Document:

Unassociated Document

    
       

      ASSET
        PURCHASE AGREEMENT 

       

      dated

       

      March
        15,
        2006

       

       

      by
        and
        among

       

      Accoona
        Corp., a Delaware corporation,

       

      as
        the
        Parent,

       

      BE
        Acquisition Corp., a Delaware corporation,

       

      as
        the
        Buyer,

       

      Internet
        Media Group LLC

      a
        New
        York limited liability company,

       

      as
        the
        Seller,

       

      the
        Members named herein

       

      and

       

      Allen
        Benzaken,

      as
        Representative

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF
        CONTENTS

      
        
          	 	 	 	 	 	
                  Page

                
	 	 	 	 	 	 
	
                  ARTICLE
                    I     DEFINITIONS

                	
                       

                	
                  1

                
	
                       

                	 	 	 	 	 
	 	
                  1.1.

                	
                       

                	
                  Definitions

                	 	
                  1

                
	 	 	 
	
                  ARTICLE
                    II     PURCHASE AND SALE

                	 	
                  7

                
	 	 	 	 	 	 
	 	
                  2.1.

                	 	
                  Purchase
                    and Sale

                	 	
                  7

                
	 	
                  2.2.

                	 	
                  Excluded
                    Assets

                	 	
                  9

                
	 	
                  2.3.

                	 	
                  Assumption
                    of Liabilities

                	 	
                  9

                
	 	
                  2.4.

                	 	
                  Excluded
                    Liabilities

                	 	
                  9

                
	 	
                  2.5.

                	 	
                  Purchase
                    Price

                	 	
                  10

                
	 	
                  2.6.

                	 	
                  Payment
                    of the Purchase Price

                	 	
                  10

                
	 	
                  2.7.

                	 	
                  Procedure
                    to Establish Net Revenues, EBITDA, Indebtedness, Tangible Personal
                    Property and Minimum Required EBITDA.

                	 	
                  11

                
	 	
                  2.8.

                	 	
                  Right
                    of Endorsement

                	 	
                  13

                
	 	
                  2.9.

                	 	
                  Allocation
                    of Purchase Price.

                	 	
                  13

                
	 	
                  2.10.

                	 	
                  Closing

                	 	
                  14

                
	 	 	 
	
                  ARTICLE
                    III     REPRESENTATIONS AND WARRANTIES OF SELLER
                    AND THE MEMBERS

                	 	
                  14

                
	 	 	 	 	 	 
	 	
                  3.1.

                	 	
                  Corporate
                    Existence and Power

                	 	
                  14

                
	 	
                  3.2.

                	 	
                  Corporate
                    Authorization.

                	 	
                  15

                
	 	
                  3.3.

                	 	
                  Charter
                    Documents; Legality

                	 	
                  15

                
	 	
                  3.4.

                	 	
                  Capitalization
                    and Ownership of Seller

                	 	
                  15

                
	 	
                  3.5.

                	 	
                  Subsidiaries

                	 	
                  15

                
	 	
                  3.6.

                	 	
                  Affiliates

                	 	
                  16

                
	 	
                  3.7.

                	 	
                  Assumed
                    Names

                	 	
                  16

                
	 	
                  3.8.

                	 	
                  Governmental
                    Authorization

                	 	
                  16

                
	 	
                  3.9.

                	 	
                  Consents

                	 	
                  16

                
	 	
                  3.10.

                	 	
                  Financial
                    Statements.

                	 	
                  16

                
	 	
                  3.11.

                	 	
                  Accounts
                    Receivable

                	 	
                  17

                
	 	
                  3.12.

                	 	
                  Books
                    and Records.

                	 	
                  18

                
	 	
                  3.13.

                	 	
                  Absence
                    of Certain Changes.

                	 	
                  18

                
	 	
                  3.14.

                	 	
                  Real
                    Property.

                	 	
                  19

                
	 	
                  3.15.

                	 	
                  Tangible
                    Personal Property.

                	 	
                  19

                
	 	
                  3.16.

                	 	
                  Intellectual
                    Property.

                	 	
                  19

                
	 	
                  3.17.

                	 	
                  Inventory.

                	 	
                  20

                
	 	
                  3.18.

                	 	
                  Suppliers
                    and Business Relationships.

                	 	
                  20

                
	 	
                  3.19.

                	 	
                  Litigation

                	 	
                  21

                
	 	
                  3.20.

                	 	
                  Contracts.

                	 	
                  21

                
	 	
                  3.21.

                	 	
                  Licenses
                    and Permits

                	 	
                  22

                
	 	
                  3.22.

                	 	
                  Compliance
                    with Laws

                	 	
                  23

                
	 	
                  3.23.

                	 	
                  Pre-payments

                	 	
                  23

                
	 	
                  3.24.

                	 	
                  Employees

                	 	
                  23

                
	 	
                  3.25.

                	 	
                  Compliance
                    with Labor Laws and Agreements

                	 	
                  23

                

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	 	 	 	 	 	
                  Page

                
	 	 	 	 	 	 
	 	
                  3.26.

                	 	
                  Pension
                    and Benefit Plans

                	 	
                  24

                
	 	
                  3.27.

                	 	
                  Employment
                    Matters

                	 	
                  24

                
	 	
                  3.28.

                	 	
                  Tax
                    Matters

                	 	
                  24

                
	 	
                  3.29.

                	 	
                  Finders’
                    Fees

                	 	
                  25

                
	 	
                  3.30.

                	 	
                  Investment
                    Representations.

                	 	
                  25

                
	 	
                  3.31.

                	 	
                  Software.

                	 	
                  30

                
	 	
                  3.32.

                	 	
                  Business
                    Operations; Servers.

                	 	
                  30

                
	 	
                  3.33.

                	 	
                  Powers
                    of Attorney and Suretyships

                	 	
                  31

                
	 	
                  3.34.

                	 	
                  Other
                    Information

                	 	
                  31

                
	 	 	 
	
                  ARTICLE
                    IV     REPRESENTATIONS AND WARRANTIES OF
                    PARENT

                	 	
                  31

                
	 	 	 	 	 	 
	 	
                  4.1.

                	 	
                  Due
                    Incorporation

                	 	
                  31

                
	 	
                  4.2.

                	 	
                  Corporate
                    Authorization

                	 	
                  32

                
	 	
                  4.3.

                	 	
                  Governmental
                    Authorization

                	 	
                  32

                
	 	
                  4.4.

                	 	
                  No
                    Violation

                	 	
                  32

                
	 	
                  4.5.

                	 	
                  Charter
                    Documents

                	 	
                  32

                
	 	
                  4.6.

                	 	
                  Consents

                	 	
                  32

                
	 	
                  4.7.

                	 	
                  Issuance
                    of Parent Class C Common Stock

                	 	
                  32

                
	 	
                  4.8.

                	 	
                  Finders’
                    Fees

                	 	
                  33

                
	 	
                  4.9.

                	 	
                  Other
                    Information

                	 	
                  33

                
	 	 	 
	
                  ARTICLE
                    V     COVENANTS OF SELLER AND THE MEMBERS PENDING
                    CLOSING

                	 	
                  34

                
	 	 	 	 	 	 
	 	
                  5.1.

                	 	
                  Conduct
                    of the Business

                	 	
                  34

                
	 	
                  5.2.

                	 	
                  Access
                    to Information.

                	 	
                  36

                
	 	
                  5.3.

                	 	
                  Notices
                    of Certain Events

                	 	
                  36

                
	 	 	 
	
                  ARTICLE
                    VI     COVENANTS OF SELLER AND THE
                    MEMBERS

                	 	
                  36

                
	 	 	 	 	 	 
	 	
                  6.1.

                	 	
                  Confidentiality

                	 	
                  36

                
	 	
                  6.2.

                	 	
                  Conduct
                    of the Business

                	 	
                  37

                
	 	
                  6.3.

                	 	
                  Exclusivity

                	 	
                  38

                
	 	
                  6.4.

                	 	
                  Reporting
                    and Compliance With Law

                	 	
                  38

                
	 	
                  6.5.

                	 	
                  Injunctive
                    Relief

                	 	
                  38

                
	 	
                  6.6.

                	 	
                  Covenants
                    with respect to Parent Class C Common Stock.

                	 	
                  39

                
	 	 	 
	
                  ARTICLE
                    VII     COVENANTS OF ALL PARTIES
                    HERETO

                	 	
                  41

                
	 	 	 	 	 	 
	 	
                  7.1.

                	 	
                  Best
                    Efforts; Further Assurances

                	 	
                  41

                
	 	
                  7.2.

                	 	
                  Confidentiality
                    of Transaction

                	 	
                  41

                
	 	
                  7.3.

                	 	
                  Best
                    Efforts to Obtain Consents

                	 	
                  41

                
	 	
                  7.4.

                	 	
                  Tax
                    Matters.

                	 	
                  41

                
	 	 	 
	
                  ARTICLE
                    VIII     CONDITIONS TO CLOSING

                	 	
                  43

                
	 	 	 	 	 	 
	 	
                  8.1.

                	 	
                  Condition
                    to the Obligations of Parent, Buyer and Seller

                	 	
                  43

                
	 	
                  8.2.

                	 	
                  Conditions
                    to Obligations of Parent and Buyer

                	 	
                  43

                
	 	
                  8.3.

                	 	
                  Conditions
                    to Obligations of Seller

                	 	
                  45

                

        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          	 	 	 	 	 	
                  Page

                
	 	 	 	 	 	 
	
                  ARTICLE
                    IX     RELIANCE ON REPRESENTATIONS AND
                    WARRANTIES

                	 	
                  46

                
	 	 	 	 	 	 
	 	
                  9.1.

                	 	
                  Reliance
                    on Representations and Warranties of Seller and the
                    Members

                	 	
                  46

                
	 	
                  9.2.

                	 	
                  Reliance
                    on Representations and Warranties of Parent

                	 	
                  46

                
	 	 	 
	
                  ARTICLE
                    X     INDEMNIFICATION

                	 	
                  47

                
	 	 	 	 	 	 
	 	
                  10.1.

                	 	
                  Indemnification
                    of Parent, Buyer.

                	 	
                  47

                
	 	
                  10.2.

                	 	
                  Indemnification
                    of Members

                	 	
                  48

                
	 	
                  10.3.

                	 	
                  Procedure

                	 	
                  48

                
	 	
                  10.4.

                	 	
                  Periodic
                    Payments

                	 	
                  49

                
	 	
                  10.5.

                	 	
                  Right
                    of Set Off

                	 	
                  50

                
	 	
                  10.6.

                	 	
                  Payment
                    of Indemnification by Members

                	 	
                  50

                
	 	
                  10.7.

                	 	
                  Insurance

                	 	
                  50

                
	 	
                  10.8.

                	 	
                  Survival
                    of Indemnification Rights

                	 	
                  50

                
	 	 	 
	
                  ARTICLE
                    XI     DISPUTE RESOLUTION

                	 	
                  50

                
	 	 	 	 	 	 
	 	
                  11.1.

                	 	
                  Arbitration.

                	 	
                  50

                
	 	
                  11.2.

                	 	
                  Waiver
                    of Jury Trial; Exemplary Damages

                	 	
                  52

                
	 	
                  11.3.

                	 	
                  Attorneys’
                    Fees

                	 	
                  52

                
	 	 	 
	
                  ARTICLE
                    XII     TERMINATION

                	 	
                  52

                
	 	 	 	 	 	 
	 	
                  12.1.

                	 	
                  Termination
                    Without Default

                	 	
                  52

                
	 	
                  12.2.

                	 	
                  Termination
                    Upon Default.

                	 	
                  52

                
	 	
                  12.3.

                	 	
                  Survival

                	 	
                  53

                
	 	 	 
	
                  ARTICLE
                    XIII     MISCELLANEOUS

                	 	
                  53

                
	 	 	 	 	 	 
	 	
                  13.1.

                	 	
                  Notices

                	 	
                  53

                
	 	
                  13.2.

                	 	
                  Amendments;
                    No Waivers.

                	 	
                  54

                
	 	
                  13.3.

                	 	
                  Ambiguities

                	 	
                  54

                
	 	
                  13.4.

                	 	
                  Publicity

                	 	
                  54

                
	 	
                  13.5.

                	 	
                  Expenses

                	 	
                  54

                
	 	
                  13.6.

                	 	
                  Successors
                    and Assigns

                	 	
                  54

                
	 	
                  13.7.

                	 	
                  Governing
                    Law

                	 	
                  54

                
	 	
                  13.8.

                	 	
                  Counterparts;
                    Effectiveness

                	 	
                  54

                
	 	
                  13.9.

                	 	
                  Entire
                    Agreement

                	 	
                  55

                
	 	
                  13.10.

                	 	
                  Severability

                	 	
                  55

                
	 	
                  13.11.

                	 	
                  Captions

                	 	
                  55

                
	 	
                  13.12.

                	 	
                  Construction.

                	 	
                  55

                
	 	
                  13.13.

                	 	
                  Members’
                    Representative.

                	 	
                  55

                

        

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

    ASSET
      PURCHASE AGREEMENT

     

    AGREEMENT,
      dated March 15, 2006, by and among Accoona Corp., a Delaware corporation
      (“Parent”), BE Acquisition Corp., a Delaware corporation (“Buyer”), Internet
      Media Group LLC, a New York limited liability company (“Seller”), and the
      members of Seller listed on Schedule I hereto (each a “Member” and collectively,
      the “Members”) and Allen Benzaken (“Benzaken”) in his capacity as Representative
      (as hereinafter defined).

     

    W
      I T N E S S E T H :

     

    WHEREAS,
      Seller is in the business of providing internet comparison shopping and related
      services (the foregoing being referred to hereinafter collectively as the
“Business”);

     

    WHEREAS,
      Members are the sole members of Seller; 

     

    WHEREAS,
      Buyer desires to purchase certain of the assets and assume certain liabilities
      of the Business from Seller, and Seller desires to sell such assets to Buyer
      and
      have Buyer assume such liabilities of the Business, upon the terms and subject
      to the conditions hereinafter set forth; and

     

    WHEREAS,
      pursuant to Section 13.13, the Members hereby appoint Benzaken as their true
      and
      lawful agent and attorney-in-fact (the “Representative”).

     

    NOW,
      THEREFORE, in consideration of the foregoing and the representations,
      warranties, covenants and agreements herein contained and other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1. Definitions.
      The
      following terms, as used herein, have the following meanings:

     

    “Accounts
      Receivable” has the meaning set forth in Section 3.11.

     

    “Action”
      means any legal action, suit, investigation, hearing or proceeding, including
      any audit for taxes or otherwise.

     

    “Additional
      Agreements” means each of the Conveyance Documents, Employment Agreements and
      Restrictive Covenants Agreements.

     

    “Adjusted
      Tangible Assets” means all Tangible Assets plus any cash and cash equivalents,
      including any marketable securities (equal to the closing price on the third
      business day prior to the Closing Date) (except for common stock of Dynamic
      Marketing, Inc.), prepaid expenses, deposits, and accounts receivable (including
      credit card receivables but excluding any loans payable) and net of a reserve
      for doubtful accounts of 1%.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
      means, with respect to any Person, any Person directly or indirectly
      controlling, controlled by, or under common control with such other Person.
      With
      respect to any natural person, the term Affiliate shall also include any member
      of said person’s immediate family, any family limited partnership for said
      person and any trust, voting or otherwise, of which said person is a trustee
      or
      of which said person or any of said person’s immediate family is a beneficiary.
      For avoidance of any doubt (i) with respect to all periods prior to the
      Closing, each Member and Skynet and Zylonet are Affiliates of Seller, and (ii)
      with respect to all periods subsequent to the Closing, Parent and Buyer are
      Affiliates of the Seller.

     

    “Arbitrator”
      has the meaning set forth in Section 11.1.

     

    “Assumed
      Liabilities” has the meaning set forth in Section 2.3.

     

    “Authority”
      shall mean any governmental, regulatory or administrative body, agency or
      authority, any court or judicial authority, any arbitrator, or any public,
      private or industry regulatory authority, whether international, national,
      Federal, state, or local.

     

    “Books
      and Records” means all books and records, ledgers, employee records, customer
      lists, files, correspondence, and other records of every kind (whether written,
      electronic, or otherwise embodied) owned or used by Seller or in which Seller’s
      assets, business, or transactions are otherwise reflected.

     

    “Business
      Day” means any day other than a Saturday, Sunday or a legal holiday on which
      commercial banking institutions in New York are not open for
      business.

     

    “Charter
      Documents” has the meaning set forth in Section 3.3.

     

    “Closing
      Date” has the meaning set forth in Section 2.10.

     

    “Closing”
      has the meaning set forth in Section 2.10.

     

    “Closing
      Payment” has the meaning set forth in Section 2.5.

     

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

     

    “Contracts”
      has the meaning set forth in Section 2.1(c)

     

    “Conveyance
      Documents” has the meaning set forth in Section 2.10(b).

     

    “December
      Balance Sheet” has the meaning set forth in Section 3.10(a).

