common
                        control with, such person;

     "Agreement"        means this Share  Purchase  Agreement  and all Schedules
                        hereto;

     "Audit"            has the meaning set out in Clause 4.2.1;

     "Business"         means the  business of the Group  Companies as currently
                        conducted by each of them on the date of this  Agreement
                        and  from  time to time  thereafter,  including  without
                        limit the  provision  of internet  and IP voice and data
                        services (ISP);

     "Business Day(s)"  means any day(s)  (other than a Saturday or Sunday) when
                        commercial  banks  are open for  business  in New  York,
                        Budapest, Bucharest and London;

     "Cash and          means (i)  money or the  equivalent  thereof,  including
     Cash  Equivalents" currency,  coins,  negotiable cheques,  balances in bank
                        accounts and interest-bearing  financial assets and (ii)
                        deposits held at call with banks (in the case of (i) and
                        (ii),  free and clear of any  Encumbrances)  minus (iii)
                        any bank overdrafts;

     "Closing Date"     means the date on which Closing occurs;

     "Closing"          has the meaning set out in Clause 6.1;

     "Collective        means any agreement or arrangement  made by or on behalf
      Agreement"        of a Group  Company  and by or on  behalf  of any one or
                        more trade unions, works councils, staff associations or
                        other body  representing  employees and any agreement or
                        arrangement  made by or on behalf of any  employers'  or
                        trade  association  and one or more trade unions,  works
                        councils,  staff  associations,   association  of  trade
                        unions  or other  central  body  representing  employees
                        which  applies  to a Group  Company  or to which a Group
                        Company is subject;

     "Conditions"       has the meaning set out in Clause 3.1;

     "Consolidated      means  the   difference   between   (a)  the   aggregate
      Net Debt"         Indebtedness   of  the  Group   Companies  and  (b)  the
                        aggregate  Cash  and  Cash   Equivalents  of  the  Group
                        Companies;

                                       3
<PAGE>

     "Deloitte          means,  collectively,  Deloitte Touche Tohmatsu, a Swiss
     & Touche"          Verein,   its  member   firms,   and  their   respective
                        subsidiaries and affiliates.

     "Encumbrance(s)"   means  a  mortgage,   charge,  pledge,  lien,  right  of
                        usufruct, depository receipt, option, restriction, right
                        of first refusal, right of pre-emption, easement, lease,
                        third-party  right or  interest,  other  encumbrance  or
                        security  interest  of any kind,  or any  other  type of
                        preferential arrangement (including, without limitation,
                        any title  transfer and  retention  arrangement)  having
                        similar effect;

     "Euroweb           Guarantee  Agreement"  means  the  guarantee  agreement,
                        dated  February 23, 2004,  between Pantel as obligee and
                        Seller as guarantor;

     "EuroWeb Hungary"  has the meaning set out in Recital A;

     "EuroWeb Hungary   has the meaning set out in Recital A;
     Shares"

     "EuroWeb Romania"  has the meaning set out in Recital C;

     "EuroWeb Romania   has the meaning set out in Recital C;
     Shares"

     "Group Companies"  has the meaning set out in Recital C;

     "HUF"              means  Hungarian  Forint,  or  any  successor   currency
                        thereto;
     "IFRS"             means   International   Financial   Reporting  Standards
                        promulgated  from  time  to  time  by the  International
                        Accounting  Standards Board (which include standards and
                        interpretations approved by said Board and International
                        Accounting     Standards     issued    under    previous
                        constitutions);

     "Indebtedness"     means (i)  indebtedness  for borrowed  money,  including
                        without limit indebtedness  evidenced by any note, bond,
                        debenture,  mortgage  or other debt  instrument  or debt
                        security   and   including    without    further   limit
                        indebtedness  owing from any of the Group  Companies  to
                        Seller  or from  Seller  to the  Group  Companies,  (ii)
                        obligations  or  commitments  to repay deposits or other
                        amounts  advanced by and owing to third  parties,  (iii)
                        obligations  under any interest rate,  currency or other
                        hedging agreement,  (iv) obligations under leases which,
                        under IFRS,  qualify as finance leases (but not, for the
                        avoidance  of doubt,  obligations  under  leases  which,
                        under  IFRS,   qualify  as  operating  leases)  and  (v)
                        guarantees or other contingent liabilities. Indebtedness
                        shall not include  accounts  payable to trade  creditors
                        and accrued  expenses  arising in the ordinary course of
                        business consistent with past practice;

                                       4
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     "Indemnifying      has the meaning set out in Clause 9.7;
     Party"

     "Indemnitee"       has the meaning set out in Clause 9.7;

     "Indemnities"      means the indemnities given by Seller in Clause 9.2;

     "Intellectual      means patents,  trade marks,  service  marks,  trade and
     Property"          business  names,   registered  designs,  design  rights,
                        copyright,  database  rights,  domain  names,  rights in
                        reports, procedures,  practices,  forecasts, data, lists
                        of Subscribers and all other  commercial  information in
                        any form,  inventions,  software  (computer  programs in
                        both  source  and  object  code  form),  trade  secrets,
                        confidential  information of all kinds and other similar
                        proprietary  rights which may subsist in any part of the
                        world and whether  registered or not,  including,  where
                        such rights are  obtained  or enhanced by  registration,
                        any  registration of such rights and rights to apply for
                        such registrations;

     "Interim Period"   has the meaning set out in Clause 5.2;

     "International     Accounting  Standards"  means  International   Financial
                        Reporting Standards promulgated from time to time by the
                        International  Accounting Standards Board (which include
                        standards and interpretations approved by said Board and
                        International Accounting Standards issued under previous
                        constitutions);

     "Key Employees"    means,  collectively,  with respect to EuroWeb  Hungary,
                        Gerlei Gyongyver, Zsok Gabor, Aranka Juhasz, Kun Istvan,
                        Erdesz  Anita  and Papp  Zombor  and,  with  respect  to
                        EuroWeb  Romania,   Laurentiu  Stan,   Grozea  Octavian,
                        Scarlat Catalin, Amortoaie Claudiu and Moise Emilia;

     "Liability         means  any  liability  to  make  an  actual  payment  or
     for Tax"           increased payment of Tax;

     "Long Stop Date"   has the meaning set out in Clause 6.1;

     "Loss" or "Losses" has the meaning set out in Clause 9.2;

     "Management        means the  unaudited  balance sheet of each of the Group
     Accounts"          Companies  as at  October  31,  2005  and the  unaudited
                        profit and loss  account of each of the Group  Companies
                        as at October 31, 2005;

     "Material Adverse  means any material adverse change in or material adverse
     Change" and/or     effect on the business, assets,  liabilities,  condition
     "Material Adverse  (financial or  otherwise),  prospects  and/or results of
     Effect"            operation  of  any  of the  Group  Companies,  including
                        adverse  currency  movements  and adverse  financial and
                        operational movements;

     "Material          has the meaning set out in Clause 8.1.5(a);
     Agreements"

                                       5
<PAGE>

     "Minority Share"   means 1 series A common share,  nominal value HUF 1,000,
                        representing  0.01%  of the  issued  share  capital  and
                        voting rights in EuroWeb Hungary;

     "Navigator"        means  NAVIGATOR   INFORMATIKA   Uzleti  Szolgaltato  es
                        Kereskedelmi Rt., a Hungarian  joint-stock  company with
                        its registered  seat at Konyves  Kalman krt. 5/B.,  1097
                        Budapest, Hungary;

     "Navigator         means a loan in the  aggregate  principal  amount of USD
     Indebtedness"      6,000,000 (or HUF 1,237,200,000) by Commerzbank  Hungary
                        Rt. to EuroWeb  Hungary,  pursuant  to a loan  agreement
                        dated  September 27, 2005,  whose purpose was to finance
                        70.59% of the purchase price payable by EuroWeb  Hungary
                        for the Navigator Shares;

     "Navigator Shares" means the shares of stock in Navigator  contemplated  to
                        be  acquired  by  EuroWeb   Hungary  in  the   Navigator
                        Transaction;

     "Navigator SPA"    means sale and purchase agreement,  dated July 21, 2005,
                        among Marivaux  Investments  Limited and Graeton Holding
                        Limited, as Vendors,  and EuroWeb Hungary and Seller, as
                        Purchasers;

     "Navigator         means (1) the purchase by EuroWeb  Hungary and Seller of
     Transaction"       85% and 15%, respectively,  of the outstanding shares of
                        stock in Navigator pursuant to the Navigator SPA and (2)
                        the incurrence of the Navigator Indebtedness in order to
                        finance such purchase;

     "Network"          means a fixed or mobile  signal  distribution  system to
                        which Subscribers have access or are connected;

     "NHH"              means the National Communications Authority of Hungary;

     "Pantel"           means  Pantel   Tavkozlesi  es   Kommunikacios   Rt.,  a
                        Hungarian joint stock company;

     "Pantel Claim"     has the meaning set out in Clause 5.10;

     "Permits           has the meaning set out in Clause 8.1.9(a);

     "Pre-Closing       has the meaning set out in Clause 8.1.6(a);
     Periods"

     "Purchaser"        has the meaning set out in the introduction;

     "Purchase Price"   has the meaning set out in Clause 4.1;

     "Purchased Shares" has the meaning set out in Recital C;

     "Related Party"    means any Affiliate of any of the Group Companies;

     "Returns"          has the meaning set out in Clause 8.1.6(b);

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<PAGE>

     "ROL"              means Romanian Lei or any successor currency thereto;

     "Seller"           has the meaning set out in the introduction;

     "Stockholders      has the meaning set out in Clause 3.2.1;
     Meeting"

     "Subscriber"       has the meaning set out in Clause 8.1.16(a);

     "Subscription      has the meaning in Clause 8.1.16(a);
     Agreement(s)"

     "Tax" or           means and includes  all forms of taxation and  statutory
     "Taxation"         and governmental,  state, provincial, local governmental
                        or municipal charges, duties,  contributions and levies,
                        withholdings   and   deductions,    including,   without
                        limitation,   any  social   security  or  other  similar
                        payments, value added tax, wherever and whenever imposed
                        and all related penalties, charges, costs and interest;

         "Taxation      means any  governmental or other authority  competent to
         Authority"     impose Taxation;

         "Third Party   has the meaning set forth in Clause 9.7;
         Claim"

         "Transaction"  has the meaning set out in Recital E; and

         "USD"          means United  States  Dollar or any  successor  currency
                        thereto;

         "Verification" has the meaning in Clause 4.2.4;

1.2   References to a "person" include any company, partnership,  joint venture,
      firm, association, trust and any governmental or regulatory authority.

1.3   The table of contents and headings are inserted for  convenience  only and
      do not affect the construction of this Agreement.

1.4   Unless the context otherwise  requires,  words in the singular include the
      plural and vice versa and a  reference  to any gender  includes  all other
      genders.

1.5   References  to  Clauses,  paragraphs  and  Schedules  are to  Clauses  and
      paragraphs of and Schedules to, this Agreement. The Schedules form part of
      this Agreement.

1.6   References  to "party" or  "parties"  are to a party to or the  parties to
      this Agreement.

1.7   References  to any statute or statutory  provision  include a reference to
      that statute or statutory  provision as amended,  consolidated or replaced
      from time to time (whether before or after the date of this Agreement) and
      include any  subordinate  legislation  made under the relevant  statute or
      statutory provision.

1.8   The expressions "ordinary course of business" or "business in the ordinary
      course"  mean the  ordinary  and usual  course of  business  of any of the
      relevant Group Companies, consistent in all respects (including nature and
      scope) with the prior practice of such relevant Group Companies.

1.9   References  to  "contract"  and  "agreement"   include  any   arrangement,
      obligation, understanding or commitment.

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<PAGE>

1.10  References  to  "shares" in a person  include a  reference  to the shares,
      membership  interests  or  other  equity  interests  in  such  person  and
      references to "shareholders" shall be construed accordingly.

1.11  References in Clause 5.3 and Clause 8 to USD shall  include  references to
      the equivalent  amounts in another  currency by reference to the spot rate
      of exchange of HVB  Hungaria  Rt. for the  purchase of the other  currency
      with USD in the Budapest  foreign  exchange  market at or about 11 a.m. on
      the date of this Agreement.

2.    SALE AND PURCHASE

2.1   On the terms, and subject to the Conditions:

      2.1.1 Seller agrees to sell, assign,  transfer and deliver to Purchaser on
            the Closing Date,  and  Purchaser  agrees to purchase from Seller on
            the  Closing  Date,  the  Purchased  Shares,  free and  clear of all
            Encumbrances;

      2.1.2 Seller agrees to procure the sale, assignment, transfer and delivery
            to Purchaser and  Purchaser  agrees to purchase on the Closing Date,
            the Minority Share, free and clear of all Encumbrances; and

      2.1.3 Seller shall sell and Purchaser shall purchase the Purchased Shares,
            and Seller shall  procure the sale of and Purchaser  shall  purchase
            the  Minority  Share,  in each  case,  with all rights now or in the
            future  attaching  to them  (including  the  right  to  receive  all
            dividends, distributions or any return of capital declared).

3.    CONDITIONS

3.1   The Closing will take place as set forth in Clause 6 below, conditional on
      the following conditions (the "Conditions") being satisfied,  or waived in
      accordance with Clause 3.4, at or prior to the Closing:

      3.1.1 the issuance of a resolution by the Hungarian  Economic  Competition
            Office  unconditionally  approving the Transaction  without imposing
            any other terms on  Purchaser,  Group  Companies or  Affiliates,  or
            stating that the Transaction is not subject to its approval;

      3.1.2 the  approval  by the  shareholders  of Seller  of the  transactions
            contemplated by this Agreement;

      3.1.3 the delivery of the Audit in accordance  with Clause 4.2.1,  and the
            absence  in the  results  of the Audit of any event or  circumstance
            that could  reasonably be expected to have a Material Adverse Effect
            of  which  Purchaser  was not  actually  aware  on the  date of this
            Agreement; and

      3.1.4 since October 31, 2005,  there shall not have occurred any change or
            circumstance  that has  resulted  or would be  reasonably  likely to
            result in any Material Adverse Change.

3.2   Seller  will  use its best  efforts  to  procure  the  fulfillment  of the
      Condition  in Clause  3.1.2 as soon as possible  and in any event prior to
      the Long Stop Date. Without limiting the foregoing:

      3.2.1 Seller  shall  take,  in  accordance  with  applicable  laws and its
            certificate of  incorporation  and by-laws,  all action necessary to
            convene a meeting of its shareholders (the  "Stockholders  Meeting")
            as promptly as practicable  after the execution of this Agreement to
            consider and vote upon the adoption of this Agreement.

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<PAGE>

      3.2.2 The board of directors of Seller shall  recommend  such adoption and
            shall  take all  lawful  action to  solicit  such  adoption  of this
            Agreement.  In the event that  subsequent  to the date  hereof,  the
            board of directors of Seller  determines  that this  Agreement is no
            longer advisable and makes any change in recommendation  contrary to
            the terms of this Agreement,  Seller shall nevertheless  submit this
            Agreement  to its  shareholders  for  adoption  at the  Stockholders
            Meeting  unless  this  Agreement   shall  have  been  terminated  in
            accordance  with its terms prior to the  Stockholders  Meeting  and,
            except as required by applicable law or by its shareholders,  Seller
            shall not adjourn,  postpone or cancel (or propose for  adjournment,
            postponement or cancellation) the Stockholders Meeting.

      3.2.3 Purchaser and its counsel shall be given a reasonable opportunity to
            review and comment  upon the proxy  statement  prepared by Seller in
            respect of the  Stockholders  Meeting  prior to its filing  with the
            U.S.  Securities and Exchange  Commission.  Seller agrees to provide
            the Purchaser and its counsel with  information  with respect to any
            oral comments and with copies of any written  comments Seller or its
            counsel  may receive  from the SEC or its staff with  respect to the
            proxy  statement  promptly  after receipt of such comments and shall
            provide  Purchaser  and its  counsel  a  reasonable  opportunity  to
            comment on the response of Seller to such comments.

      3.2.4 Based on its certificate of incorporation and by-laws and applicable
            law, Seller represents and warrants that only a simple majority vote
            of the  Stockholders  is  necessary  for  lawful  approval  of  this
            Transaction.

3.3   If by the date which is 120 days after the date of this Agreement,  Seller
      either  fails  to  comply  with  the  provisions  of  Clause  3.2,  or the
      Stockholders Meeting fails to approve the Transaction as set forth in this
      Agreement,  then Seller shall on demand  reimburse to Purchaser all costs,
      expenses  and  fees  (including  without  limit  financial  and  technical
      advisors  and  attorneys  fees)  in  relation  to the  investigation,  and
      negotiation of the Transaction,  and all associated and connected  matters
      up to the maximum amount of EUR 400,000. The payment of this amount is the
      sole remedy available for Purchaser if the  Stockholders  Meeting fails to
      approve the Transaction as set forth in this Agreement, except in the case
      of the wilful breach by Seller of the provisions of Clause 3.2.

3.4   Purchaser  may (but is not  obliged  to) waive the  Conditions  set out in
      Clauses 3.1.3 and/or 3.1.4.

3.5   Purchaser shall diligently take all reasonable actions necessary to obtain
      the approval of the Hungarian  Economic  Competition Office (Clause 3.1.1)
      at  its  own  cost  and  expense.  Seller  shall  provide  all  reasonable
      assistance  to Purchaser  in  obtaining  the  approval.  If the  Hungarian
      Economic Competition Office grants its approval subject to conditions, the
      Parties shall conduct good faith  negotiations  on whether such conditions
      are  acceptable.  If the  conditions  are acceptable to Purchaser then the
      Condition in Clause 3.1.1 is deemed to be fulfilled.

3.6   If any of the Conditions  required to be fulfilled by Seller or Purchaser,
      as the case may be, are not  fulfilled  by such Party or are not waived by
      the other  Party,  on or before the Long Stop Date,  then the other  Party
      shall be entitled to terminate this Agreement by written notice.

3.7   If this  Agreement is terminated  in accordance  with Clause 3.6, then the
      following shall apply:

      3.7.1 If this  Agreement is terminated due to the failure of the Condition
            set forth in Clause 3.1.1 to be fulfilled,  then Purchaser shall not
            be liable to Seller  except to the extent  that it  breached  Clause
            3.5;

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<PAGE>

      3.7.2 If this  Agreement is terminated due to the failure of the Condition
            set forth in Clause 3.1.2 to be fulfilled,  then Seller shall not be
            liable to Purchaser except to reimburse the costs, expenses and fees
            of Purchaser pursuant to Clause 3.3; and

      3.7.3 If this Agreement is terminated due to the failure of the Conditions
            set forth in Clauses  3.1.3 or 3.1.4 to be  fulfilled,  then  Seller
            shall not be liable to Purchaser  except to the extent that a breach
            by Seller of the provisions of this  Agreement  shall have caused or
            contributed in any material respect to such failure.

4.    CONSIDERATION

4.1   The  consideration  for the sale and purchase of the Purchased  Shares and
      the  Minority  Share  shall be the payment by  Purchaser  to Seller of USD
      30,000,000 (the "Purchase  Price"),  which Purchase Price shall be payable
      as follows:

      4.1.1 98% of the  Purchase  Price  (or USD  29,400,000)  shall  be paid by
            Purchaser on the Closing Date; and

      4.1.2 2% of the Purchase Price (or USD 600,000),  as adjusted  pursuant to
            Clause 4.2.5,  shall be paid by Purchaser  within three (3) Business
            Days  after  the  Independent   Auditor  shall  have  delivered  the
            Verification.

4.2   The Purchase Price shall be adjusted as follows:

      4.2.1 From no later than February 1, 2006,  Seller shall procure that each
            Group Company provide Deloitte & Touche with access to all documents
            and information required for Deloitte & Touch to prepare an audit of
            the  financial   statements  prepared  by  the  Company  under  IFRS
            (including,  without limitation,  the balance sheet, profit and loss
            statement  and  statement of cash flows) of each such Group  Company
            for the twelve  (12)  month  period  ended  December  31,  2005 (the
            "Audit");

      4.2.2 Seller and  Purchaser  shall use their  respective  best  efforts to
            procure  that  Deloitte & Touche  prepare and deliver to the parties
            the  Audit,  as soon as  possible  and in any  event by the 40th day
            after the date on which  Deloitte  & Touche has been  provided  with
            access to all documents and  information  required for it to prepare
            the Audit;

      4.2.3 at the  Closing,  Seller  shall  deliver  to  Deloitte  & Touche and
            Purchaser a certificate identifying the Indebtedness outstanding and
            the Cash and Cash  Equivalents of the Group Companies on the Closing
            Date;

      4.2.4 Seller and  Purchaser  shall use their  respective  best  efforts to
            procure that  Deloitte & Touche  verify and deliver to the parties a
            statement  as to the  Consolidated  Net Debt as at the Closing  Date
            (the  "Verification") as soon as possible and in any event within 10
            Business Days after the Closing Date.  Purchaser  shall procure that
            the Group  Companies  provide  Deloitte & Touch  with  access to all
            documents and information  required for Deloitte & Touche to conduct
            such audit and deliver such Verification;

      4.2.5 the Purchase Price shall be either:

            (a)   reduced  by the  amount by which the  Verification  determines
                  that the  Consolidated  Net Debt on the Closing Date  exceeded
                  zero,  and  Purchaser  shall be entitled to deduct such excess
                  from the  instalment  of the Purchase  Price paid  pursuant to
                  Clause  4.1.2;  provided  that Seller  shall pay to  Purchaser
                  within 30 days after delivery of the  Verification  the amount
                  (if any) by which such excess  exceeds the  instalment  of the
                  Purchase Price paid pursuant to Clause 4.1.2; or

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<PAGE>

            (b)   increased by the amount by which the  Verification  determines
                  that the  Consolidated  Net Debt on the Closing  Date was less
                  than zero; and

      4.2.6 the fees and costs of  Deloitte & Touche in the  preparation  of the
            Audit and the  Verification  shall be borne 50% by Seller and 50% by
            Purchaser.

4.3   Seller shall be  responsible  for paying to the transferor of the Minority
      Share such portion of the Purchase Price as Seller and such transferor may
      agree and shall  hold  harmless  Purchaser  from and  against  any  Losses
      resulting  from any claim by the transferor of the Minority Share relating
      to his, her or its compensation for the transfer of the Minority Share.

5.    INTERIM PERIOD

5.1   On or prior to the Closing Date, Seller shall cause the Group Companies to
      repay,  with no  additional or residual cost or liability to Purchaser and
      all Navigator Indebtedness.

5.2   During the period from the date of this Agreement to the Closing Date (the
      "Interim  Period"),  Seller shall cause the Group Companies to operate and
      carry on their respective businesses in the ordinary course of business in
      a manner  consistent  with past practices and will not,  without the prior
      written  consent of Purchaser,  cause or permit any of the Group Companies
      to take any action or omit to take any action which would cause any of the
      representations  and  warranties  set  forth  in  Clause  8 to be  untrue,
      inaccurate or misleading in any material respect.

5.3   Without  limiting the generality of Clause 5.2,  Seller shall procure that
      during the Interim  Period  neither  Group  Company  shall take any of the
      following actions without the prior written consent of Purchaser:

      5.3.1 the amendment of its by-laws or articles;

      5.3.2 acquisition of, or agreement to acquire,  by merger,  consolidation,
            purchase or otherwise any stock or all or  substantially  all of the
            assets of any person (be it a corporation,  partnership, association
            or other business organization in the ordinary course of business);

      5.3.3 the alteration or reorganization of its outstanding capital stock or
            equity  securities or declaration,  set aside,  making or payment of
            any  dividend in respect of its capital  (in cash or  otherwise)  or
            purchase or redemption of any shares of its capital;

      5.3.4 the issuance or sale, or redemption or acquisition  of, or agreement
            to issue or sell, or redeem or acquire,  any of its capital or other
            equity interest or any options, warrants or other rights to purchase
            any  such  shares  or  other  equity   interest  or  any  securities
            convertible into or exchangeable for such shares or equity interests
            or purchase,  or agree to purchase,  any such  securities of a third
            party;

      5.3.5 the  reorganization,  dissolution  or  entering  into  any  plan  of
            liquidation  or  dissolution  or similar  proceeding,  or ceasing to
            carry on its business operations;

      5.3.6 except for the sale of the  Navigator  Shares,  the sale,  transfer,
            lease or pledge,  or  agreement to sell,  transfer,  lease or pledge
            (whether   by  a  single   transaction   or  a  series  of   related
            transactions),  any asset,  tangible or intangible having a value of
            more than USD 50,000  or,  over the  course of the  Interim  Period,
            assets with a value of more than USD 200,000 in the aggregate;

      5.3.7 the  cancellation or termination of any insurance policy (other than
            any car insurance policy);

      5.3.8 the provision of credits,  lending of amounts and issuance of credit
            notes or waiver or  cancellation of any receivables or debts owed to
            it having a value of more than USD 50,000 or, over the course of the
            Interim  Period,  credits,  loans,  credit  notes  and  waivers  and
            cancellation of receivables and debt having a value of more than USD
            200,000 in the aggregate;

                                       11
<PAGE>

      5.3.9 except  for  the  Navigator  Indebtedness,  incurrence  of  any  new
            Indebtedness  over the course of the Interim  Period in an aggregate
            principal amount in excess of USD 200,000 in the aggregate;

      5.3.10 the amendment or voluntary termination of any Material Agreement;

      5.3.11 the entering into any new contract or agreement  that would qualify
            as  a  Material  Agreement  or  any  other  contract,  agreement  or
            commitment with a Related Party;

      5.3.12 any  departure  or deviation  from the ordinary  course of business
            consistent  with past  practice  in the  management  of the  working
            capital  of  any  of  the  Group   Companies,   including,   without
            limitation, through the delay in payment of payables or acceleration
            of invoicing or collection of receivables;

      5.3.13 the making by any of the Group Companies of any capital expenditure
            in excess of USD 50,000 or, over the course of the  Interim  Period,
            capital expenditures in excess of USD 200,000 in the aggregate;

      5.3.14 the  appointment  and  removal of the  auditors of any of the Group
            Companies;

      5.3.15 the entering into of any swap, forward contract,  futures contract,
            option or any other  derivative or financial  arrangement  by any of
            the Group Companies other than in the ordinary course of business;

      5.3.16 the commencement or settlement of any material litigation involving
            any of the Group Companies; or

      5.3.17 the  employment of any management  staff member,  or termination of
            any Key Employee.

      For the purposes of requesting  Purchaser's  consent hereunder,  Purchaser
      designates  Martin Lea and Rob Bowker  acting  separately  and not jointly
      with immediate effect and with full power to give consents;  provided that
      Purchaser  shall have the right at any time upon written  notice to Seller
      to change the  identity  of the  individuals  designated  to provide  such
      consents.  Purchaser agrees not to unreasonably  withhold any such consent
      (considering the commercial sensitivities of the relevant decision and the
      information  provided  by  Seller  in  connection  therewith)  and  not to
      unreasonably  delay any such consent (and any such consent shall be deemed
      to be given if Purchaser has not  consented or refused its consent  within
      five (5) Business Days).

5.4   During the Interim Period:

      5.4.1 Seller  shall:  (a)  provide to  Purchaser  copies of all  financial
            reports  (including,  without  limitation,  the  monthly  management
            accounts with respect to each Group Company within 20 days after the
            end of each calendar month) and other material information regarding
            the  Group  Companies,   including,  without  limitation,  all  such
            information made available to members of the boards of directors and
            supervisory boards of the Group Companies  (including any committees
            consisting  of members of such  boards);  (b)  notify  Purchaser  of
            anything that constitutes an unexpected  emergency or other material
            change in the normal  course of the  business or  operations  of the
            properties or other assets of any of the Group  Companies and of any
            complaints,  investigations,   hearings,  adjudicatory  or  arbitral
            proceedings  (including  submissions  thereto)  of any  governmental
            authority or arbitral  tribunal  involving  the  properties or other
            assets of the Group Companies,  and keep Purchaser fully informed of
            such events and permit Purchaser's  representatives prompt access to
            all materials prepared in connection therewith.

                                       12
<PAGE>

      5.4.2 Seller shall, and shall procure that (upon prior notice by Purchaser
            to Seller) the management of each of the Group Companies confer on a
            regular   and   frequent   basis   with   one  or  more   designated
            representatives  of  Purchaser  to report  operational  matters  and
            report the  general  status of ongoing  operations  relating  to the
            businesses of the Group Companies.

      5.4.3 Seller shall, upon reasonable request,  procure that representatives
            of Purchaser have access, at all reasonable times and in a manner so
            as not to interfere with the normal business operations of the Group
            Companies, to the senior management.

      5.4.4 Seller shall  procure  that EuroWeb  Romania use its best efforts to
            apply  for and  obtain  as many  Permits  as  practicable  that were
            required for the  construction  of the  existing  Network of EuroWeb
            Romania and that have not been applied for and obtained.

5.5   Purchaser  agrees to hold all  information  it  receives  from Seller with
      respect to the Group  Companies  pursuant  to Clause  5.4 as  confidential
      information  until the Closing Date, will not use any of such  information
      at any time  prior to the  Closing  Date  except in  connection  with this
      Agreement, and, if this Agreement is terminated for any reason whatsoever,
      will (a) return to Seller all copies of such  information  that are in its
      possession promptly upon the written request of Seller and (b) destroy any
      internal analyses that have  incorporated any such  information;  provided
      that Purchaser shall be entitled to retain for record keeping purposes one
      copy of any material presented to its Board of Directors or shareholders.

5.6   During the  Interim  Period,  Purchaser  shall be  entitled  to speak with
      management  staff  members of the Group  Companies  and offer to them,  on
      behalf of the relevant  Group Company,  a retention  bonus payable by such
      Group  Company  contingent  upon the  occurrence  of the Closing and their
      remaining with such Group Company for at least a specified  number of days
      after the Closing Date.  Promptly  upon the request of  Purchaser,  Seller
      shall procure that the relevant  Group  Company  authorize and execute any
      such offer.  For the avoidance of doubt, any such  arrangements  shall not
      include the payment of any part of such a bonus by a Group  Company  prior
      to the Closing Date or by Seller at any time.

5.7   During the Interim  Period,  Seller shall not take, and shall procure that
      each of the Group Companies  refrain from taking,  any action to, directly
      or  indirectly,  encourage,  initiate  or  engage  in any  discussions  or
      negotiations  with, or provide any  information to, any person (other than
      Purchaser  and/or  its  Affiliates)  concerning:  (a) any  sale  or  other
      disposition  of the  Purchased  Shares or all or any material  part of the
      assets or  business  of any Group  Company;  (b) any  issuance  of any new
      shares by any of the  Group  Companies;  or (c) any  merger,  demerger  or
      transformation of any of the Group Companies.

5.8   During the Interim  Period,  Seller shall disclose to Purchaser in writing
      any event or circumstance either (a) originating prior to the date of this
      Agreement  that  constitutes  a breach  of  Seller's  representations  and
      warranties  set out in Clause 8.1 or (b) that has occurred  since the date
      of this  Agreement  and that (i)  would  constitute,  if  existing  on the
      Closing  Date, a breach of Seller's  representations  and  warranties  set
      forth in  Clause  8.1  and/or  (ii)  constitutes  or could  reasonably  be
      expected to result in a Material Adverse Effect. Each such notice shall be
      delivered  by Seller as soon as  reasonably  practicable  after Seller has
      become  aware of such event or  circumstance  and no later than 5 Business
      Days after Seller having become so aware.

5.9   For avoidance of doubt, absent any agreement to the contrary by Purchaser,
      no disclosure by Seller under Clause 5.8 shall serve to excuse Seller from
      liability under this Agreement arising from a representation, warranty and
      a breach of a covenant under Clause 5 or otherwise.

                                       13
<PAGE>

5.10  During the Interim Period, Seller and Purchaser shall use their respective
      reasonable  efforts  to  obtain  jointly  the  consent  of  Pantel  to the
      assignment by Seller to Purchaser of all  obligations  of Seller under the
      Euroweb Guaranty Agreement,  such assignment to take effect on the Closing
      Date. If such assignment proves to be impossible or impractical due to the
      failure of Pantel to provide  its consent to such  assignment,  (a) Seller
      shall  remain the  contracting  party in respect of the Euroweb  Guarantee
      Agreement,  (b) Seller shall notify  Purchaser of any action,  proceeding,
      claim,  liability  demand or assessment  asserted by Pantel against Seller
      under the Euroweb Guarantee Agreement relating to an event or circumstance
      occurring after the Closing Date (a "Pantel  Claim"),  (c) Purchaser shall
      be solely  responsible for satisfying any Pantel Claim and shall indemnify
      and hold  harmless  Seller from and  against  any and all Losses  actually
      suffered or incurred by Seller  arising out of or resulting  from any such
      Pantel Claim and (d) the provisions of Clauses 9.7 through 9.9 shall apply
      as if the Pantel  Claim was a Third Party Claim  thereunder,  as if Seller
      was the  Indemnitee  thereunder and Purchaser was the  Indemnifying  Party
      thereunder.

5.11  During  the  Interim  Period,  Seller  shall  and  shall  cause  the Group
      Companies to cooperate  fully with  Purchaser and  Purchaser's  lenders in
      finalizing  for signature by the Group  Companies at Closing all documents
      requested by Purchaser's  lenders in connection with Purchaser's  existing
      credit  facilities   (including  without  limitation  the  supply  of  all
      necessary information); provided that any and all such documents signed at
      Closing shall be conditional upon successful Closing hereunder.

5.12  On or prior to the Closing Date, Seller shall procure the following:

      5.12.1 The purchase by Seller from EuroWeb Hungary of all of the Navigator
            Shares for a purchase price that shall not exceed the purchase price
            paid by EuroWeb Hungary for the Navigator Shares,  and the repayment
            of any and all  Navigator  Indebtedness  from the  proceeds  of such
            purchase  price,  such  repayment to be (a) subject to no prepayment
            fees or  penalties  (provided  that if any such  prepayment  fees or
            penalties  are  payable,  then  Seller  shall  pay them on behalf of
            EuroWeb  Hungary)  and (b)  simultaneous  with  the  release  of any
            Encumbrances securing such Navigator Indebtedness; and

      5.12.2 The  release  by the  vendors  under the  Navigator  SPA of EuroWeb
            Hungary from and against any and all actions,  proceedings,  claims,
            liabilities,  demands or assessments  they may have against  EuroWeb
            Hungary under the Navigator SPA.

6.    CLOSING

6.1   The  sale and  purchase  of  Purchased  Shares  in  accordance  with  this
      Agreement (the  "Closing") will take place at the office of Reczicza White
      & Case LLP,  Andrassy ut 11, 1062  Budapest,  Hungary on the date which is
      seven (7) Business Days after the date on which the last of the Conditions
      is  satisfied  or waived,  or at such other time and place as is agreed in
      writing by Seller and Purchaser,  provided that such date is no later than
      June 30, 2006 (the "Long Stop Date").

6.2   At Closing the parties shall  undertake those actions listed in Clause 6.5
      applicable to it.

6.3   If the  provisions of Clause 6.5 are not complied with on the Closing Date
      by either party, then the other party shall not be obliged to proceed with
      the Closing and may:

      6.3.1 defer  Closing  to a date no less  than  five  (5) and no more  than
            fifteen (15)  Business Days after the date set for Closing (with the
            provisions of this Clause 6 applying to Closing as so deferred);

      6.3.2 proceed to Closing as far as  practicable  (without  limiting  their
            rights under this Agreement); or

                                       14
<PAGE>

      6.3.3 terminate  this Agreement for breach of condition upon notice to the
            party that has  breached its  obligations  under Clause 6.5 (without
            limiting its rights and remedies under this Agreement).

6.4   The payment of the Purchase  Price by wire  transfer of funds  pursuant to
      Clause  6.5.2 and the  crediting of the same on the bank account of Seller
      shall  discharge the payment  obligation  of Purchaser  pursuant to Clause
      6.5.2(a) of this Agreement,  and Purchaser shall not be concerned with the
      application of such sums by Seller.

6.5   Closing Arrangements

      6.5.1 Seller's Obligations

      At Closing, Seller shall procure the delivery of the following for each of
      Seller and Group Companies:

            (a)   evidence  satisfactory  to Purchaser  that this  Agreement has
                  been duly authorized and duly executed by Seller;

            (b)   a certificate  signed by a duly  authorized  officer of Seller
                  certifying as to the  authenticity of the attached  resolution
                  of the  shareholders  of  Seller  approving  the  transactions
                  contemplated by this Agreement;

            (c)   valid and effective resolutions of the general meetings of the
                  shareholders  of the Group Companies  appointing,  with effect
                  from  the  Closing  Date,  the  persons  set  out in  Schedule
                  6.5.1(c) or such other persons as Purchaser  shall nominate at
                  least 45 days prior to the Closing Date as members of board of
                  directors, managing directors,  administrators and auditors of
                  the Group Companies (as appropriate);

            (d)   the share certificates for the Purchased Shares, duly endorsed
                  in blank,  or  accompanied by transfers duly executed in favor
                  of Purchaser by Seller;

            (e)   authentic  copies of the share registry of Euroweb Hungary and
                  the shareholders  registry of EuroWeb  Romania,  in each case,
                  reflecting the  registration of the transfers of the Purchased
                  Shares to Purchaser, signed by each of Seller and Purchaser;

            (f)   written  resignations  in the agreed terms to take effect from
                  Closing  of  all  members  of  the  board  of  directors   and
                  supervisory  board  of  each  Group  Company,   in  each  case
                  relinquishing any right (past,  present or future) against any
                  of  the  Group   Companies   for  loss  of   office   (whether
                  contractual, statutory or otherwise);

            (g)   a  certificate  of tax  residency  in the United  States  with
                  respect to Seller;

            (h)   evidence  satisfactory  to Purchaser of the fulfillment of the
                  Conditions;

            (i)   the books and records of the Group  Companies  as described in
                  Clause 8.1.12;

            (j)   signed documents  required by the banks of the Group Companies
                  to change the signatory  rights over the accounts of the Group
                  companies to the designee of Purchaser;

            (k)   signed  consents  of  counter-parties   under  those  Material
                  Agreements  requiring such consent in the event of a change of
                  control in any of the Group Companies;

            (l)   evidence  satisfactory to Purchaser  (acting  reasonably) that
                  all of the actions required to be taken pursuant to Clause 5.1
                  have been taken;

                                       15
<PAGE>

            (m)   all  documents   (duly  signed  by  the  Group  Companies  and
                  notarized if necessary) requested by Purchaser's lenders under
                  its existing credit facilities;

            (n)   certified  declaration  updating Seller's  representations and
                  warranties  in Clause 8 as at Closing  in the  agreed  form of
                  Schedule 6.5.1(o); and

            (o)   any and all other documents required to effect the Transaction
                  and divest in Purchaser the ownership and control of the Group
                  Companies and their Business.

      6.5.2 Purchaser's Obligations

            At Closing, Purchaser shall:

            (a)   procure that the Purchase  Price shall be transferred by Swift
                  transfer in  immediately  available  funds to the bank account
                  notified  by Seller at least five  Business  Days prior to the
                  Closing  Date,  and  provide  copies  of  the  relevant  Swift
                  instructions certified by Purchaser's bank;

            (b)   deliver  to  Seller a  certified  copy of the  minutes  of the
                  meeting of the board of directors of Purchaser authorizing the
                  execution of this Agreement; and

            (c)   deliver  to Seller a  certified  copy of the  approval  of the
                  Hungarian Economic Competition Office.

7.    PURCHASER REPRESENTATIONS AND WARRANTIES

7.1   Purchaser  represents and warrants to Seller that each of the following is
      on the date hereof and will be on the Closing Date true,  accurate and not
      misleading:

      7.1.1 Purchaser is a company duly  incorporated and validly existing under
            the laws of Hungary.  It has the corporate  power to enter into this
            Agreement and to perform its obligations hereunder. The execution of
            and  entering  into  this  Agreement  and  the  consummation  of the
            transactions  contemplated  hereby,  by  Purchaser  have  been  duly
            authorized by all necessary corporate and other action applicable to
            Purchaser.  This  Agreement  constitute  legal,  valid  and  binding
            obligations of Purchaser enforceable against Purchaser in accordance
            with their terms.

      7.1.2 The  execution  of  and  entering  into  this  Agreement,   and  the
            consummation of the  transactions  contemplated  hereby,  do not and
            will not  (with or  without  the  passage  of time or the  giving of
            notice) (i) violate or conflict  with any  provision of the articles
            of Purchaser,  (ii) violate or conflict with any regulation  binding
            upon  Purchaser or any of its assets,  or (iii) except for Hungarian
            Competition Office approval, require the consent of or notice to any
            person  under any  agreement  or  obligation  to which  Purchaser is
            bound.

      7.1.3 Purchaser has conducted a comprehensive  legal,  tax,  financial and
            technical  due  diligence  with respect to the Group  Companies  and
            received detailed answers to questions regarding the Group Companies
            and,  without  limiting the right of Purchaser to recover  under any
            Indemnity  set out in  Clauses  9.2.2,  9.2.3 or 9.2.4,  on the date
            hereof is not aware of any  material  breach of the  representations
            and  warranties  given by Seller  pursuant to Clause 8. Seller shall
            not be liable under the  representations  and warranties given by it
            in Clause 8 to the  extent  that  Purchaser  was aware of the facts,
            events or circumstances which cause any of such  representations and
            warranties  to be  breached  or  misleading;  for  purposes  of  the
            foregoing, Purchaser shall be deemed to be aware of facts, events or
            circumstances  if and to the extent  (and only if and to the extent)
            that any of Martin Lea, Rob Bowker,  Zsuzsanna  Czebe or Andrea Raba
            were actually aware of such facts,  events or  circumstances  on the
            date of this  Agreement  or that a  reasonable  and  prudent  buyer,
            advised by competent  and  experienced  legal  counsel and financial
            advisors,  could  reasonably  be  expected  to have  discovered  and
            understood such facts, events or circumstances (including the extent
            of Losses that could  reasonably be expected to occur as a result of
            such facts,  events or  circumstances)  from an  examination  of the
            documents  set out in the data  room  made  available  by  Seller to
            Purchaser and its advisors.

                                       16
<PAGE>

      7.1.4 Purchaser  will on the  Closing  Date have  sufficient  funds at its
            disposal to pay the Purchase Price  hereunder.  Attached as Schedule
            7.1.4 is a confirmation  from HVB Hungaria Rt. that it has agreed to
            underwrite a facility  for the purpose of  financing  the payment by
            Purchaser of a portion of the Purchase Price.

8.    SELLER REPRESENTATIONS AND WARRANTIES

8.1   Seller  represents  and warrants to Purchaser  each of the following is on
      the date hereof and will be on the  Closing  Date true,  accurate  and not
      misleading:

      8.1.1 Existence, Power and Authority

            (a)   Seller is a company  duly  incorporated  and validly  existing
                  under  the laws of the  State of  Delaware,  United  States of
                  America.  It has  the  corporate  power  to  enter  into  this
                  Agreement  and to  perform  its  obligations  thereunder.  The
                  execution  of  and  entering  into  this   Agreement  and  the
                  consummation  of the  transactions  contemplated  thereby,  by
                  Seller have been duly  authorized by the Board of Directors of
                  Seller.  On the  date of this  Agreement  the  obligations  of
                  Seller   hereunder   constitute   legal,   valid  and  binding
                  obligations of Seller enforceable against Seller in accordance
                  with their terms other than the  obligation  of Seller to sell
                  to Purchaser the Purchased Shares, which shall be legal, valid
                  and binding  upon the approval of the holders of a majority of
                  the common stock of Seller  pursuant to Clause 3.2.1. No other
                  corporate  approvals  are necessary to authorize the execution
                  or the performance by Seller of this Agreement.

            (b)   The  execution of and entering  into this  Agreement,  and the
                  consummation of the transactions  contemplated thereby, do not
                  and  will not  (with or  without  the  passage  of time or the
                  giving of notice) (i) violate or conflict  with any  provision
                  of the articles of Seller or any of the Group Companies,  (ii)
                  violate or conflict with any regulation binding upon Seller or
                  any of the  Group  Companies  or any of  their  assets,  (iii)
                  require  the  consent  of or  notice to any  person  under any
                  agreement or obligation to which any of the Group Companies is
                  bound or (iv) violate or conflict with, result in a breach of,
                  constitute  a  default  under or  result  in the  termination,
                  cancellation  or  modification  of any  Material  Agreement or
                  other material  obligation by which any of the Group Companies
                  is  bound or  result  in the  creation  or  imposition  of any
                  Encumbrance upon any asset of any of the Group Companies.

            (c)   Set forth in Schedule 8.1.1(c) is a complete and accurate list
                  of each of the  jurisdictions  in which  the  Group  Companies
                  operate,  and/or are  qualified  and  licensed to do business.
                  Each of the Group  Companies  is duly  organized  and  validly
                  existing under the laws of the country of its formation.  Each
                  of the  Group  Companies  has all  requisite  power to own its
                  property  and other  assets  and to carry on its  business  as
                  currently  being  conducted.  None of the Group  Companies  is
                  insolvent,  has been declared  insolvent,  has been dissolved,
                  or, to the best  knowledge,  information and belief of Seller,
                  in the future  could  reasonably  be  expected  to be declared
                  insolvent,  and there has been no petition filed proposing the
                  opening  of  bankruptcy  proceedings  in respect of any of the
                  Group Companies.

                                       17
<PAGE>

            (d)   No  consent or  approval  of, or  registration,  notification,
                  filing and/or declaration with, any governmental  authority or
                  other person  (other than the approval by the U.S.  Securities
                  and Exchange  Commission of the proxy  materials  submitted in
                  connection  with the  Stockholders  Meeting) is required to be
                  given  or made by  Seller  or any of the  Group  Companies  in
                  connection  with  the  execution  of this  Agreement,  and the
                  consummation  of the  Transaction;  and to the best knowledge,
                  information  and  belief  of  Seller,  the  execution  of this
                  Agreement,  and the consummation of the Transaction,  will not
                  result in the termination, cancellation or modification of any
                  permit.

      8.1.2 Capitalization

            (a)   Schedule  8.1.2(a)  sets forth a true,  accurate  and complete
                  description  of  the  capitalization  of  each  of  the  Group
                  Companies.

            (b)   Seller is the registered and beneficial owner of the Purchased
                  Shares,   free  of  any  and  all  Encumbrances   (other  than
                  Encumbrances  securing  the  Navigator   Indebtedness,   which
                  Encumbrances  shall  be  released  in  full on or  before  the
                  Closing  Date).  For the  avoidance  of  doubt,  there  are no
                  options, warrants, rights (including conversion or pre-emptive
                  rights) or agreements,  orally or in writing, for the purchase
                  or acquisition of the Purchased Shares, other than as detailed
                  in this Agreement.

            (c)   Seller has a valid call option to purchase the Minority Share.

      8.1.3 Shares

            (a)   The Purchased Shares have been duly and validly issued,  fully
                  paid and are  non-assessable  and free of Encumbrances  (other
                  than Encumbrances securing the Navigator  Indebtedness,  which
                  Encumbrances  shall  be  released  in  full on or  before  the
                  Closing Date).

            (b)   Neither  Group  Company  owns,  directly  or  indirectly,  any
                  shares,  membership  interests or other equity or  proprietary
                  interest  in any other  person  (other than the  ownership  by
                  Euroweb Hungary of the Navigator Shares,  which shall cease on
                  or before the Closing Date).

      8.1.4 Management Accounts and no Changes

            (a)   The Management  Accounts,  except as indicated therein, to the
                  best  knowledge,  information  and belief of Seller,  (i) have
                  been prepared in accordance with local accounting standards or
                  accounting law  consistently  applied  throughout the ten (10)
                  month period ended on October 31, 2005 and (ii) present a true
                  and fair view of the financial position of the Group Companies
                  taken as a whole as at the date  thereof  and the  results  of
                  their operations and changes in the financial  position of the
                  Group Companies taken as a whole for the such period.

            (b)   Since  October 31,  2005,  there has not been (i) any Material
                  Adverse Change, except such changes as have generally effected
                  the market within which either Group Company operates,  and to
                  the best knowledge, information and behalf of Seller, there is
                  no  fact  or  condition  that  exists  or is  contemplated  or
                  threatened  which could  reasonably be expected to result in a
                  Material  Adverse  Effect  in  the  future  save  for  general
                  economic conditions and matters generally affecting businesses
                  which compete with the business of any of the Group Companies.

                                       18
<PAGE>

            (c)   To the best knowledge,  information and belief of Seller, none
                  of the Group Companies has any material  claims,  obligations,
                  liabilities  or  Indebtedness,   whether  absolute,   accrued,
                  contingent or otherwise,  except for (i) claims,  obligations,
                  liabilities  or  Indebtedness  set  forth  in  the  Management
                  Accounts  and (ii)  accounts  payable to trade  creditors  and
                  accrued  expenses  incurred  subsequent to October 31, 2005 in
                  the ordinary course of business consistent with past practice.

            (d)   To the best knowledge,  information and belief of Seller,  the
                  amount of all accounts receivable, unbilled invoices and other
                  debts due or recorded in the  respective  records and books of
                  account of the Group  Companies as being due as at the Closing
                  Date (less the  amount of any  provision  or reserve  therefor
                  made in the  respective  records  and books of  account of the
                  Group  Companies  and  its  Subsidiaries)  will  be  good  and
                  collectible in full in the ordinary  course of business and in
                  any event not later than  ninety  (90) days after the  Closing
                  Date; and none of such accounts  receivable or other debts is,
                  or at the Closing Date will be, subject to any counterclaim or
                  set-off except to the extent of any such provision or reserve.
                  There has been no Material  Adverse  Change since  October 31,
                  2005 in the amount of accounts  receivable  or other debts due
                  to any the Group  Companies  or the  allowances  with  respect
                  thereto, or accounts payable of the Group Companies, from that
                  reflected in the Management Accounts.

            (e)   Schedule  8.1.4(e) set forth an accurate and complete  list of
                  all  Indebtedness  and Cash and Cash  Equivalents of the Group
                  Companies on October 31, 2005.

      8.1.5 Material Agreements

            (a)   To the best  knowledge,  information  and  belief  of  Seller,
                  Schedule  8.1.5(a) sets forth an accurate and complete list of
                  (i)  all  agreements  and  other   instruments  which  contain
                  restrictions   on  the   payment   of   dividends   or   other
                  distributions  in respect  of the  capital of any of the Group
                  Companies,  (ii) all  agreements  relating to the  issuance or
                  repurchase  of shares or other equity  interests or in respect
                  of registration  rights,  pre-emptive rights,  rights of first
                  refusal,  transfer  rights or  restrictions,  voting rights or
                  other  rights of share or other  equity  holders of any of the
                  Group  Companies,  (iii) all  agreements  relating  to a joint
                  venture,  shareholders or other similar arrangement  involving
                  any of the Group Companies,  (iv) all agreements of any of the
                  Group  Companies   relating  to  a  loan  or  advance  to,  or
                  investment  in,  any person in excess of USD  50,000,  (v) all
                  guarantees  and  other  contingent  liabilities  of any of the
                  Group  Companies  in  respect  of any  indebtedness  or  other
                  contingent  obligation of any person (other than another Group
                  Company),  (vi) all agreements pursuant to which any of Seller
                  or Group  Companies has contracted  with a third party for all
                  or a  material  part  of the  management  of any of the  Group
                  Companies,  (vii) all contracts limiting the ability of any of
                  the  Group  Companies  to engage  in any line of  business  or
                  compete with any person, (viii) all other agreements of any of
                  the Group Companies having a value or cost, or potential value
                  or  cost,  in  excess  of USD  100,000  or (ix)  all  material
                  agreements  of  any  of  the  Group  Companies  which,  or the
                  termination of which,  could  reasonably be expected to have a
                  Material   Adverse   Effect   (all   agreements,    contracts,
                  instruments  or  commitments  set forth or  required to be set
                  forth on Schedule 8.1.5(a), the "Material Agreements").