     

    “Earnout
      Payment” has the meaning set forth in Section 2.6(c)

     

    “Earnout
      Payment Period” has the meaning set forth in Section 2.1(c).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “EBITDA”
      means with respect to any Person earnings from the Business before interest
      income and expense, income Taxes (whether federal, state or local, and domestic
      or foreign), depreciation and amortization, and in each case shall be determined
      pursuant to GAAP on a consolidated basis (but after subtracting any minority
      interests) consistent with Parent’s accounting practices from the sale of
      advertising; provided,
      that in
      making such determinations advertising costs shall be expensed as incurred
      and
      neither the proceeds from nor any dividends or refunds with respect to, nor
      any
      increases in the cash surrender value of, any life insurance policy under which
      such person, or any subsidiary of either of them, is the named beneficiary
      or
      otherwise entitled to recovery, shall be included as income, and the premium
      expense related to any such life insurance policy shall not be treated as an
      expense; provided further that the amount of earnings for the relevant period
      shall only be from payments for advertising received by Seller (as to
      pre-Closing periods) and by Buyer (as to post-Closing periods), amounts paid
      for
      any services related to the foregoing, net of all factoring charges and
      commissions, rebates, discounts, refunds, credits, cancellations and similar
      items and shall not include: any amounts until the cash with respect thereto
      is
      received, or, in the case of checks or money orders, until such amounts have
      cleared (provided such cash is collected within, or within 30 days after the
      termination of, the applicable earnings period); amounts for any items sold
      at
      cost; reserves released by banks or credit card companies, commissions, fees
      or
      similar payments made by banks or credit card companies, whether for signing
      up
      customers or otherwise; cancellation fees; any sales until the expiration date
      for the return period has passed and no notice of return had been given
      (provided once such return period has passed without notice of return then
      the
      sale will be counted as of the date of the sale, rather than the date of the
      expiration of the return period); and sales Tax and any other pass through
      items
      and shall be after subtracting all costs and expenses paid or payable by Seller
      with respect to the transactions contemplated by this Agreement.

     

    “Employment
      Agreements” has the meaning set forth in Section 8.2(i).

     

    “ERISA”
      means the Employment Retirement Income Security Act of 1974, as amended from
      time to time.

     

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

     

    “Excluded
      Assets” has the meaning set forth in Section 2.2.

     

    “Excluded
      Liabilities” has the meaning set forth in Section 2.4.

     

    “Excluded
      Persons” has the meaning set forth in Section 6.5.

     

    “Financial
      Statements” has the meaning set forth in Section 3.10.

     

    “GAAP”
      means U.S. generally accepted accounting principles.

     

    “Indebtedness”
      means with respect to any Person, (a) all obligations of such Person for
      borrowed money, or with respect to deposits or advances of any kind (including
      amounts by reason of overdrafts and amounts owed by reason of letter of credit
      reimbursement agreements) including with respect thereto, all interests, fees
      and costs, (b) all obligations of such Person evidenced by bonds, debentures,
      notes or similar instruments, (c) all obligations of such Person under
      conditional sale or other title retention agreements relating to property
      purchased by such Person, (d) all obligations of such Person issued or assumed
      as the deferred purchase price of property or services (other than accounts
      payable to creditors for goods and services incurred in the ordinary course
      of
      business), (e) all Indebtedness of others secured by (or for which the holder
      of
      such Indebtedness has an existing right, contingent or otherwise, to be secured
      by) any lien or security interest on property owned or acquired by such Person,
      whether or not the obligations secured thereby have been assumed, (f) all
      obligations of such Person under leases required to be accounted for as capital
      leases under GAAP, and (g) all guarantees by such Person other than intercompany
      guarantees.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Indemnification
      Notice” has the meaning set forth in Section 10.3.

     

    “Indemnified
      parties” has the meaning set forth in Section 10.3.

     

    “Indemnifying
      party” has the meaning set forth in Section 10.3.

     

    “Initial
      Public Offering” means the registration of any class of Parent’s securities with
      the SEC under the Act or the Securities Exchange Act of 1934, as
      amended.

     

    “Intellectual
      Property Right” means any trademark, service mark, registration thereof or
      application for registration therefor, trade name, license, invention, patent,
      patent application, trade secret, trade dress, know-how, copyright,
      copyrightable materials, copyright registration, application for copyright
      registration, software programs, data bases, the “Internet Media Group” and
“Buyer’s Edge” names and all derivations thereof, u.r.l.s, and any other type of
      proprietary intellectual property right, and all embodiments and fixations
      thereof and related documentation, registrations and franchises and all
      additions, improvements and accessions thereto, in each case which is owned
      or
      licensed or filed by Seller or used or held for use in the Business, whether
      registered or unregistered or domestic or foreign.

     

    “Interim
      Parent Balance Sheet” has the meaning set forth in Section 4.8.

     

    “Interim
      Balance Sheet” has the meaning set forth in Section 3.10(a).

     

    “January
      Balance Sheet” has the meaning set forth in Section 3.10(a).

     

    “Labor
      Agreements” has the meaning set forth in Section 3.26(a).

     

    “Law”
      means any domestic or foreign Federal, state, municipality or local law,
      statute, ordinance, code, rule or regulation or common law.

     

    “Lien”
      means, with respect to any asset, any mortgage, lien, pledge, charge, security
      interest or encumbrance of any kind in respect of such asset, including any
      agreement to give any of the foregoing and any conditional sale and including
      any voting agreement or proxy.

     

    “Loss(es)”
      has the meaning set forth in Section 10.1.

     

    “Material
      Adverse Change” means a material adverse change in the business, assets,
      condition (financial or otherwise), liabilities, and results of operations
      or
      prospects of the Business individually or as a whole; provided,
      however,
      without
      prejudicing whether any other matter qualifies as a Material Adverse Change,
      any
      matter involving a loss or payment in excess of $50,000 shall constitute a
      Material Adverse Change, per se. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Material
      Adverse Effect” means a material adverse effect on the business, assets,
      condition (financial or otherwise), liabilities, results of operations or
      prospects of the Business individually or as a whole; provided, however,
      without
      prejudicing whether any other matter qualifies as a Material Adverse Effect,
      any
      matter involving a loss or payment in excess of $50,000 shall constitute a
      Material Adverse Effect, per se.

     

    “Members”
      has the meaning set forth in the Preamble.

     

    “Merger
      Agreement” means Agreement and Plans of Mergers, dated as of the date hereof, by
      and among, Parent, SN Acquisition Corp., ZS Acquisition Corp., Skynet, Zylonet,
      the Representative and the Shareholders thereto.

     

    “Minimum
      Required EBITDA” means the cumulative EBITDA of Seller plus Skynet and Zylonet,
      taken as a whole, for the period of October 1, 2005 through the Closing
      Date.

     

    “Net
      Revenues” means, in each case determined pursuant to GAAP on a consolidated
      basis consistent with Parent’s practice, revenues from the sale of advertising
      from the Business, specifically excluding any amounts attributable to interest
      income, income from Taxes, extraordinary or one-time gains and after the
      deduction of any factoring charges and commissions, rebates, discounts, refunds,
      credits, cancellations and similar items and shall not include: any amounts
      from
      either Surviving Corporation (as defined in the Merger Agreement) subsequent
      to
      any date that Parent directs Buyer not to do business with either of them;
      any
      amounts until the cash with respect thereto is received, or, in the case of
      checks or money orders, until such amounts have cleared (provided such cash
      is
      collected within or within 30 days after, the termination of, the applicable
      earnings period); amounts for any items sold at cost; reserves released by
      banks
      or credit card companies; commissions, fees or similar payments made by banks
      or
      credit card companies, whether for signing up customers or otherwise;
      cancellation fees; and sales Tax and any other pass through items; it being
      understood that no accounts receivable as of the Closing Date (including the
      payment thereof) are taken into account in calculating Net Revenue.

     

    “Office
      Lease” has the meaning set forth in Section 2.1(a).

     

    “Orders”
      means any decree, order, judgment, writ, award, injunction, rule or consent
      of
      or by an Authority.

     

    “Outside
      Closing Date” means March 31, 2006.

     

    “Parent
      Class C Common Stock” means the Class C Common Stock, $.0001 par value per
      share, of Parent.

     

    “Parent
      Consents” means the consents, waivers and amendments to be obtained by Parent
      and its Affiliates with respect to the execution, delivery and performance
      by
      Parent and its Affiliates of this Agreement and all related matters between
      Parent and its Affiliates and the Members.

     

    
      
        
        

      

      
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    “Parent
      Financial Statements” has the meaning set forth in Section 4.8.

     

    “Permits”
      has the meaning set forth in Section 3.20.

     

    “Person”
      means an individual, a corporation, a partnership, a limited liability company,
      an association, a trust or other entity or organization, including a government,
      domestic or foreign, or political subdivision thereof, Seller or an agency
      or
      instrumentality thereof.

     

    “Purchased
      Assets” has the meaning set forth in Section 2.1.

     

    “Purchase
      Price” has the meaning set forth in Section 2.5.

     

    “Purchaser
      Indemnitees” has the meaning set forth in Section 10.1.

     

    “Publicly
      Traded” has the meaning set forth in Section 6.8(e).

     

    “Real
      Property” means, collectively, all real properties and interests therein
      (including the right to use), together with all buildings, fixtures, trade
      fixtures, plant and other improvements located thereon or attached thereto;
      all
      rights arising out of use thereof (including air, water, oil and mineral
      rights); and all subleases, franchises, licenses, permits, easements and
      rights-of-way which are appurtenant thereto.

     

    “Receiving
      Persons” has the meaning set forth in Section 6.6(f)(ii).

     

    “Repurchase
      Event” has the meaning set forth in Section 6.6(d).

     

    “Restrictive
      Covenants” has the meaning set forth in Section 6.7.

     

    “Restrictive
      Covenants Agreements” has the meaning set forth in Section 8.1(k).

     

    “Rights
      Shares” has the meaning set forth in Section 6.6(f)(ii).

     

    “SEC”
      means the Securities and Exchange Commission.

     

    “Securities
      Act” means the Securities Act of 1933, as amended.

     

    “Seller
      Consents” has the meaning set forth in Section 3.9.

     

    “Seller
      Indemnitees” has the meaning set forth in Section 10.2.

     

    “Shareholder”
      and “Shareholders” means each of the holders of shares of common stock of Skynet
      or Zylonet.

     

    “Skynet”
      means Skynet Communications Corp., a New York corporation. 

     

    
      
        
        

      

      
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    “Tangible
      Assets” has the meaning set forth in Section 2.1(c).

     

    “Tax(es)”
      means any federal, state, local or foreign tax, charge, fee, levy, deficiency,
      or other assessment of any kind or nature imposed by any governmental authority
      (including without limitation any income (net or gross), alternative minimum,
      gross receipts, profits, sales, use, ad valorem, franchise, license,
      withholding, employment, social security, workers compensation, unemployment
      compensation, transfer, excise, import, real property, personal property,
      intangible property, occupancy, recording, minimum, environmental or estimated
      tax), including any liability therefor as a transferee (including without
      limitation under Section 6901 of the Code or similar provision of applicable
      law), as a result of Treasury Regulation Section 1.1502-6 or similar provision
      of applicable law or as a result of any Tax sharing indemnification or similar
      agreement, together with any interest, penalty and additions to tax imposed
      with
      respect thereto.

     

    “Tax
      Return” means any return, declaration, information return, claim for refund or
      credit, report or any similar statement, and any amendment thereto, including
      any attached schedule and supporting information filed or required to be filed
      with any governmental authority in connection with the determination,
      assessment, collection or payment of a Tax or the administration of any law,
      rule or regulation relating to any Tax.

     

    “Third
      Party Claim” has the meaning set forth in Section 10.3.

     

    “UCC”
      shall mean the Uniform Commercial Code of the State of New York, or any
      corresponding or succeeding provisions of Laws of the State of New
      York,
      or any
      corresponding or succeeding provisions of Laws, in each case as the same may
      have been and hereafter may be adopted, supplemented, modified, amended,
      restated or replaced from time to time.

     

    “Units”
      means the issued and outstanding membership interests of Seller.

     

    “Underlying
      Parent Stock” means the Common Stock, $.0001 par value per share, of Parent
      issued or issuable upon conversion of Parent Class C Common Stock.

     

    “Website(s)”
      shall mean all of the internet domain names for Seller set forth on Schedule
      3.7.

     

    “Zylonet”
      means Zylonet Systems, Inc., a New Jersey corporation.

     

    ARTICLE
      II

     

    PURCHASE
      AND SALE

     

    2.1. Purchase
      and Sale.
      Upon
      the terms and subject to the conditions of this Agreement, at the Closing Buyer
      shall purchase from Seller and Seller shall (and the Members shall cause Seller
      to) sell, convey, transfer, assign and deliver to Buyer, free and clear of
      all
      Liens, all right, title and interest of Seller in, to and under all of the
      assets, properties and rights of Seller of every kind and description
      whatsoever, wherever located, real, personal or mixed, tangible or intangible,
      other than the Excluded Assets, including the following described assets,
      properties and rights of Seller as the same shall exist at the Closing
      (including all such assets, properties and rights acquired by Seller on or
      after
      the date hereof) (the “Purchased Assets”):

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (a) the
      goodwill of the Business;

     

    (b) the
      lease
      with respect to Seller’s office space at 481 Kings Highway, Brooklyn, New York
      11223, described on Schedule 2.1(b) attached hereto, together with all fixtures
      and improvements erected on the premises leased thereby (the “Office
      Lease”);

     

    (c) all
      tangible personal property and interests therein, including inventory machinery,
      computers and accessories, furniture, office equipment, communications equipment
      and other tangible property, including the items listed on Schedule 2.1(c)
      (collectively, the “Tangible Assets”);

     

    (d) all
      raw
      materials, work-in-process, finished goods, supplies and other inventories
      of
      Seller;

     

    (e) the
      contracts, agreements, leases (including equipment leases and capital leases),
      licenses, commitments, client contracts, sales and purchase orders and other
      instruments listed on Schedule 2.1(e), and similar instruments entered into
      by
      Seller in compliance with Section 5.1 after the signing hereof and prior to
      the
      Closing, and all rights and benefits thereunder, including all rights and
      benefits thereunder with respect to all cash and other property of third parties
      under Seller’s dominion or control (together with the Office Lease,
      collectively, the “Contracts”);

     

    (f) all
      prepaid expenses and deposits pertaining to any of the Purchased Assets,
      including leases and rentals (including the deposit under the Office
      Lease);

     

    (g) all
      of
      Seller’s rights, claims, credits, causes of action or rights of set-off against
      third parties relating to the Purchased Assets, including unliquidated rights
      under manufacturers’ and vendors’ warranties;

     

    (h) all
      Intellectual Property Rights and other intangible property of Seller (and all
      goodwill associated therewith), including interests in client accounts and
      the
      items listed on Schedule 2.1(h);

     

    (i) all
      cash,
      cash equivalents, deposits, securities, commodities, deposit accounts, checking
      accounts, brokerage accounts and all other accounts and all securities and
      investments, less any undistributed amounts under Section (2.2)(b) designated
      for accrued profits of Seller through September 30, 2006;

     

    (j) all
      accounts, notes, and other receivables, whether or not accrued, and whether
      or
      not billed, of Seller, without any allowance for doubtful accounts, including
      the items set forth on Schedule 2.1(x);

     

    (k) all
      transferable licenses, permits or other governmental authorizations of Seller,
      including the items listed on Schedule 3.13; and

     

    
      
        
        

      

      
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    (l) all
      Book
      and Records.

     

    2.2. Excluded
      Assets.
      Buyer
      expressly understands and agrees that the following assets and properties of
      Seller (the “Excluded Assets”) shall be excluded from the Purchased
      Assets:

     

    (a) all
      rights of Seller in and to this Agreement;

     

    (b) any
      undistributed amounts of cash from accrued profits of Seller through September
      30, 2005;

     

    (c) the
      cash
      surrender value of all life insurance policies; and

     

    (d) the
      Unit
      books and minute books of Seller, and all Books and Records relating to any
      Excluded Asset or Excluded Liability.

     

    2.3. Assumption
      of Liabilities.
      Upon
      the terms and subject to the conditions of this Agreement, at the Closing,
      Buyer
      shall assume the following liabilities and obligations of Seller (the “Assumed
      Liabilities”): (a) all liabilities reflected on the January Balance Sheet and
      existing on the Closing Date, other than Excluded Liabilities; (b) any payables
      of Seller for goods and services incurred subsequent to the date of the January
      Balance Sheet but prior to the Closing Date that are outstanding on the Closing
      Date incurred in the ordinary course of business and consistent in kind and
      amount with those payables set forth on the January Balance Sheet; (c) any
      indebtedness of Seller to Skynet or Zylonet; and (d) all liabilities and
      obligations of Seller arising from and after the Closing Date, under the
      Contracts other than (i) Contracts as to which (A) a Seller Consent was required
      but was not obtained, except if Seller notifies Buyer that Seller Consent has
      not been obtained and, notwithstanding such notification, Buyer desires to,
      and
      effectively does, assume the Contract, or (B) any party is in default (whether
      with or without the passage of time or the giving of notice or both) or breach
      as of the Closing Date (a “Defaulted Contract”), and (ii) liabilities or
      obligations attributable to (A) any failure by Seller to comply with the terms
      thereof prior to the Closing Date or (B) except as specifically provided in
      clauses (a) and (b) of this Section 2.3, materials, equipment or space
      purchased, leased or otherwise provided or services rendered prior to the
      Closing Date. If Seller notifies Buyer prior to the Closing that any Contract
      is
      a Defaulted Contract, then Buyer shall have the option whether or not to assume
      any liabilities associated with such Defaulted Contract.