                                       19
<PAGE>

            (b)   To the best knowledge,  information and belief of Seller, none
                  of the  Group  Companies  is in  breach  with  respect  to the
                  performance  of  contractual  obligations  under any  Material
                  Agreement, and there is no event that, with notice or lapse of
                  time or both, will constitute a material default by any of the
                  Group Companies thereunder. To the best knowledge, information
                  and  belief of  Seller,  no other  party  under  any  Material
                  Agreement  is in default with  respect to the  performance  of
                  contractual  obligations  thereunder,  and  there  is no event
                  which, with notice or lapse of time or both, will constitute a
                  default by any such party  thereunder.  To the best knowledge,
                  information  and belief of  Seller,  each  Material  Agreement
                  constitutes  the legal,  valid and binding  obligation  of the
                  Group Companies which are a party thereto, enforceable against
                  each of such parties in accordance with its terms.

      8.1.6 Taxes

            To the best knowledge, information and belief of Seller:

            (a)   All Taxes and Tax  liabilities of the Group  Companies for all
                  taxable  years or periods  that end on or before  the  Closing
                  Date and, with respect to any taxable year or period beginning
                  before and ending after the Closing Date,  the portion of such
                  taxable  year or period  ending on and  including  the Closing
                  Date ("Pre-Closing  Periods") have been timely paid or accrued
                  and  adequately  disclosed and fully provided for on the books
                  and  records  of  the  Group   Companies  in  accordance  with
                  International   Accounting   Standards  or  local   accounting
                  standards.

            (b)   The Group Companies have duly and timely filed all Tax returns
                  and all other Tax  documents,  forms,  statements  and reports
                  that are  required  to have been  filed by them in  accordance
                  with  applicable  regulations  ("Returns").  The Returns  have
                  accurately  (i)  reflected  liability  for  Taxes of the Group
                  Companies,  including any tax losses,  for the periods covered
                  thereby, (ii) characterised and reflected transactions between
                  Group  Companies,  including  financing  transactions  between
                  Group  Companies,  and (iii)  reflected the residual value for
                  Tax purposes of the assets of the Group  Companies.  There are
                  no  requests  for  extensions  of time for the  filing  of any
                  Returns.

            (c)   Other than  disclosed in Schedule  8.1.6(c)  none of the Group
                  Companies  or Seller has been the subject of an audit or other
                  examination  of Taxes by the tax  authorities  of any  nation,
                  state  or   locality   (and  no  such   audit  is  pending  or
                  contemplated)  nor has any of the  Group  Companies  or Seller
                  received any notices from any taxing authority relating to any
                  issue which  could or  reasonably  be  expected to  materially
                  affect the Tax liability of any of the Group Companies.

            (d)   Neither  Seller nor any of the Group  Companies has, as of the
                  Closing  Date,  (a)  entered  into an  agreement  or waiver or
                  requested to enter into an agreement or waiver  extending  any
                  statute of  limitations  relating to the payment or collection
                  of  Taxes or (b) is  presently  contesting  any Tax  liability
                  before any court, tribunal or agency.

            (e)   None  of  the  Group   Companies  has  been  included  in  any
                  "consolidated",  "unitary" or "combined"  Return  provided for
                  under the law of the United States, any non-U.S.  jurisdiction
                  or any state,  province,  prefect or locality  with respect to
                  Taxes  for  any  taxable  period  for  which  the  statute  of
                  limitations has not expired.

                                       20
<PAGE>

            (f)   All  Taxes  which  the  Group   Companies,   individually  and
                  collectively,  is (or  was)  required  by law to  withhold  or
                  collect  in  connection  with  amounts  paid or  owing  to any
                  employee,  independent  contractor,  creditor,  stockholder or
                  other third party have been duly  withheld or  collected,  and
                  have been  timely paid over to the proper  authorities  to the
                  extent due and payable.

            (g)   No written claim has ever been made by any Taxing authority in
                  a jurisdiction  where any of the Group Companies does not file
                  Returns that such of the Group  Companies is or may by subject
                  to Taxation by that jurisdiction.

            (h)   There  are  no Tax  sharing,  allocation,  indemnification  or
                  similar  agreements  in  effect  as  between  any of the Group
                  Companies  or any  predecessor  or  Affiliate  thereof and any
                  other  party   (including   Seller  and  any  predecessors  or
                  Affiliates   thereof)  under  which  Purchaser  or  the  Group
                  Companies could be liable for any Taxes or other claims of any
                  party.

            (i)   None of the Group Companies has applied for, been granted,  or
                  agreed to any  accounting  method  change for which it will be
                  required  to take into  account any  adjustment  under the Tax
                  laws of any  nation,  state,  province,  prefect or  locality.

      8.1.7 Labor

            (a)   EuroWeb  Hungary is not a party to a  Collective  Agreement or
                  required  to  comply  with  a  Collective  Agreement.  EuroWeb
                  Romania is a party to a Collective Agreement for the year 2005
                  - 2006  that  is  substantially  the  same  as its  Collective
                  Agreement for the year 2004 - 2005.

            (b)   No Group Company has a works or  supervisory  council or other
                  body   representing   employees   which  has  a  right  to  be
                  represented  or  attend  at or  participate  in any  board  or
                  council  meeting or a right to be informed,  consulted or make
                  representations  in  relation  to  the  business  of  a  Group
                  Company, other than any right of consultation of the employees
                  to be informed or consulted with respect to matters concerning
                  them arising by operation of any laws of general application.

            (c)   Except as disclosed in Schedule 8.1.8(a),  no Group Company is
                  involved in a dispute regarding a claim of material importance
                  with its  employees or any trade union,  association  of trade
                  unions,  works  council,   staff  association  or  other  body
                  representing  its  employees  and there  are no  circumstances
                  likely to give rise to any such dispute.

            (d)   Within  the  period  of two  years  ending on the date of this
                  Agreement no Group Company has:

                  (i)   made  or  started   implementation   of  any  collective
                        dismissals   that   have   required   or  will   require
                        notification  to any  authority  or  notification  to or
                        consultation with any trade union, works council,  staff
                        association or other body representing employees; or

                                       21
<PAGE>

                  (ii)  been  a  party  to  any   transfer   of  a  business  or
                        undertaking   that   has   required   or  will   require
                        notification  to or  consultation  with any trade union,
                        works   council,   staff   association   or  other  body
                        representing employees.

            (e)   None of the  Group  Companies  have,  or are  under  any legal
                  obligation  to  establish,   any  pension  schemes  for  their
                  employees except as disclosed in Schedule 8.1.7(e).

            (f)   Seller and each of the Group Companies have provided Purchaser
                  and  its  advisors  with  a  form  of   employment   agreement
                  applicable to all employment and other arrangements  between a
                  Group Company and each Key Employee.

            (g)   Other than with respect to sales representatives entitled to a
                  bonus based upon their respective  sales, no Group Company has
                  in existence nor is it proposing to introduce, and none of its
                  employees or contractors  directly or indirectly  participates
                  in (whether or not established by a Group Company),  any share
                  trust,  share incentive scheme,  share option scheme or profit
                  sharing scheme for the benefit of all or any of its present or
                  former  employees or  contractors  or the dependants of any of
                  such persons or any scheme  whereunder any present employee or
                  contractor is entitled to a commission,  bonus or remuneration
                  of any other sort calculated by reference to the whole or part
                  of the turnover,  profits or sales of Seller,  the Group,  any
                  Group Company or any other person,  firm or company or payable
                  upon the consummation of the Transaction.

      8.1.8 Litigation; Compliance with Law

            (a)   Except as disclosed in Schedule  8.1.8(a)  there is no action,
                  suit,  arbitration or administrative or other proceeding by or
                  before (or, so far as Seller is aware, any  investigation  by)
                  any court, governmental authority or arbitral tribunal pending
                  or, to the best  knowledge,  information and belief of Seller,
                  threatened  against or affecting any of the Group Companies or
                  any material assets of any of the Group Companies, and, to the
                  best  knowledge,  information  and belief of Seller,  no valid
                  basis exists for any such action, proceeding or investigation.
                  None of the  Group  Companies  is  subject  to any  judgments,
                  orders or decrees.

            (b)   To the best  knowledge,  information  and  belief  of  Seller,
                  except as  disclosed in Schedule  8.1.8(b),  none of the Group
                  Companies is in violation or default of any  provisions of its
                  articles  or,  is in  violation  of  any  applicable  laws  or
                  regulations.  Each of the  Group  Companies  has  operated  in
                  compliance with all applicable laws and regulations.

            (c)   To the best  knowledge,  information  and  belief  of  Seller,
                  except as  disclosed in Schedule  8.1.8(b),  none of the Group
                  Companies has received notice of any alleged  violation of any
                  applicable laws or regulations.

            (d)   To the best knowledge,  information and belief of Seller, none
                  of the Group  Companies has offered or given, or has knowledge
                  of any  person  that has  offered  or  given on their  behalf,
                  anything  of value to: (i) any  national  or local  government
                  official,  any  political  party or official  thereof,  or any
                  candidate for political  office;  (ii) customer or member of a
                  governmental authority; or (iii) any other person, in any such
                  case  while  knowing  or  having  reason to know that all or a
                  portion of such money or thing of value may be offered,  given
                  or promised, directly or indirectly, to any customer or member
                  of a governmental  authority or candidate for political office
                  for the purpose of the following:  (A)  influencing any action
                  or decision of such person,  in his or its official  capacity,
                  including a decision  to fail to perform  his or its  official
                  function; (B) inducing such person to use his or its influence
                  with any governmental authority to effect or influence any act
                  or decision of such governmental authority, in each of (A) and
                  (B) in order to  assist  any Group  Company  in  obtaining  or
                  retaining business for, or with, or directing business to, any
                  person  and  where  such  payment  would  constitute  a bribe,
                  kickback or illegal or improper payment.

                                       22
<PAGE>

      8.1.9 Permits

            To the best knowledge, information and belief of Seller:

            (a)   Seller  has  delivered  or made  available  to  Purchaser  for
                  inspection  a true and correct copy of each  material  permit,
                  certificate,   license,   consent  or   authorization  of  all
                  governmental  or  other  authority  or  person   (collectively
                  "Permits")  obtained or possessed by the Group Companies.  The
                  Group   Companies   have  all  Permits   necessary  for  their
                  operations and the Business as currently  conducted  including
                  Permits   for  the   design,   construction,   operation   and
                  maintenance  of all Networks,  as well as for the provision or
                  any modification of the services of any Networks.

            (b)   Except as disclosed in Schedule 8.1.9(d),  each of the Permits
                  held  by any of the  Group  Companies  is in  full  force  and
                  effect.  The Group  Companies have conducted their business in
                  accordance  with  their  respective  Permits,  and none of the
                  Group Companies has received any notice that indicates that it
                  has not complied with any of the terms of such Permits.

      8.1.10 Intellectual Property

            To the best knowledge, information and belief of Seller:

            (a)   Schedule   8.1.10(a)   sets  forth  all   material   items  of
                  Intellectual  Property  owned  and/or  licensed  by the  Group
                  Companies or under which they have  rights.  Each of the Group
                  Companies  owns  or  possesses  all  requisite  rights  to all
                  Intellectual  Property  used  or  required  to be  used  by it
                  without  infringing the rights of third parties.  All material
                  Intellectual  Property has been duly registered with, filed in
                  or issued by the  appropriate  governmental  authority  to the
                  extent required to provide the Group Companies with the rights
                  used or  contemplated  to be  used  by  them,  and  each  such
                  registration,  filing and  issuance  remains in full force and
                  effect.

            (b)   So far as Seller is aware,  no claim  adverse to the interests
                  of any of the Group  Companies  in any  Intellectual  Property
                  right has been threatened or asserted, no basis exists for any
                  such claim and no person has  infringed or otherwise  violated
                  any such interest of any of the Group  Companies.  None of the
                  Group Companies has received any communications  alleging that
                  it has violated any of the Intellectual Property rights of any
                  other person.

      8.1.11 Insurance

            (a)   To the best  knowledge,  information  and  belief  of  Seller,
                  Schedule  8.1.11  is an  accurate  and  complete  list of each
                  insurance  policy  covering  the  Group  Companies  and  their
                  businesses, employees and assets (other than any car insurance
                  policy).  Each of the Group  Companies  has in full  force and
                  effect insurance  policies in such amounts,  and on such terms
                  and covering such risks as are  customary in  accordance  with
                  industry standards and practices in Hungary or Romania, as the
                  case  may  be,  and  are  required   under  any  agreement  or
                  obligation  to which the  relevant of the Group  Companies  is
                  bound.

                                       23
<PAGE>

            (b)   With respect to each such insurance policy: (i) such insurance
                  policy is legal, valid, binding and enforceable; (ii) no party
                  thereto  is in  breach  or  default,  or has  repudiated  such
                  insurance policy; and (iii) since the end of their most recent
                  financial  year,  neither  of the  Group  Companies  has  been
                  notified  by the  relevant  insurer  that it is no eligible to
                  make any claim under such insurance policy.

      8.1.12 Books and Records

            To the best knowledge, information and belief of Seller, the minutes
            and related books of resolutions of each of the Group Companies have
            been  kept  in  accordance  with  the   requirements  of  applicable
            regulation.  All the accounts,  books, ledgers,  financial and other
            records of each of the Group  Companies are in its possession or the
            possession of its advisors and, so far as Seller is aware, have been
            properly and accurately kept. The register of shareholders and other
            statutory  books   (including  the  minutes  and  related  books  of
            resolutions)  of each of the Group  Companies are in its  possession
            and have been properly maintained.

      8.1.13 Properties

            (a)   Schedule  8.1.13(a)  contains an accurate and complete list of
                  all real  property  owned  in  whole  or in part by the  Group
                  Companies. Each of the Group Companies has good and marketable
                  title to all the real property  owned by it, free and clear of
                  all Encumbrances.

            (b)   To the best  knowledge,  information  and  belief  of  Seller,
                  Schedule  8.1.13(b) contains an accurate and complete list and
                  description  of the material  terms of all leases or subleases
                  of real  property to which the Group  Companies is a party (as
                  lessee or  lessor).  To the best  knowledge,  information  and
                  belief of Seller,  the Group  Companies  have valid  leasehold
                  interests in all leased real property  described in each lease
                  set forth in Schedule 8.1.13(b), free and clear of any and all
                  Encumbrances. To the best knowledge, information and belief of
                  Seller,  each lease set forth in Schedule 8.1.13(b) is in full
                  force and effect;  all rents and additional  rents due to date
                  on each such lease have been  paid;  in each case,  the lessee
                  has been in peaceable possession since the commencement of the
                  original  term of such lease and is not in default  thereunder
                  and no waiver,  indulgence  or  postponement  of the  lessee's
                  obligations  thereunder  has been  granted by the lessor;  and
                  there exists no default or event, occurrence, condition or act
                  (including  the purchase of the  Purchased  Shares  hereunder)
                  which,  with the  giving of  notice,  the lapse of time or the
                  happening of any further  event or  condition,  would become a
                  default under such lease.

      8.1.14 Assets

            Each of the Group  Companies has good and valid title to, or a valid
            leasehold  interest  in, all of the fixed  assets  reflected  in the
            Management  Accounts  and those  fixed  assets  acquired,  leased or
            otherwise used by Group Companies since the end of their most recent
            financial year,  other than those disposed of since that date in the
            ordinary  course of  business,  free and  clear of all  Encumbrances
            (other than Encumbrances securing the Navigator Indebtedness,  which
            Encumbrances  shall be  released  in full on or before  the  Closing
            Date).

      8.1.15 Networks

            To the best knowledge, information and belief of Seller:

                                       24
<PAGE>

            (a)   The Group Companies, individually or collectively, as the case
                  may be, have good and valid title to, and the exclusive  right
                  to use, operate, alter or dispose of, all Networks operated by
                  them, free and clear of any Encumbrances.

            (b)   All Networks  operated by the Group Companies having regard to
                  their age and  reasonable  wear and tear are in good operating
                  condition  and in a state of good  maintenance  and repair and
                  are adequate and suitable for their  present use.  Each of the
                  Group Companies has adequate easements,  rights of ingress and
                  egress,  pole attachment rights,  leasehold and other property
                  interests  necessary for the operation and  maintenance of the
                  Business   and   Network(s)   and,  to  the  best   knowledge,
                  information   and  belief  of   Seller,   none  of  such  real
                  properties,   nor  the  operation  or   maintenance   thereof,
                  encroaches on the property of others.  Neither  Seller nor any
                  of the Group  Companies  has received  notice that any Network
                  has not been  constructed  and operated and  maintained at all
                  times, in accordance with all applicable laws and regulations.

8.1.16   Subscribers

            (a)   The  Group   Companies   have  at  least  11,600   subscribers
                  ("Subscribers") in the aggregate with whom the Group Companies
                  have written  agreements to furnish  internet and IP voice and
                  data services (ISP) (collectively, "Subscription Agreements").
                  All persons  receiving  services from the Group  Companies are
                  party to a Subscription Agreement.

            (b)   To the best knowledge,  information and belief of Seller,  the
                  Subscription   Agreements  are  legal,   valid,   binding  and
                  enforceable  obligations  of  the  Subscribers.  There  are no
                  governmental,  contractual  or  similar  restrictions  on  the
                  amounts that the Group  Companies  are permitted to charge for
                  providing  such  services.  None of the Group  Companies is in
                  material breach with respect to the performance of contractual
                  obligations under any of the Subscription Agreements,  and, so
                  far as Seller is aware, there is no event that, with notice or
                  lapse of time or both, will  constitute a material  default by
                  any of the Group Companies thereunder.

      8.1.17 Bank Accounts and Powers of Attorney

            Set  forth on  Schedule  8.1.17 is an  accurate  and  complete  list
            showing  (a) the name and  address  of each  bank in which the Group
            Companies has an account or safe deposit box, the number of any such
            account or any such box and the names of all persons  authorized  to
            draw  thereon  or to have  access  thereto  and (b) the names of all
            persons,   if  any,  holding  powers  of  attorney  from  the  Group
            Companies.

8.1.18   Disclosure

            To the best  knowledge,  information  and belief of Seller,  none of
            this  Agreement or  Management  Accounts  (including  the  footnotes
            thereto), any Schedule, Exhibit or certificate delivered pursuant to
            this  Agreement or any  document or  statement in writing  which has
            been supplied to Purchaser or its representatives by or on behalf of
            Seller,  the Group  Companies or any of its  Subsidiaries  or any of
            their respective directors, officers or employees in connection with
            the  Transaction,  contains any untrue statement of a material fact,
            or omits any  statement  of a material  fact  necessary  to make the
            statements  contained herein or therein not misleading.  There is no
            fact known to Seller that would have a Material  Adverse Effect with
            respect to any of the Group  Companies  which has not been set forth
            in this  Agreement or Management  Accounts  (including the footnotes
            thereto) or any Schedule,  Exhibit or certificate delivered pursuant
            to this Agreement.

                                       25
<PAGE>

8.2   Seller shall notify Purchaser in writing with full details of any event or
      circumstance  which is or may be  expected  to cause a  breach  of,  or be
      inconsistent  with,  any of the  foregoing  Seller's  representations  and
      warranties  promptly upon such event coming to its notice whether  before,
      at the time of, or after Closing.

8.3   Except if Purchaser is actually aware of the underlying breach on the date
      of  this  Agreement,  if  a  material  breach  of  any  of  the  foregoing
      representations   and  warranties  of  Seller  occurs  prior  to  Closing,
      Purchaser  shall be entitled to  terminate  this  Agreement  upon  written
      notice to Seller  provided that the accrued rights and  liabilities of the
      parties (including, for the avoidance of doubt, Purchaser's right to claim
      damages  for breach of  Seller's  representations  and  warranties)  shall
      subsist.

8.4   Where any of Seller's  representations  and  warranties  are  qualified by
      knowledge,  information,  belief or awareness of Seller,  Seller  confirms
      that (1) it has made reasonable  inquiry within the ordinary course of its
      business as to the subject-matter of such representation and warranty, (2)
      in the ordinary  course of its business  Seller  should have been aware of
      any breach of each such  representation and warranty and (3) Seller is not
      aware of any such breach.

9.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

9.1   The  respective  representations  and  warranties  of Seller and Purchaser
      contained  in this  Agreement  shall  survive the purchase and sale of the
      Purchased Shares pursuant to this Agreement.

9.2   From and after the Closing Date,  subject to the  limitations set forth in
      this Agreement, Seller shall indemnify and hold harmless Purchaser and the
      Group Companies from and against any and all losses,  damages and expenses
      (including,  without  limitation,  reasonable  attorneys' and consultants'
      fees and expenses) (collectively,  "Losses") actually suffered or incurred
      by  Purchaser  or any of the Group  Companies  arising out of or resulting
      from any of the following:

      9.2.1 the failure of any representation and warranty of Seller to be true,
            accurate and not misleading on the date of this Agreement and on the
            Closing  Date or the  breach by Seller  of any of its  covenants  or
            agreements hereunder.

      9.2.2 any claims  relating  to the  legality of the  provision  by EuroWeb
            Hungary of carrier  pre-selection  (CPS) service up to and including
            the  Closing  Date;  provided  that,  in the event  that,  after the
            Closing Date, any authority  shall fine Euroweb Hungary with respect
            to the provision of such service but shall not allocate such fine to
            a specific  period,  then Seller's  indemnity  obligation  hereunder
            shall extend to a proportion  of such fine in which the numerator is
            the  number  of days  between  the  date on  which  Euroweb  Hungary
            commenced  providing  such  service  and the  Closing  Date  and the
            denominator  is the total  number of days in which  Euroweb  Hungary
            provided such service  (including,  for the avoidance of doubt,  the
            period after the Closing Date);

      9.2.3 the  revocation  by the NHH on or prior to the  Closing  Date of the
            right  of the  Group  Companies  to use the SHS  (51)310-000-310-999
            numbering range;

      9.2.4 any  Liability  for Tax of the Group  Companies  in respect of or in
            consequence  of  any  event,  act,  omission  or  transaction  which
            occurred on or before the Closing Date;

      9.2.5 any event or  circumstance  that  occurs on or prior to the  Closing
            Date relating to the absence of any Permit for the  construction  of
            the existing Network of EuroWeb Romania (for the avoidance of doubt,
            Purchaser  shall be  responsible  for any Losses  arising  out of or
            resulting from any such event or circumstance  that occurs after the
            Closing Date);

                                       26
<PAGE>

      9.2.6 the Navigator Transaction.

9.3   For the purposes of indemnification under Clause 9.2:

      9.3.1 Seller  shall not be liable in  respect  of any claim for  breach of
            representation  and warranty  under Clause 9.2.1 where the liability
            agreed or  determined  in  respect  of any such  claim for breach of
            representation  and warranty does not exceed one-percent (1%) of the
            Purchase  Price  (provided  that  any  event or  circumstance  which
            results in Losses of Purchaser or any Group  Company in excess of 1%
            of the Purchase  Price shall be deemed to be "material" for purposes
            of  determining  whether  or  not  a  breach  has  occurred  of  any
            representation and warranty qualified by materiality in Clause 8 and
            such  qualification  shall be disregarded in the  quantification  of
            Losses  arising from such a breach),  unless and until the aggregate
            amount of all such claims for breach of representation  and warranty
            for which  Seller  would  otherwise be liable in the absence of this
            provision exceeds  one-percent (1%) of the Purchase Price. Where the
            amount agreed or determined in respect of all claims  referred to in
            Clause 9.2 for breach of  representation  and  warranty or Indemnity
            exceeds  one-percent  (1%) of the  Purchase  Price,  Seller shall be
            liable for the entire amount thereof;

      9.3.2 the  aggregate  liability  of Seller in respect of  breaches  of the
            representations  and warranties set forth in Clauses 8.1.5 and 8.1.7
            through  8.1.17 and the  Indemnities  set forth in Clauses 9.2.2 and
            9.2.3 shall not exceed 15% of the Purchase Price;

      9.3.3 the  aggregate  liability  of  Seller  for the  representations  and
            warranties and  Indemnities  specified in Clause 9.3.2 and set forth
            in Clauses 8.1.4, 8.1.6, 9.2.4, 9.2.5 and 9.2.6 shall not exceed 30%
            of the  Purchase  Price (for the  avoidance  of doubt,  the  parties
            acknowledge  that in any  aggregation of liability under this Clause
            9.3.3,  the liability under Clause 9.3.2 shall not exceed 15% of the
            Purchase Price in any circumstances);

      9.3.4 the  aggregate  liability  of Seller in respect of  breaches  of the
            representations  and warranties set forth in Clause 8.1.1, 8.1.2 and
            8.1.3 shall not exceed 100% of the Purchase Price;

      9.3.5 Seller  shall not incur any  liability  in  respect of any claim for
            breach of  representation  and  warranty or  indemnity  and any such
            claim shall be wholly barred and unenforceable unless notice of such
            claim shall have been served upon Seller by  Purchaser no later than
            60 days after the approval by Purchaser of the  statutory  financial
            reports of the Group  Companies for the financial  year 2006 (but in
            any  event no later  than  June 1,  2007),  or in the case of Clause
            8.1.6 (Taxes) or Clause  9.2.4,  five (5) years from the last day of
            the calendar year in which the Closing Date occurs.  Notwithstanding
            anything to the contrary herein,  the time limitations  contained in
            this  Clause  shall  not  apply  to  any  claim  for  breach  of any
            representation  and  warranty  set forth in  Clauses  8.1.1  through
            8.1.3; and

      9.3.6 Seller  shall not incur any  liability  in  respect of any claim for
            breach of  representations  and warranty or  indemnity  under Clause
            8.1.6 (Taxes) or Clause 9.2.4 in respect of an event or circumstance
            in any financial  year unless the liability  agreed or determined in
            respect of all claims for events or  circumstances in such financial
            year exceed USD 50,000.

                                       27
<PAGE>

9.4   Purchaser  shall  indemnify and hold harmless  Seller from and against any
      and all Losses  actually  suffered or incurred by Seller arising out of or
      resulting from the failure of any  representation or warranty of Purchaser
      to be true,  accurate and not misleading on the date of this Agreement and
      the Closing  Date or the breach by  Purchaser  of any of its  covenants or
      agreements  hereunder;   provided  that  Purchaser  shall  not  incur  any
      liability  in  respect  of any claim  for  breach  of  representation  and
      warranty  or  indemnity  and any such  claim  shall be wholly  barred  and
      unenforceable  unless  notice of such claim  shall have been  served  upon
      Purchaser by Seller no later than twenty-four (24) months from the Closing
      Date.

9.5   In no event shall either  Purchaser or Seller be liable to the other under
      Clauses 9.2 or 9.4 for any  consequential,  indirect,  special or punitive
      losses, damages or liabilities.

9.6   Any payment under Clauses 9.2 or 9.4 shall be made to Purchaser or Seller,
      as the case may be,  or at the  respective  party's  direction  within  30
      Business  Days after a demand by Purchaser or Seller,  as the case may be.
      If either party  disputes a demand made by the other party,  then it shall
      be entitled to withhold payment of the disputed  amount;  provided that if
      the  dispute  shall be  resolved  in the  favor of the  other  party,  the
      disputed amount shall be deemed to bear interest in accordance with Clause
      23 from the 30th day after the demand.

9.7   Subject  to  the  limitations  set  by  this  Agreement,  if  any  action,
      proceeding,  claim, liability, demand or assessment shall be asserted by a
      third  party  against  Purchaser  or  any  of  the  Group  Companies  (the
      "Indemnitee") with respect to any matter set forth in Clause 9.2 (a "Third
      Party  Claim")  in respect of which  such  Indemnitee  proposes  to demand
      indemnification,  such Indemnitee  shall notify Seller (the  "Indemnifying
      Party")  thereof  within  a  reasonable  period  of time  after  assertion
      thereof; provided, however, that the failure to so notify the Indemnifying
      Party shall not affect the Indemnitee's right to indemnification hereunder
      unless (and solely to the extent) the Indemnifying  Party's  interests are
      actually and materially prejudiced thereby. Subject to rights of or duties
      to any  insurer or other  third  Person  having  liability  therefor,  the
      Indemnifying  Party  shall  have the  right,  within  ten (10) days  after
      receipt of such notice,  to defend the Indemnitee  against the Third Party
      Claim  with  counsel  of  its  choice   reasonably   satisfactory  to  the
      Indemnitee;  provided,  however,  that the Indemnifying Party notifies the
      Indemnitee in writing  within  fifteen (15) days after the  Indemnitee has
      given  notice of the Third  Party Claim that the  Indemnifying  Party will
      indemnify the  Indemnitee  from and against the entirety of any damage the
      Indemnitee may suffer resulting from,  arising out of, relating to, in the
      nature of, or caused by the Third Party Claim,  and provided  further that
      the  Indemnifying  Party may not assume such control without  Indemnitee's
      express  written  consent  if: (i) the Third  Party Claim does not involve
      only money damages but also seeks an injunction or other equitable relief;
      or (ii)  settlement of, or an adverse  judgment with respect to, the Third
      Party Claim is, in the good faith  judgment of the  Indemnitee,  likely to
      establish  a  precedential  custom or practice  materially  adverse to the
      continuing  business  interests or the reputation of the  Indemnitee.  The
      Indemnifying  Party  shall  conduct  the  defense of the Third Party Claim
      actively and diligently.

9.8   So long as the  Indemnifying  Party is conducting the defense of the Third
      Party  Claim  in  accordance  with the  foregoing  Clause  above,  (i) the
      Indemnitee  may retain  separate  counsel at its sole cost and expense and
      participate  in the  defense  of the  Third  Party  Claim,  provided  that
      Indemnitee's counsel may not oppose the professional decisions of the lead
      counsel engaged by the  Indemnifying  Party except on reasonable  grounds;
      (ii) the Indemnitee will not consent to the entry of any judgment or enter
      into any  settlement  with  respect to the Third Party  Claim  without the
      prior  written  consent  of the  Indemnifying  Party  (not to be  withheld
      unreasonably);  and (iii) the  Indemnifying  Party will not consent to the
      entry of any  judgment or enter into any  settlement  with  respect to the
      Third Party  Claim  without the prior  written  consent of the  Indemnitee
      (which may only be withheld in the event that such settlement  would serve
      to create a  precedential  custom or  practice  materially  adverse to the
      continuing business interests or the reputation of the Indemnitee).

                                       28
<PAGE>

9.9   In the event that  Indemnifying  Party declines or fails to assume control
      of the defense of any Third Party Claim as  specified  above,  then and in
      such event the Indemnitee may defend against,  and consent to the entry of
      any judgment or enter into any settlement with respect to, the Third Party
      Claim in any manner it  reasonably  may deem  appropriate,  subject to the
      consent of the Indemnifying  Party which may not be unreasonably  withheld
      or delayed. The Indemnifying Party shall reimburse the Indemnitee promptly
      and periodically for the costs of defending  against the Third Party Claim
      (including  reasonable  attorneys' fees and expenses incurred in defending
      the Third  Party  Claim  pursuant  to this  Clause  9.9),  and will remain
      responsible  for any Losses the  Indemnitee  may  suffer  resulting  from,
      arising  out of,  relating  to, in the  nature  of, or caused by any Third
      Party Claim in accordance with the provisions of this Agreement.

10.   POST-CLOSING INTEGRATION ASSISTANCE

Seller shall, and shall procure that its Chief Executive Officer, Csaba Toro and
      his successors,  assist Purchaser in the transition and integration of the
      Group  Companies  during  the  first  year  after  Closing,  at no cost to
      Purchaser or the Group Companies.  Without limiting the foregoing,  Seller
      undertakes to provide at no cost to Purchaser, during the first year after
      the Closing, 25 days (total 8 hours a day) of consulting services by Csaba
      Toro and his  successors  to assist  Purchaser in the  integration  of the
      Group Companies, on dates and at times reasonably requested by Purchaser.

11.   NO-RECRUITMENT; NON-COMPETE

11.1  Seller  shall not and shall  procure that each of its  Affiliates  and its
      Chief Executive Officer,  Csaba Toro and his Affiliate shall not, directly
      or  indirectly,  either  alone or jointly  with any other person or in any
      capacity whatsoever:

      11.1.1 neither  pending nor within 2 years after the Closing Date carry on
            or be engaged or otherwise  interested in any business in Hungary or
            Romania  which  competes  with  the  Business  or  any  part  of the
            Business;

      11.1.2 neither  pending  nor  within 2 years  after the  Closing  Date not
            employ any employee of, or consultant to, either  Company  (provided
            that the foregoing  shall not restrict Seller or its Affiliates from
            employing any of Csaba Toro,  Kriszta  Hollo,  Balazs Nyiri,  Wilson
            Balanchandra,  Zoltan Toth;  provided further that Zoltan Toth shall
            be available  to Euroweb  Hungary for a period of 2 months after the
            Closing Date to continue his duties as and to the extent such duties
            exist on the date hereof); or

      11.1.3 at any time within 2 years after the Closing  Date in the course of
            any business  use the words  EuroWeb,  Freestart,  or use any trade,
            business or domain name or distinctive  mark, design or logo used or
            previously  used in the  Business by any of the Group  Companies  or
            anything  which is capable of so being  confused  with the exception
            that  Seller   shall  be   entitled   to  use  the  names   "Euroweb
            International",  "EWI" and "EWEB" and related domain names in such a
            manner as does not cause any confusion in the respective  markets in
            which the Group Companies operate.

11.2  Notwithstanding  Clause 11.1, it is understood  that Navigator  provides a
      full scope of IT services and additional trade capacity.  Its full service
      IT system  implementation and IT project management includes  consultancy,
      system design,  development  and  implementation,  and training.  Its full
      service IT system  operation  includes full support and maintenance of the
      provided services: application development;  telecommunications;  Internet
      access;  virus  protection  services;   LAN  support;  and  other  related
      services.  Nothing in this  Agreement  shall prevent  Seller,  in its sole
      discretion,  from continuing to own or subsequently transferring Navigator
      or  Navigator  from  continuing  to provide  the  services  its  currently
      provides on the date of this Agreement.

                                       29
<PAGE>

11.3  Each of the restrictions contained in this Clause 11 shall be construed as
      a  separate   provision  of  this   Agreement.   If  any   restriction  is
      unenforceable  but  would be valid if  reduced  in scope or  duration  the
      restriction shall apply with the minimum modifications as may be necessary
      to make it valid and enforceable.

12.   PREFERRED VENDOR STATUS

      Seller  undertakes  that it  shall,  and  shall  procure  that each of its
      Affiliates shall provide  preferred vendor status to Purchaser and each of
      the  Group  Companies  in any  business  they  conduct  subsequent  to the
      Closing; in return for a reciprocal  commitment by Purchaser and the Group
      Companies in favor of Seller.

13.   CONFIDENTIALITY

13.1  Seller shall treat as  confidential  the  provisions of this Agreement and
      all information it has received or obtained about Purchaser as a result of
      entering  into this  Agreement.  The  provisions  of this  Clause 13 shall
      survive Closing and the eventual termination of this Agreement.

13.2  Purchaser shall treat as confidential the provisions of this Agreement and
      all  information it has received or obtained about Seller and/or the Group
      Companies as a result of entering into this Agreement.

13.3  Either  party  may   disclose   information   which  would   otherwise  be
      confidential if and to the extent:

      13.3.1 required  by  law  or  any  securities   exchange,   regulatory  or
            governmental body or Tax authority;

      13.3.2 disclosed to its professional  advisers (provided that such persons
            are required to treat such information as confidential); or

      13.3.3 it comes into the public  domain other than as a result of a breach
            by a party of this Clause 13,

      provided that prior written notice of any  confidential  information to be
      disclosed pursuant to this Clause 13 shall be given to the other party.

14.   ANNOUNCEMENTS

14.1  No  announcement  shall be made by either party relating to this Agreement
      without the prior written  approval of the other party,  such approval not
      to be unreasonably withheld or delayed.

14.2  Either party may make an  announcement  relating to this Agreement if (and
      only to the extent)  required by the law of any relevant  jurisdiction  or
      any securities  exchange,  regulatory or  governmental  body provided that
      prior written notice of any  announcement  required to be made is given to
      the other  party in which case such  party  shall take all steps as may be
      reasonable in the circumstances to agree the contents of such announcement
      with the other party prior to making such announcement.

15.   ASSIGNMENT

      The rights and  benefits  of this  Agreement  (together  with any cause of
      action  arising in  connection  with any of them) may be assigned  and the
      obligations under this Agreement transferred by Purchaser to any Affiliate
      or to its  successor in title;  provided that in the event of any transfer
      of  obligations  Purchaser  shall remain  jointly and severally  liable to
      Seller for the fulfillment of such obligations.

                                       30
<PAGE>

16.   FURTHER ASSURANCE

      Each  Party  shall from time to time and at its own cost do,  execute  and
      deliver or procure to be done,  executed  and  delivered  all such further
      acts, documents and things required by, and in a form satisfactory to, the
      other Party to give full effect to this  Agreement and its rights,  powers
      and remedies under this Agreement.

17.   ENTIRE AGREEMENT

      This  Agreement,  together  with any other  documents  referred  to in the
      Agreement   constitutes  the  whole  agreement  between  the  parties  and
      supersedes any previous  arrangements or agreements  between them relating
      to the Transaction.

18.   SEVERANCE AND VALIDITY

      If any  provision  of this  Agreement  is or becomes  illegal,  invalid or
      unenforceable  in any  respect  under  the law of any  jurisdiction,  such
      provision  shall be  deemed to be  severed  from  this  Agreement  and the
      parties shall replace such provision with one having an effect as close as
      possible to the deficient provision.  The remaining provisions will remain
      in full force in that  jurisdiction  and all  provisions  will continue in
      full force in any other jurisdiction.

19.   AMENDMENTS

      No amendment of this  Agreement  shall be effective  unless in writing and
      signed by or on behalf of the parties.

20.   REMEDIES AND WAIVERS

20.1  No waiver of any right under this Agreement  shall be effective  unless in
      writing.  Unless  expressly  stated  otherwise a waiver shall be effective
      only in the circumstances for which it is given.

20.2  No delay or  omission  by any  party in  exercising  any  right or  remedy
      provided by law or under this Agreement shall  constitute a waiver of such
      right or remedy.

20.3  The single or partial  exercise of a right or remedy under this  Agreement
      shall not preclude any other nor restrict any further exercise of any such
      right or remedy.

20.4  The rights and remedies  provided in this  Agreement are cumulative and do
      not exclude any rights or remedies provided by law.

21.   EFFECT OF CLOSING

The   provisions  of this  Agreement  which  remain  to be  performed  following
      Closing shall continue in full force and effect notwithstanding Closing.

22.   COSTS AND EXPENSES

Except as provided otherwise, each party shall pay its own costs and expenses in
      connection  with the  negotiations,  preparation  and  performance of this
      Agreement.

23.   DEFAULT INTEREST

Any   and all amounts  which are due and payable under this  Agreement  shall be
      paid in USD and shall carry interest at a rate of 3-month LIBOR plus 4%.

24.   NOTICES

24.1  Any notice or other  communication to be given under or in connection with
      this Agreement  ("Notice") shall be in the English language in writing and
      signed by or on behalf of the party giving it and marked for the attention
      of the relevant  party.  A Notice may be delivered  personally  or sent by
      fax,  pre-paid  recorded  delivery or pre-paid  registered  airmail to the
      address or fax number provided in Clause 24.3.

                                       31
<PAGE>

24.2  A Notice shall be deemed to have been received:

      24.2.1 at the time of delivery if delivered personally;

      24.2.2 at the time of transmission if sent by fax;

      24.2.3 2 (two) Business Days after the time and date of posting if sent by
            pre-paid recorded delivery; or

      24.2.4 5 (five)  Business  Days after the time and date of posting if sent
            by pre-paid registered airmail,

      provided that if deemed receipt of any Notice occurs after 6.00 p.m. or is
      not on a Business Day,  deemed receipt of the Notice shall be 9.00 a.m. on
      the next Business  Day.  References to time in this Clause 24 are to local
      time in the country of the addressee.

24.3  The addresses and fax numbers for service of Notice are:

      Seller:

      Name:                    Euroweb International Corp.

      Address:                 1138 Budapest, Vaci ut 141, Hungary

      For the attention of:    Csaba Toro, Chief Executive Officer

      Fax number:              +36 1 889-7128

      Purchaser:

      Name:           Invitel Tavkozlesi Szolgaltato Rt.

      Address:                 2040 Budaors, Puskas Tivadar utca 8-10

      For the attention of:    Martin Lea, Chief Executive Officer

      Fax number:              +36 1 801-1675

24.4  A party shall notify the other parties of any change to its address
      in accordance with the provisions of this Clause 24 provided that
      such notification shall only be effective on the later of the date
      specified in the notification and 5 (five) Business Days after deemed
      receipt.

25.   COUNTERPARTS

      This Agreement may be executed in counterparts and shall be effective when
      each party has executed a counterpart.  Each counterpart  shall constitute
      an original of this Agreement.

26.   GOVERNING LAW

26.1  The  validity,  interpretation,   construction  and  performance  of  this
      Agreement  shall be  governed  by the  laws of the  Republic  of  Hungary,
      excluding  any  conflict  of laws rule or  principle  that might refer the
      governance  of the  construction  of this  Agreement to the law of another
      jurisdiction.  Notwithstanding  the foregoing,  the conditions and binding
      effect of the transfer of the EuroWeb  Romania Shares shall be governed by
      the laws of Romania.

27.   SETTLEMENT OF DISPUTES

                                       32
<PAGE>

27.1  Any  dispute,  controversy  or claim  arising  out of,  relating  to or in
      connection  with this Agreement  shall be referred to, and finally settled
      by,  international  arbitration  under  the  Rules of  Arbitration  of the
      International  Chamber of  Commerce  (the  "ICC") in effect on the date of
      this  Agreement,  which Rules are deemed to be  incorporated  by reference
      into this Clause. The place of the arbitration shall be Budapest,  Hungary
      and the award shall be deemed to have been rendered there. The language of
      the arbitration  shall be English.  The arbitral tribunal shall consist of
      three arbitrators.  Seller shall nominate one arbitrator;  Purchaser shall
      nominate  one  arbitrator;  and a third  arbitrator,  who  shall  serve as
      chairman,  shall  be  appointed  by  the  Secretary  General  of  the  ICC
      International  Court of  Arbitration if the two  arbitrators  cannot agree
      upon a chairman  within 30 days of the  confirmation  of the second of the
      first two  arbitrators.  The award  shall be final  and  binding  upon the
      parties,  who undertake to carry it out without delay and without recourse
      to judicial proceedings in any jurisdiction  whatsoever seeking annulment,
      setting aside,  modification  or any diminution or impairment of its terms
      or effect.

IN WITNESS  WHEREOF  each party has  executed  this  Agreement,  or caused  this
Agreement to be executed by its duly authorized representatives.

EUROWEB INTERNATIONAL CORP., a Delaware, U.S. corporation

By:/s/ Csaba Toro
  ---------------
Csaba Toro, its Chief Executive Officer

INVITEL TAVKOZLESI SZOLGALTATO RT., a Hungarian joint stock company

By: /s/Martin Lea
  ---------------
Martin Lea, its Chief Executive Officer

By: /s/Rob Bowker
   --------------
Rob Bowker, its Chief Financial Officer

                                       33
<PAGE>

                                   Schedule 1

                               The Group Companies

Company name            :     Euroweb Internet Szolgaltato Rt.

Company number          :     01-10-044965

Date and place of       :     Registered with the Metropolitan Court as Court of
incorporation                 Registration on October 13, 2003

Registered address      :     H-1138 Budapest, Vaci ut 141

Authorized share capital:   -

Issued share capital    :     HUF 20,000,000

Shareholders            :     Euroweb International  Corporation (holding 19,999
                              pieces  of  shares  with a  nominal  value  of HUF
                              19,999,000)  and dr.  Timea  Toronyi  (holding one
                              piece of shares with a nominal value of HUF 1,000)

Directors               :     Mr.  Csaba  Toro,  Ms.  Gyongyver  Gerlei  and Mr.
                              Domonkos Kovacs  (currently  being replaced by Ms.
                              Kriszta Hollo)

Secretary               :   -

Auditors                :     Deloitte    Konyvvizsgalo    es   Tanacsado   Kft.
                              (appointed until May 31, 2006)

Company name            :      S.C. Euroweb Romania S.A.

Company number          :     R 10347830

Date and place of       :     Registered with the Bucharest Register of Commerce
incorporation                 on March 16, 1998

Registered address      :     102  Lipscani  St.,  Nouveau  Center,  corp A, 3rd
                              floor, Bucharest 3rd District

Authorized share        :   -
capital

Issued share capital    :     ROL 32,073,835,000  (ROL  31,013,585,000  plus USD
                              50,000)

Shareholders            :     Euroweb International  Corporation (holding 99.96%
                              of the shares), Gheorghe M. Rusu, Eugen Ghe. Rusu,
                              Elena T. Jugariu and Cristina  Frent-Lung (holding
                              each 0.01% of the shares)

Administrators          :     Mr.  Csaba  Toro,  Mr.  Gregg  Betz and Mr.  Peter
                              Szigeti

                                       34
<PAGE>

General Manager         :     Mr. Stan Laurentiu

Auditors                :     Auditors Commossion: Adina Tudorache, Filip Maria,
                              Vlad Melinte (members) and Protopopescu  Petrisor,
                              Protopopescu   Natalia  Fleur,   Ciopeica  Felicia
                              (substitutes)

                                       35
<PAGE>

                                Schedule 6.5.1(c)
                               Invitel Appointees

Board of Directors  Euroweb  Internet  Szolgaltato  Rt.: Martin Lea, Rob Bowker,
Peter Bezeredy

Supervisory  Board of Euroweb Internet  Szolgaltato  Rt.: Kerim Turkmen,  Botond
Mihalyi, Ian McKenzie

Board of Directors  S.C.  Euroweb  Romania S.A.:  Martin Lea, Rob Bowker,  Peter
Bezeredy

                                       36
<PAGE>

                                Schedule 6.5.1(o)
               Certificate updating representations and warranties

Invitel Tavkozlesi Szolgaltato Rt.
2040 Budaors
Puskas Tivadar utca 8-10
Hungary

re Closing Certificate

Ladies and Gentlemen:

Reference is made to Clause 6.5.1(o) of the Share Purchase Agreement,  dated [o]
(the  "SPA"),   between  Euroweb  International  Corp.  and  Invitel  Tavkozlesi
Szolgaltato Rt.

Except where the context requires otherwise,  capitalized terms used herein have
the meanings given to them in the SPA.

The undersigned  duly authorized  representative  of the Seller hereby certifies
that each of the representations and warranties of the Seller in Clause 8 of the
SPA is true,  correct  and not  misleading  on the date  hereof as  though  such
representation and warranty had been made on and as of the date hereof.

IN WITNESS  WHEREOF,  the undersigned has executed this  certificate on this [o]
day of [o], 200[o].

EUROWEB INTERNATIONAL CORP.

By:______________________________
Name:
Title:

                                       37
<PAGE>

                                 Schedule 7.1.4
                                HVB Confirmation

                                       38
<PAGE>

                                Schedule 8.1.1(c)
                  Jurisdictions of Group Companies' activities

                                       39
<PAGE>

                                Schedule 8.1.2(a)
                         Group Companies capitalization

                                       40
<PAGE>
                                Schedule 8.1.4(e)
                   Indebtedness and Cash and Cash Equivalents

                                       41
<PAGE>

                                Schedule 8.1.5(a)
                               Material Agreements

                                       42
<PAGE>

                                Schedule 8.1.6(c)
                             Tax Audits and Notices

                                       43
<PAGE>

                                Schedule 8.1.7(e)
                                 Pension Schemes

                                       44
<PAGE>

                                Schedule 8.1.8(a)
                                   Litigation

                                       45
<PAGE>

                                Schedule 8.1.8(b)
                               Compliance with Law

                                       46
<PAGE>

                               Schedule 8.1.10(a)
                              Intellectual Property

                                       47
<PAGE>

                                 Schedule 8.1.11
                                    Insurance

                                       48
<PAGE>

                               Schedule 8.1.13(a)
                                 Owned Property

                                       49
<PAGE>

                               Schedule 8.1.13(b)
                                 Leased Property

                                       50
<PAGE>

                                 Schedule 8.1.17
                      Bank accounts and powers of attorney

                                       51
<PAGE>

                                TABLE OF CONTENTS

1.    DEFINITIONS AND INTERPRETATION..........................................3

2.    SALE AND PURCHASE.......................................................8

3.    CONDITIONS..............................................................8

4.    CONSIDERATION..........................................................10

5.    INTERIM PERIOD.........................................................11

6.    CLOSING................................................................14

7.    PURCHASER REPRESENTATIONS AND WARRANTIES...............................16

8.    SELLER REPRESENTATIONS AND WARRANTIES..................................17

9.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION............26

10.   POST-CLOSING INTEGRATION ASSISTANCE....................................29

11.   NO-RECRUITMENT; NON-COMPETE............................................29

12.   PREFERRED VENDOR STATUS................................................30

13.   CONFIDENTIALITY........................................................30

14.   ANNOUNCEMENTS..........................................................30

15.   ASSIGNMENT.............................................................30

16.   FURTHER ASSURANCE......................................................31

17.   ENTIRE AGREEMENT.......................................................31

18.   SEVERANCE AND VALIDITY.................................................31

19.   AMENDMENTS.............................................................31

20.   REMEDIES AND WAIVERS...................................................31

21.   EFFECT OF CLOSING......................................................31

22.   COSTS AND EXPENSES.....................................................31

23.   DEFAULT INTEREST.......................................................31

24.   NOTICES................................................................31

25.   COUNTERPARTS...........................................................32

26.   GOVERNING LAW..........................................................32

27.   SETTLEMENT OF DISPUTES.................................................32

================================================================================--------------------------------------------------------------------------------

                            EQUITY PURCHASE AGREEMENT

                                  by and among

                                 EU Energy Inc.,

                                       and

                          CTC Wind Systems Corporation

                          Dated as of December 15, 2005

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                    <C>
EXHIBIT INDEX..........................................................................................iii

ARTICLE 1 PURCHASE AND SALE OF EQUITY....................................................................1
   1.1     Purchase and Sale of Equity...................................................................1
   1.2     Place and Date of Closing; Closing Deliveries.................................................1
   1.3     The Purchase Price............................................................................2
   1.4     Payment of Purchase Price.....................................................................2
   1.5     Use of Purchase Price.........................................................................2
   1.6     Shareholders' Agreement.......................................................................2
Article 2         Representations And Warranties Of The Seller...........................................4
   2.1     Shares; Agreements............................................................................4
   2.2     Status........................................................................................4
   2.3     Authority.....................................................................................4
   2.4     Governmental Authorization....................................................................5
   2.5     Non-Contravention.............................................................................5
   2.6     Capitalization; Subsidiaries..................................................................5
   2.7     Changes.......................................................................................5
   2.8     Taxes.........................................................................................7
   2.9     Financial Statements; Solvency; Current Assets................................................7
   2.10    Absence of Undisclosed Liabilities............................................................8
   2.11    Materials Contracts and Agreements............................................................8
   2.12    Litigation....................................................................................9
   2.13    Compliance with Applicable Laws...............................................................9
   2.14    Environmental Compliance; OSHA; MSHA..........................................................9
   2.15    Leases, Other Real Property..................................................................10
   2.16    Intellectual Property........................................................................11
   2.17    Employee Benefit Plans; ERISA................................................................12
   2.18    Labor Matters, etc...........................................................................13
   2.19    Business Relationships.......................................................................13
   2.20    Insurance Policies...........................................................................14
   2.21    Related Party Transactions...................................................................14
   2.22    Brokerage and Financial Advisors.............................................................14
   2.23    Warranties True and Correct..................................................................14
Article 3         Representations And Warranties Of Buyer...............................................14
   3.1     Status.......................................................................................14
   3.2     Authority....................................................................................15
   3.3     Non-Contravention, Approvals and Consents....................................................15
Article 4         Covenants.............................................................................15
   4.1     Operation of the Business....................................................................15
   4.2     Application for Regulatory Consent and Licenses..............................................16
   4.3     Access to Facilities, Files and Records......................................................16
   4.4     Notice of Proceedings........................................................................17
   4.5     Reasonable Commercial Efforts................................................................17
   4.6     Notification of Certain Matters..............................................................17
   4.7     Expenses.....................................................................................17
</TABLE>

                                       i

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                    <C>
Article 5         Conditions To Closing.................................................................17
   5.1     Conditions to Obligations of Each Party......................................................17
   5.2     Conditions to the Obligations of Seller......................................................18
   5.3     Conditions to Obligations of Buyer...........................................................18
Article 6         Termination...........................................................................20
   6.1     Termination by Mutual Consent................................................................20
   6.2     Termination by Either Seller or Buyers.......................................................20
   6.3     Termination by Seller........................................................................20
   6.4     Termination by Buyer.........................................................................20
   6.5     Effect of Termination and Abandonment........................................................21
Article 7         Indemnification.......................................................................21
   7.1     Survival.....................................................................................21
   7.2     Agreement of Seller to Indemnify.............................................................21
   7.3     Agreement of Buyer to Indemnify..............................................................22
   7.4     Procedures for Indemnification...............................................................22
   7.5     Defense of Third Party Claims................................................................23
   7.6     General Tax Indemnity........................................................................24
   7.7     Limitations..................................................................................24
Article 8         Closing And Due Diligence.............................................................25
   8.1     Closing and Due Diligence....................................................................25
   8.2     Termination due to unsatisfactory Due Diligence..............................................25
Article 9         General Provisions....................................................................26
   9.1     Certain Definitions..........................................................................26
Article 10        Miscellaneous.........................................................................31
   10.1    Entire Agreement; No Third Party Beneficiaries...............................................31
   10.2    Amendments; Waiver...........................................................................31
   10.3    Assignment...................................................................................31
   10.4    Notices......................................................................................32
   10.5    Governing Law; Dispute Resolution............................................................32
   10.6    Counterparts.................................................................................34
   10.7    Captions.....................................................................................34
   10.8    Interpretations..............................................................................34
   10.9    Severability.................................................................................34
   10.10   Right to Specific Performance................................................................34
</TABLE>

                                       ii

<PAGE>

                            EQUITY PURCHASE AGREEMENT

      THIS EQUITY PURCHASE  AGREEMENT (this  "Agreement"),  dated as of December
15,  2005,  is  entered  into by and  among  EU  Energy  Incorporated,  a Nevada
corporation ("EU Inc." or "Seller"), and CTC Wind Systems Corporation,  a Nevada
corporation ("CTC" or "Buyer").