     

    2.4. Excluded
      Liabilities.
      Notwithstanding any provision in this Agreement or any other writing to the
      contrary, Buyer is assuming only the Assumed Liabilities and is not assuming
      and
      shall not assume any other liability or obligation of Seller of whatever nature
      whether presently in existence or arising hereafter. All such other liabilities
      and obligations, including (a) all Indebtedness, except as set forth in Section
      2.3(c), (b) any liability relating to any Action, against or affecting Seller,
      the Business or any Purchased Asset or Contract before any court or arbitrator
      or any governmental body or agency official, which Action arose out of any
      action or omission of Seller prior to the Closing Date, (c) any liability to
      Reserved, (d) any liability resulting from any tort or any violation of any
      Law
      (including violations of warranties, trademark infringement, for “spamming”,
      privacy violations or consumer complaints) or the breach of any contract; (e)
      any liability relating to any phantom equity or other employee benefit plan,
      (f)
      any liability of Seller for Taxes, whether or not payable, (g) any liability
      under the Contracts specified in clauses (i) and (ii) of Section 2.3, (h) any
      liability or obligation relating to any Excluded Asset, and (i) any
      indebtedness, liability or obligation of any kind of Seller to any of its
      Affiliates (except as set forth in Section 2.3(c)), shall in each and every
      case
      be retained by and remain obligations and liabilities of Seller (all such
      liabilities and obligations not being assumed being herein referred to as the
      “Excluded Liabilities”).

     

    
      
        
        

      

      
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    2.5. Purchase
      Price.
      The
      purchase price for the Purchased Assets shall be the sum of the Closing Payment
      plus the Earnout Payment, subject to adjustment as set forth in Sections 2.7
      (collectively, the “Purchase Price”). The “Closing Payment” shall be an amount
      equal to Five Million Dollars ($5,000,000) in cash.

     

    2.6. Payment
      of the Purchase Price.
      The
      Purchase Price shall be payable by Buyer as follows:

     

    (a) The
      Closing Payment shall be payable by Buyer on the Closing Date in the form of
      $5,000,000 in cash.

     

    (b) The
      Closing Payment shall be payable in United States Dollars and shall be delivered
      by Buyer on the Closing Date in the form of a wire transfer of immediately
      available funds to an account of Seller in New York City designated in writing
      by Seller at least three Business Days prior to the Closing Date. 

     

    (c) Subject
      to the remaining provisions of this Section 2.6, (I) an Earnout Payment of
      857,412 shares of Parent Class C Common Stock (minus any amounts payable
      pursuant to clause (II) of this Section 2.6(c)) shall be payable to Seller,
      subject to Buyer achieving in any same consecutive twelve month period from
      and
      after Closing and terminating on and including October 31, 2007 (A) Net Revenues
      of at least $15,000,000 and (B) EBITDA of at least $1,000,000; and (II) an
      Earnout Payment of 428,706 shares of Parent Class C Common Stock shall be
      payable to Seller, subject to Buyer achieving in the 13-month period starting
      on
      the first day of the calendar month on or otherwise immediately after the
      Closing Date EBITDA of at least $500,000.

     

    The
      payments described in this Section 2.6(c) are referred to herein as the “Earnout
      Payment”. The period from the Closing Date through October 31, 2007 is referred
      to as the “Earnout Payment Period.” The Earnout Payment shall be made no later
      than ten (10) Business Days after October 31, 2007.

     

    (d) The
      stock
      portion of the Purchase Price shall be evidenced by a certificate registered
      in
      the name of the Seller and dated the issuance date. The Earnout Payment is
      made
      subject to confirmation based on Parent’s subsequent review of the financials
      for the applicable payment period. 

     

    (e) No
      Fractional Shares.
      No
      certificates or scrip representing fractional shares of Parent Class C Common
      Stock will be issued, and such fractional share interests will not entitle
      the
      owner thereof to vote or to any rights of a stockholder of Parent. Any
      fractional shares will be rounded to the nearest whole share.

     

    
      
        
        

      

      
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    (f) Parent
      Class C Common Stock Transfer Restrictions.
      Any
      Parent Class C Common Stock distributed as part of the Purchase Price shall
      be
      subject to the restrictions contained in Sections 3.30(v) and (w) and Section
      6.6.

     

    (g) (i) In
      the
      event that Parent waives its conditions to Closing set forth in Section 8.2(l)
      and (m) herein, then, notwithstanding such waiver, to the extent that as of
      the
      Closing the Seller, Skynet and Zylonet, taken as a whole, have Indebtedness
      (excluding Indebtedness of Seller to Skynet) or Seller’s, Skynet’s and Zylonet’s
      aggregate Adjusted Tangible Assets (excluding Excluded Assets), taken as a
      whole, do not exceed their aggregate liabilities (excluding Excluded Liabilities
      and Indebtedness of Seller to Skynet) by at least the Minimum Required EBITDA,
      Seller and the Members jointly and severally shall pay to Buyer within five
      (5)
      Business Days of the notification of the calculation an aggregate amount in
      cash
      equal to such Indebtedness or the shortfall against the Minimum Required EBITDA;
      provided,
      however,
      Buyer,
      may at its option, subject to Section 2.6(g)(ii), reduce the amount of the
      Purchase Price by the amount equal to such Indebtedness and/or such shortfall
      (such reduction to be applied first to the Closing Payment and then to the
      Earnout Payment); provided,
      further,
      any
      amounts paid by Skynet or Zylonet under Section 2.5(h) of the Merger Agreement
      therein shall not be deducted from the Purchase Price under this Section
      2.6.

     

    (ii) The
      initial determination of whether any payment or withholding is due under Section
      2.6(g)(i) shall be made by Parent in good faith and, subject to Section 2.7,
      absent manifest error, shall be binding and conclusive on all parties hereto.
      

     

    2.7. Procedure
      to Establish Net Revenues, EBITDA, Indebtedness, Adjusted Tangible Assets and
      Minimum Required EBITDA.  

     

    (a) Within
      90
      days after the end of the Earnout Payment Period, Parent will notify the
      Representative of the amount of Net Revenues and EBITDA for each consecutive
      twelve month period within such period, confirmed by the regular independent
      public accountants of Parent, as calculated in accordance with this Agreement.
      The Representative shall have the right, at its sole expense, to have the
      relevant portions of the books and records of Buyer for each consecutive twelve
      month period such fiscal period to be reviewed by one independent certified
      public accounting firm of its choosing to verify or dispute the Net Revenues
      and
      EBITDA amount set forth in the Parent notice. The Representative must dispute
      the Net Revenues and EBITDA calculation within fifteen (15) days of receiving
      such calculation from Parent. If such calculation is not disputed within such
      period, the Representative will be deemed to have accepted the calculation.
      If
      by the 120th
      day
      after the end of such fiscal period the accountants for Parent and for the
      Representative are unable to agree upon the Net Revenues and EBITDA
      calculations, the accountants for Parent and the Representative shall provide
      their calculations of Net Revenues and EBITDA to a third-party accountant
      mutually agreed upon by the accountants for Parent and the Representative who
      shall make a determination as to the amount of Net Revenues and EBITDA for
      each
      consecutive twelve month period such fiscal period, which determination shall
      be
      final and binding on all parties. The expenses for such accountant shall be
      paid
      for by the party whose calculation of Net Revenues and EBITDA was most different
      from the calculation of such third-party accountants, as determined by such
      third-party accountant in its reasonable discretion.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b) With
      respect to Net Revenues and EBITDA, if the Earnout Payment is received by
      Sellers or the Members, but Parent’s accountants determine, based on a review of
      Buyer’s Books and Records, that Sellers or the Members were not entitled to have
      received such payment, Parent shall give notice to the Representative of such
      determination by Parent’s accountants, which will include the related
      calculations on which such determination was based and a demand for the return
      of the Earnout Payment. The Representative shall have the right, at its sole
      expense, to cause the relevant portions of the books and records of Buyer for
      such fiscal period to be reviewed by one independent certified public accounting
      firm of its choosing to verify or dispute whether or not Sellers or the Members
      were entitled to receive the Earnout Payment. The Representative must dispute
      the Net Revenues and EBITDA calculation within fifteen (15) Business Days of
      receiving such calculation from Parent. If such calculation is not disputed
      within such period, the Representative will be deemed to have accepted the
      calculation as of the end of such period. If by the 30th
      day
      after the Representative has received notice of the determination by Parent’s
      accountants, the accountants for Parent and for the Representative are unable
      to
      agree upon the correct calculation, the accountants for Parent and the
      Representative shall provide their calculation of Net Revenues and EBITDA to
      a
      third-party accountant mutually agreed upon by the accountants for Parent and
      the Representative, who shall make a determination as to the amount of Net
      Revenues and EBITDA, which determination shall be final and binding on all
      parties. The expenses for such accountant shall be paid for by the party whose
      calculation of Net Revenues and EBITDA was most different from the calculation
      of such third-party accountants, as determined by such third-party accountant
      in
      its reasonable discretion. Seller and the Members, jointly and severally shall
      repay and return the Earnout Payment to Parent in the form in which it was
      received within ten (10) Business Days of the date that the Representative
      accepted the calculation of the Buyer’s accountants or the date on which it has
      been finally determined that Seller and the Members were not entitled to the
      Earnout Payment. Each of the Seller and the Members and the Representative
      will
      be jointly and severally liable for any repayment to be made pursuant to this
      Section 2.7(b).

     

    (c) Any
      adjustments to the Purchase price in connection with Section 2.3(g) shall adhere
      to the procedures set forth in Section 2.7(a) and (b) for the purposes of
      determining Indebtedness, Adjusted Tangible Assets and Minimum Required EBITDA.
      In accordance with Section 2.3(g), Parent will notify the Representative of
      the
      amount of Indebtedness and/or shortfall of Adjusted Tangible Assets by which
      the
      Purchase Price has been reduced, confirmed by the regular independent public
      accountants of Parent, as calculated in accordance with this Agreement. The
      Representative shall have the right, at its sole expense, to have the relevant
      portions of the books and records of Buyer for the relevant fiscal period to
      be
      reviewed by one independent certified public accounting firm of its choosing
      to
      verify or dispute the Indebtedness and/or Adjusted Tangible Assets and/or
      Minimum Required EBITDA amounts set forth in the Parent notice. The
      Representative must dispute the Indebtedness and/or Adjusted Tangible Assets
      and/or Minimum Required EBITDA calculation within fifteen (15) days of receiving
      such calculation from Parent. If such calculation is not disputed within such
      period, the Representative will be deemed to have accepted the calculation.
      If
      by the 90th
      day
      after Closing the accountants for Parent and for the Representative are unable
      to agree upon a Indebtedness and/or Adjusted Tangible Assets and/or Minimum
      Required EBITDA calculation, the accountants for Parent and the Representative
      shall provide their calculation of Indebtedness and/or Adjusted Tangible Assets
      and/or Minimum Required EBITDA to a third-party accountant mutually agreed
      upon
      by the accountants for Parent and the Representative who shall make a
      determination as to the amount of Indebtedness and/or Adjusted Tangible Assets
      and/or Minimum Required EBITDA, which determination shall be final and binding
      on all parties. The expenses for such accountant shall be paid for by the party
      whose calculation of Indebtedness and/or Adjusted Tangible Assets and/or Minimum
      Required EBITDA was most different from the calculation of such third-party
      accountants, as determined by such third-party accountant in its reasonable
      discretion. To the extent the downward adjustment of Purchase Price, due to
      such
      Indebtedness and/or the shortfall against the Minimum Required EBITDA, has
      been
      deemed to exceed the determination of the accountant as set forth in this
      Section 2.6(c), Parent shall pay to Members an amount equal to such excess
      by
      wire transfer of immediately available funds as soon as commercially practicable
      and the Purchase Price shall be adjusted accordingly to reflect such
      determination of the accountant. In connection with the calculations set forth
      in this Section 2.6, the Shareholders shall make available, or shall cause
      Skynet and Zylonet to make available, the Books and Records (as such term
      applies to Skynet and Zylonet) of Skynet and Zylonet for the purposes of
      calculating Indebtedness, Adjusted Tangible Assets and/or Minimum Required
      EBITDA.

     

    
      
        
        

      

      
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    2.8. Right
      of Endorsement.
      From and
      after the Closing Date, Buyer shall have the absolute and unconditional right
      and authority to endorse, without recourse, the name of Seller on any check
      or
      other form of payment received by Buyer on account of any of the Purchased
      Assets. In connection therewith, Seller shall deliver to Buyer at the Closing
      copies of the resolutions duly adopted by its Board of Managers certified by
      Seller’s Secretary, and a letter of instruction executed by Seller’s President
      and the Secretary, sufficient to permit Buyer to deposit such payments, so
      endorsed, in bank accounts in the name of Buyer.

     

    2.9. Allocation
      of Purchase Price.

     

    (a) After
      a
      thorough analysis of the transaction and arms’ length negotiations between the
      parties, Buyer and Seller agree that the Purchase Price and the Assumed
      Liabilities (to the extent not required to be treated as interest under Section
      1274 of the Code) shall be allocated among the Purchased Assets in accordance
      with their fair market value, with the fair market value of those Purchased
      Assets, if any, that fall within Classes I, II and III of Tax Form 8594 being
      their book value on the Closing Date as set forth on Seller’s Books and Records
      and otherwise in accordance with the determination of book value as set forth
      in
      Section 2.9 hereof and the remainder allocated to Classes IV and V of said
      form.
      Buyer and Seller shall be bound by such allocation for Tax purposes shall
      prepare and file all Tax Returns, including Forms 8594, in a manner consistent
      with such allocation, and shall not take any position inconsistent with such
      allocation in any Tax Return, proceeding before any Tax authority or otherwise,
      unless required to do so pursuant to a “determination” (as defined in Section
      1313(a) of the Code).

     

    (b) Buyer
      and
      Seller shall duly and timely file their respective Forms 8594 with respect
      to
      the Closing Payment and Assumed Liabilities (as adjusted pursuant to Section
      2.9), with respect to each Earnout Payment, and any adjustment thereto and
      with
      respect to each payment pursuant to Article X hereof, in accordance with Section
      2.9(a). Each party shall furnish a copy of its Form 8594 to the other party
      promptly after filing.

     

    (c) In
      the
      event any allocation is questioned, audited or disputed by any Tax authority,
      the party receiving notice thereof shall promptly notify and consult with the
      other party concerning the strategy for the resolution thereof, and shall keep
      the other party apprised of the status of such question, audit or dispute and
      the resolution thereof.

     

    
      
        
        

      

      
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    2.10. Closing.
      Subject
      to the satisfaction or waiver of the conditions set forth in Article IX, the
      closing (the “Closing”) of the purchase and sale of the Purchased Assets and the
      assumption of the Assumed Liabilities hereunder shall take place at the offices
      of Parent in New Jersey, on March 16, 2006 at 10:00 a.m., or at such other
      date,
      time or place as Buyer and Seller may agree (the date and time at which the
      Closing is actually held being the “Closing Date”). In addition to those
      obligations set forth in Article VIII, at the Closing,

     

    (a) Buyer
      shall deliver the Closing Payment in accordance with Section 2.6(a);
      and

     

    (b) Seller
      and Buyer shall enter into an Assignment and Assumption Agreement in the form
      of
Exhibit
      A
      hereto,
      and Seller shall deliver to Buyer such other bills of sale, endorsements,
      consents, assignments and other good and sufficient instruments of conveyance
      and assignment (collectively, with the Assignment and Assumption Agreement,
      the
“Conveyance Documents”) as Buyer and its counsel shall deem reasonably necessary
      or appropriate to vest in Buyer all right, title and interest in, to and under
      the Purchased Assets; and all original documents that represent Purchased
      Assets, including original Contracts and Permits.

     

    (c) For
      financial reporting purposes only, upon the Closing this Agreement and the
      purchase and sale of the Purchased Assets contemplated hereunder shall be deemed
      to have closed immediately prior to the commencement of business on March 1,
      2006.