                                    RECITALS:

      WHEREAS,  the  Seller  has the  ability  and  approval,  by its  Board  of
Directors and  Shareholder,  to issue [Insert number of shares] shares of common
stock of EU Inc. (the "Shares"),  which  subsequent to being issued,  constitute
[approximately 48%] of all the issued and outstanding shares of capital stock in
EU Inc.;

      WHEREAS,  the  Seller  desires  to sell to  Buyer,  and Buyer  desires  to
purchase  from the Seller,  directly or  indirectly,  all of the Shares upon the
terms and conditions set forth herein;

      WHEREAS,  the Board of  Directors of each of Buyer and Seller has approved
and adopted this Agreement and the transaction  contemplated hereby or will have
adopted by resolution dated concurrent with the date hereof.

                                   AGREEMENT:

      NOW, THEREFORE,  in consideration of the mutual promises and covenants set
forth  herein and for other  good a  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged,  the parties hereto,  intending to
be legally bound, do hereby agree as follows:

ARTICLE 1 PURCHASE AND SALE OF EQUITY

1.1   Purchase and Sale of Equity.

      Subject to the terms and  conditions set forth in this  Agreement,  at the
Closing, the Seller shall sell, assign, convey and transfer to the Buyer and the
Buyer shall purchase from the Seller, directly or indirectly,  free and clear of
any and all Liens, all of the Shares.

1.2   Place and Date of Closing; Closing Deliveries.

      (a) The Closing  shall take place at the offices of  Composite  Technology
Corporation,  2026 McGaw Avenue,  Irvine, CA, on Monday, January 31, 2005 or, if
later,  on a date not later than five (5) business days after (i) all conditions
in Article 5 have been satisfied or waived by the party in whose favor each such
condition  existed and (ii) CTC shall have completed its due diligence review in
accordance  with the terms of Article 8, or on such other date as the Seller and
Buyer may agree to in writing.

      (b) At the Closing,  the Seller shall execute and/or deliver to Buyer, (i)
certificates representing all the Shares, duly endorsed by the applicable Seller
(or  accompanied  by duly  executed  stock  powers),  and (ii) the documents and
instruments specified in Section 5.3.

      (c) At the Closing,  Buyer shall execute  and/or deliver to the Seller the
documents and  instruments  specified in Section 5.2. The Purchase Price for the
Shares  shall be as  provided in Section 1.3 and paid as provided in Section 1.4
below.

1.3   The Purchase Price.

Subject to the terms  described in Section 1.4,  the total  consideration  to be
paid by Buyer for the Shares  shall be an aggregate of a maximum of Five Million
Dollars ($5,000,000) (the "Purchase Price") as set forth in Section 1.4.

<PAGE>

1.4   Payment of Purchase Price.

      (a) At the Closing, a cash payment shall be made by Buyer by wire transfer
of immediately  available  funds to such account or accounts as the Seller shall
designate  in  writing  in  the   aggregate   amount  of  One  Million   Dollars
($1,000,000).

      (b) The  remaining  Four  Million  Dollars  ($4,000,000)  shall be paid to
Seller in two (2) equal installments of Two Million Dollars  ($2,000,000) within
ten (10) days of the later of the following dates:

            1st Installment:  March 1, 2006 or sixty (60) days after the date of
            Closing; and

            2nd Installment: April 1, 2006 or ninety (90) days after the date of
            Closing

      If any of the payments  referenced in this Section  1.4(b) are not paid to
Seller on or about the dates referenced,  the Buyer shall pay to Seller interest
of 6.0% annually on any unpaid balances and such payments shall be paid monthly.

1.5   Use of Purchase Price.

      The Purchase Price shall be used by the Seller to fund regular  operations
and for working capital purposes of the Seller.  The Seller shall not distribute
or cause to  distribute  any of the Purchase  Price to any  shareholder,  party,
affiliate, subsidiary or related party.

1.6   Shareholders' Agreement

      The Parties  shall procure that all of the  shareholders  of EU Inc at the
time  of  Closing  ("EU  Shareholders")  shall  sign a  shareholders'  agreement
("Shareholders' Agreement") that shall contain the following substantive terms:

      Buyer  shall  have the right to  appoint 2 Board  Members  to the Board of
Directors of EU Inc. and collectively  the other EU Shareholders  shall have the
right to appoint 2 Board Members.  The initial directors shall be appointed at a
meeting to be held concurrently with the Closing. Any Major Decisions to be made
by the Board of  Directors of EU Inc.  will require a unanimous  decision of the
Board.  "Major  Decisions"  shall be listed in the  Shareholders'  Agreement and
shall include, but are not limited to, the following:

      (a) the variation of the  authorized or issued capital stock of EU Inc. or
the  allottment,  issuance or grant of any option over or interest  in, or other
right to subscribe for shares or convert into any securities of EU Inc. or issue
any  instrument  carrying  rights of conversion  into, any share or other equity
security;

      (b) the alteration of the Bylaws of EU Inc.;

      (c) the taking  steps to wind up or dissolve  EU Inc.,  or the filing of a
petition in bankruptcy or the making of any arrangement  with any creditors,  or
the  permitting  or suffering of any act or thing  whereby it may be wound up or
placed into bankruptcy;

      (d) any disposal of all or substantially all of the Business;

      (e) the removal of any of the members of the Board of Directors,  provided
however  that neither CTC nor any EU  Shareholder  will  unreasonably  refuse to
permit the removal and replacement of any member of the Board by the shareholder
that has nominated such members;

      (f) the entry into or material  change to any contract or  transaction  or
waiver of any right under any contract  whose value exceeds  $500,000  except in
the ordinary and proper course of business on commercial terms;

      (g) the acquisition,  purchase or subscription for any shares, debentures,
or other  securities  (or any interest  therein) in any company,  trust or other
body;

      (h) the acquisition or purchase of the business;

      (i) the sale, transfer, lease, license, assignment, creation of any option
or  right of  pre-emption  or right of first  refusal  or  conversion  over,  or
otherwise  disposal of all or any material part of EU Inc.'s business,  property
and/or  assets (or any  interest  therein)  whether by a single  transaction  or
series of related transactions;

                                       2
<PAGE>

      (j) the increase in the remuneration of any senior  employee,  director or
consultant of EU Inc. who is paid more than $120,000 per annum by more than 10%;

      (k) the implementation or variation of any bonus,  incentive or commission
arrangements  of EU Inc.,  excluding,  however,  the regular  benefits  that are
required to be paid By contract or by law or other applicable legal act or which
are usual in the employment market of any State in which EU is doing business;

      (l) the creation of any fixed or floating charge,  lien (other than a lien
arising by operation of law) or other  encumbrance over the whole or any part of
EU Inc.'s  undertaking,  property or assets other than that which is required or
usual in the normal course of business;

      (m) the  borrowing  of any sum of  money  that  exceeds  an  aggregate  of
$100,000 or where the interest  rate is  unusually  high except from its bankers
and credit card providers in the ordinary and proper course of its business;

      (n) the making of any loan or advance  or giving  any credit  (other  than
normal trade credit) in excess of $10,000 by EU Inc. to any person;

      (o) the giving of any  guarantee  or  indemnity  by EU Inc.  to secure the
liabilities or  obligations  of any person,  except for the purposes of settling
any  employee  related  litigation  or  pursuant  to any of the normal  employee
procedures of complaint, or for civil liability cases not exceeding $100,000;

      (p) the entry  into any  contract,  arrangement  or  commitment  involving
capital expenditure other than approved budgets in the normal course of business
or the  realization  of  capital  assets if the  amount of such  expenditure  or
realization by EU Inc. would exceed $10,000;

      (q) the  initiation,  conduct,  settlement  or  abandon  of any  legal  or
arbitration  proceedings  where the amount claimed exceeds $50,000 or the making
of any admission of liability in respect of such a matter by EU Inc.,  excepting
for matters  relating to employees who are neither  directors nor officers of EU
Inc;

      (r) the  declaration or payment of any dividend or other  distribution  in
cash or otherwise  (whether out of revenue  profits,  capital profits or capital
reserves) on any Share by EU Inc. ; or

      (s) the grant of any power of  attorney  by EU Inc.  unless  such power of
attorney shall be for a limited period and only where EU Inc would reasonably be
expected to suffer damage in the event of a delay.

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE SELLER

      The Seller hereby  warrants and represents to Buyer, as of the date hereof
and as the Closing Date, as follows:

2.1   Shares; Agreements.

      The  Seller  has the  ability  and  has  obtained  any  and all  necessary
approvals,  including,  without  limitation,  that of its Board of Directors and
Shareholders,  to issue the Shares.  At the Closing,  the Seller  shall  execute
and/or deliver to Buyer, certificates or valid and marketable title representing
all the Shares clear of any Liens. There are no registration  rights agreements,
voting trust agreements, powers of attorney,  shareholder agreements,  operating
agreements,  partnership agreements,  proxies or any other Contracts relating to
the voting,  dividend or  economic  rights,  management  or Control  rights,  or
disposition  or pledge of the Shares or otherwise  granting any Person any right
in respect of such Shares,  with the exception of the  Shareholders'  Agreement,
and  except  for  this  Agreement  and  the  Ancillary  Agreements  executed  in
connection herewith,  there are no restrictions on the transfer of the Shares or
other the equity  securities of EU Inc.  other than those imposed by federal and
state securities laws, generally.

2.2   Status.

      Seller is duly  organized,  validly  existing  and in good  standing  as a
corporation  under the laws of the state of its formation and in any place where
it is doing  business.  Seller has the  requisite  power and authority to own or
lease all of its properties and assets and to conduct businesses as they are now
being conducted. Seller has no subsidiaries.

                                       3
<PAGE>

2.3   Authority.

      Seller has the power and  authority to execute and deliver this  Agreement
and the other Transaction Documents to which it is a party and to consummate the
transactions   contemplated   hereby  and  thereby.   All  company  actions  and
proceedings  necessary to be taken by or on the part of the Seller in connection
with this  Agreement and the other  Transaction  Documents and the  transactions
contemplated  hereby and thereby  have been or will prior to the Closing be duly
and  validly  taken.  This  Agreement  has been,  and at the  Closing  the other
Transaction Documents will be, duly and validly executed and delivered by Seller
and shall  constitute  the  legal,  valid and  binding  obligations  of  Seller,
enforceable  against it in accordance with and subject to their terms, except as
such  enforceability  may be limited by applicable  bankruptcy,  reorganization,
insolvency,  moratorium  or  other  similar  laws  from  time to time in  effect
affecting   creditors'   rights   generally  or  by  principles   governing  the
availability of equitable remedies.

2.4   Governmental Authorization.

      With the  exception of filing to do business in any State that is required
as a result of the Parties  agreement during the due diligence process and which
has been  recorded and approved by the Board of Directors of EU Inc on or before
the  Closing,  neither  Seller  nor  any  of its  Affiliates  nor  any of  their
respective  officers,  directors or managing employees is required to obtain any
material license, approval or consent from, or give any notice or make any other
filing  with  respect  to,  any  Regulatory  Authority  in  connection  with the
consummation  of the  transactions  contemplated by this Agreement and the other
Transaction Documents.

2.5   Non-Contravention.

      Neither the  execution  and delivery by Seller of this  Agreement  nor the
consummation  of the  transactions  contemplated  hereby  will (a)  violate  any
provision  of  the   organizational,   governing   documents,   or  articles  of
incorporation  of EU Inc., (b) result in a Default  under,  or require the other
contracting  party to Consent to the assignment or continuation of, any Material
Contract  to which  Seller is a party or by which any Asset of EU Inc. is bound,
(c) violate any Order against or binding upon EU Inc., (d) violate any agreement
with any  Governmental  Authority  with or in respect of EU Inc., (e) subject to
obtaining  the  governmental  authorizations  referred to in Section 2.4 hereof,
violate any Law, (f) result in a Default under, or otherwise cause an impairment
or a revocation  of, any Permit of EU Inc., or (g) result in the creation of any
Lien on any Asset of EU Inc.

2.6   Capitalization; Subsidiaries.

      The entire  authorized  capital stock or other equity interests of EU Inc.
and the number of shares of capital  stock or other equity  interests  which are
issued  and  outstanding  of EU Inc.,  including  the  Shares  to be  issued  in
connection with this Agreement, and the record and beneficial owners thereof are
as set forth in Schedule 2.6 attached hereto.  All of the outstanding  shares of
capital  stock and other equity  interests of EU Inc. are held free and clear of
all  Liens.  All of the  outstanding  shares of capital  stock and other  equity
interests of EU Inc. are fully paid and non-assessable.  None of the outstanding
shares of capital  stock and other equity  interests of EU Inc. have been issued
in   violation   of  any   pre-emptive   rights   of  the   current   or  former
shareholders/partners/members.  There are no outstanding equity  securities,  or
warrants,  options,  subscriptions,  convertible or  exchangeable  securities or
other Contracts pursuant to which EU Inc. is obligated to issue, sell, purchase,
retire or redeem any shares of capital  stock or other  equity  interests  of EU
Inc.

2.7   Changes.

      From the  effective  date of this  Agreement  through the Closing Date the
business of EU Inc. has been conducted  only in the ordinary  course of business
and there has not been:

      (a) any change in EU Inc.'s  authorized or issued  capital stock or equity
interests;  any grant of any stock option or right to purchase shares of capital
stock or equity  interest of EU Inc.;  any issuance of any security  convertible
into such capital stock or equity interest; any grant of any registration rights
with  respect  to  such  stock  or  equity  interest;   any  dividend  or  other
distribution or payment in respect of shares of capital stock or equity interest
in EU Inc.; any purchase,  redemption,  retirement,  or other  acquisition by EU
Inc. of any shares of its capital stock or equity interests;

                                       4
<PAGE>

      (b) any  amendment  to the  articles  of  incorporation,  bylaws  or other
organizational documents of EU Inc.;

      (c) any change in the assets, liabilities,  financial condition or results
of operations of EU Inc. from that reflected in the Financial Statements, except
changes  in the  ordinary  course  of the  Business  and  consistent  with  past
practices  that  individually,  or in the  aggregate,  have  not had a  Material
Adverse Effect;

      (d) any damage,  destruction or loss, whether or not covered by insurance,
materially  and  adversely  affecting  the  Business,  properties  or  financial
condition of Seller;

      (e) any  waiver  or  compromise  by  Seller  of a  valuable  right or of a
material debt owed to it;

      (f) any  satisfaction  or discharge of any lien,  claim, or encumbrance or
payment of any obligation by Seller,  except in the ordinary  course of business
consistent  with  past  practices  and  that is not  material  to the  Business,
properties or financial condition of Seller;

      (g) any new material  contract or  agreement  or any material  change to a
material  contract or agreement by which Seller or any of its assets is bound or
subject;

      (h) any material change in any compensation (including severance and other
benefits),  arrangement  or agreement  with any  employee,  officer,  manager or
member, except changes in the ordinary course of business,  consistent with past
practices;

      (i) any sale, assignment, transfer or license of any Intellectual Property
or any  settlement  regarding the breach or  infringement  of any license or any
Intellectual Property;

      (j) any  resignation  or  termination  of employment of any officer or key
employee  of Seller,  and Seller is not aware of any  impending  resignation  or
termination of employment of any such officer or key employee;

      (k) any  mortgage,  pledge,  transfer of a security  interest in, or Lien,
created by Seller,  with  respect to any of its material  properties  or assets,
except Liens for Taxes not yet due or payable;

      (l) any loan or guarantee made by Seller to any Person,  other than travel
advances and other  advances to  employees,  officers or  directors  made in the
ordinary course of its business, consistent with past practices;

      (m)  receipt of notice  that there has been a loss of, or  material  order
cancellation  by, any major  customer of, or  third-party  doing  business with,
Seller;

      (n) any  declaration,  setting aside or payment or other  distribution  in
respect to any of Seller's capital stock (or any securities  convertible into or
exchangeable for any such capital stock), or any direct or indirect  redemption,
purchase, or other acquisition of any of such capital stock by Seller;

      (o) to Seller's  Knowledge,  any other event or condition of any character
relating  principally  to the Business that is reasonably  likely to result in a
Material Adverse Effect;

      (p) any  material  transaction  or event  not in the  ordinary  course  of
business and consistent with past practices; or

      (q) any  change  in any  method  of  accounting  or  accounting  practice,
principles, methods or policies;

      (r) any  arrangement  or  commitment  by  Seller  to do any of the  things
described in this Section 2.7.

2.8   Taxes.

      Seller  has timely  filed all Tax  Returns  required  to be filed by or on
behalf of EU Inc.  for any  period on or before  the date  hereof,  taking  into
account any  extension  of time to file that has been  granted to or obtained on
behalf of Seller,  and all such Tax  Returns  are  correct  and  complete in all
material  respects.  Seller has paid when due all Taxes shown as due on such Tax
Returns. All other Taxes that are due (or claimed by any Regulatory Authority to
be due) in connection  with EU Inc., that are chargeable as a Lien upon EU Inc.,
or that may become due in connection  with EU Inc.,  have been paid or have been
adequately  reserved for in the books and records of Seller.  All Taxes required
to be withheld by EU Inc.  have been duly withheld and paid to the proper taxing
authority or properly  reserved for in accounts for such purpose.  No deficiency
for Tax has been asserted or assessed by a taxing  authority  against EU Inc. No
written  document or  comparable  consent  extending  or waiving,  or having the
effect of extending or waiving,  the  application  of the statute of limitations
with  respect to any Taxes or Tax Returns in respect of, or relating to EU Inc.,
and no power of  attorney  with  respect  to any such Taxes or Tax  Returns,  is
currently outstanding,  pending or otherwise in effect with the Internal Revenue
Service  ("IRS")  or any other  taxing  authority.  No Tax  Returns  or Taxes in
respect  of, or  relating  to EU Inc.  are  currently  under audit by any taxing
authority.

2.9   Financial Statements; Solvency; Current Assets.

      (a)  Schedule  2.9 shall  consist of complete  and  correct  copies of the
unaudited  consolidated balance sheet of EU Inc. as of December 31, 2005 and the
related  unaudited  consolidated   statements  of  income  and  cash  flow  from
operations   since  inception  (the  "Financial   Statements").   The  Financial
Statements  (i) are in accordance  with the books and records of EU Inc.,  which
have been  properly  maintained  and are  complete  and correct in all  material
respects,  (ii) have been prepared in accordance with GAAP consistently applied,
except that the interim Financial Statements are subject to normal and customary
year-end  adjustments which will not, in the aggregate,  be material,  and (iii)
present fairly the financial  position of EU Inc. as of the dates  indicated and
the results of their operations and cash flows for the periods indicated.

      (b) EU Inc.  has not  admitted in writing its  inability to pay its debts,
generally  as they  become  due;  filed or  consented  to the filing  against it
respectively  of a petition in bankruptcy or a petition to take  advantage of an
insolvency  act; made an assignment for the benefit of its creditors;  consented
to the  appointment of a receiver for itself or for the whole or any substantial
part of its  property;  had a petition  in  bankruptcy  filed  against  it; been
adjudged a bankrupt  or filed a petition  or answer  seeking  reorganization  or
arrangement  under the  federal  bankruptcy  laws or any law or  statute  of the
United States of America or any other jurisdiction.

      (c) All accounts receivable shown on the Financial  Statements  represent,
and the  accounts  receivable  of EU Inc.  outstanding  on the Closing Date will
represent,  sales actually made or services  actually  performed in the ordinary
course of business in bona fide  transactions  completed in accordance  with the
terms and provisions  contained in any documents relating thereto.  All accounts
receivable shown on the Existing  Receivables schedule will be fully collectible
to the extent not reserved for in the Existing Receivables schedule.

      (d) All Inventory,  except Inventory in transit,  whether reflected on the
Financial  Statements or  subsequently  acquired,  (i) is now and at the Closing
Date  will be  located  on the Real  Property  or on the  Leased  Real  Property
consistent with past practices,  (ii) to the extent acquired from third parties,
has been or will be acquired by EU Inc. only in bona fide  transactions  entered
into in the ordinary  course of business,  (iii) with respect to inventory  held
for resale, is valued at Inventory Value, and (iv) unless its Inventory Value is
zero,  is useable and salable at no less than  Inventory  Value in the  ordinary
course of business of EU Inc. EU Inc.  has now and on the Closing Date will have
valid  legal  title to its  Inventory  free and clear of any  Liens,  other than
Permitted  Liens.  The  quantities  of  all  categories  of  Inventory  are  not
excessive,  but  are  reasonable  and  consistent  with  past  practice.  To the
Knowledge  of Seller,  EU Inc.  has no  Liability  with respect to the return of
Inventory in the  possession  of  customers,  except for  potential buy backs of
excess  inventory  in the  ordinary  course at levels that are  consistent  with
historic experience and that are not in the aggregate material.

2.10  Absence of Undisclosed Liabilities.

      Except as and to the extent  accrued or reserved for and  disclosed in the
Financial Statements,  EU Inc. has no Liabilities,  other than those incurred in
the ordinary  course of business since the date of its  incorporation  on August
26, 2005, and not exceeding $10,000  individually and $100,000 in the aggregate.
EU Inc. is not  directly or  indirectly  liable,  by  guarantee,  indemnity,  or
otherwise,  upon or with  respect to, or  obligated,  by discount or  repurchase
agreement  or in any other way, to provide  funds in respect to, or obligated to
guarantee or assume any Liability of any other Person.

                                       5
<PAGE>

2.11  Materials Contracts and Agreements.

      (a) Except for agreements explicitly set forth in Schedule 2.11(a),  there
are no agreements,  understandings or proposed  transactions  between Seller and
any of its officers, directors, members, Affiliates, or any Affiliate thereof.

      (b) Except for agreements explicitly set forth in Schedule 2.11(a),  there
are no  agreements,  understandings,  instruments,  contracts or  commitments to
which  Seller is a party or by which it is bound  that (i)  involve  obligations
(contingent or otherwise) of, or payments to, Seller in excess of, $25,000, (ii)
involve the  license to or from  others,  or the  restriction,  of  Intellectual
Property,  other  than  end-user  licenses  granted  in the  ordinary  course of
business  consistent with past  practices,  (iii) involve the grant of rights to
manufacture,  produce,  assemble,  license,  market, or sell its products to any
other  person  or  affect  Seller's  exclusive  right to  develop,  manufacture,
assemble,  distribute,  market  or sell  its  products,  or (iv)  are  otherwise
material to the Business (collectively,  the "Contracts"). All the Contracts are
valid,  binding and in full force and effect in all material  respects.  Neither
Seller nor any of its  Affiliates  nor, to the  Knowledge  of Seller,  any other
party thereto has materially breached any of the Contracts. Seller has delivered
or made available to Buyer correct and complete copies of each of the Contracts.

      (c) Seller does not have any liability or  obligation  in connection  with
any  Contract  which  has been  terminated  by  Seller  or for  which  notice of
termination has been delivered by Seller.

      (d) After reasonable  inquiry,  Seller does not have Knowledge that any of
its  employees  is obligated  under or in  violation of any contract  (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment,  decree or order of any court or  administrative  agency,  that
would  materially  interfere  with the use of such  employee's  best  efforts to
promote  the  interest  of Seller or that  would  materially  conflict  with the
Business.  Neither the execution or delivery of this Agreement, nor the carrying
on of Seller's Business by the employees of Seller,  nor the conduct of Seller's
Business as proposed,  will, to Seller's  Knowledge  after  reasonable  inquiry,
conflict with or result in a breach of the terms, conditions,  or provisions of,
or constitute a default under, any contract,  covenant or instrument under which
any such employee is now obligated.