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF

    SELLER
      AND THE MEMBERS

     

    Seller
      and the Members, jointly and severally, hereby represent and warrant to Parent
      and Buyer that:

     

    3.1. Corporate
      Existence and Power.
      Seller
      is a limited liability company duly formed, validly existing and in good
      standing under and by virtue of the Laws of the State of New York, and has
      all
      power and authority, corporate and otherwise, and all governmental licenses,
      franchises, permits, authorizations, consents and approvals required to own
      and
      operate its properties and assets and to carry on its business as now conducted
      and as proposed to be conducted. Seller is not qualified to do business as
      a
      foreign corporation in any jurisdiction, and there is no jurisdiction in which
      the character of the property owned or leased by Seller or the nature of its
      activities make qualification of Seller in any such jurisdiction necessary.
      The
      only office, warehouse or business location of Seller is located at 481 Kings
      Highway, Brooklyn, New York 11223; (the “Office”). Seller has not taken any
      action, adopted any plan, or made any agreement in respect of any merger,
      consolidation, sale of all or substantially all of its respective assets,
      reorganization, recapitalization, dissolution or liquidation. 

     

    
      
        
        

      

      
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    3.2. Corporate
      Authorization. 

     

    (a) The
      execution, delivery and performance by Seller of this Agreement and each of
      the
      other Additional Agreements to which Seller is named as a party and the
      consummation by Seller of the transactions contemplated hereby and thereby
      are
      within the corporate powers of Seller and have been duly authorized by all
      necessary action on the part of Seller, including, without limitation, the
      unanimous approval of the Members. This Agreement constitutes, and, upon their
      execution and delivery, each of the Additional Agreements will constitute,
      a
      valid and legally binding agreement of Seller, enforceable against Seller in
      accordance with their respective terms.

     

    (b) Each
      Member has full legal capacity, power and authority to execute and deliver
      this
      Agreement and the Additional Agreements to which such Member is named as a
      party, to perform such Member’s obligations hereunder and thereunder and to
      consummate the transactions contemplated hereby and thereby. This Agreement
      and
      the Additional Agreements to which each Member is named as a party have been,
      or
      at Closing will be, duly executed and delivered by each Member and are, or
      upon
      their execution and delivery will be, valid and legally binding obligations
      of
      each Member, enforceable against each Member in accordance with their respective
      terms.

     

    3.3. Charter
      Documents; Legality.
      Seller
      has previously delivered to Parent true and complete copies of its Certificate
      of Formation and operating agreement, minute books and stock books (the “Charter
      Documents”), as in effect or constituted on the date hereof. The execution,
      delivery, and performance by Seller and each Member of this Agreement and any
      Additional Agreement to which Seller or such Member is to be a party has not
      violated and will not violate, and the consummation by Seller or the Members
      of
      the transactions contemplated hereby or thereby will not violate, any of the
      Charter Documents or any Law. 

     

    3.4. Capitalization
      and Ownership of Seller.
      Schedule 3.4 sets forth, with respect to Seller, (i) Seller’s authorized
      capital, (ii) the number of Seller’s Units that are outstanding, (iii) each
      Member owning such Seller’s Units and the number of shares of such Units owned
      by such Member, and (iv) each security convertible into or exercisable or
      exchangeable for Seller’s Units, the number of Units such security is
      convertible into, the exercise or conversion price of such security and the
      holder of such security. No person other than the Members owns any securities
      of
      Seller. None of Seller’s Charter Documents authorizes a class of preferred stock
      having preference over any other class of stock. Each Member owns the Units
      set
      forth in Schedule 3.4, free and clear of any Lien. There is no Contract that
      requires or under any circumstance would require (a) Seller to issue, or grant
      any right to acquire, any Units of Seller, or any security or instrument
      exercisable or exchangeable for or convertible into, the capital stock or
      membership interest of any Company or to merge, consolidate, dissolve,
      liquidate, restructure, or recapitalize Seller or (b) any holder of the Units
      of
      Seller to transfer or grant any rights with respect to any capital stock of
      Seller. The issuance of all the outstanding membership interests of Seller
      has
      been duly authorized, and all such membership interests are validly issued,
      fully paid and nonassessable.

     

    3.5. Subsidiaries.
      Seller
      does not own, and since its formation has not owned, directly or indirectly,
      securities or other ownership interests in any other entity. Seller is not
      a
      party to any agreement relating to the formation of any joint venture,
      association or other entity.

     

    
      
        
        

      

      
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    3.6. Affiliates.
      Other
      than the Members, the Seller is not controlled by any Person and Seller is
      not
      in control of any other Person. Except as set forth in Schedule 3.6, none of
      the
      Members (x) engages in any business, except through Seller or Zylonet or Skynet,
      or is an employee of or provides any service for compensation to, any other
      business concern or (y) owns any equity security of any business concern, except
      for publicly traded securities. Schedule 3.6 lists each Contract, arrangement,
      or understanding to which Seller and any Member or any Affiliate of any Member
      is a party. Except as disclosed in Schedule 3.6, none of the Members or any
      Affiliate of any Member (i) own, directly or indirectly, in whole or in part,
      any tangible or intangible property (including Intellectual Property Rights)
      that Seller uses or the use of which is necessary for the conduct of Seller’s
      business, or (ii) have engaged in any transaction with Seller.

     

    3.7. Assumed
      Names.
      Schedule 3.7 is a complete and correct list of all assumed or “doing business
      as” names currently or formerly used by Seller, including names on any Websites.
      Seller has not used any name other than the names listed on Schedule 3.7 to
      conduct its business. Seller has filed appropriate “doing business as”
certificates in all applicable jurisdictions.

     

    3.8. Governmental
      Authorization.
      None of
      the execution, delivery or performance by Seller or any Member of this Agreement
      or any Additional Agreement requires any consent, approval, license or other
      action by or in respect of, or registration, declaration or filing with, any
      Authority.

     

    3.9. Consents.
      The
      Contracts listed on Schedule 3.9 are the only agreements, commitments,
      arrangements, contracts or other instruments binding upon Seller or any of
      its
      properties or any Member requiring a consent, approval, authorization, order
      or
      other action of or filing with any Person as a result of the execution, delivery
      and performance of this Agreement or any of the Additional Agreements or the
      Merger Agreement or the consummation of the transactions contemplated hereby
      or
      thereby (each of the foregoing, a “Seller Consent”).

     

    3.10. Financial
      Statements. 

     

    (a) Attached
      hereto as Schedule 3.10 are unaudited balance sheets of Seller as of September
      30, 2005, December 31, 2005 and January 31, 2006, and statements of operations
      and retained earnings and cash flow (only for December 31, 2005) of Seller
      for
      the nine months ended September 30, 2005 and the years ended December 31, 2005,
      (collectively, the “Financial Statements”). The balance sheet contained in the
      Financial Statements as of September 30, 2005 is referred to herein as the
      “Interim Balance Sheet”. The balance sheet contained in the Financial Statements
      as of December 31, 2005 is referred to herein as the “December Balance Sheet”.
      The balance sheet contained in the Financial Statements as of January 31, 2006
      is referred to herein as the “January Balance Sheet”. The Financial Statements
      (i) were prepared from the Books and Records; (ii) were prepared in
      accordance with GAAP consistently applied, subject in the case of the September
      30, 2005 financial statements to normal year end adjustments; (iii) fairly
      and
      accurately present Seller’s financial condition and the results of its
      operations as of their respective dates and for the periods then ended; (iv)
      contain and reflect all necessary adjustments and accruals for a fair
      presentation of Seller’s financial condition as of their dates; and (v) contain
      and reflect adequate provisions for all reasonably anticipated liabilities
      for
      all material income, property, sales, payroll or other Taxes applicable to
      Seller with respect to the periods then ended. Seller has heretofore delivered
      to Parent complete and accurate copies of all “management letters” received by
      it from Seller’s accountants and all responses during the last three years by
      lawyers engaged by Seller to inquiries from Seller’s accountant or any
      predecessor accountants.

     

    
      
        
        

      

      
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    (b) Schedule
      3.10(b) sets forth for Seller, the first nine months of 2005 and for calendar
      years 2005 and 2004 (the amount of advertising revenues from the Websites (on
      a
      per Website basis).

     

    (c) Except
      as
      specifically disclosed, reflected or fully reserved against on the Interim
      Balance Sheet and for liabilities and obligations of a similar nature and in
      similar amounts incurred in the ordinary course of business since the date
      of
      the Interim Balance Sheet, there are no liabilities, debts or obligations of
      any
      nature (whether accrued, absolute, contingent, liquidated or unliquidated,
      unasserted or otherwise) relating to Seller. All debts and liabilities, fixed
      or
      contingent, which should be included under GAAP on an accrual basis on the
      Interim Balance Sheets are included therein.

     

    (d) The
      Interim Balance Sheet accurately reflects the outstanding Indebtedness of Seller
      as of the date thereof. Except as set forth on Schedule 3.10, Seller does not
      have any Indebtedness.

     

    (e) All
      accounts, books and ledgers of Seller have been properly and accurately kept
      and
      completed in all material respects, and there are no material inaccuracies
      or
      discrepancies of any kind contained or reflected therein. Seller has none of
      its
      records, systems controls, data or information recorded, stored, maintained,
      operated or otherwise wholly or partly dependent on or held by any means
      (including any mechanical, electronic or photographic process, whether
      computerized or not) which (including all means of access thereto and therefrom)
      is not under the exclusive ownership (excluding licensed software programs)
      and
      direct control of Seller or Skynet or Zylonet and which is not located at the
      Office. 

     

    (f) Attached
      hereto as Schedule 3.10(f) is a true, correct and complete schedule setting
      forth the amounts paid by Seller for direct-response advertising for each of
      the
      periods covered by the Financial Statements.

     

    (g) All
      financial projections delivered by or on behalf of Seller or the Members to
      Parent were prepared in good faith using assumptions that Seller or the Members
      believe to be reasonable and neither Seller nor any Member is
      aware
      of the existence of any fact or occurrence of any circumstance that is
      reasonably likely to have an adverse impact on said projections.

     

    3.11. Accounts
      Receivable.
      Schedule 3.11 sets forth as of a date within three (3) days of the date hereof
      all accounts, notes and other receivables, whether or not accrued, and whether
      or not billed, of Seller, in accordance with GAAP (“Accounts Receivable”).
      Except as set forth in Schedule 3.11, all Accounts Receivable represent bona
      fide sales of advertising by Seller in the ordinary course of its business
      through means of the Website and are fully collectible, net of any reserves
      shown on the Interim Balance Sheet. At the Closing, Seller shall provide Parent
      with an updated Schedule 3.11 as of a date within five days of the
      Closing.

     

    
      
        
        

      

      
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    3.12. Books
      and Records.

     

    (a) The
      Books
      and Records accurately and fairly, in reasonable detail, reflect Seller’s
      transactions and dispositions of assets. Seller maintains a system of internal
      accounting controls sufficient to provide reasonable assurance
      that:

     

    (i) transactions
      are executed in accordance with management’s authorization;

     

    (ii) access
      to
      assets is permitted only in accordance with management’s authorization;
      and

     

    (iii) recorded
      assets are compared with existing assets at reasonable intervals, and
      appropriate action is taken with respect to any differences.

     

    (b) Seller
      has heretofore made all of its Books and Records available to Parent for its
      inspection and has heretofore delivered to Parent complete and accurate copies
      of documents referred to in the Schedules or Parent otherwise has requested.
      All
      Contracts, documents, and other papers or copies thereof delivered to Parent
      by
      or on behalf of Seller in connection with this Agreement and the transactions
      contemplated herein are accurate, complete, and authentic.

     

    (c) Schedule
      3.12 is a complete and correct list of all savings, checking, brokerage or
      other
      accounts pursuant to which Seller has cash or securities on deposit and such
      list indicates the signatories on each account.

     

    3.13. Absence
      of Certain Changes. 

     

    (a) Except
      as
      set forth in Schedule 3.13, since September 30, 2005, Seller has conducted
      its
      business in the ordinary course consistent with past practices, and there has
      not been:

     

    (i) any
      Material Adverse Change or any event, occurrence, development or state of
      circumstances or facts which could reasonably be expected to result individually
      or in the aggregate in a Material Adverse Change or on Seller’s ability to
      consummate the transactions contemplated herein or upon the value to Parent
      or
      Buyer of the transactions contemplated hereby;

     

    (ii) any
      transaction, contract, agreement or other instrument entered into, or commitment
      made, by Seller relating to the Business or any relinquishment by Seller of
      any
      Contract or other right, in either case other than transactions and commitments
      in the ordinary course of business consistent in all respects, including kind
      and amount, with past practices and those contemplated by this
      Agreement;

     

    (iii) any
      bonus, salary or other compensation paid or agreed to be paid to any employee
      except in accordance with Schedule 3.13;

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth in Schedule 3.13, since September 30, 2005, through and including
      the
      date hereof, Seller has not taken any action nor has had any event occur which
      would have violated any covenant of Seller set forth in Article V hereof if
      such
      action had been taken or such event had occurred between the date hereof and
      the
      Closing Date.

     

    3.14. Real
      Property.

     

    (a) Seller
      does not own any Real Property. Seller has delivered to Parent true, correct,
      and complete copies of each lease for Real Property to which Seller is a party,
      and all amendments thereto. Each such lease, together with all amendments,
      is
      listed in Schedule 3.14 and is valid and enforceable by Seller with respect
      to
      the other party thereto. Seller has not breached or violated and is not in
      default under any lease or any local zoning ordinance, and no notice from any
      Person has been received by Seller or served upon Seller or any Member claiming
      any violation of any lease or any local zoning ordinance.

     

    (b) Seller
      has not experienced any material interruption in the delivery of adequate
      quantities of any utilities (including, without limitation, electricity, natural
      gas, potable water, water for cooling or similar purposes and fuel oil) or
      other
      public services (including, without limitation, sanitary and industrial sewer
      service) required by Seller in the operation of the Business.

     

    3.15. Tangible
      Personal Property. 

     

    (a) Each
      piece of Tangible Assets has no defects, is in good operating condition and
      repair and functions in accordance with its intended use (ordinary wear and
      tear
      excepted), has been properly maintained, and is suitable for its present uses.
      Schedule 2.1(c) sets forth a complete and correct list of the Tangible Assets
      owned by Seller, setting forth a description of such property and its location,
      as of a date within five days of the date of this Agreement.

     

    (b) Seller
      has, and upon consummation of the transactions contemplated hereby Buyer will
      have, good, valid and marketable title in and to, each piece of Tangible Assets
      listed on Schedule 3.15 hereto, free and clear of all Liens, except as set
      forth
      on Schedule 3.15(b).

     

    (c) Except
      as
      indicated on Schedule 3.15, all Tangible Assets are located at the offices,
      retail property or warehouses located at 481 Kings Highway, Brooklyn, New York.
      

     

    3.16. Intellectual
      Property. 

     

    (a) Schedule
      2.1(h) sets forth a true and complete list of all Intellectual Property Rights,
      specifying as to each, as applicable: (i) the nature of such Intellectual
      Property Right; (ii) the owner of such Intellectual Property Right; (iii) the
      jurisdictions by or in which such Intellectual Property Right has been issued
      or
      registered or in which an application for such issuance or registration has
      been
      filed; and (iv) all licenses, sublicenses and other agreements pursuant to
      which
      any Person (including the Companies) is authorized to use such Intellectual
      Property Right.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (b) Except
      as
      set forth on Schedule 3.16, within the past three (3) years (or prior thereto
      if
      the same is still pending or subject to appeal or reinstatement) and other
      than
      as evidenced in Schedule 3.16 with respect to threatened matters, Seller has
      not
      been sued or charged in writing with or been a defendant in any claim, suit,
      action or proceeding that involves a claim of infringement of any Intellectual
      Property Rights, and Seller does not have any knowledge of any other claim
      of
      infringement by Seller , and no knowledge of any continuing infringement by
      any
      other Person of any Intellectual Property Rights.

     

    (c) The
      current use by Seller of the Intellectual Property Rights does not infringe,
      and
      the use by Buyer, Parent or any of its Affiliates of the Intellectual Property
      Rights after the Closing will not infringe, upon the rights of any other
      Person.

     

    (d) Except
      as
      set forth on Schedule 3.16, all employees, agents, consultants or contractors
      (including any Members) who have contributed to or participated in the creation
      or development of any copyrightable, patentable or trade secret material on
      behalf of Seller or any predecessor in interest thereto either: (i) is a party
      to a “work-for-hire” agreement under which Seller is deemed to be the original
      owner/author of all property rights therein; or (ii) has executed an assignment
      or an agreement to assign in favor of Seller (or such predecessor in interest,
      as applicable) all right, title and interest in such material. All of Seller’s
      Intellectual Property Rights are created on a “work-for-hire” basis and owned by
      Seller.

     

    3.17. Inventory.

     

    (a) Seller
      has no inventory. 