2.12  Litigation.

      Except as set forth on Schedule 2.12,  there is no Litigation,  proceeding
or  investigation  pending or, to the Knowledge of Seller,  threatened,  against
Seller, any of its Affiliates.

2.13  Compliance with Applicable Laws

      EU Inc. is in compliance in all material  respects with all Laws,  and has
not received any written notice  alleging any violation of any such Law. EU Inc.
is not currently subject to any fine, penalty,  Liability or restriction,  which
relates to EU Inc.  or its  Assets,  as a result of a failure to comply with any
Law, nor has EU Inc. received any notice of such non-compliance. EU Inc. has the
Permits  listed  by its  name on  Schedule  2.13  which  are all of the  Permits
necessary to conduct its business in the manner it is presently being conducted,
and all such  Permits  are valid and in full force and effect.  EU Inc.  has not
engaged  in any  activity  that is  reasonably  likely  to cause  revocation  or
suspension  of any  such  Permit  and no  action  or  proceeding  looking  to or
contemplating  the revocation or suspension of any such Permit is pending or, to
Knowledge of Seller, threatened.

2.14  Environmental Compliance; OSHA; MSHA.

Hereto,

      (a) EU Inc. is, and has been at all times, in material compliance with all
Environmental  Laws. EU Inc. has not (i) been  notified  that it is  potentially
liable under or (ii)  received any written  requests  for  information  or other
correspondence under, any Environmental Law;

      (b)  EU  Inc.  has   prepared  and  timely  filed  with  the   appropriate
jurisdictions  all reports and filings  required  pursuant to any  Environmental
Law, and such reports and filings were accurate in all material respects;

      (c) EU Inc. has not entered  into or  received,  nor is EU Inc. in Default
under, any Order (draft or final) relating to environmental protection;

                                       6
<PAGE>

      (d) EU Inc. has obtained all Environmental  Permits and has been and is in
material compliance with each such Environmental Permit;

      (e) EU Inc. has not been, or is not currently, a "generator" of "hazardous
waste" (as those terms are defined by the Resource Conservation and Recovery Act
of 1976, or any analogous state, and the regulations promulgated thereunder);

      (f) All waste  containing  any  Hazardous  Material  disposed  at off-site
locations by EU Inc.,  or sent by EU Inc. for disposal at an off-site  location,
has been  released  or  disposed  of in  compliance  with  applicable  reporting
requirements  under  Environmental  Laws,  and there  are not any  environmental
claims,  requests  for  information  from a  Governmental  Authority  or written
demands to take  response,  removal,  corrective,  remedial or other  responsive
action or to pay for the costs of any such  action at the site with  respect  to
any such release or disposal;

      (g) There is no Litigation pending or, to Seller' Knowledge, threatened by
any  Governmental  Authority  or other  Person,  against  EU Inc.  or any Seller
relating to environmental protection, compliance with Environmental Laws, or the
condition  of the Leased Real  Property or the Real  Property  or, to the Actual
Knowledge of Seller, any real property  previously owned,  operated or leased by
EU Inc.;

      (h) (i) There are no  Hazardous  Materials  (A) at, on, in, above or under
the Real  Property,  the Leased Real  Property or any real  property  previously
owned,  operated or leased by EU Inc.,  (B)  originating  or emanating  from any
other  property that are present in, on, under or above the Real  Property,  the
Leased Real Property or any real property  previously owned,  operated or leased
by EU Inc., or (C)  originating or emanating from the Real Property,  the Leased
Real Property or any real property  previously  owned,  operated or leased by EU
Inc.  that are present in, on,  under or above any other  property,  and (ii) no
Hazardous  Materials have ever been  generated,  treated,  stored,  disposed of,
handled on, spilled,  discharged or released on or from or removed from the Real
Property,  the Leased  Real  Property  or any real  property  previously  owned,
operated or leased by EU Inc.;

      (i) To the Knowledge of Seller,  no audit or other  investigation has been
conducted as to  environmental  matters at the Leased Real  Property or the Real
Property  other than Phase 1s in the  ordinary  course of  business  and Buyer's
diligence inquiries;

      (j) EU Inc. has not operated,  nor, to Seller' Knowledge has a third party
operated,  an  underground  storage tank on the Real Property or the Leased Real
Property,  and, to Seller' Knowledge,  no underground  storage tanks are located
on, nor have any underground  storage tanks been removed from, the Real Property
or the Leased Real  Property or to Seller'  Actual  Knowledge  any real property
previously owned, operated or leased by EU Inc.;

      (k) To the extent in the possession or control of the Seller,  Seller have
provided  to  Buyer  true  and   complete   copies  of  all  reports  and  other
documentation regarding any environmental assessment,  testing or sampling at or
with  respect to the Real  Property  or the  Leased  Real  Property  or any real
property previously owned, operated or leased by EU Inc.; and

      (l) EU Inc. is in compliance,  and has at all times been in compliance, in
all material  respects,  with the Occupational  Safety and Health Act, 29 U.S.C.
ss.ss. 651, et seq., and with the Mined Safety Health Act, 30 U.S.C. ss.ss. 801,
et seq.

2.15  Leases, Other Real Property.

      (a) No  real  property,  or  interest  in  real  property,  is used in the
operation of EU Inc. except for the Leased Premises, listed on Schedule 2.15(a).
Seller has delivered to Buyer correct and complete copies of the Leases.

      (b) Each Lease is the legal,  valid and binding  obligation of Seller and,
to Seller's Knowledge, the other signatories thereto, and each is enforceable in
accordance  with its  terms,  except as such  enforceability  may be  limited by
applicable bankruptcy,  reorganization,  insolvency, moratorium or other similar
laws from time to time in effect  affecting  creditors'  rights  generally or by
principles  governing  the  availability  of  equitable  remedies.   Seller  has
performed in all material  respects all obligations  required to be performed by
it under the Leases and is not in default thereunder,  and no event has occurred
which,  with the  lapse of time or  action by a third  party  could  result in a
default by Seller, or, to Seller's Knowledge,  by any other party thereto, under
any Lease.  Seller  enjoys  peaceful and  undisturbed  possession  of the Leased
Premises under its Leases.

                                       7
<PAGE>

      (c) To Seller's  Knowledge,  each of the Leased  Premises is in compliance
with all Applicable Law, including applicable building,  zoning, subdivision and
other land use and similar  laws and  regulations  affecting  the Real  Property
(collectively,  "Real Property Laws"),  except to the extent that the failure to
be in compliance with such Real Property Laws would not be reasonably  likely to
have a  Material  Adverse  Effect,  and Seller  has not  received  any notice of
violation or claimed  violation and, to the Knowledge of Seller, no violation is
threatened in respect of any Real Property Law.

      (d) Seller has no Knowledge that (i) any real property taxes, sales levies
or assessments  with respect to the Leased  Premises which are payable by Seller
have not been paid in full or (ii) any  proceedings  with  respect  thereto have
been commenced.

      (e)  Schedule  2.15(e)  sets  forth a list and  location  of all  Personal
Property of EU Inc. having an original or replacement value greater than $5,000.
EU Inc. (i) has good and valid title to all of the Personal Property it purports
to own and (ii) owns such  Personal  Property free and clear of all Liens except
for Permitted Liens. All of the Personal  Property,  whether owned or leased, by
EU Inc. are in the possession and control of EU Inc., and, if leased,  is leased
subject  to one or more of the  valid and  binding  leases  listed  on  Schedule
2.11(a).  No Seller,  third  party or  Affiliate  of any Seller has any claim or
interest in any of the Personal Property of EU Inc..

      (f) The Assets of EU Inc.  are in good  operating  condition  and  repair,
ordinary wear and tear excepted, and such Assets include all rights, properties,
interest in properties and other Assets  necessary to permit EU Inc. to continue
its business after the Closing Date as presently  conducted.  The Seller have no
Actual  Knowledge  of any  present  or  future  condition  or  state of facts or
circumstances that would prevent EU Inc. from carrying on its business after the
Closing Date in the same manner as it is presently being carried on. EU Inc. has
only  conducted  its  business  under  such names and at such  locations  as are
identified  on Schedule  2.15(f) and all of the Assets of EU Inc. are  currently
located at those locations identified on Schedule 2.15(f).

2.16  Intellectual Property.

      (a) Schedule  2.16 sets forth a complete and accurate list of all patents,
trademarks,  trade names,  service marks, domain names,  copyrights and computer
software  (excluding  commonly  available  software  acquired  via  shrink  wrap
licenses) used in the conduct of the business of EU Inc.. Except as set forth on
Schedule 2.16, EU Inc. owns or has the uncontested right to use all Intellectual
Property necessary for the conduct of its business as presently  conducted.  For
purposes  of this  Agreement,  the  term  "Intellectual  Property"  shall  mean,
collectively,  patents,  designs,  inventions,  trademarks,  trade names, domain
names, service marks, copyrights, computer software, manufacturing processes and
confidential or proprietary information.

      (b) No claim is pending,  or to the  Knowledge of Seller  threatened,  and
Seller  has not  received  any  written  notice  that the  conduct  of EU Inc.'s
business  (including without limitation,  its use of any Intellectual  Property)
infringes  upon,  misappropriates  or conflicts with any rights in  Intellectual
Property claimed by any third party. No claim is pending, or to the Knowledge of
Seller  threatened,  which  alleges  that  any  Intellectual  Property  owned or
licensed  by or to EU Inc.  or which EU Inc.  otherwise  has the right to use is
invalid or unenforceable by EU Inc.

      (c) Except as set forth in Material  Contracts listed on Schedule 2.11(a),
no  royalties  or  fees  are  payable  by EU  Inc.  to  anyone  for  use  of any
Intellectual Property.

                                       8
<PAGE>

2.17  Employee Benefit Plans; ERISA.

      (a)  Schedule  2.17  lists  and  identifies  each  Employee  Benefit  Plan
maintained or contributed to by Seller,  or under which Seller has any liability
or contingent  liability,  that provides or may provide benefits or compensation
in respect of any Employee or former Employee of Seller or the  beneficiaries or
dependents of any such  Employee or former  Employee or under which any Employee
is or may become  eligible to participate or derive a benefit and that is or has
been maintained or established by Seller.  Seller has provided or made available
to the Buyer complete and correct copies of: (i) such Employee  Benefit Plan, if
written, or a description of such Employee Benefit Plan if not written, and (ii)
to the extent  applicable to such Employee  Benefit Plan, all trust  agreements,
insurance  contracts or other  funding  arrangements,  the two lost recent trust
reports, the two most recent Forms 5500 required to have been filed with the IRS
and all schedules thereto, the most recent IRS determination letter, all current
summary plan descriptions,  all material communications received from or sent to
the IRS or the Department of Labor (including a written  description of any oral
communication),  if any,  and  all  amendments  and  modifications  to any  such
document.  Seller has not communicated to any Employee any binding commitment to
modify any Employee Benefit Plan or to establish or implement any other employee
or retiree benefit compensation plan or arrangement.

      (b) Each Employee  Benefit Plan is in material  compliance with Applicable
Laws and has been and currently is administered  and operated in accordance with
its terms in all material respects. Each Employee Benefit Plan which is intended
to be `qualified'  within the meaning of section 401(a) of the Code has received
a  favorable  determination  letter  from  the  IRS or is  within  the  remedial
amendment  period with respect to such plan's  qualified status since the plan's
inception or the most recent determination letter, and no event has occurred and
no  condition  exists  which  could  reasonably  be  expected  to  result in the
revocation  of any such  determination.  There are no  material  pending  or, to
Seller's  Knowledge,  threatened  claims by or on behalf of any of the  Employee
Benefit Plans, by any Employee or otherwise  involving any such Employee Benefit
Plan or the assets of any Employee  Benefit Plan (other than routine  claims for
benefits).

      (c) No Employee Benefit Plan is a "multiemployer  plan" within the meaning
of section  4001(a)(3)  of ERISA or a "multiple  employer  plan" as addressed in
section 413 of the Code. None of the Employee Benefit Plans,  now, or within the
preceding  six  years,  is or has been  subject  to Title IV of  ERISA.  None of
Seller,  or any entity  required to be  aggregated  with Seller for  purposes of
section 414 of the Code or section 4001 of ERISA  ("Related  Persons")  has ever
maintained,  contributed  to,  or had any  liability  for any  employee  pension
benefit  plan (as defined in section  3(2) of ERISA) that is or has been subject
to Title IV of ERISA.

      (d) Neither Seller nor any Related Person has incurred (either directly or
indirectly, including as a result of an indemnification obligation) any material
liability under or pursuant to Title I or IV of ERISA or the penalty, excise Tax
or joint and  several  liability  provisions  of the Code  relating  to Employee
Benefit  Plan and,  to the  Knowledge  of Seller  after due  inquiry,  no event,
transaction  or  condition  has occurred or exists that could result in any such
liability to Seller any such Related Person or, following the Closing, the Buyer
or any of its Affiliates.  All required  contributions to, and all payments with
respect to, the Employee Benefit Plans have been timely made.

      (e) The  consummation of the  transactions  contemplated by this Agreement
will not (i)  entitle any current or former  employee,  officer,  or director of
Seller to any  severance or  termination  pay, or (ii) increase the amount of or
accelerate  the time of  payment  of any  compensation  due any  such  employee,
officer, or director.

2.18  Labor Matters, etc.

      Seller is not a party to or bound by any collective  bargaining  agreement
and there are no labor unions or other organizations representing, purporting to
represent or attempting to represent any employees  employed in the operation of
EU Inc. There has not occurred or, to the Knowledge of Seller,  been  threatened
any material strike, slowdown,  picketing,  work stoppage,  concerted refusal to
work  overtime or other  similar  labor  activity  with respect to any employees
employed  in the  operation  of EU Inc.  There are no labor  disputes  currently
subject to any grievance  procedure,  arbitration  or litigation and there is no
representation  petition  or, to the  Knowledge  of  Seller,  no  representation
application  pending or threatened with respect to any employee  employed in the
operation of EU Inc.  Seller has complied with all provisions of Applicable Laws
pertaining to the employment of employees,  including,  without limitation,  all
such  Applicable  Laws  relating  to labor  relations,  equal  employment,  fair
employment practices,  entitlements,  prohibited discrimination or other similar
employment  practices  or acts,  except to the extent the failure to comply with
such Applicable Laws would not be reasonably  likely to have a Material  Adverse
Effect.

                                       9
<PAGE>

2.19  Business Relationships.

      The relationships between EU Inc. and all customers,  clients, third party
payors,  suppliers,  vendors,  employees  and those others who receive goods and
services  from or provide  goods and services to EU Inc. are in the  reasonable,
good faith judgment of Seller, satisfactory, and EU Inc. has no Knowledge of (a)
any facts or  circumstances  which could  reasonably  be expected to  materially
alter, negate,  impair or in any way adversely affect the continuity of any such
relationships,  excluding  any event,  occurrence  or condition to the extent it
results  from  changes  in the Nevada  economy  in  general or (b) any  material
complaints,  claims,  threats,  plans or  intentions to  discontinue  or curtail
relations under any such relationships. EU Inc. is not required, in the ordinary
course of  business,  to provide  any  bonding or any other  financial  security
arrangements in connection with its transactions with any customer or supplier.

2.20  Insurance Policies.

      All of the Assets,  employees and  operations of EU Inc. are insured under
various  policies  of general  liability  and other  forms of  insurance,  which
policies  are of the type  and in the  amounts  in the  reasonable,  good  faith
judgment of Seller  customary and adequate for the business of EU Inc..  Correct
and complete  copies of all current  insurance  policies and  certificates of EU
Inc.  have been  delivered to Buyer prior to the date of this  Agreement and all
current policies are in full force and effect and enforceable in accordance with
their terms.  EU Inc. is not in Default  regarding  the  provisions  of any such
policy,  including,  without  limitation,  failure to make timely payment of all
premiums due thereon.  To the  Knowledge of the Seller',  EU Inc. has never been
refused,  or denied  renewal of, any insurance  coverage by insurance  companies
offering such  insurance.  Seller have provided to Buyer copies of all insurance
audit reports, loss prevention reports, all claims made and loss history reports
in respect of any  insurance  maintained by EU Inc. or any  predecessor  thereof
during the past five (5) years.

2.21  Related Party Transactions.

      Except as set forth on Schedule 2.21 there are no existing arrangements or
proposed  transactions (a) between EU Inc., and (i) any Seller or any officer or
director  of EU  Inc.  or any  member  of  the  immediate  family  of any of the
foregoing  persons (such Seller,  officers,  directors and family  members being
hereinafter individually referred to as a "Related Party"), or (ii) any business
(corporate  or otherwise)  which a Related  Party owns, or controls  directly or
indirectly,  or in which a  Related  Party  has an  ownership  interest,  or (b)
between any Related Party and any business  (corporate or otherwise)  with which
EU Inc. regularly does business material to the operations of EU Inc.

2.22  Brokerage and Financial Advisors.

      No broker, finder or financial adviser has acted directly or indirectly as
such  for,  or is  entitled  to any  compensation  from,  the  Seller  or  their
Affiliates in connection  with this Agreement or the  transactions  contemplated
hereby.

2.23  Warranties True and Correct.

      No warranty or  representation  by the Seller contained in this Agreement,
the exhibits or schedules attached hereto, or in any Ancillary  Agreement taking
into account Knowledge,  Actual Knowledge and materiality  qualifying  language,
contains or will  contain any untrue  statement of fact or omits or will omit to
state any material fact required to make the statements  therein  contained,  in
light of the circumstances in which they were made, not misleading.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER

      Buyer hereby represents and warrants to the Seller as follows:

3.1   Status.

      Buyer  is a  corporation  duly  organized,  validly  existing  and in good
standing  under the laws of the State of Nevada and has all requisite  power and
authority required to carry on its business as now conducted.

                                       10
<PAGE>

3.2   Authority.

      Buyer has the power and  authority to execute and deliver  this  Agreement
and the other Transaction Documents to which it is a party and to consummate the
transactions   contemplated   hereby  and  thereby.   All  company  actions  and
proceedings  necessary to be taken by or on the part of the Buyer in  connection
with this  Agreement and the other  Transaction  Documents and the  transactions
contemplated  hereby and thereby  have been or will prior to the Closing be duly
and  validly  taken.  This  Agreement  has been,  and at the  Closing  the other
Transaction  Documents will be, duly and validly executed and delivered by Buyer
and  shall  constitute  the  legal,  valid  and  binding  obligations  of Buyer,
enforceable  against it in accordance with and subject to their terms, except as
such  enforceability  may be limited by applicable  bankruptcy,  reorganization,
insolvency,  moratorium  or  other  similar  laws  from  time to time in  effect
affecting   creditors'   rights   generally  or  by  principles   governing  the
availability of equitable remedies.

3.3   Non-Contravention, Approvals and Consents.

      (a) Neither the execution and delivery by Buyer of this  Agreement and the
other  Transaction  Documents to which it is a party nor the consummation of the
transactions  contemplated hereby and thereby is an event that, in and of itself
or with the giving of notice or the passage of time or both,  will (i)  conflict
with the Buyer's  organizational  documents,  (ii) constitute a violation of, or
conflict  with or result in any breach of or any default  under,  or  constitute
grounds for termination or acceleration of, any material agreement or instrument
to  which  Buyer is a party or by  which  Buyer  is bound or (iii)  violate  any
Governmental  Approval,  material judgment,  decree or order or statute, rule or
regulation applicable to Buyer.

      (b) Neither Buyer nor any of its  Affiliates  nor any of their  respective
officers,  directors  or managing  employees  is required to obtain any material
license,  approval or consent  from, or give any notice or make any other filing
with respect to, any Regulatory Authority in connection with the consummation of
the  transactions  contemplated  by this  Agreement  and the  other  Transaction
Documents,  except  for  approvals  allowing  Buyer to assume  and  perform,  or
novations of, the Government Contracts.

ARTICLE 4 COVENANTS

      From the date of this  Agreement  until  the  completion  of the  Closing,
subject to the requirements of Applicable Law and Regulatory Authorities, Seller
shall comply with the covenants set forth in this Article 4.

4.1   Operation of the Business.

      Seller  shall  cause the  Business  to  continue  to be  carried on in the
ordinary course and consistent with past practices in compliance in all material
respects with all Applicable Laws and Seller shall use  commercially  reasonable
efforts to preserve the Business,  its operations and employees and the goodwill
of its customers and others having business  relations with it. Without limiting
the  generality of the  foregoing,  without the prior written  consent of Buyer,
Seller  covenants  and agrees  that Seller will not do or agree to do any of the
following  (other  than in the  ordinary  course  of  business  consistent  with
Seller's past practices) on or before the Closing:

      (a) grant any increase in salary,  fringe  benefits or other  compensation
payable,  or to become  payable,  by Seller to any officer,  employee,  agent or
representative of Seller;

      (b) enter into any contract, commitment or transaction;

      (c) make capital  expenditures on or lease any items of capital  equipment
having a cost in excess of $15,000 in the aggregate;

      (d) sell or dispose of any capital  equipment other than capital equipment
which is worn out or obsolete;

      (e) waive, cancel or compromise any material right or claim of Seller;

      (f) modify,  amend, cancel or terminate any material contract or agreement
by which Seller or any of its assets is bound; or

      (g) knowingly take any action that would cause any of the  representations
and warranties set forth in Article 2 to be untrue in any material respect.

                                       11
<PAGE>

      Seller  covenants  and  agrees  that  Seller  will do or  agree  to do the
following continuously until the Closing:

      (i) conduct all Tax affairs relating to Seller other than in substantially
the same manner as such affairs would have been conducted if the parties had not
entered into this Agreement.

4.2   Application for Regulatory Consent and Licenses.

      To the extent that Buyer or its  Affiliates  requires any license or other
approvals,  consents or authorizations  from, or is required to give or make any
notices to or filings with respect to, any Regulatory  Authority to permit Buyer
or its  Affiliates  to conduct the  Business  from and after the  Closing  Date,
including,  without limitation, any relating to the Government Contracts, Seller
shall use all commercially  reasonable efforts, as promptly as practicable after
the date of this  Agreement,  and in no event later than fifteen (15) days after
the date of this  Agreement,  to assist  Buyer in the  filing  of all  requisite
applications  and  make  all  other  requisite   filings  with  the  appropriate
Regulatory Authorities in all cases at Buyer's expense.  Seller shall diligently
assist Buyer in taking all steps (at Buyer's expense) that are necessary, proper
or  desirable  to  expedite  the  preparation  of such  regulatory  and  license
applications and filings and their prosecution to a favorable conclusion. Seller
will promptly provide Buyer with copies of any application, amendment, pleading,
notice, order, request for additional  information or other document filed by it
or served on it relating to such applications. Buyer shall cooperate with Seller
and provide to Seller all information regarding the Business reasonably required
by Seller for use in connection with such applications and filings.

4.3   Access to Facilities, Files and Records.

      During the Due  Diligence  Period (as that term is defined in Section 8.1)
and in addition to its  obligations of disclosure  contained in this  Agreement,
the Seller and its  Affiliates  will give or cause to be given to the  officers,
employees,  accountants,  counsel and  authorized  representatives  of Buyer (a)
reasonable  access during normal business hours upon reasonable  prior notice to
the management personnel,  property, and provide copies of the Contracts, Leases
and other  records and files  relating to the Business and Buyer's due diligence
thereof,   other  than  matters   which,   by  their   terms,   are  subject  to
confidentiality  agreements with third parties or which are documents subject to
the  attorney-client  privilege  which  matters will be  disclosed  and shall be
reasonably  satisfactory  to Seller as a condition to Closing,  and (b) all such
other  information  solely  relating to the  transactions  contemplated  by this
Agreement as Buyer may reasonably request.

4.4   Notice of Proceedings.

      Seller will  promptly  notify Buyer in writing upon (a) becoming  aware of
any order or decree or any complaint praying for any order or decree restraining
or  enjoining  the  execution  of  this  Agreement  or the  consummation  of the
transactions  contemplated hereunder, or (b) receiving any notice from any court
or  any  Regulatory  Authority  of its  intention  (i) to  institute  a suit  or
proceeding  to  restrain  or  enjoin  the  execution  of this  Agreement  or the
consummation of the  transactions  contemplated  by this  Agreement,  or (ii) to
nullify or render ineffective this Agreement if executed or such transactions if
consummated.

4.5   Reasonable Commercial Efforts.

      Subject  to the  terms  of this  Agreement,  Seller  agrees,  at its  sole
expense,  to use its  reasonable  commercial  efforts in good faith to take,  or
cause to be  taken,  all  actions,  and to do, or cause to be done,  all  things
necessary  under  Applicable  Laws to permit  consummation  of the  transactions
contemplated  hereby  and by the other  Transaction  Documents  as  promptly  as
practicable and otherwise enable  consummation of the transactions  contemplated
hereby,  including  satisfaction  of the  conditions  set forth in  Section  5.2
hereof, and shall cooperate fully with Buyer to that end.

4.6   Notification of Certain Matters.

      Seller  shall  give  prompt  notice  to  Buyer  of  any  fact,   event  or
circumstance  known to it that (a) is reasonably  likely,  individually or taken
together with all other facts,  events and circumstances  known to it, to result
in any Material  Adverse Effect or (b) would cause or constitute a breach of any
of its representations, warranties, covenants or agreements contained herein.

                                       12
<PAGE>

4.7   Expenses.

      Except as otherwise  specifically provided in this Agreement,  the parties
to this Agreement shall bear their  respective  expenses  incurred in connection
with the  preparation,  execution  and  performance  of this  Agreement  and the
transactions  contemplated hereby, including,  without limitation,  all fees and
expenses of agents, representatives,  counsel, investment bankers, actuaries and
accountants, and all such expenses of EU Inc. shall be either paid in full prior
to Closing or EU Inc shall  procure that such  expenses  shall be paid by the EU
Shareholders.