     

    3.18. Advertisers
      and Business Relationships.

     

    (a) Schedule
      3.18(a) is an accurate and complete and current list of each of Seller’s 20
      largest advertisers (in terms of revenues) and suppliers for each year, setting
      forth the amount of business done with each during such year, since January
      1,
      2000 or Seller’s formation, if later. Except as disclosed in Schedule 3.18(a),
      no single supplier or advertiser is material to Seller and none are Affiliates
      of Seller. The relationships of Seller with its customers, advertiser,
      distributors, sales representatives, and suppliers are good commercial working
      relationships; no advertiser listed on Schedule 3.18(a) has terminated, changed,
      or threatened to terminate, the amount, rate, or nature of the business it
      conducts with, or the services or supplies provided to, Seller or prices at
      which such business is conducted; and to the knowledge of Seller and each
      Member, the execution, delivery, or performance of this Agreement, or the
      consummation of the transactions contemplated hereby will not affect adversely
      to the Parent or Buyer or the amount, rate, or nature of the business conducted
      with any Person listed on Schedule 3.18(a) or the Parent’s or Buyer’s
      relationship with any such Person. 

     

    (b) Seller
      is
      unaware of any impending changes in the rates at which materials or services
      are
      charged to it by any Person identified on Schedule 3.18(a). Schedule 3.18(b)
      sets forth a complete and correct description of Seller’s refund and credit
      policies with each of its respective ten largest advertisers, as set forth
      in
      Section 3.18(a)(i).

     

    (c) Except
      as
      listed on Schedule 3.18(c), Seller does not outsource any of its respective
      operations. 

     

    
      
        
        

      

      
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    (d) Schedule
      3.18(d) is an accurate and complete and current list of Seller’s ten largest
      customers (in terms of dollar amounts of sale) for each year since its formation
      and up and through December 31, 2005, setting forth the amount of business
      done
      with Seller during such year.

     

    3.19. Litigation.
      There
      is no Action (or any basis therefor) pending against, or to the best knowledge
      of Seller or the Members, threatened against or affecting, Seller, any of its
      officers or directors, any Member, the business of Seller, or any Contract
      before any court or arbitrator or any governmental body, agency or official
      or
      which in any manner challenges or seeks to prevent, enjoin, alter or delay
      the
      transactions contemplated hereby. There are no outstanding judgments against
      Seller or any Member. Seller is not now, nor have it been in the past five
      years, subject to any proceeding with the Federal Trade Commission or the Equal
      Employment Opportunity Commission or any comparable body of any state or
      political subdivision.

     

    3.20. Contracts.

     

    (a) Each
      Contract to which Seller is a party is a valid and binding agreement, and is
      in
      full force and effect, and Seller nor, to the best knowledge of Seller or the
      Members, any other party thereto is in breach or default (whether with or
      without the passage of time or the giving of notice or both) under the terms
      of
      any such Contract. Seller has not assigned, delegated, or otherwise transferred
      any of its rights or obligations with respect to any Contracts, or granted
      any
      power of attorney with respect thereto. Seller has given a true and correct
      fully executed copy of each material Contract to Parent. 

     

    (b) Schedule
      2.1(e) lists each material Contract (other than the Charter Documents) of
      Seller, including, but not limited to:

     

    (i) any
      Contract pursuant to which Seller is required to pay, has paid or is entitled
      to
      receive or has received an amount in excess of $10,000 during the current fiscal
      year or any one of the two preceding fiscal years (other than purchase orders
      for Inventory entered into in the ordinary course of business (excluding however
      any such purchase orders which are open for purchases in excess of
      $50,000);

     

    (ii) all
      employment contracts and sales representatives contracts;

     

    (iii) all
      material sales, agency, factoring, commission and distribution contracts to
      which Seller is a party;

     

    (iv) all
      joint
      venture, strategic alliance, limited liability company and partnership
      agreements to which Seller is a party; 

     

    (v) all
      significant documents relating to any acquisitions or dispositions of assets
      by
      Seller (other than of dispositions of Inventory in the ordinary course of
      business);

     

    (vi) all
      material licensing agreements, including agreements licensing Intellectual
      Property Rights, other than “shrink wrap” licenses; 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (vii) all
      secrecy, confidentiality and nondisclosure agreements restricting the conduct
      of
      Seller;

     

    (viii) all
      Contracts relating to patents, trademarks, service marks, trade names, brands,
      copyrights, trade secrets and other Intellectual Property Rights of
      Seller;

     

    (ix) all
      guarantees, with the terms and conditions and privacy policies and other
      provisions of the Websites indemnification arrangements and other hold harmless
      arrangements made or provided by Seller;

     

    (x) all
      website hosting contracts or agreements; 

     

    (xi) all
      Contracts or agreements with or pertaining to Seller to which any Member or
      any
      Affiliate of any Member is a party; 

     

    (xii) all
      agreements relating to real property, including any real property lease,
      sublease, or space sharing, license or occupancy agreement, whether Seller
      is
      granted or granting rights thereunder to occupy or use any
      premises;

     

    (xiii) all
      material agreements relating to Tangible Assets; and

     

    (xiv) all
      agreements relating to outstanding Indebtedness.

     

    (c) Seller
      is
      not subject to any Contract which prohibits, limits or restricts any use by
      it
      of any information regarding its customers, including limiting the solicitation
      of or other communication by it with its customers or providing any information
      regarding its customers to any third party. Seller has acted in compliance
      in
      all material respects with all terms and conditions and privacy policies
      published on each Website (collectively, “Website Rules”), including with
      respect to its use of information regarding customers. Except as set forth
      in
      Schedule 3.20(c), the disclosure to Buyer and Parent, and the use by them,
      of
      customer identities and information regarding them and communications with
      them
      by Buyer and Parent, including offers to download Parent toolbars, will not
      violate any Contract or any Website Rules.

     

    (d) Seller
      is
      in compliance with all covenants, including all financial covenants, in all
      notes, indentures, bonds and other instruments or agreements evidencing any
      Indebtedness.

     

    3.21. Licenses
      and Permits.
      Schedule 3.21 is a complete and correct list of each material license,
      franchise, permit, order or approval or other similar authorization affecting,
      or relating in any way to, the Business, together with the name of the
      government agency or entity issuing the same (the “Permits”). Such Permits are
      valid and in full force and effect and, assuming the related Seller Consents,
      if
      any, have been obtained prior to the Closing Date, are transferable by Seller,
      and none of the Permits will, assuming the related Seller Consents have been
      obtained or waived prior to the Closing Date, be terminated or impaired or
      become terminable as a result of the transactions contemplated hereby. Seller
      has all Permits necessary to operate the Business.

     

    
      
        
        

      

      
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    3.22. Compliance
      with Laws.
      Seller
      is not in violation of, has not violated, and to the best knowledge of Seller
      and the Members , are not under investigation with respect to nor have been
      threatened to be charged with or given notice of, any violation or alleged
      violation of, any Law or Order, nor is there any basis for any such
      charge.

     

    3.23. Pre-payments.
      Seller
      has not received any payments with respect to any services to be rendered or
      goods to be provided after the Closing.

     

    3.24. Employees.
      Schedule 3.24 sets forth a true and complete list of the names, titles, annual
      salaries or wage rates and other compensation, vacation and fringe benefits,
      claims under benefit plans, resident alien status (if applicable), residence
      addresses, social security numbers, relationship to any Member and office
      location of all employees of Seller, indicating part-time and full-time
      employment and all changes in salaries and wage rates per employee since January
      1, 2004. Neither Seller nor the Members has promised any employee, consultant
      or
      agent of Seller that he or she will be employed by or receive any particular
      benefits from the Parent or Buyer on or after the Closing. Schedule 3.24 sets
      forth a true and complete list of the names, addresses and titles of the
      directors and officers of Seller.

     

    3.25. Compliance
      with Labor Laws and Agreements.
      Seller
      has complied in all material respects with all applicable Laws and Orders
      relating to employment or labor. To Seller’s knowledge, no such Law or Order
      requires Parent or Buyer to give any notice, make any filing, receive any
      approval, or take any other action to, with, or from or with respect to any
      Authority in connection with the transactions contemplated hereby. There is
      no
      legal prohibition with respect to the permanent residence of any employee of
      Seller in the United States or his or her permanent employment by Seller or
      Parent or Buyer. No present or former employee, officer or director of Seller
      has, or will have at the Closing Date, any claim against Buyer for any matter
      including, without limitation, for wages, salary, vacation, severance, or sick
      pay except for the same incurred in the ordinary course of business for the
      last
      payroll period prior to the Closing Date. There is no:

     

    (a) unfair
      labor practice complaint against Seller pending before the National Labor
      Relations Board or any state or local agency; 

     

    (b) pending
      labor strike or other material labor trouble affecting Seller;

     

    (c) material
      labor grievance pending against Seller;

     

    (d) pending
      representation question respecting the employees of Seller; or

     

    (e) pending
      arbitration proceeding arising out of or under any collective bargaining
      agreement to which Seller is a party.

     

    In
      addition, to Seller and each Member’s knowledge: (i) none of the matters
      specified in clauses (a) through (e) above is threatened against Seller; (ii)
      no
      union organizing activities have taken place with respect to Seller; (iii)
      no
      basis exists for which a claim may be made under any collective bargaining
      agreement to which Seller is a party; and (iv) each of the Members is in good
      health.

     

    
      
        
        

      

      
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    3.26. Pension
      and Benefit Plans.
      All
      accrued obligations of Seller applicable to its employees, whether arising
      by
      operation of Law, by contract, by past custom or otherwise, for payments by
      Seller to trusts or other funds or to any governmental agency, with respect
      to
      unemployment compensation benefits, social security benefits or any other
      benefits for its employees with respect to the employment of said employees
      through the date hereof have been paid or adequate accruals therefor have been
      made on the Financial Statements. All reasonably anticipated obligations of
      Seller with respect to such employees (except for those related to wages during
      the pay period immediately prior to the Closing Date and arising in the ordinary
      course of business), whether arising by operation of Law, by contract, by past
      custom, or otherwise, for salaries and holiday pay, bonuses and other forms
      of
      compensation payable to such employees in respect of the services rendered
      by
      any of them prior to the date hereof have been or will be paid by Seller prior
      to the Closing Date.

     

    3.27. Employment
      Matters.
      Schedule 3.27 sets forth a true and complete list of every employment agreement,
      commission agreement, employee group or executive medical, life, or disability
      insurance plan, and each incentive, bonus, profit sharing, retirement, deferred
      compensation, equity, phantom equity, option, equity purchase, equity
      appreciation right or severance plan of Seller now in effect or under which
      Seller has or might have any obligation, or any understanding between Seller
      and
      any employee concerning the terms of such employee’s employment that does not
      apply to such Company’s employees generally (collectively, “Labor Agreements”).
      Seller does not have any employee benefit plans within the meaning of Section
      3(3) of ERISA. Seller has delivered to Parent true and complete copies of each
      such Labor Agreement and, where applicable, the most recent Form 5500 filed
      for
      the plan. 

     

    3.28. Tax
      Matters.
      Within
      the times and in the manner prescribed by Law, Seller has filed all required
      Tax
      Returns, which accurately and completely reflected Seller’s Tax liability for
      the respective periods covered thereby, has paid or provided for all Taxes
      shown
      thereon to be due and owing by it and has paid or provided for all deficiencies
      or other assessments of Taxes, interest or penalties owed by it; no Tax
      Authority has asserted any claim for the assessment of any additional Taxes
      of
      any nature with respect to any periods covered by any such Tax Returns; and,
      all
      Taxes required to be withheld or collected by Seller have been duly withheld
      or
      collected and, to the extent required, have been properly reported and paid
      to
      the proper taxing Authority or properly segregated or deposited as required
      by
      Law. Each Tax Return filed by Seller fully and accurately reflects its liability
      for Taxes for such year or period and accurately sets forth all items (to the
      extent required to be included or reflected in such returns) relevant to its
      future liabilities for Taxes, including the Tax basis of its properties and
      assets. No audit of any Tax Return of Seller is in progress or, to the knowledge
      of Seller or any Member, threatened. Seller has not waived or extended any
      applicable statute of limitations relating to the assessment or collection
      of
      any Taxes. No issue has been raised with Seller by any Tax Authority that is
      currently pending in connection with any Tax Return. No material issue has
      been
      raised in any examination by any Tax Authority with respect to Seller which,
      by
      application of similar principles, reasonably could be expected to result in
      a
      proposed deficiency for any other period not so examined. There are no
      unresolved issues or unpaid deficiencies relating to any such examination.
      Seller has delivered to Parent true and correct copies of all of Seller’s
      federal, state and local income Tax Returns for all periods from and after
      January 1, 2001.

     

    
      
        
        

      

      
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    3.29. Finders’
      Fees.
      There
      is no investment banker, broker, finder or other intermediary that has been
      retained by or is authorized to act on behalf of Seller, any Member or any
      of
      their respective Affiliates who might be entitled to any fee or commission
      from
      either Buyer, Parent or any of its Affiliates upon consummation of the
      transactions contemplated by this Agreement.

     

    3.30. Investment
      Representations. 

     

    (a) Seller
      and each Member recognize that an investment in Parent involves a high degree
      of
      risk for many reasons, including, without limitation, that (i) an investment
      in
      the Parent Class C Common Stock is highly speculative and only investors who
      can
      afford the loss of their entire investment should consider purchasing the Parent
      Class C Common Stock; (ii) there may be no public market for the Underlying
      Parent Stock and an investor may not be able to liquidate its investment for
      the
      foreseeable future; (iii) Parent is an early stage company with limited
      operating history upon which to base its likelihood for success; (iv)
      transferability of the Parent Class C Common Stock is extremely limited; and
      (v)
      the Company’s business plan involves conducting business in the Peoples Republic
      of China, which involves substantial risks. Seller and each Member acknowledge
      that Parent makes no representation that the effective price per share being
      paid by each Member pursuant to this Agreement represents the fair market value
      for the Shares. 

     

    (b) Each
      Member is an “accredited investor” as such term is defined in Rule 501 of
      Regulation D (“Reg. D”) promulgated under the Act by virtue of the fact that
      each Member is a natural person whose individual net worth or joint net worth
      with that person’s spouse exceeds $1,000,000; and or is a natural person who had
      an individual income in excess of $200,000 in each of the two most recent years
      or joint income with that person’s spouse is in excess of $300,000 in each of
      those years and has a reasonable expectation of reaching the same income in
      the
      current year. Seller is an “accredited investor” as such term is defined in Rule
      501 of Regulation D (“Reg. D”) promulgated under the United States Securities
      Act of 1933, as amended (the “Act”) by virtue of the fact that it is a
      corporation not formed for the specific purpose of acquiring the securities
      offered, with total assets in excess of $5,000,000, or a corporation in which
      all of the equity investors are accredited investors. Seller and each Member
      acknowledge that Parent has the right to require evidence of Seller's and
      Member’s status as an accredited investor, if necessary.

     

    (c) Seller
      and each Member acknowledge that it has prior investment experience, including
      investments in non-listed and non-registered securities, or has employed the
      services of an investment advisory, attorney or accountant to evaluate the
      merits and risks of such an investment on its behalf, and Seller and each Member
      represent that it or he, as the case may be, understand the highly speculative
      nature of an investment in Parent Class C Common Stock which may result in
      the
      loss of the total amount of such investment.

     

    (d) Seller
      and each Member has adequate means of providing for Seller or such Member’s
      current needs and possible personal contingencies, and Seller and each Member
      has no need, and anticipates no need in the foreseeable future, for liquidity
      in
      such Seller and Member’s investment in the Parent Class C Common Stock. Seller
      and each Member is able to bear the economic risks of this investment and,
      consequently, without limiting the generality of the foregoing, Seller and
      each
      Member is able to hold the Parent Class C Common Stock for an indefinite period
      of time and has a sufficient net worth to sustain a loss of the entire
      investment in the event such loss should occur.

     

    
      
        
        

      

      
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    (e) No
      Member
      has made an overall commitment to investments which are not readily marketable
      that are disproportionate to such Member’s net worth, and such Member’s
      investment in the Parent Class C Common Stock will not cause such overall
      commitment to become excessive. 

     

    (f) Except
      as
      otherwise set forth in Article IV, Parent has not and is not making any
      representations or warranties to Seller or the Members or providing any advice
      or information to Seller or the Members at all. Seller and each Member
      acknowledge that it has retained its own professional advisors to evaluate
      the
      tax and other consequences of an investment in the Parent Class C Common Stock
      and Underlying Parent Stock.

     

    (g) Seller
      and each Member acknowledge that this offering of Parent Class C Common Stock
      has not been reviewed by the SEC because this is intended to be a non-public
      offering pursuant to Section 4(2) of the Act and Rule 506 under Regulation
      D of
      the Act. Each Member acknowledges that it is not acquiring the Parent Class
      C
      Common Stock as a result of any general solicitation or advertising. The Parent
      Class C Common Stock and Underlying Parent Stock will be received by Seller
      and
      each Member for such Member’s own account, for investment and not for
      distribution or resale to others. 

     

    (h) Seller
      and each Member understand that there is no market for the Parent Class C Common
      Stock. Seller and each Member understand that even if a public market ultimately
      develops in the United States for the Underlying Parent Stock, Rule 144 (the
      “Rule”) promulgated under the Act requires, among other conditions, a one year
      holding period prior to the resale (in limited amounts) of securities acquired
      in a non public offering without having to satisfy the registration requirements
      under the Act. Seller and each Member understand that Parent makes no
      representation or warranty regarding its fulfillment in the future of any
      reporting requirements under the Securities Exchange Act of 1934, as amended,
      or
      its dissemination to the public of any current financial or other information
      concerning Parent, as is required by the Rule as one of the conditions of its
      availability. 

     

    (i) Seller
      and each Member understand that Parent may need to raise capital in the near
      term through private financings in order to develop its business as proposed,
      which may include the sale of equity securities. The issuance of these equity
      securities could result in dilution to Seller and each Member. Seller and each
      Member understand that if Parent is unable to raise capital when needed, Parent
      may not be able to develop its business as planned and its inability to raise
      capital in the future could adversely affect its ability to
      operate.

     

    (j) Seller
      and each Member understand that Armand Rousso is the co-founder and a consultant
      providing key services to Parent and that Parent’s success is highly dependent
      upon retaining his services, as well as it being able to recruit and retain
      the
      services of qualified executive officers and management to manage its day-to-day
      business operations and to establish and maintain relationships with any future
      customers. Seller and each Member understands that Parent’s success will also
      depend upon its ability to recruit and retain qualified technical personnel
      experienced in, among other things, website hosting and related services and
      network security. Competition is strong for the types of personnel Parent
      requires to operate its business as proposed Seller and each Member understand
      that there are no assurances that Parent will be able to hire, motivate and
      retain such persons.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (k) Seller
      and each Member recognize that Parent will have to continue to develop
      proprietary information and other intellectual property in order to develop
      and
      operate its business and there are no assurances that such intellectual property
      will be developed in a timely manner, if at all. Parent may be unable to
      adequately protect its proprietary rights and other intellectual property and
      unauthorized parties may misappropriate or infringe on the trade secrets,
      copyrights, trademarks, service marks and similar proprietary rights of Parent.
      Parent may have to resort to litigation to protect its intellectual property
      rights, to protect trade secrets or to determine the validity and scope of
      the
      proprietary rights of others. Any litigation, regardless of its success, would
      be costly and require significant time and attention of management and technical
      personnel. Seller and each Member recognize that any such litigation could
      force
      Parent to: refrain from selling, incorporating or using products that
      incorporate any challenged intellectual property; pay damages; enter into
      licensing or royalty agreements that may contain undesirable terms; or redesign
      products or services that eliminate infringing or potentially infringing
      technology.

     

    (l) Seller
      and each Member recognize that Parent may also be the subject of litigation
      brought by third parties claiming that Parent is violating their intellectual
      property. These third parties may litigate to protect their intellectual
      property rights, to protect trade secrets or to determine the validity and
      scope
      of their proprietary rights. Defending against such litigation, regardless
      of
      its success, would be costly and require significant time and attention of
      management and technical personnel and could force Parent to: refrain from
      selling, incorporating or using products that incorporate any challenged
      intellectual property; pay damages; enter into licensing or royalty agreements
      that may contain undesirable terms; or redesign products or services that
      eliminate infringing or potentially infringing technology.

     

    (m) Seller
      and each Member understand and acknowledge that the Parent’s business will also
      depend upon its ability to protect its computer and software systems and data
      centers against damage from fire, power loss, hacker attacks, worms, trojan
      horses, viruses and other similar events. Seller and each Member understand
      and
      acknowledge that there can be no assurance that Parent will be successful in
      protecting such systems. 

     

    (n) Seller
      and each Member recognize that the Parent’s business will be highly dependent on
      its computer equipment and software systems and Parent will need to develop
      and
      maintain technological capabilities that enable it to meet customer demands.
      Seller and each Member understand and acknowledge that there can be no assurance
      that Parent can successfully undertake such endeavors. 

     

    (o) Seller
      and each Member understand that Parent does business in China, including
      pursuant to its contracts with China Daily Information d/b/a Chinadaily.com.cn,
      a Chinese corporation (“Chinadaily.com”). Seller and each Member understand that
      in doing business in China, Parent faces substantial risks, including:
      significant political and economic uncertainties, including changes in laws
      and
      regulations, or their interpretation and changes in government officials
      responsible for administering such matters; the imposition of confiscatory
      taxation; language barriers and other difficulties in staffing and managing
      foreign operations; legal uncertainties or unanticipated changes regarding
      regulatory requirements; the nationalization or other expropriation of private
      enterprises; restrictions on currency conversion and repatriation; devaluations
      of currency; uncertainties of laws and enforcement relating to the protection
      of
      intellectual property; potentially uncertain or adverse tax consequences; and
      the overall economic conditions in China.

     

    
      
        
        

      

      
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    (p) Seller
      and each Member understand that there is a risk that the government of China
      and
      any agency thereof may, with or without cause, prohibit, restrict or block
      access to the Parent’s search engine throughout China. Seller and each Member
      understand that if the government of China or any agency thereof took such
      actions, there may be limited or no legal remedies available to Parent. Seller
      and Each Member further understand that if access to Parent’s search engine is
      in any way prohibited, restricted or blocked throughout China, even for a
      limited period of time, Parent’s business as proposed would be materially
      adversely affected.

     

    (q) Seller
      and each Member understand that if Parent does business in China and other
      foreign countries as proposed, Parent could face foreign currency risks. Seller
      and each Member understand that to the extent future revenue of Parent is
      denominated in foreign currencies, it would be subject to increased risks
      relating to foreign currency exchange rate fluctuations that could have a
      material adverse effect on Parent’s business and operations.

     

    (r) Foreign
      companies may experience a lack of remedies and impartiality under the Chinese
      legal system. China has a civil law system based on written statutes in which
      judicial decisions have little precedence value. The Chinese government has
      enacted some laws and regulations dealing with matters such as corporate
      organization and governance, foreign investment, commerce, taxation and trade.
      However, their experience in implementing, interpreting and enforcing these
      laws
      and regulations is limited, and Parent’s ability to enforce commercial claims or
      to resolve commercial disputes is unpredictable. These matters may be subject
      to
      the exercise of considerable discretion by agencies of the Chinese government,
      and forces unrelated to the legal merits of a particular matter or dispute
      may
      influence their determination. As such, Seller and each Member understand that
      Parent may not be able to satisfactorily redress any grievances it may have
      against another party in China or which another party may have against
      it.

     

    (s) Seller
      and each Member have been advised of the following. In The
      United States of America v. Marc Armand Rousso, etc,
      in the
      U.S. District Court, in New Jersey (the “Court”), CR. No. 99-512 Mr. Rousso
      entered into a plea agreement in 1999 whereby, inter
      alia,
      Mr.
      Rousso pleaded guilty to (A) one felony count of violating 15 U.S.C. §§ 78j(b)
      and 78ff(a) and 17 C.F.R. § 240.10b in connection with securities, and (B) one
      felony count involving the transportation, transmission and transfer of monetary
      instruments and funds to conceal proceeds of the aforesaid activities contrary
      to 18 U.S.C. § 1956(a)(2)(B)(i), in violation of 18 U.S.C. § 1956(h). The
      provisions of any Court sentencing could preclude Mr. Rousso from rendering
      services to Parent. At the same time, Mr. Rousso was convicted in France of,
      inter
      alia,
      stock
      fraud, and as part of the proceeding Mr. Rousso was credited with time served
      and was fined 120,000 euros. The case is titled The
      Government v. Rousso and Laroze,
      Case
      No. 9334769086. 

     

    
      
        
        

      

      
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    (t) Although
      Parent has launched its search engine website, substantial upgrades and
      improvements to it are necessary in order for the website to perform according
      to Parent’s standards and for Parent’s search engine website to be successful
      and there is no assurance that any of the foregoing can or will be attained.
      Seller and each Member also understand that the Parent’s business plan involves
      the possibility of making additional acquisitions, but that there is no
      certainty that Parent will be successful in doing so.

     

    (u) Parent’s
      business plan as envisioned is heavily dependent on the Parent’s contract with
      Chinadaily.com, under which, among other things, Chinadaily.com is to endeavor
      to use its best efforts to deliver and update all or a majority of the data
      regarding China in its website. There is no guarantee that Chinadaily.com,
      respectively, will be able to effectively perform under its contract, if at
      all.
      In the event that Chinadaily.com fails to perform effectively under such
      contract, Parent’s business as proposed will be materially adversely
      affected.

     

    (v) Seller
      and each Member understand and consent to the placement of a legend on any
      certificate or other document evidencing Parent Class C Common Stock and
      Underlying Parent Stock stating that such Parent Class C Common Stock and
      Underlying Parent Stock has not been registered under the Act and setting forth
      or referring to the restrictions on transferability and sale thereof. Each
      certificate evidencing the shares shall bear the legends set forth below, or
      legends substantially equivalent thereto, together with any other legends that
      may be required by federal or state securities laws at the time of the issuance
      of the Parent Class C Common Stock and Underlying Parent Stock:

     

    THE
      SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR
      OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) REGISTERED
      UNDER THE ACT OR (II) (A) THE ISSUER OF THE SHARES (THE “ISSUER”) HAS RECEIVED
      AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
      SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
      ACT
      AND (B) THE CONSENT OF ISSUER IN ACCORDANCE WITH THE ASSET PURCHASE AGREEMENT
      REFERRED TO BELOW.

     

    THE
      SHARES REPRESENTED HEREBY ARE SUBJECT TO “DRAG ALONG” PROVISIONS AND OTHER
      RESTRICTIONS PURSUANT TO THAT CERTAIN ASSET PURCHASE AGREEMENT BETWEEN, AMONG
      OTHERS, THE ISSUER AND THE ORIGINAL HOLDER. A COPY OF SAID AGREEMENT IS
      AVAILABLE FROM THE COMPANY UPON REQUEST

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (w) Seller
      and each Member consent that Parent may permit the transfer of the Parent Class
      C Common Stock and the Underlying Parent Stock out of its name only (i) after
      the Earnout Payment Period, (ii) when its request for transfer is accompanied
      by
      an opinion of counsel reasonably satisfactory to the Company that neither the
      sale nor the proposed transfer results in a violation of the Act or any
      applicable foreign securities or U.S. state “blue sky” laws (collectively
“Securities Laws”) and (iii) to a transferee acceptable to Parent, so long as
      the Underlying Stock is not publicly traded; provided however, notwithstanding
      the foregoing, Seller may transfer the said shares to the Members so long so
      long as they take the same subject to the terms of this Agreement. 

     

    3.31. Software.

     

    (a) Schedule
      3.31(a) contains a true, correct, complete and accurate list of Seller’s owned
      Software (“Software”), except for “shrink wrap” software. Except as set forth on
      Schedule 3.31(a), Seller is the sole and exclusive owner of such
      Software.

     

    (b) All
      software used or held for use by Seller that is not owned by Seller (the “Third
      Party Software”) (including any commonly available “shrink wrap” Software
      copyrighted by third parties) is used pursuant to an agreement or license and
      each such agreement or license is valid and enforceable and in full force and
      effect and neither Seller nor, to the knowledge of Seller, is any licensor
      is in
      material default under or in breach of any such license or agreement. Schedule
      3.31(b) lists all of the material Third Party Software of Seller.

     

    (c) The
      Software and the Third party Software and Seller’s rights therein are sufficient
      and adequate to conduct the Business of Seller to the full extent the Business
      of Seller is conducted as of the date hereof and as such business will be
      conducted as of the Closing. Consummation of the transactions contemplated
      by
      this Agreement will not result in an impairment of the rights of Buyer to any
      of
      the Software, or to any Third party Software. Consummation of the transactions
      contemplated by this Agreement will not result in any increase of any license
      fees with respect to any of the Third party Software. All Software and any
      Third
      party Software that is incorporated into the Software perform in accordance
      with
      the documentation and other written material used in connection with the
      Software and Third party Software, is in machine readable form and contains
      all
      current revisions of such Software and Third party Software. The Software and,
      to the knowledge of Seller, the Third party Software, is free of material
      defects in operations. The Software and, to the knowledge of Seller, the Third
      party Software, contains no disabling devices.

     

    (d) The
      source code for all Software will compile into object code or otherwise be
      capable of performing the functions described in the documentation pertaining
      to
      the Software in all material respects. All source code and other documentation
      concerning the Software is free of any defect which would prevent it from
      compiling or performing in all material respects.

     

    3.32. Business
      Operations; Servers.

     

    (a) Schedule
      3.32(a) is a complete and correct list of the methods of payment (including
      specific types of credit cards accepted and whether or not personal checks,
      bank
      checks or money orders are accepted) that Seller accepts for sales of
      advertising on its Websites. Schedule 3.32(a) also indicates the average amount
      of time taken for Seller to receive payment on any form of payment and the
      likelihood of Seller not receiving payment based on the form of
      payment.

     

    
      
        
        

      

      
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    (b) Seller
      owns all of its servers and other computer equipment (other than webservers)
      necessary to operate its Business as conducted as of the date hereof and as
such
      Business will be conducted by Seller as of the Closing.

     

    (c) The
      amounts payable and paid by Seller each month to DataPipe for various hosting
      and bandwidth services provided to Seller has been $2,100.00. Consummation
      of
      the transactions contemplated by this Agreement will not result in any increase
      in fees or any change with respect to such services.

     

    (d) Schedule
      3.32(d) is a complete and correct list of the websites owned and maintained
      by
      Seller. Except as indicated on Schedule 3.32(d), all websites are in good
      working order.

     

    (e) Except
      as
      set forth on Schedule 3.32(e), since November 7, 2005, Seller has not declared
      or paid any dividends or made any distribution or bonus payment to any Member
      or
      employee of Seller except that notwithstanding the foregoing, but subject to
      the
      other provisions of this Agreement, Seller may so payout in the aggregate an
      amount not in excess of all accrued but previously undistributed profits of
      Seller for periods ended prior to October 1, 2005.

     

    3.33. Powers
      of Attorney and Suretyships.
      Seller
      has not any general or special powers of attorney outstanding (whether as
      grantor or grantee thereof) or any obligation or liability (whether actual,
      accrued, accruing, contingent, or otherwise) as guarantor, surety, co-signer,
      endorser, co-maker, indemnitor or otherwise in respect of the obligation of
      any
      Person.

     

    3.34. Other
      Information.
      Neither
      this Agreement nor any of the documents or other information made available
      to
      Parent or its Affiliates, attorneys, accountants, agents or representatives
      pursuant hereto or in connection with Parent’s due diligence review of the
      Business or the transactions contemplated by this Agreement contains or will
      contain any untrue statement of a material fact or omits or will omit to state
      a
      material fact necessary in order to make the statements contained therein not
      misleading. To the best knowledge of Seller and each Member Seller has provided
      Parent with all material information regarding the Business.

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES OF PARENT

     

    Parent
      represents and warrants to Seller and each Member as follows:

     

    4.1. Due
      Incorporation.
      Parent
      is a corporation duly organized, validly existing and as of Closing will be
      in
      good standing under the Laws of the State of Delaware. Buyer is a corporation
      duly organized, validly existing and in good standing under the Laws of the
      State of Delaware. Parent has all requisite power and authority, corporate
      and
      otherwise, and all governmental licenses, franchises, permits, authorizations,
      consents and approvals required to own, lease, and operate its assets,
      properties and businesses and to carry on its business as now conducted on
      the
      date hereof. Buyer has not conducted any business to date and has only engaged
      in certain activities relating to its organization. Parent has not adopted
      any
      plan, or made any agreement in respect of any merger, consolidation, sale of
      all
      or substantially all of its assets, reorganization, recapitalization,
      dissolution or liquidation.

     

    
      
        
        

      

      
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    4.2. Corporate
      Authorization.
      The
      execution, delivery and performance by Parent and Buyer of this Agreement and
      each of the other Additional Agreements to which it is a party and the
      consummation by Parent and Buyer of the transactions contemplated hereby and
      thereby are within the corporate powers of Parent and Buyer and have been duly
      authorized by all necessary corporate action on the part of Parent and Buyer.
      This Agreement constitutes, and upon their execution and delivery, each of
      the
      Additional Agreements will constitute, the valid and legally binding agreement
      of Parent or Buyer, as applicable, enforceable against each in accordance with
      their respective terms.

     

    4.3. Governmental
      Authorization.
      Except
      for the Certificate of Amendment to Parent’s Certificate of Incorporation in
      connection with the issuance of Parent Class C Common Stock, none of the
      execution, delivery or performance by Parent or Buyer of this Agreement or
      any
      Additional Agreement requires any consent, approval, license or other action
      by
      or in respect of, or registration, declaration or filing with, any Authority
      by
      Parent or Buyer, except for the filing of the certificate of amendment by the
      Parent to create the Parent Class C Common Stock and Form D with the
      SEC.

     

    4.4. No
      Violation.
      Neither
      the execution and delivery of this Agreement or any Additional Agreement to
      be
      executed by Parent or Buyer hereunder nor the consummation of the transactions
      contemplated herein and therein will (a) violate any provision of Parent’s or
      Buyer’s Certificate of Incorporation, By-laws or other charter documents; or (b)
      violate any Laws or Orders to which either Parent or Buyer or their property
      is
      subject.