ARTICLE 5 CONDITIONS TO CLOSING

5.1   Conditions to Obligations of Each Party.

      The respective  obligations  of each party to consummate the  transactions
contemplated hereby are subject to completion of their Due Diligence obligations
(as defined in Article 8) and the further  fulfillment prior to or at Closing of
the following  conditions  and the conditions set forth in Sections 5.2 and 5.3,
unless waived by the Seller and Buyer in writing:

      (a) No action,  proceeding,  investigation or legislation  shall have been
instituted,  threatened  or  proposed  before any  Governmental  Body to enjoin,
restrain, prohibit or obtain substantial damages in respect of this Agreement or
the consummation of the transactions contemplated hereunder; and

      (b)  The  completion  and  execution  of any  and  all  agreements  and/or
modifications to agreements that may be identified in the Due Diligence  carried
out by the Buyer that will establish,  secure, define or otherwise contribute to
the  proposed  business  of EU Inc in  accordance  with  the  intentions  of the
parties.

5.2   Conditions to the Obligations of Seller.

      The obligations of the Seller to consummate the transactions  contemplated
hereby are subject to the  fulfillment  prior to or at Closing of the  following
conditions, unless waived by the Seller in writing:

      (a) All of the covenants and obligations that Buyer is required to perform
or to comply with  pursuant to this  Agreement at or prior to the Closing  shall
have been duly performed and complied with in all material respects;

      (b) Each of  Buyer's  representations  and  warranties  contained  in this
Agreement  shall be true and correct in all material  respects as of the date of
this Agreement and as of the Closing Date as if made on the Closing Date (except
as to any  representation  or warranty that  specifically  relates to an earlier
date,  which shall be true and correct in all  respects  only as of such date or
time  period);  provided  that  any  such  representation  or  warranty  with  a
qualification  or limitation by reference to the  materiality  of matters stated
therein or as to matters having or not having a Material Adverse Effect or words
of similar effect shall be true and correct in all respects; and

      (c) Seller shall have received  from Buyer a certificate  signed by a duly
authorized  officer  of Buyer to the  effect  that the  conditions  set forth in
Section 5.2(a) and (b) have been satisfied.

      (d)  Seller  shall  have  received  from  Buyer  a  certified  copy of the
resolutions duly adopted by CTC's board of directors approving the execution and
delivery of this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby.

5.3   Conditions to Obligations of Buyer.

      The  obligations  of Buyer to  consummate  the  transactions  contemplated
hereby are subject to the  fulfillment  prior to or at Closing of the  following
conditions, unless waived by Buyer in writing:

      (a) All of the  covenants  and  obligations  that EU Inc.  are required to
perform or to comply with pursuant to this  Agreement at or prior to the Closing
shall have been duly performed and complied with in all material respects;

      (b)  Each  Seller's  representations  and  warranties  contained  in  this
Agreement  shall be true and correct in all material  respects as of the date of
this Agreement and as of the Closing Date as if made on the Closing Date (except
as to any  representation  or warranty that  specifically  relates to an earlier
date,  which shall be true and correct in all  respects  only as of such date or
time  period);  provided  that  any  such  representation  or  warranty  with  a
qualification  or limitation by reference to the  materiality  of matters stated
therein or as to matters having or not having a Material Adverse Effect or words
of similar effect shall be true and correct in all respects;

                                       13
<PAGE>

      (c) Buyer shall have received from the Seller each of the following:

            (i) A  certificate  signed  by the  Seller  to the  effect  that the
conditions set forth in Section 5.3(a) and (b) have been satisfied;

            (ii) A certified copy of the  resolutions  duly adopted by EU Inc.'s
board of directors  approving the  execution and delivery of this  Agreement and
the consummation of the transactions contemplated hereby;

            (iii) A certificate of good standing  regarding EU Inc. certified by
the  Secretary  of State of the  State of Nevada  dated not more than  seven (7)
business days prior to the Closing;

            (iv) A copy of the charter, articles of incorporation, bylaws and/or
other  organizational and governing documents of EU Inc.,  certified as true and
in full force and effect as of the Closing by such EU Inc.'s  Secretary or other
duly authorized representative;

            (v) Complete copies of all shareholders' and directors'  resolutions
since the incorporation of EU Inc.;

            (vi)  Documentation  duly  executed  and  evidencing  conveyance  of
unencumbered  title to the Shares to the Buyer together with a certified copy of
the entire  share  transfer  log showing the transfer as well as all other prior
issuances and transfers;

            (vii) A  certified  copy of the minutes of a  Shareholders'  Meeting
held on the date of the Closing that shall implement the following resolutions:

                  i.    Nomination  of the new  directors  of the EU Inc.  whose
                        identities have been agreed prior to closing;

                  ii.   Any  initial  changes  to the Bylaws of EU Inc that have
                        been agreed prior to closing.

            (viii) A certified copy a resolution of the Board of Directors of EU
Inc. that shall implement the following resolutions:

                  i.    Nomination  of all of the  officers  of EU Inc. to their
                        respective positions, including as a minimum, persons to
                        assume  the  roles  of  the  President/Chief   Executive
                        Officer, the Corporate  Secretary,  the Treasurer/Senior
                        Financial Officer;

                  ii.   Location of the US head office of EU Inc.  together with
                        a decision to apply to do  business  within the State in
                        which  such  office is  located  and  authorization  for
                        filing the same;

                  iii.  Establishment of the Financial year of EU Inc;

                  iv.   Appointment of the auditors of EU Inc;

                  v.    Approval of any  important  operating  matters that have
                        been identified and agreed during due diligence

            (ix)  An  executed  original  of  the  Shareholders'   Agreement  as
contemplated herein;

            (x) A certificate  attesting to the accuracy and completeness at the
Effective  Time of (1) the list of all of the assets of EU Inc appended  thereto
and (2) the list of all of the agreements to which EU Inc is a party or by which
it may be bound (with copies of all such written agreements appended thereto);

            (xi) An  opinion  of  counsel  to Seller  substantially  in the form
attached hereto as Exhibit 5.3(c)(vi);

      (d) There shall not have been any Material  Adverse Effect with respect to
EU Inc. or their Assets  between the date hereof and the Closing Date, and Buyer
shall have  received a certificate  dated as of the Closing Date,  signed by the
Seller to such effect.

                                       14
<PAGE>

ARTICLE 6 TERMINATION

6.1   Termination by Mutual Consent.

      This Agreement may be terminated and the transactions  contemplated hereby
may be  abandoned  at any time  prior to the  Closing  pursuant  to the terms of
Section 8.1 or by mutual written consent of Seller and Buyer.

6.2   Termination by Either Seller or Buyers.

      This Agreement may be terminated and the transactions  contemplated hereby
abandoned  (a) on written  notice by either  the Seller or Buyer if the  Closing
shall  not have  occurred  by May 1,  2006 (the  "Termination  Date"),  provided
however, that any cure period provided to any party pursuant to Sections 4.3 and
6.4 shall move the  Termination  Date to another date that is the same number of
days removed from any fixed  Termination Date as the length of such cure period;
(b) on written  notice by either  the  Seller or Buyer if any Order  permanently
restraining, enjoining or otherwise prohibiting consummation of the transactions
contemplated by this Agreement shall become final and non-appealable;  provided,
that the right to terminate  this  Agreement  pursuant to clause (a) above shall
not be available to Seller if Seller,  or to Buyer if Buyer, has breached in any
material respect his or its obligations  under this Agreement in any manner that
shall have  proximately  contributed  to the  occurrence  of the  failure of the
transactions contemplated by this Agreement to be consummated.

6.3   Termination by Seller.

      This Agreement may be terminated and the transactions  contemplated hereby
abandoned at any time prior to the Closing Date by the Seller on written  notice
to Buyer if (i) any  condition  in Section 5.1 or Section  5.2 is not  performed
(other  than as a result  of a  Default  by  Seller  in the  performance  of its
obligations hereunder) and the performance of such condition has not been waived
by Seller in writing at or prior to the Closing  Date,  or (ii) there has been a
material breach by Buyer of any representation,  warranty, covenant or agreement
contained  in this  Agreement  that is not curable or, if curable,  is not cured
within 20 business days after  written  notice of such breach is given by Seller
to Buyer.

6.4   Termination by Buyer.

      This Agreement may be terminated and the transactions  contemplated hereby
abandoned  at any time prior to the Closing  Date by Buyer on written  notice to
Seller if (i) any  condition  in  Section  5.1 or Section  5.3 is not  performed
(other  than as a  result  of a  Default  by  Buyer  in the  performance  of its
obligations hereunder) and the performance of such condition has not been waived
by Buyer in  writing  at or prior to the  Closing  Date,  (ii)  there has been a
material breach by Seller of any representation, warranty, covenant or agreement
contained  in this  Agreement  that is not curable or, if curable,  is not cured
within 20 business days after written notice of such breach is given by Buyer to
the Seller, or (iii) any condition in Section 8.1 is unsatisfactory to Buyer, at
Buyer's sole discretion.

6.5   Effect of Termination and Abandonment.

      In the event of termination  of this Agreement and the  abandonment of the
transactions pursuant to this Article 6, this Agreement shall become void and of
no effect;  provided,  however,  that the  provisions  of this  Section 6.5, and
Articles  7,  9  and  10  (excluding   Section  9.10)  shall  survive  any  such
termination,  and any such termination shall not relieve any party hereto of any
Liability for damages resulting from any prior breach of this Agreement.

ARTICLE 7 INDEMNIFICATION

7.1   Survival.

      All agreements,  covenants,  representations and warranties made by Seller
in this Agreement or pursuant  hereto or in any certificate  delivered  pursuant
hereto shall  survive the Closing  Date for the time  periods  indicated in this
Article 7. The representations, warranties, covenants and agreements made by any
of the Seller shall not be affected or deemed  waived by reason of the fact that
Buyer or its  Representatives  should have known that any such  representations,
warranties,  covenants or agreements  are or might be inaccurate in any respect.
Any  furnishing  of   information  to  Buyer  by  Seller  or  their   respective
Representatives,  pursuant to, or otherwise in connection  with,  this Agreement
shall not waive Buyer's right to rely on any representation,  warranty, covenant
or agreement made by any of the Seller.

                                       15
<PAGE>

7.2   Agreement of Seller to Indemnify.

      Subject  to  the   provisions  of  this  Article  7,   regardless  of  any
investigation  (including any  environmental  investigation or assessment or any
due  diligence  review  or  investigation)  conducted  with  respect  to, or any
knowledge  acquired  (or capable of being  acquired) at any time before or after
the  execution and delivery of this  Agreement,  the Seller agrees to indemnify,
defend, and hold harmless the Buyer Group from, against,  for, and in respect of
any and all Losses  asserted  against,  imposed  upon,  or incurred by the Buyer
Group by reason of, resulting from, based upon, or arising out of:

      (a) the breach of any  representation  or warranty of any Seller contained
in or made  pursuant  to  this  Agreement,  any  Ancillary  Agreement  or in any
certificate, Schedule, or Exhibit attached hereto or specifically required to be
delivered hereunder. For purposes of determining whether any Seller has breached
any such  representation  or warranty,  any  qualification or limitation of such
representation  or warranty by reference to the  materiality  of matters  stated
therein or as to matters having or not having a Material Adverse Effect or words
of similar effect shall be disregarded;

      (b) the breach or  non-fulfillment  of any  covenant or  agreement  of any
Seller contained in or made pursuant to this Agreement,  any Ancillary Agreement
or in any  certificate,  Schedule,  or Exhibit  attached  hereto or specifically
required to be delivered hereunder;

      (c) any brokerage or finder's fees or commissions or similar  payments due
in  respect  of the  transactions  contemplated  hereto  based on  contracts  or
understandings with Seller;

      (d) a  failure  to file or an  incomplete  filing of any Form 5500 for the
Employee  Benefit  Plans that should have been filed with the  Internal  Revenue
Service on or prior to the Closing  Date,  including  any sanctions or penalties
imposed and any costs incurred in the preparation of such Form 5500;

      (e) any failure to maintain a signed  written  plan  document for any Code
Section 125 plan;

      (f) any Litigation listed on Schedule 2.12.

7.3   Agreement of Buyer to Indemnify.

      Subject to the terms and  conditions of this Article 7,  regardless of any
investigation  (including any  environmental  investigation or assessment or any
due  diligence  review  or  investigation)  conducted  with  respect  to, or any
knowledge  acquired  (or capable of being  acquired) at any time before or after
the execution and delivery of this Agreement, Buyer agrees to indemnify, defend,
and hold harmless the Seller Group from, against, for, and in respect of any and
all Losses  asserted  against,  imposed upon, or incurred by the Seller Group by
reason of, resulting from, based upon, or arising out of:

      (a) the breach of any  representation or warranty of Buyer contained in or
made pursuant to this Agreement,  any Ancillary Agreement or in any certificate,
Schedule, or Exhibit furnished by Buyer in connection herewith or therewith. For
purposes of determining  whether Buyer has breached any such  representation  or
warranty,  any qualification or limitation of such representation or warranty by
reference to the  materiality  of matters stated therein or as to matters having
or not having a Material  Adverse  Effect or words of  similar  effect  shall be
disregarded;

      (b) the breach or  non-fulfillment  of any  covenant or agreement of Buyer
contained in or made pursuant to this Agreement,  any Ancillary  Agreement or in
any certificate,  Schedule, or Exhibit furnished by Buyer in connection herewith
or therewith; and

                                       16
<PAGE>

7.4   Procedures for Indemnification.

      (a) An  Indemnification  Claim shall be made by the Indemnitee by delivery
of a  written  declaration  to the  Indemnitor  requesting  indemnification  and
specifying in reasonable detail the basis on which indemnification is sought and
the amount of asserted Losses and, in the case of a Third Party Claim, attaching
any written  correspondence  asserting such Third Party Claim. With respect to a
Third Party Claim,  an Indemnitee  shall deliver such  declaration to Indemnitor
promptly after receiving  notice of such Third Party Claim;  provided,  however,
the failure to notify the  Indemnitee  will not relieve  the  Indemnitor  of any
liability  that it may have to the  Indemnitee,  except to the  extent  that the
Indemnitor's  defense  of or  ability to settle  such  Indemnification  Claim is
actually and  materially  prejudiced  by the  Indemnitee's  failure to give such
notice.

      (b) If the  Indemnification  Claim  involves  a  Third  Party  Claim,  the
procedures  set forth in Section 7.5 hereof shall be observed by the  Indemnitee
and the Indemnitor.

      (c) If the  Indemnification  Claim  involves  a matter  other than a Third
Party Claim,  the  Indemnitor  shall have twenty (20) Business Days to object to
such Indemnification  Claim by delivery of a written notice of such objection to
the Indemnitee specifying in reasonable detail the basis for such objection.  If
an objection is timely interposed by the Indemnitor, then the Indemnitee and the
Indemnitor  shall  negotiate in good faith for a period of fifteen (15) Business
Days from the date (such period is hereinafter  referred to as the  "Negotiation
Period") the Indemnitee  receives such objection.  After the Negotiation Period,
if the Indemnitor and the  Indemnitee  still cannot agree on an  Indemnification
Claim,  either the Indemnitor and Indemnitee may commence  litigation  regarding
the dispute.

      (d) Upon determination of the amount of an  Indemnification  Claim that is
binding on both the Indemnitor and the Indemnitee,  the Indemnitor shall pay the
amount of such Indemnification  Claim by wire transfer of immediately  available
funds within ten (10) days of the date such amount is determined.

7.5   Defense of Third Party Claims.

      The Indemnitor shall have the right,  upon receipt of the  Indemnification
Claim involving a Third Party Claim and at its expense using counsel  reasonably
satisfactory  to the  Indemnitee,  to defend such Third Party Claim actively and
diligently,  and in such  manner  as to  minimize  the  risk  of the  Indemnitee
becoming subject to Liability for any other significant  matter, in its own name
or, if necessary,  in the name of the  Indemnitee;  provided  however,  that the
assumption  of the  defense  by the  Indemnitor  of a Third  Party  Claim  shall
constitute a final and binding  acknowledgment by the Indemnifying Party that it
is obligated under this Article 7 to indemnify the Indemnitee in respect of such
Third  Party  Claim.  If an  Indemnitor  assumes the defense of such Third Party
Claim,  the Indemnitee  will cooperate with and make available to the Indemnitor
such  assistance  and  materials as may be  reasonably  requested of it, and the
Indemnitee shall have the right, at its expense,  to participate in the defense.
The  Indemnitor  shall have the right to settle and  compromise  such claim only
with the consent of the  Indemnitee  (which  consent  shall not be  unreasonably
withheld or delayed)  unless the sole relief  provided is monetary  damages that
are paid in full by the Indemnitor and such settlement includes an unconditional
term releasing the Indemnitee from all Liability.

      In the event the Indemnitor  shall notify the Indemnitee  that it does not
wish to defend the Third Party Claim,  or if the  Indemnitor  fails to undertake
the  defense  or  to  notify  the  Indemnitee   within  ten  (10)  days  of  the
Indemnification  Claim that it is undertaking  the defense,  then the Indemnitee
shall have the right to conduct a defense  against  such Third Party  Claim.  In
addition, and Section 7.5(a)  notwithstanding,  if a Third Party Claim involves,
in the  Indemnitee's  reasonable  opinion,  a matter  that could have a material
adverse  effect  on  the  business,  operations,  prospects  or  Assets  of  the
Indemnitee, then the Indemnitee shall have the right to the defense of the Third
Party Claim. All costs,  expenses and fees, including all reasonable  attorneys'
fees which may be incurred by the Indemnitee in connection  with  conducting the
defense,  compromise  or  settlement  of Third Party Claims  referenced  in this
Section 7.5(b) shall be included as part of the  indemnification  obligations of
the  Indemnitor  hereunder  to the extent  that the  Indemnitee  is  entitled to
indemnification.  The  Indemnitee  shall have the right to settle and compromise
the Third Party Claims  referenced in this Section 7.5(b) if it acts  reasonably
and in good faith upon ten (10) days  notice to, but without the consent of, the
Indemnitor.

      With respect to Seller'  indemnification of Buyer Group for the Litigation
listed on Schedule  2.12,  the parties  acknowledge  and agree that Buyer and EU
Inc., together with any relevant insurance companies,  shall control the defense
of such Third  Party  Claims,  and  provided  that Buyer  shall not agree to any
settlement of any such  Litigation  without the prior written consent of Seller,
not to be unreasonably  denied,  if such settlement  creates any Liabilities for
the Seller.

                                       17
<PAGE>

7.6   General Tax Indemnity.

      Notwithstanding  anything  to the  contrary in the  Agreement,  the Seller
shall indemnify the Buyer Group and hold them harmless from and against (without
duplication),  any  and  all  Losses  attributable  to (i)  all  Taxes  (or  the
non-payment  thereof) of EU Inc. for all taxable periods ending on or before the
Closing Date and the portion through the end of the Closing Date for any taxable
period that  includes (but does not end on) the Closing Date  ("Pre-Closing  Tax
Period"), (ii) all Taxes of any member of an affiliated,  consolidated, combined
or unitary group of which EU Inc. (or any  predecessor  of any of the foregoing)
is or was a member  on or prior  to the  Closing  Date,  including  pursuant  to
Treasury  Regulation  ss.1.1502-6 or any analogous or similar state,  local,  or
foreign law or regulation, and (iii) any and all Taxes of any person (other than
EU Inc.)  imposed on EU Inc.  as a  transferee  or  successor,  by  contract  or
pursuant to any law,  rule,  or  regulation,  which Taxes  relate to an event or
transaction  occurring before the Closing.  Seller shall reimburse Buyer for any
Taxes of EU Inc. which are the responsibility of Seller pursuant to this Section
7.6 within fifteen (15) business days after payment of such Taxes by Buyer or EU
Inc.  For  purposes of this  Agreement,  in the case of any Taxable  period that
includes  (but does not end on) the  Closing  Date (a  "Straddle  Period"),  the
amount of any Taxes based on or  measured  by income or receipts of EU Inc.  for
the  Pre-Closing  Tax Period shall be determined  based on an interim closing of
the books as of the close of business on the Closing Date (and for such purpose,
the taxable period of any partnership or other  pass-through  entity in which EU
Inc. holds a beneficial  interest shall be deemed to terminate at such time) and
the amount of other Taxes of EU Inc.  for a Straddle  Period which relate to the
Pre-Closing  Tax  Period  shall be deemed  to be the  amount of such Tax for the
entire  Taxable  period  multiplied  by a fraction the numerator of which is the
number  of days  in the  Taxable  period  ending  on the  Closing  Date  and the
denominator of which is the number of days in such Straddle Period.

7.7   Limitations.

      Seller  shall be  obligated  to  indemnify  the Buyer Group under  Section
7.2(a) only when the  aggregate of all Losses  suffered or incurred by the Buyer
Group as to which a right of  indemnification  is provided  solely under Section
7.2(a) exceeds Two Hundred Thousand Dollars ($200,000) (the "Threshold Amount");
provided,  however,  that the  Threshold  Amount  shall not apply to claims  for
breach of Sections 2.1 and 2.6. After the aggregate of all such Losses  suffered
or incurred by the Buyer Group exceeds the Threshold Amount, the Seller shall be
obligated  to  indemnify  the  Indemnitee  to the full  extent of such Losses in
excess of the  Threshold  Amount.  The  aggregate  Liability of the Seller under
Section 7.2(a):  (i) with respect to claims for breach of any  representation or
warranty  other than those  contained in Sections 2.1, 2.6, 2.8 and 2.14,  shall
not exceed Five Million  Dollars  ($5,000,000);  (ii) with respect to claims for
breach of any  representation or warranty in Section 2.14, shall not exceed Five
Million  Dollars  ($5,000,000);  and (iii) with respect to Sections 2.1, 2.6 and
2.8, shall not exceed the Purchase Price.

      The  indemnification  rights of the  parties  hereto for Losses  resulting
solely  from a  breach  of  representations  and  warranties  contained  in this
Agreement  under  Sections  7.2(a) are subject to the condition  that the Seller
shall have received an Indemnification  Claim for the Losses for which indemnity
is sought within two (2) years after the Closing Date; provided,  however, that,
the indemnification  rights of Buyer Group for Losses resulting from a breach of
the  representations and warranties made by the Seller in (a) Sections 2.3, 2.4,
2.5,  2.14 and 2.17 are  subject to the  condition  that the  Seller  shall have
received  written notice of the Losses for which  indemnity is sought within six
(6) years after the Closing Date and (b) Sections 2.1, 2.6 and 2.8 shall survive
indefinitely.  There is no time limitation for Indemnification Claims for Losses
other than under subsection 7.2(a).

      Notwithstanding  any  provision  in this  Agreement to the  contrary,  the
limitations  described in this Section 7.7 shall only apply to claims for Losses
under Section 7.2(a).

      Except  in the  case  of  fraud  and for  equitable  remedies,  a  party's
exclusive remedy for claims for monetary Losses arising solely out of any breach
of any representation or warranty shall be  indemnification  pursuant to Section
7.2(a).

      Notwithstanding  anything in this  Agreement to the  contrary,  the Seller
shall not be liable for breaches or non-fulfillment  of any Ancillary  Agreement
executed  solely by an  individual  Seller.  In such cases  only the  respective
breaching Seller shall be liable to the Buyer Group.

      The  amount of any Loss  subject  to  indemnification  hereunder  shall be
calculated  net of any insurance  proceeds  actually  received by the Indemnitee
(net of any incremental collection and other expenses with respect thereto) that
are directly  attributable to such Losses.  Each Indemnitee shall use good faith
efforts  to  seek  full  recovery  under  any  insurance  policies  covering  an
indemnifiable Loss; provided,  however,  that each Indemnitor shall make any and
all  payments  required  under  this  Article  7 without  regard  to any  future
potential  recovery by the Indemnitee  under any such insurance  policy.  In the
event that an  insurance  recovery is made by the  Indemnitee  with respect to a
Loss for which it has been previously indemnified hereunder, then a refund equal
to the  amount  of  the  recovery  (but  not  exceeding  the  amount  previously
indemnified) shall be made promptly to the Seller' Representative,  who shall be
responsible for distributing such amount among the Seller.

                                       18
<PAGE>

ARTICLE 8 CLOSING AND DUE DILIGENCE

8.1   Closing and Due Diligence.

      From the date of the  execution of this  Agreement  and until such time as
the  Buyer  shall  have  completed  its due  diligence  review  ("Due  Diligence
Period"),  the Buyer shall  undertake the normal due diligence  review of all of
the operations and business of EU Inc. The Due Diligence Period shall extend for
a period not to exceed 15 business  days from the date on which the Seller shall
provide the Buyer with copies of the Due Diligence Materials.

The term "Due Diligence  Materials"  shall mean any information  that has or may
reasonably  be expected to have a material  affect on the  business of EU Inc in
whatever form held,  stored or maintained and shall include Actual Knowledge and
any unwritten knowledge of any Director, Officer or employee of EU Inc. The term
shall also include any information which any Director, Officer or employee of EU
Inc  shall be aware is in the  possession  of any EU  Shareholders  or its other
affiliates.

8.2   Termination due to unsatisfactory Due Diligence.

      This agreement may be terminated,  however such  termination  shall not be
unreasonable, at any time prior to Closing, at Buyer's sole discretion, if Buyer
is not satisfied with its due diligence  investigations,  or is unable to obtain
satisfactory  financing  to  meet  the  terms  of  Section  1.3  and 1.4 of this
Agreement.

ARTICLE 9 GENERAL PROVISIONS

9.1   Certain Definitions.

      The following  capitalized  terms shall have the  respective  meanings set
forth below:

      "Actual Knowledge" means, with respect to the Seller, the actual knowledge
of each of the  following  individuals:  Michael  Porter,  Ian Zant-Boer and any
director or officer of EU Inc.

      "Affiliate"  means,  with  respect to a specified  Person,  at the time in
question,  any other Person  Controlling,  Controlled by or under common Control
with the specified Person or any officer,  director,  manager, partner or direct
or indirect  beneficial owner of any 10% or greater equity or voting interest of
such Person.  In addition,  with respect to EU Inc., the term  "Affiliate"  also
includes any Person  capable of being  controlled by any  combination of EU Inc.
and it's respective Affiliates.