     

    4.5. Charter
      Documents.
      Parent
      and Buyer have previously delivered to Seller and Members true and complete
      copies of its respective Articles of Incorporation and By-laws, as in effect
      or
      constituted on the date hereof

     

    4.6. Consents.
      There
      are no agreements, commitments, arrangements, contracts or other instruments
      binding upon Parent or Buyer or any of their properties requiring a consent,
      approval, authorization, order or other action of or filing with any Person
      as a
      result of the execution, delivery and performance of this Agreement or any
      of
      the Additional Agreements or the consummation of the transactions contemplated
      hereby or thereby.

     

    4.7. Capitalization
      of Parent and Merger Subs.
      Schedule 4.7 sets forth, with respect to Parent, (i) the Parent’s authorized
      capital stock, (ii) the number of shares of Parent’s common stock that is
      outstanding, (iii) each security convertible into or exercisable or exchangeable
      for Parent’s common stock, the number of shares of common stock such security is
      convertible into, and the exercise or conversion price of such security. The
      issuance of all the outstanding capital stock of Parent has been duly
      authorized, and all such capital stock is validly issued, fully paid and
      nonassessable.

     

    
      
        
        

      

      
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    4.8. Financial
      Statements.
      

     

    (a) Attached
      hereto as Schedule 4.8 is an unaudited consolidated balance sheet of Parent
      as
      of December 31, 2005 and the audited balance sheet of Parent as of December
      31,
      2004, and statements of operations and retained earnings and cash flow
      statements of Parent for the years ended December 31, 2004 and December 31,
      2005
      (collectively, the "Parent Financial Statements"). The balance sheet contained
      in the Parent Financial Statements as of the twelve months ended December 31,
      2005 is referred to herein as the "Interim Parent Balance Sheet". The Parent
      Financial Statements (i) were prepared from the books and records of Parent;
      (ii) were prepared in accordance with GAAP consistently applied; (iii) fairly
      and accurately present Parent's financial condition and the results of its
      operations as of their respective dates and for the periods then ended; (iv)
      contain and reflect all necessary adjustments and accruals for a fair
      presentation of Parent's financial condition as of their dates; and (v) contain
      and reflect adequate provisions for all reasonably anticipated liabilities
      for
      all material income, property, sales, payroll or other Taxes applicable to
      Parent with respect to the periods then ended.

     

    (b) Except
      as
      specifically disclosed, reflected or fully reserved against on the Interim
      Parent Balance Sheet and for liabilities and obligations of a similar nature
      and
      in similar amounts incurred in the ordinary course of business since the date
      of
      the Interim Parent Balance Sheet, there are no liabilities, debts or obligations
      of any nature (whether accrued, absolute, contingent, liquidated or
      unliquidated, unasserted or otherwise) relating to Parent. All debts and
      liabilities, fixed or contingent, which should be included under GAAP on an
      accrual basis on the Interim Balance Sheets are included therein.

     

    4.9. Litigation.
      There
      is no action, suit, investigation, hearing or proceeding (or any basis therefor)
      pending against, or to the best knowledge of Parent, threatened against or
      affecting, Parent, any of its officers or directors, or the business of Parent,
      before any court or arbitrator or any governmental body, agency or official
      which if adversely determined against Parent, has or could reasonably be
      expected to have a material adverse effect on the business, assets, condition
      (financial or otherwise), liabilities, results or operations or prospects of
      Parent, or which in any manner challenges or seeks to prevent, enjoin, alter
      or
      delay the transactions contemplated hereby. There are no outstanding judgments
      against Parent.

     

    4.10. Issuance
      of Parent Class C Common Stock.
      The
      Parent Class C Common Stock, when issued in accordance with this Agreement,
      will
      be duly authorized and validly issued, fully paid and
      nonassessable.

     

    4.11. Finders’
      Fees.
      There
      is no investment banker, broker, finder or other intermediary which has been
      retained by or is authorized to act on behalf of Parent or Buyer or any of
      their
      Affiliates who might be entitled to any fee or commission from Seller or the
      Members or any of their respective Affiliates upon consummation of the
      transactions contemplated by this Agreement.

     

    4.12. Other
      Information.
      Neither
      this Agreement nor any of the documents or other information made available
      to
      Members or their Affiliates, attorneys, accountants, agents or representatives
      pursuant hereto or in connection with Seller’s and the Members’ due diligence
      review of the business of Parent, Buyer or the transactions contemplated by
      this
      Agreement contains or will contain any untrue statement of a material fact
      or
      omits or will omit to state a material fact necessary in order to make the
      statements contained therein not misleading.

     

    
      
        
        

      

      
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    ARTICLE
      V

     

    COVENANTS
      OF SELLER AND THE MEMBERS PENDING CLOSING

     

    Each
      Company and the Members jointly and severally covenant and agree
      that:

     

    5.1. Conduct
      of the Business.
      From the
      date hereof through the Closing Date, Members shall cause Seller to, and Seller
      shall, conduct the Business only in the ordinary course (including the payment
      of accounts payable and the collection of accounts receivable), consistent
      with
      past practices, and shall not enter into any material transactions without
      the
      prior written consent of Parent, and shall use their respective best efforts
      to
      preserve intact Seller’s business relationships with employees, advertisers,
      suppliers, customers and other third parties.

     

    Without
      limiting the generality of the foregoing, from the date hereof until the Closing
      Date, without Parent’s prior written consent, Seller shall not:

     

    (a) amend,
      waive any provision of, terminate prior to its scheduled expiration date, or
      otherwise compromise in any way, any Contract (including contracts described
      in
      clause (b) below), or any other right or asset of such respective
      Company;

     

    (b) enter
      into any contract, agreement, lease, license or commitment, which (i) is with
      respect to real property, (ii) extends for a term of one year or more or (iii)
      obligates the payment of more than $50,000 (individually or in the
      aggregate);

     

    (c) make
      any
      capital expenditures in excess of $50,000 (individually or in the aggregate);
      

     

    (d) sell,
      lease, license or otherwise dispose of any assets or assets covered by any
      Contract except (i) pursuant to existing contracts or commitments disclosed
      herein and (ii) sales of inventory in the ordinary course consistent with past
      practice; 

     

    (e) accept
      returns of products sold from Inventory except in the ordinary course,
      consistent with past practice; 

     

    (f) pay,
      declare or promise to pay any dividends or other distributions with respect
      to
      its capital stock, or pay, declare or promise to pay any other payments to
      any
      Member (other than payments of salary accrued in said period at the current
      salary rate set forth in Schedule 3.24) or any Affiliate of Seller; provided,
      however,
      that,
      notwithstanding
      the forgoing and subject to the other provisions of this Agreement, but without
      duplication, Seller may so payout in the aggregate an amount not in excess
      of
      all accrued but previously undistributed profits of Seller for periods ended
      prior to October 1, 2005;

     

    (g) authorize
      any salary increase of more than 10% for any employee making an annual salary
      of
      greater than $50,000 or in excess of $5,000 in the aggregate on an annual basis
      or change the bonus or profit sharing policies of Seller;

     

    
      
        
        

      

      
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    (h) obtain
      or
      suffer to exist any Indebtedness in excess of $25,000 in the aggregate, other
      than Indebtedness to Skynet; 

     

    (i) suffer
      or
      incur any Lien on any asset of Seller except for Liens existing as of the date
      hereof as set forth on Schedule 3.15(b);

     

    (j) suffer
      any damage, destruction or loss of property related to any assets of Seller,
      whether or not covered by insurance;

     

    (k) delay,
      accelerate or cancel any receivables or Indebtedness owed to Seller or write-off
      or make further reserves against the same;

     

    (l) merge
      or
      consolidate with or acquire any other Person or be acquired by any other
      Person;

     

    (m) suffer
      any insurance policy protecting the assets of Seller to lapse; 

     

    (n) make
      any
      change in its accounting principles or methods or write down the value of any
      inventory or assets;

     

    (o) change
      the place of business of Seller;

     

    (p) extend
      any loans other than travel or other expense advances to employees in the
      ordinary course of business not to exceed $2,000 individually or $7,500 in
      the
      aggregate; 

     

    (q) issue,
      redeem or repurchase any shares of their respective capital stock or membership
      interests;

     

    (r) effect
      or
      agree to any changes in shipping practices, terms or rates;

     

    (s) reduce
      the prices of products sold from Inventory for customers except in the ordinary
      course of business;

     

    (t) effect
      or
      agree to any change in any practices or terms, including payment terms, with
      respect to customers or suppliers;

     

    (u) hire
      any
      employees, consultants or advisors;

     

    (v) make
      or
      rescind any election related to Taxes, file any amended income Tax Return or
      make any changes in its methods of Tax accounting; or

     

    (w) agree
      to
      do any of the foregoing.

     

    Neither
      Seller nor the Members shall cause Seller to, (i) take or agree to take any
      action that might make any representation or warranty of Seller or any Member
      hereunder inaccurate in any respect at, or as of any time prior to, the Closing
      Date or (ii) omit to take, or agree to omit to take, any action necessary to
      prevent any such representation or warranty from being inaccurate in any respect
      at any such time.

     

    
      
        
        

      

      
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    5.2. Access
      to Information. 

     

    (a) From
      the
      date hereof until and including the Closing Date, Seller shall, and each Member
      shall cause Seller to, (a) continue to give Parent, its counsel and other
      representatives full access to the offices, properties, books and records of
      Seller, (b) furnish to Parent, its counsel and other representatives such
      information relating to the Business as such Persons may request and (c) cause
      the employees, counsel, accountants and representatives of Seller to cooperate
      with Parent in its investigation of the Business; provided
      that
      no
      investigation pursuant to this Section 5.2 (or any investigation prior to
      the date hereof) shall affect any representation or warranty given by Seller
      or
      the Members;

     

    (b) Seller
      and the Members shall arrange for representatives of Parent to meet with or
      speak to the representatives of the three (3) largest advertisers of
      Seller.

     

    5.3. Notices
      of Certain Events.
      Seller
      and each Member shall promptly notify Parent of:

     

    (i) any
      notice or other communication from any Person alleging or raising the
      possibility that the consent of such Person is or may be required in connection
      with the transactions contemplated by this Agreement or that the transactions
      contemplated by this Agreement might give rise to any claims or causes of action
      or other rights by or on behalf of such Person or result in the loss of any
      rights or privileges of Seller to any such Person or any Lien or any of
      Purchased Assets;

     

    (ii) any
      notice or other communication from any Authority in connection with the
      transactions contemplated by this Agreement; 

     

    (iii) any
      actions, suits, claims, investigations or proceedings commenced or threatened
      against, relating to or involving or otherwise affecting any Member, the
      Purchased Assets, Seller or the Business or that relate to the consummation
      of
      the transactions contemplated by this Agreement; and

     

    (iv) the
      occurrence of any fact or circumstance which might make any representation
      made
      hereunder by Seller and/or any Member false in any respect or result in the
      omission or the failure to state a material fact.

     

    ARTICLE
      VI

     

    COVENANTS
      OF SELLER AND THE MEMBERS

     

    Seller
      and the Members jointly and severally covenant and agree that:

     

    6.1. Confidentiality.
      Except
      as otherwise required by law, on and after the Closing, no Member shall, without
      the prior written consent of Parent, or a person authorized thereby, disclose
      to
      any other Person or use (whether for the account of any Member or any other
      party) any confidential information or proprietary work product of Parent,
      Buyer
      or Seller or any client of Parent, Buyer or Seller . In the event Seller or
      any
      Member believes that it is required to disclose any such confidential
      information pursuant to applicable Laws, Seller or such Member shall give timely
      written notice to Parent so that Parent may have an opportunity to obtain a
      protective order or other appropriate relief. Seller and all Members shall
      cooperate fully in any such action by Parent.

     

    
      
        
        

      

      
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    6.2. Conduct
      of the Business.
      From the
      Closing Date until the end of the Earnout Period, the Members shall cause Buyer
      to, and Buyer shall, conduct the Business only in the ordinary course (including
      the payment of accounts payable and the collection of accounts receivable),
      consistent with past practices of Seller, and shall not enter into any material
      transactions without the prior written consent of Parent or the approval of
      the
      board of directors of Buyer, and shall use its respective best efforts to
      preserve intact the Buyer’s business relationships with employees, advertisers,
      suppliers, customers and other third parties. Without limiting the generality
      of
      the foregoing, from the Closing Date through the end of the Earnout Payment
      Period, without Parent’s prior written consent, or the approval of the board of
      directors of Buyer, Buyer shall not:

     

    (a) enter
      into any contract, agreement, lease, license or commitment which is outside
      the
      ordinary course of business or, even if the ordinary course of business,
      involving payments in excess of $10,000 or having a term in excess of three
      months or involving any real property;

     

    (b) make
      any
      capital expenditures;

     

    (c) sell,
      lease, license or otherwise dispose of any of its assets, except sales of
      Inventory in the ordinary course consistent with past practice;

     

    (d) accept
      returns of products sold from Inventory except in the ordinary course,
      consistent with past practice; 

     

    (e) obtain
      or
      suffer to exist any loan or other Indebtedness, other than to Skynet;

     

    (f) suffer
      or
      incur any Lien on any of its assets;

     

    (g) merge
      or
      consolidate with or acquire any other Person or be acquired by any other
      Person;

     

    (h) issue,
      redeem or repurchase any shares of their respective capital stock;

     

    (i) effect
      or
      agree to any material changes in shipping practices, terms or
      rates;

     

    (j) reduce
      the prices of products sold from Inventory for customers except in the ordinary
      course of business; or

     

    (k) agree
      to
      do any of the foregoing.

     

    
      
        
        

      

      
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    6.3. Exclusivity.
      So long
      as this Agreement is in effect, neither Seller nor any Member nor anyone acting
      on their behalf shall, directly or indirectly, (i) encourage, solicit, initiate
      or participate in discussions or negotiations with, or provide any information
      to or cooperate in any manner with any Person, other than Parent or its
      Affiliates (collectively “Excluded Persons”), or an officer, partner, employee
      or other representative of an Excluded Person, concerning the sale of all or
      any
      part of the Business of Seller or the capital stock or other securities of
      Seller, whether such transaction takes the form of a sale of stock or assets,
      merger, consolidation or otherwise or any joint venture or partnership, or
      (ii)
      otherwise solicit, initiate or encourage the submission of any proposal
      contemplating the sale of all or any part of the Business of Seller or the
      capital stock or other securities of Seller, whether such transaction takes
      the
      form of a sale of stock or assets, merger, consolidation or otherwise or any
      joint venture or partnership or (iii) consummate any such transaction or
      accept any offer or agree to engage in any such transaction. Seller or the
      Members shall promptly (within 24 hours) communicate to Parent the terms of
      any
      proposal, contract or sale which it may receive in respect of any of the
      foregoing and respond to any such communication in a manner reasonably
      acceptable to Parent. Seller or the Members under this Section 6.3 will include
      the identity of the person making such proposal or offer, copies (if written)
      or
      a written description of the terms (if oral) thereof and any other such
      information with respect thereto as Parent may reasonably request.

     

    6.4. Reporting
      and Compliance With Law.
      From
      the date hereof through the Closing Date, Seller shall duly and timely file
      all
      Tax Returns required to be filed with Authorities, pay any and all Taxes
      required by any Authority and duly observe and conform, in all material
      respects, to all applicable Laws and Orders. 

     

    6.5. Injunctive
      Relief.
      If
      Seller or any Member breaches, or threatens to commit a breach of, any of the
      covenants set forth in Section 6.1, Section 6.3, or Section 13.4 (the
“Restrictive Covenants”), Parent shall have the following rights and remedies,
      which shall be in addition to, and not in lieu of, any other rights and remedies
      available to Parent by agreement (including those set forth in Section 11.1
      hereof), under law or in equity:

     

    (a) The
      right
      and remedy to have the Restrictive Covenants specifically enforced by any court
      having equity jurisdiction, all without the need to post a bond or any other
      security or to prove any amount of actual damage or that money damages would
      not
      provide an adequate remedy, it being acknowledged and agreed that any such
      breach or threatened breach will cause irreparable injury to Parent and that
      monetary damages will not provide adequate remedy to Parent; and

     

    (b) The
      right
      and remedy to require Seller and each Member, jointly and severally, (i) to
      account for and pay over to Parent all compensation, profits, monies, accruals,
      increments or other benefits derived or received by Seller, any Member or any
      associated party as the result of any such breach; and (ii) to indemnify Parent
      against any other losses, damages (including special and consequential damages),
      costs and expenses, including actual attorneys fees and court costs, which
      may
      be incurred by it and which result from or arise out of any such breach or
      threatened breach. 

     

    
      
        
        

      

      
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    6.6. Covenants
      with respect to Parent Class C Common Stock.