      "Agreement"  means  this  Equity  Purchase  Agreement  together  with  all
Schedules  and  Exhibits,  as the same may be amended or  modified  from time to
time.

      "Ancillary  Agreements" means, as to any party, the agreements,  documents
and  instruments  to be executed and  delivered  by such party  pursuant to this
Agreement.

      "Assets" of a Person means all of the assets,  properties,  businesses and
rights of such Person of every kind, nature, character and description,  whether
real,  personal or mixed,  tangible or  intangible,  accrued or  contingent,  or
otherwise  relating  to or  utilized  in such  Person's  business,  directly  or
indirectly, in whole or in part, whether or not carried on the books and records
of such  Person,  and  whether  or not  owned in the name of such  Person or any
Affiliate of such Person and wherever located.

      "Business"  means the business carried on by Seller from time to time, and
all businesses and activities ancillary thereto.

                                       19
<PAGE>

      "Business  Day" or  "business  day" means any day other  than a  Saturday,
Sunday,  or a day on which banking  institutions  in the State of California are
permitted or obligated by applicable Law to be closed.

      "Buyer" has the meaning set forth in the preface above.

      "Buyer Group" means the Buyer and each of its respective  Affiliates,  and
Representatives.

      "Closing" means the consummation of the transactions  contemplated by this
Agreement,  except to the extent such  transactions  are specified to occur,  if
ever, after the Closing.

      "Closing Date" means the date on which the Closing actually occurs.

      "Code" means the Internal  Revenue Code of 1986, as amended.  Any citation
to a provision of the Code includes a citation to any successor provision.

      "Consent"  means any consent,  notice,  approval,  authorization,  filing,
declaration,  registration,  clearance, exemption, waiver or similar affirmation
by any Person pursuant to any Contract, applicable Law or Order.

      "Contract" has the meaning set forth in Section 2.11(b).

      "Control,  Controlling,  or  Controlled"  means  possessing,  directly  or
indirectly,  the power to direct or cause the  direction of the  management  and
policies of another Person,  whether through ownership of voting securities,  by
contract or otherwise.

      "Default"   means  (i)  any  breach  or  violation  of,   default   under,
contravention  of, or  conflict  with,  any  Contract,  Law or  Order,  (ii) any
occurrence of any event that with the passage of time or the giving of notice or
both would constitute a breach or violation of, default under, contravention of,
or conflict  with,  any Contract,  Law or Order,  or (iii) any occurrence of any
event that with or without  the passage of time or with or without the giving of
notice would give rise to a right of any Person to exercise any remedy or obtain
any relief under, terminate or revoke, suspend,  cancel, or modify or change the
current terms of, or  renegotiate,  or to accelerate the maturity or performance
of, or to increase or impose any Liability under, any Contract, Law or Order.

      "Effective  Time"  means  11:59  p.m.  in  Irvine,  California  on the day
preceding the Closing.

      "Employee  Benefit Plans" shall include  pension and profit sharing plans,
retirement and post  retirement  welfare  benefits,  health  insurance  benefits
(medical, dental and vision), disability, life and accident insurance,  sickness
benefits,  vacation,  employee  loans  and  banking  privileges  and any  bonus,
incentive, deferred compensation, stock purchase, stock option, phantom stock or
other equity-based  severance,  employment,  change of control or fringe benefit
plan,  program or agreement  (whether  written or oral),  including any employee
benefit plans as defined in ERISA.

      "Environmental  Laws"  means any and all Laws in effect on or prior to the
Closing  Date  relating  to  pollution  or  protection  of human  health  or the
environment  (including  ambient air, indoor air,  surface water,  ground water,
land surface, or subsurface  strata),  including,  without  limitation,  (i) the
Comprehensive  Environmental Response Compensation and Liability Act, as amended
(42 U.S.C.  ss.ss.9601 et seq.  ("CERCLA")),  (ii) the Resource Conservation and
Recovery  Act, as amended (42 U.S.C.  ss.ss.6901  et seq.  ("RCRA")),  (iii) the
Clean Air Act (42  U.S.C.  ss.ss.  7401 et seq.);  (iv) the Clean  Water Act (33
U.S.C.   ss.ss.1251  et  seq.),   (v)  the  Emergency   Planning  and  Community
Right-to-Know Act (42 U.S.C.  ss.ss.  11011 et seq.), (vi) the Oil Pollution Act
of 1990  (33  U.S.C.  ss.ss.  2701  et  seq.),  (vii)  the  Hazardous  Materials
Transportation Act (49 U.S.C.  ss.ss. 1801 et seq.), (viii) the Toxic Substances
Control  Act (15  U.S.C.  ss.ss.  2601 et  seq.),  (ix) any  state or local  Law
analogous to the Laws listed in parts (i) - (viii) of this subparagraph, (x) any
amendments to the statues,  laws or  ordinances  listed in parts (i) - (viii) of
this  subparagraph,  in existence on the date hereof, and (xi) any other Law now
in effect  relating to  emissions,  discharges,  releases,  threatened  releases
generation,  management,  handling, control, use, treatment,  storage, disposal,
transport, removal, remediation or recovery of any Hazardous Material.

      "Environmental  Permit"  means  Permits,   Consents,   Orders,  and  other
authorizations that are required under Environmental Laws in connection with the
operation of the business of each  Purchased  Entity or the  ownership,  use, or
lease of the Assets of each Purchased Entity.

                                       20
<PAGE>

      "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  as
amended, and all final and temporary regulations thereunder.

      "Financial Statements" has the meaning set forth in Section 2.8(a).

      "GAAP" means United States generally accepted accounting  principles as in
effect from time to time and consistently applied to the Financial Statements.

      "Governmental  Authority" means any federal, state, county, local, foreign
or other governmental or public agency, instrumentality,  commission, authority,
court, board or other body.

      "Hazardous  Materials" means and shall include,  without  limitation,  any
material,  substance,  waste, chemical,  compound,  product, solid, gas, liquid,
byproduct,  pollutant or contaminant which as of or prior to the Closing Date is
or was: (a) listed in the United States Department of  Transportation  Hazardous
Materials Table (49 C.F.R. ss.ss. 172.101,  including the Appendix thereto); (b)
identified by the United States  Environmental  Protection Agency as a hazardous
substance (40 C.F.R.  Part 301);  (c)  designated as a "hazardous  substance" in
Section 311 of the federal Water Pollution Control Act (33 U.S.C.  ss.ss.  1251,
et seq.;  (d) defined as a "hazardous  waste" under  Section 1004 of the federal
Resource  Conservation  Recovery  Act, (42 U.S.C.  ss.ss.  6901,  et seq.);  (e)
defined as a "hazardous  substance" pursuant to Section 101 of the Comprehensive
Environmental  Response  Compensation  Liability  Act, 42 U.S.C ss.ss.  9601, et
seq., as amended by the Superfund  Amendments  and  Reauthorization  Act of 1986
("SARA");  (f) any material  containing asbestos above regulated levels; (g) any
radioactive  materials;  (h)  any  regulated  petroleum  hydrocarbon,  petroleum
hydrocarbon product, or natural gas material;  (i) defined as "hazardous waste,"
"hazardous  material,"  "hazardous  substance," or words of similar import under
any  applicable  federal,  state or local,  environmental  or worker  health and
safety  Laws;  or (j)  which is  prohibited,  limited,  or  regulated  under any
amendments,  revisions,  supplements or replacements of any of the above and any
regulations implementing any of the above.

      "Indebtedness"  means (a) indebtedness  for borrowed money,  (indebtedness
for any deferred purchase price (other than trade payables for goods or services
payable on terms of net 30 days (or less) and arising in the ordinary  course of
business), (c) indebtedness under title retention agreements, (d) obligations as
lessee under capital leases,  (e)  Liabilities  for unfunded  benefits under any
pension plan or scheme for employees,  (f) obligations under currency,  interest
rate or other hedging  arrangements or swaps, and (g) any Liability  required to
be  reflected  on a  balance  sheet  other  than  current  Liabilities,  all  as
determined in accordance with GAAP, consistently applied.

      "Indemnitee" means a party seeking  indemnification  under Section 1.7, or
Article 7.

      "Indemnification  Claim" means a claim for  indemnification  under Section
1.7 or Article 7.

      "Indemnitor"  means a party  from whom  indemnification  is  sought  under
Section 1.7 or Article 7.

      "Intellectual Property" has the meaning set forth in Section 2.16(a).

      "IRS" has the meaning set forth in Section 2.8.

      "Inventory" means inventory held for sale/resale and raw materials.

      "Inventory Value" means the value of the raw materials and inventory of EU
Inc. as of the Effective Time, provided that all the raw materials are valued at
cost.

      "Knowledge" means, with respect to the Seller, (i) the actual knowledge of
each  of the  following  individuals:  Michael  Porter,  Ian  Zant-Boer  and any
director or officer of EU Inc.;  and (ii) the knowledge a prudent  individual in
the position of any of the foregoing individuals could be reasonably expected to
possess concerning the existence of the matters at issue.

      "Law" means any domestic or foreign federal,  state or local statute, law,
ordinance, rule, administrative  interpretation,  regulation, order, judgment or
decree.

                                       21
<PAGE>

      "Leased  Premises" shall mean the offices and other  facilities  leased by
Seller or any of its  Affiliates  pursuant to the Leases and used in  connection
with the Business.

      "Leased Real Property" means real property leased by EU Inc.

      "Leases"  shall  mean the  real  property  leases  and  rental  agreements
(including  subleases),  as  amended,  entered  into with  respect to the Leased
Premises, as set forth in Schedule 2.15(a).

      "Liability" means any direct or indirect, primary or secondary, liability,
indebtedness,   obligation,   penalty,  cost  or  expense  (including  costs  of
investigation,   collection  and  defense),   claim,  deficiency,   guaranty  or
endorsement  of or by any  Person  of any type,  whether  accrued,  absolute  or
contingent, liquidated or unliquidated,  matured or unmatured, known or unknown,
disputed or undisputed,  secured or unsecured,  joint or several,  or otherwise,
and  whether  or not the same is  required  to be accrued  or  disclosed  on the
financial statements of such Person.

      "Lien" means any claim,  charge,  conditional  sale agreement,  default of
title, easement, encroachment, encumbrance,  hypothecation,  infringement, lien,
mortgage, pledge, reservation,  security interest or other security arrangement,
or any adverse right or interest of any nature whatsoever of, on or with respect
to any Asset.

      "Litigation" means any action, litigation,  arbitration,  cause of action,
lawsuit,   claim,  complaint,   criminal  prosecution,   governmental  or  other
examination  or  investigation,  audit (other than  regular  audits of financial
statements  by  outside  auditors),   compliance  review,  inspection,  hearing,
administrative  or other proceeding  (whether civil,  criminal,  administrative,
investigative or informal).

      "Loss"  means any and all  demands,  claims,  actions or causes of action,
damage, assessments, diminution of value, losses, damages (including special and
consequential  damages),  liabilities,  costs or  expenses,  including,  but not
limited to,  interest,  penalties,  reasonable  attorneys' fees and expenses and
reasonable costs of investigation and defense.

      "Major Decisions" has the meaning set forth in Section 1.6.

      "Material"  or  "material"  for  purposes  of  this  Agreement   shall  be
determined  in light of the facts and  circumstances  of the matter in question,
provided  that any  specific  monetary  amount  stated in this  Agreement  shall
determine materiality in that instance.

      "Material Adverse Effect" means a violation,  inaccuracy, breach, default,
failure to comply,  change in  circumstances,  loss,  effect,  fact,  agreement,
arrangement, commitment,  understanding,  obligation, event or occurrence which,
individually  or in the  aggregate,  has had or would  reasonably be expected to
have a material  adverse effect or material  adverse impact on (i) the business,
financial  condition,  Assets or results  of  operations  of EU Inc.  taken as a
whole,  or (ii) the  ability of any Seller to  perform  its/his/her  obligations
under  this  Agreement  and  the  Ancillary  Agreements  or  to  consummate  the
transactions contemplated by this Agreement and the Ancillary Agreements.

      "Material  Contracts"  means,  collectively,  the  contracts  described in
Section 2.11 hereof.

      "Negotiation Period" has the meaning set forth in Section 7.4(c).

      "Order" means any administrative  decision or award,  decree,  injunction,
judgment,  order,  quasi-judicial  decision  or  award,  ruling,  or writ of any
Governmental  Authority, or any binding determination pursuant to arbitration or
other similar alternative dispute resolution forum.

      "Permits" means all licenses,  permits, orders, approvals,  registrations,
authorizations,  qualifications  and filings with and under all federal,  state,
local or foreign laws or Governmental Authority.

      "Permitted Liens" means (i) Liens for Taxes not yet due and payable,  (ii)
materialmen's or similar liens or obligations  arising in the ordinary course of
business securing accrued obligations not yet due and payable, (iii) Liens under
equipment  leases  and  capitalized  leases  with  Persons  entered  into in the
ordinary  course of  business,  which in each  case are  disclosed  on  Schedule
2.11(a).

                                       22
<PAGE>

      "Person" means any individual, corporation, partnership, limited liability
company, firm, joint venture,  association,  joint-stock company, trust, estate,
unincorporated  organization,  business unit,  division or other entity,  or any
Governmental Authority.

      "Pre-Closing Tax Period" has the meaning set forth in Section 7.6.

      "Purchase Price" has the meaning set forth in Section 1.3(a).

      "Real Property" means all real property currently owned by EU Inc.

      "Related Party" has the meaning set forth in Section 2.21.

      "Representative"  means with respect to a particular Person, any director,
officer, agent, advisor or other representative of such Person,  including legal
counsel, accountants and financial advisors.

      "Seller" or "Seller" has the meaning set forth in the preface above.

      "Seller  Group" means the Seller and each of their  respective  Affiliates
and Representatives.

      "Shares"  has the  meaning  set  forth  in the  Recitals  section  of this
Agreement.

      "Straddle Period" has the meaning set forth in Section 7.6.

      "Tax" means any federal,  state, county, local or foreign income, premium,
payroll,  withholding,  unclaimed property, excise, sales, use, gains, transfer,
real and personal  property,  use and  occupation,  capital stock,  franchise or
other  tax,  levy,  charge,  duty or other  assessment  of any kind  whatsoever,
including interest, additions and penalties thereon.

      "Taxing  Authority"  means  the IRS and any other  Governmental  Authority
responsible for the administration of any Tax.

      "Tax Return"  means any return,  report or statement  required to be filed
with or provided to any Taxing  Authority with respect to any Tax (including any
attachments  thereto,  and any amendment  thereof),  including  any  information
return, claim for refund, amended return or declaration of estimated Tax.

      "Termination Date" has the meaning set forth in Section 6.2.

      "Threshold Amount" has the meaning set forth in Section 7.7(a).

      "Third Party Claim" means any Litigation  threatened or instituted against
the Indemnitee,  which, if prosecuted successfully,  would be a matter for which
the Indenmitee is entitled to indemnification under this Agreement.

      "Transaction  Documents"  means  this  Agreement  and all other  documents
required to give effect to the transaction contemplated hereby.

9.2   Singular and Plural.

      Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular.

ARTICLE 10 MISCELLANEOUS

10.1  Entire Agreement; No Third Party Beneficiaries.

      This  Agreement,  the  Exhibits  and  Schedules  attached  hereto  and the
Ancillary  Agreements  constitute the entire agreement  between the parties with
respect  to the  transactions  contemplated  hereby  and  supersedes  all  prior
arrangements or understandings with respect thereto, written or oral. Nothing in
this  Agreement,  expressed  or implied,  is intended to confer upon any Person,
other than the parties or their  respective  successors,  any rights,  remedies,
obligations, or liabilities under or by reason of this Agreement.

                                       23
<PAGE>

10.2  Amendments; Waiver.

      This  Agreement may be amended only by a subsequent  writing signed by the
Seller and Buyer. No waiver hereto or hereunder shall be valid unless in writing
signed  by an  authorized  signatory  of the  party or  parties  to be  affected
thereby.

10.3  Assignment.

      Neither this  Agreement  nor any of the rights,  interests or  obligations
hereunder  shall be assigned by any party hereto (whether by operation of law or
otherwise),  in whole or in part, without the prior written consent of the other
parties;  provided,  however,  that, Buyer may assign its rights and obligations
under this Agreement  without the consent of Seller to any affiliate of Buyer or
to any party that acquires  substantially all of the assets or stock of Buyer or
any successor  entity resulting from a merger or consolidation of or with Buyer.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.

10.4  Notices.

      All  notices  or other  communications  that  are  required  or  permitted
hereunder  shall be in writing and sufficient if delivered by hand, by facsimile
transmission,  by certified mail,  postage pre-paid,  or by courier or overnight
carrier,  to the  Persons  at the  addresses  set forth  below (or at such other
address  as may be  provided  hereunder),  and  shall  be  deemed  to have  been
delivered as of the date so delivered:

         If to Seller:     EU Energy Inc.
                           Attn: Andy Lockhart
                           2650 FM 470
                           Bartonville,Texas 76226
                           Phone: 940 455 7450
                           Fax: 940 455 7451

                               Copy to Counsel        Ian Zant-Boer
                                                      EMW Law
                                                      13th St.
                                                      Central Milton Keynes
                                                      Buckinghamshire, UK
                                                      Phone: 011-44-1908-399600

         If to Buyer:      CTC Wind Systems Corporation
                                    Attention: Benton H Wilcoxon, President
                                    2026 Mc Gaw Avenue
                                    Irvine CA, 92614
                                    +1-949-660-1533
                                    +1-949-428-8500

                                    Copy to Counsel   Michael McIntosh

10.5  Governing Law; Dispute Resolution.

      Notwithstanding  the place where this  Agreement may be executed by any of
the parties, the parties hereto expressly agree that this Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of California.

                                       24
<PAGE>

      Except for  obtaining a temporary  restraining  order or an  injunction in
accordance  with Section  10.5(h),  any claim or controversy  under or involving
this  Agreement  shall be  finally  settled  by  binding  arbitration  under the
Commercial Arbitration Rules of the American Arbitration Association,  except as
modified herein (the "Rules").

      The arbitration  shall be held in Irvine,  California.  There shall be one
arbitrator,  who shall have experience in the building  products  industry.  The
Buyer and the  Shareholders'  Representative  shall  attempt  to agree on such a
single mutually  acceptable  arbitrator  within ten (10) business days after any
party   invokes   arbitration   under  this  Section  10.5.  If  the  Buyer  and
Shareholders'  Representative  are unable to agree on an arbitrator  within such
ten (10) business day period, the Buyer and Shareholders'  Representative  shall
with ten (10) business  days each select one potential  arbitrator in accordance
with the Rules. The two named potential arbitrators shall then select the single
arbitrator  within  thirty (30) days of the  selection  of the second  potential
arbitrator.  If either the Buyer or the  Shareholders'  Representative  does not
name a potential  arbitrator within such period,  then the potential  arbitrator
identified  by the other party shall be the single  arbitrator  for the claim or
controversy.  If the two  named  potential  arbitrators  have not  agreed on the
single  arbitrator within the time limits specified above, then such appointment
shall be made by the American  Arbitration  Association  in accordance  with the
Rules upon the written request of the Buyer or the Shareholders'  Representative
within (30) days of such  request.  The  arbitration  hearing  shall be held, if
possible,  within one hundred eighty (180) days of the appointment of the single
arbitrator,  and the award shall be issued, if possible, within thirty (30) days
after the close of the hearing.

      Any decision or award of the arbitrator shall be based solely on the terms
of this Agreement,  applicable law, and the facts presented by the parties.  The
Parties  hereby  waive  any  rights  of  application  or  appeal to any court or
tribunal of competent  jurisdiction  (including without limitation the courts of
the United States and the State of California)  to the fullest extent  permitted
by law in  connection  with any  question  of law  arising  in the course of the
arbitration or with respect to any award made. Notwithstanding the foregoing, by
agreeing to  arbitration,  the parties do not intend to deprive any court of its
jurisdiction to issue a pre-arbitral  injunction,  pre-arbitral  attachment,  or
other order in aid of  arbitration  proceedings  and  enforcement  of any award.
Without  prejudice to such  provisional  remedies as may be available  under the
jurisdiction  of a court,  the  arbitrator  shall have full  authority  to grant
provisional  remedies and to direct the parties to request that any court modify
or vacate any temporary or preliminary relief issued by such court, and to award
damages for the failure of any party to respect the  arbitrator's  order to that
effect.

      The decision or award of the  arbitrator  shall be the sole and  exclusive
remedy  between  the  parties  regarding  any and all  issues  presented  to the
arbitrator.  The award shall be final and binding upon the parties, and judgment
upon any award may be  entered  in any court in the State of Nevada or any other
court of competent subject matter  jurisdiction,  having  jurisdiction  thereof.
Each party  hereby  irrevocably  consents to the  personal  jurisdiction  of the
courts in the State of Nevada,  solely for purposes of confirmation of, entry of
judgment upon, and enforcement of the arbitral award.  Each party further hereby
irrevocably  waives  and  covenants  not to  assert  any  defenses  in any  such
proceeding based on any alleged defects in  jurisdiction,  venue, or convenience
of the forum.

      The  non-prevailing  party or  parties  to the  arbitration  shall pay the
compensation,  costs,  fees and expenses of its own and the  prevailing  party's
witnesses,  experts and counsel.  The compensation and any costs and expenses of
the arbitrator shall also be borne by the non-prevailing  party or parties.  The
single  arbitrator  shall  determine  which  party(ies)  is(are) the  prevailing
party(ies) and the non-prevailing  party(ies).  In the event that the arbitrator
shall determine that any party to the  arbitration  was, as a result of multiple
disputes or otherwise,  both a prevailing  and  non-prevailing  party,  then the
arbitrator  shall  be  authorized  to award  costs,  fees  and  expenses  in its
discretion,  provided  that in any  event  the  party(ies)  that the  arbitrator
determines is(are) most fairly characterized as the non-prevailing party(ies) in
the  arbitration  (taken as a whole) must, at a minimum,  pay the  compensation,
costs,  fees and  expenses  of its own  witnesses,  experts  and counsel and the
compensation and any costs and expenses of the arbitrator.

      Each party will,  upon the written  request of another party,  provide the
other with copies of  specific  documents  relevant to the issues  raised by any
claim or counterclaim.  Any dispute  regarding  discovery shall be determined by
the arbitrator, whose determination shall be binding.

      The parties shall be entitled to an injunction or  injunctions  to prevent
breaches of this Agreement and to enforce  specifically the terms and provisions
hereof in any court  having  jurisdiction,  this being in  addition to any other
remedy to which they are entitled at law or in equity.

                                       25
<PAGE>

10.6  Counterparts.

      This  Agreement  may be  executed in two or more  counterparts  (including
facsimile  counterparts),  each of which shall be deemed to be an original,  but
all of which together shall constitute one and the same instrument.

10.7  Captions.

      The captions  contained in this Agreement are for reference  purposes only
and are not part of this Agreement.

10.8  Interpretations.

      No uncertainty or ambiguity  herein shall be construed or resolved against
any party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman.  The parties  acknowledge and agree
that this  Agreement has been  reviewed,  negotiated and accepted by all parties
and their  attorneys  and shall be construed  and  interpreted  according to the
ordinary  meaning of the words used so as to fairly  accomplish the purposes and
intentions of all parties hereto.

10.9  Severability.

      Any term or provision of this Agreement  that is invalid or  unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of  such   invalidity  or   unenforceability   without   rendering   invalid  or
unenforceable  the remaining terms and provisions of this Agreement or affecting
the  validity  or  enforceability  of any of the  terms  or  provisions  of this
Agreement in any other  jurisdiction.  If any provision of this  Agreement is so
broad as to be  unenforceable,  the provision shall be interpreted to be only so
broad as is enforceable.

10.10 Right to Specific Performance.

      The parties hereto agree that the Shares constitute unique property,  that
there is no  adequate  remedy  at law for the  damage  which  any of them  might
sustain  for the  failure  of the  others to  consummate  this  Agreement,  and,
accordingly, that each of them is entitled to the remedy of specific performance
to  enforce  such  consummation  subject,  however,  to  all of  the  terms  and
provisions of this Agreement.

                         [Signatures on Following Pages]

                                       26
<PAGE>

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

BUYER:                          CTC Wind Systems Corporation

                                By:    /s/ Benton H Wilcoxon
                                       --------------------------
                                Name:  Benton H Wilcoxon
                                Title: President

SELLER:                         EU Energy, Inc.

                                By:    /s/ Michael Porter
                                       --------------------------
                                Name:  Michael Porter
                                Title: Chairman

                                       27
<PAGE>

                                  Schedule 1.7

Schedule detailing purchase price allocation.

                                  Schedule 2.6

Schedule detailing capitalization of EU Inc..

                                  Schedule 2.9

Schedule including the financial statements of EU Inc.

                                Schedule 2.11(a)

List of all material contracts and agreements.

                                  Schedule 2.12

Description of any known litigation.

                                  Schedule 2.13

List of all of the Permits necessary to conduct its business in the manner it is
presently being conducted.

                                Schedule 2.15(a)

List of all leases and premises which they are connected to.

                                Schedule 2.15(e)

List and  location of all  Personal  Property  of EU Inc.  having an original or
replacement value greater than $5,000

                                Schedule 2.15(f)

Names and at locations where EU Inc.  conducts its business and where all of the
Assets of EU Inc. are currently located.

                                  Schedule 2.16

List of all patents,  trademarks,  trade names,  service  marks,  domain  names,
copyrights and computer software (excluding commonly available software acquired
via shrink wrap licenses) used in the conduct of the business of EU Inc.

                                       28
<PAGE>

                                  Schedule 2.17

Lists of each Employee Benefit Plan maintained or contributed to by Seller.

                                  Schedule 2.21

List of any Related Party transactions.

                     Exhibit 5.3(c)(vi) - Opinion of Counsel

Opinion of counsel.

                                       29

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