     

    (a) If
      the
      holders in the aggregate of more than 50% of the outstanding shares of the
      Underlying Parent Stock, as one class (“Selling Shareholders”), propose to sell,
      assign, mortgage, transfer, pledge, hypothecate or otherwise dispose of all,
      but
      not less than all, of their respective shares to a third party in one or a
      series of related transactions which is approved by a majority of the Parent’s
      Board of Directors, then the Selling Shareholders may, at their option, require
      Seller or any transferee (including each Member, the “Holder”) to sell all of
      such Holder’s capital stock of Parent in such transfer to the third party on the
      same terms and conditions, and for the same consideration, as the Selling
      Shareholders. The Holder shall take such necessary or desirable actions in
      connection with the consummation of such transaction as reasonably requested
      by
      Parent or the Selling Shareholders.

     

    (b) From
      the
      Closing Date to the end of the Earnout Payment Period, the Seller may not
      transfer any shares of the Parent Class C Common Stock or the Underlying Parent
      Stock except (i) in accordance with Section 6.6(a) and with the consent of
      Parent, (ii) for estate-planning purposes of such Person to (A) a trust
      under which the distribution of the shares of Parent Class C Common Stock or
      the
      Underlying Parent Stock may be made only to beneficiaries who is such Person,
      his or her spouse, his or her parents, members of his or her immediate family
      or
      his or her lineal descendants, and provided that such trust may never make
      a
      distribution to anyone other than such persons, (B) a charitable remainder
      trust, the income from which will be paid to such Person during his or her
      life,
      (C) a corporation, the stockholders of which are only such Person, his or
      her spouse, his or her parents, members of his or her immediate family or his
      or
      her lineal descendants and whose stockholders will at all times remain such
      persons or (D) a partnership or limited liability company, the partners or
      members of which are only such Person, his or her spouse, his or her parents,
      members of his or her immediate family or his or her lineal descendants and
      whose partners or members will at all times remain such persons, and
      (iii) in case of his or her death, by will or by the laws of intestate
      succession, to his or her executors, administrators, testamentary trustees,
      legatees or beneficiaries, unless any class of Parent’s common stock is Publicly
      Traded in which case the Seller may transfer its shares of Parent Class C Common
      Stock or the Underlying Parent Stock on the later of (x) the end of the Earnout
      Payment Period, and (y) six months after shares of the Parent Class C Common
      Stock or the Underlying Parent Stock first becomes Publicly Traded.

     

    (c) Each
      Holder agrees that in connection with an underwritten public offering of capital
      stock of Parent, upon the request of Parent or the principal underwriter
      managing such public offering, the Parent Class C Common Stock and any
      Underlying Parent Stock (and any shares received directly or indirectly with
      respect thereto) may not be sold, offered for sale or similar financial effect
      or otherwise disposed of without the prior written consent of Parent or such
      underwriter, as the case may be, for a period not exceeding six months after
      the
      effectiveness of the registration statement filed in connection with such
      offering, but only to the extent that Parent’s directors, executive officers
      and/or their immediate family are similarly bound. Each Holder agrees to sign
      such further documents as Parent may reasonably request to give this subsection
      (c) effect. The lock-up agreement established pursuant to this subsection (c)
      shall have perpetual duration.

     

    (d) Seller
      and each Member understands and agrees that if he should breach his Restrictive
      Covenant Agreement or his Employment Agreement, as the case may be, or be
      dismissed for “cause”, as such term is defined in his Employment Agreement
      (each, a “Repurchase Event”), then Parent shall have the right (but not the
      obligation) to repurchase all of such Person’s Parent Class C Common Stock and
      any outstanding Underlying Parent Stock (and any shares received directly or
      indirectly with respect thereto), for a period of one hundred and eighty (180)
      days, at its fair market value as such is determined on the date of the
      respective Repurchase Event.

     

    
      
        
        

      

      
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    (e) Seller
      and each Member understands that due to the fact that Parent Class C Common
      Stock and the Underlying Parent Stock cannot be readily purchased or sold in
      the
      open market, and for other reasons, the Parent and/or its existing shareholders
      may be irreparably damaged in the event that Sections 6.6(a) through (d) are
      not
      specifically enforced. Consequently, in the event of a breach or threatened
      breach of the terms, covenants and/or conditions of Sections 6.6(a) through
      (d),
      Parent is, in addition to all other remedies, entitled to a temporary or
      permanent injunction, without showing any actual damage or posting a bond,
      and/or a decree for specific performance, in accordance with the provisions
      hereof.

     

    (f) Restrictions
      and Registrations Rights

     

    (i) The
      restrictions and rights provided for in Section 6.6(a), shall terminate in
      the
      event that the Parent Class C Common Stock or the Underlying Parent Stock
      becomes Publicly Traded. As used herein, common stock is “Publicly Traded” if
      stock of that class is (i) listed or admitted to unlisted trading privileges
      on
      a national securities exchange, the NASDAQ National Market or the NASDAQ
      Smallcap Market, the Hong Kong Exchange, the Hong Kong GEM, the London Stock
      Exchange, the London Stock Exchange Alternative Investors Market (AIM) or any
      other recognized foreign stock exchange or (ii) if sales or bid and offer
      quotations are reported for that class of stock in the automated quotation
      system operated by the National Association of Securities Dealers,
      Inc.

     

    (ii) In
      the
      event that, prior to the earlier of the second anniversary of the date of this
      Agreement or the date the Underlying Parent Stock is Publicly Traded or the
      Initial Public Offering of Parent, Parent grants registration rights to any
      Person (the “Receiving Persons”), the Members will, with respect to the shares
      (the “Rights Shares”) of Underlying Parent Stock issuable upon the conversion of
      the Parent Class C Common Stock distributed to them pursuant to this Agreement,
      receive “piggyback” registration rights on the same terms and conditions as the
“piggyback” registration rights granted to the Receiving Persons.

     

    (iii) Any
      registration rights granted pursuant to Section 6.6(f)(ii) will be subject
      to
      usual and customary cutbacks and limitations, including that the Parent will
      not
      be required to register any shares as to which the resale provisions of Rule
      144
      under the Act as well as all applicable Laws and rules of any exchange or
      automated quotation system on which the Underlying Parent Stock trades or may
      be
      listed.

     

    (iv) The
      Members may only be granted, and may only exercise, registration rights one
      time
      pursuant to the provisions of Section 6.6(f)(ii).

     

    (v) The
      number of Rights Shares pursuant to which registration rights under Section
      6.6(f)(ii) may be granted for each Member shall be limited to the number of
      Rights Shares equal to (X) the number of Rights Shares issuable upon conversion
      of all of the shares of Parent Class C Common Stock distributed to the Member
      pursuant to this Agreement multiplied by (Y) the quotient of (i) the number
      of
      shares of capital stock of Parent with registration rights issued to the
      Receiving Person divided by (ii) the total number of shares of capital stock
      of
      Parent outstanding on a fully diluted basis.

     

    
      
        
        

      

      
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    ARTICLE
      VII

     

    COVENANTS
      OF ALL PARTIES HERETO

     

    The
      parties hereto covenant and agree that:

     

    7.1. Best
      Efforts; Further Assurances.
      Subject
      to the terms and conditions of this Agreement, each party shall use its best
      efforts to take, or cause to be taken, all actions and to do, or cause to be
      done, all things necessary or desirable under applicable Laws, and in the case
      of Seller and each Member as reasonably requested by Parent, to consummate
      and
      implement expeditiously the transactions contemplated by this Agreement. The
      parties hereto shall execute and deliver such other documents, certificates,
      agreements and other writings and take such other actions as may be necessary
      or
      desirable in order to consummate or implement expeditiously the transactions
      contemplated by this Agreement.

     

    7.2. Confidentiality
      of Transaction.
      Any
      information (except publicly available or freely usable material obtained from
      another source) respecting any party or its Affiliates will be kept in strict
      confidence by all other parties to this Agreement and their agents. Except
      as
      required by Law, neither Seller, any Member nor any of their respective
      Affiliates, directors, officers, employees or agents will disclose the terms
      of
      the transactions contemplated hereunder at any time, currently, or on or after
      the Closing, regardless of whether the Closing takes place, except as necessary
      to their attorneys, accountants and professional advisors, in which instance
      such persons and any employees or agents of Seller shall be advised of the
      confidential nature of the terms of the transaction and shall themselves be
      required by Seller to keep such information confidential. Except as required
      by
      Law, each party shall retain all information obtained from the other and their
      lawyers on a confidential basis except as necessary to their attorneys,
      accountants and professional advisors, in which instance such persons and any
      employees or agents of such party shall be advised of the confidential nature
      of
      the terms of the transaction and shall themselves be required by such party
      to
      keep such information confidential.

     

    7.3. Best
      Efforts to Obtain Consents.
      Seller
      and each Member hereby agree to use their best efforts to obtain each respective
      Seller Consent as promptly as practicable hereafter.

     

    7.4. Tax
      Matters.

     

    (a) The
      Members shall prepare or cause to be prepared and, subject to Parent’s review
      and approval, file or cause to be filed on a timely basis all Tax Returns with
      respect to Seller for taxable periods ending on or prior to the Closing Date.
      The Members shall prepare or cause to be prepared such Tax Returns on a basis
      consistent with the similar Tax Returns for the immediately preceding periods
      and shall not make, amend, revoke or terminate any election or change any tax
      accounting method, practice or procedure without Parent’s consent. The Members
      shall give a copy of each such Tax Return to Parent prior to filing and shall
      not file the same without Parent’s reasonable approval. The Members shall timely
      pay the Taxes shown to be due and owing by Seller or the Members on such Tax
      Returns.

     

    
      
        
        

      

      
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    (b) Subject
      to Section 7.4(a), Parent shall duly and timely file or cause to be filed all
      Tax Returns required to be filed by Buyer after the Closing Date and shall
      pay
      or cause Buyer to pay all Taxes required to be paid with respect to periods
      commencing after the Closing Date.

     

    7.5. Buyer’s
      Edge Plan.
      Parent
      shall make loans to Buyer as and to the extent required by the Buyer’s Edge
      Plan, a copy of which is attached hereto as Exhibit
      B.

     

    7.6. Management
      of Buyer.
      The
      following provisions shall govern the operations of Buyer during the period
      commencing on the Closing Date through the Earnout Payment Period.

     

    (a) Parent
      and the Members agree that during the Earnout Payment Period, the Buyer, will
      operate and be managed as a separate subsidiary from Parent and its other
      Affiliates, reporting to and subject to the authority of Parent.

     

    (b) Management.

     

    (i) The
      operations of Buyer shall be conducted to: (i) comply on a timely basis with
      the
      financial reporting and budgeting procedures of Parent as from time to time
      in
      effect, which procedures require the approval of annual profit and capital
      expenditure plans; (ii) operate within any Parent policies as from time to
      time
      in effect, and (iii) operate generally within the parameters of the then current
      profit plan and capital expenditure budget of Buyer as proposed by Benzaken
      and
      approved by Parent; provided, however, that if the parties are unable to agree
      upon the same in good faith, then Parent has the right to establish the same.
      

     

    (ii) Subject
      to the provisions of Section 7.6(a) above and the Employment Agreement that
      Benzaken is executing and delivering on the date hereof, during the Earnout
      Payment Period, Benzaken, shall have primary responsibility and authority for
      the day-to-day operations of Buyer and, together with Parent, the long-term
      planning of Buyer. Subject to the foregoing, Benzaken shall be responsible
      for:
      (i) personnel selection and termination, and (ii) establishment of compensation
      levels for Buyer employees (excluding employees whose compensation is governed
      by an employment contract and any Affiliate of Benzaken), provided that all
      increases in compensation for any fiscal year shall be made only in accordance
      with the current budget of Buyer as proposed by Benzaken and approved by
      Parent.

     

    (c) Restricted
      Activities. During the Earnout Payment Period, Parent agrees that it will not
      cause Buyer to take or acquiesce in Buyer taking any of the following actions
      without the prior written consent of the Representative:

     

    (i) any
      sale,
      lease or disposition of all or a substantial portion of the assets or Business;
      

     

    
      
        
        

      

      
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    (ii) entering
      into any line of business not related to the Business;

     

    (iii) any
      acquisition by Buyer of the stock, assets or business of another
      Person;

     

    (iv) the
      merger, consolidation or amalgamation of Buyer with and into another Person
      or
      of another Person with and into Buyer; or

     

    (v) the
      adoption or amendment of any profit sharing or other employee benefit plan
      except for such amendments as may be required by law.

     

    7.7. Changes
      in Management. The parties hereto understand and agree that under
      the terms of the Employment Agreements by certain of the Members, such Member
      may be terminated with or without Cause (as defined therein). Accordingly,
      each
      of the parties hereto agrees that if (a) the employment of one or more of the
      Members terminates during the Earnout Payment Period regardless of the reason
      therefor, (b) or there are changes in the composition of the Board of Director
      of Buyer, no Party to this Agreement shall have the right (x) to make a claim
      that Parent or Buyer is in breach of this Agreement as a result of any such
      action, or (y) to make a claim against Parent or any of its Affiliates that
      as a
      result of any such action the Purchase Price has been adversely
      affected.

     

    ARTICLE
      VIII

     

    CONDITIONS
      TO CLOSING

     

    8.1. Condition
      to the Obligations of Parent, Buyer and Seller.
      The
      obligations of Parent, Buyer and Seller to consummate the Closing are subject
      to
      the satisfaction of all the following conditions: 

     

    (a) No
      provision of any applicable Law or Order shall prohibit or impose any condition
      on the consummation of the Closing or limit in any material way Parent’s right
      to control or operate Buyer or any material portion of the
      Business.

     

    (b) There
      shall not be pending or threatened any proceeding by a third-party to enjoin
      or
      otherwise restrict the consummation of the Closing.

     

    8.2. Conditions
      to Obligations of Parent and Buyer.
      In
      addition to the terms and provisions of Section 2.10, the obligation of Parent
      and Buyer to consummate the Closing is subject to the satisfaction, or the
      waiver at Parent’s and Buyer’s sole and absolute discretion, of all the
      following further conditions:

     

    (a) (i)
      Each
      of Seller and the Members shall have duly performed in all material respects
      all
      of their respective obligations hereunder required to be performed by them
      at or
      prior to the Closing Date, (ii) the representations and warranties of Seller
      and
      the Members contained in this Agreement, the Additional Agreements and in any
      certificate or other writing delivered by Seller or any Member pursuant hereto,
      disregarding all qualifications and exceptions contained therein relating to
      materiality or Material Adverse Effect, shall be true and correct at and as
      of
      the Closing Date, as if made at and as of such date with only such exceptions
      as
      could not in the aggregate reasonably be expected to have a Material Adverse
      Effect, (iii) there shall have been no event, change or occurrence which
      individually or together with any other event, change or occurrence, could
      reasonably be expected to have a Material Adverse Change or a Material Adverse
      Effect, regardless of whether it involved a known risk, and (iv) Parent and
      Buyer shall have received a certificate signed by the President and Chief
      Financial Officer of Seller and all of the Members to the effect set forth
      in
      clauses (i), (ii) and (iii) of this Section 8.2(a).

     

    
      
        
        

      

      
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    (b) No
      court,
      arbitrator or governmental body, agency or official shall have issued any Order,
      or have pending before it a proceeding for the issuance of any thereof, and
      there shall not be any provision of any applicable Law, statute, rule or
      regulation, restraining or prohibiting the consummation of the Closing or the
      effective operation or enjoyment by Parent or Buyer of the Business after the
      Closing Date.

     

    (c) Parent
      shall have received all documents it may request relating to the existence
      of
      Seller and the authority of Seller to enter into and perform its respective
      obligations under this Agreement, all in form and substance reasonably
      satisfactory to Parent and its legal counsel, including (i) a copy of the
      certificate of formation of Seller certified as of a recent date by the
      Secretary of State of New York, (ii) copies of Seller’s operating agreement as
      effective on the date hereof; (iii) copies of resolutions duly adopted by the
      Board of Managers of Seller and by the unanimous vote or consent of Seller’s
      members authorizing this Agreement and the Additional Agreements and the
      transaction contemplated hereby and thereby, (iv) a certificate of the Secretary
      of Seller certifying each of the foregoing and as to signatures of the
      officer(s) authorized to execute this Agreement and any certificate or document
      to be delivered pursuant hereto, together with evidence of the incumbency of
      such Secretary, and (v) a recent good standing certificate regarding Seller
      from
      the office of the Secretary of State of the State of New York, and each other
      jurisdiction in which Seller is qualified to do business. 

     

    (d) Parent
      shall be fully satisfied, in its sole discretion which shall be exercised in
      good faith, with the results of its and its representatives’ review of Seller
      and the Business (including any review of the assets, financial condition,
      and
      prospects of the Business); provided,
      that no
      such review shall affect any representation or warranty of Seller or any Member
      given hereunder or in any instrument related to the transactions contemplated
      hereby.

     

    (e) Each
      of
      Skynet, Zylonet and their respective Shareholders shall have duly performed
      all
      of their respective obligations under the Merger Agreement to be performed
      by
      them at or prior to the Closing Date thereunder and Parent shall be fully
      satisfied, in its sole discretion which shall be exercised in good faith, that
      all such conditions with respect to the Closing as defined thereunder shall
      have
      been fulfilled and satisfied.

     

    (f) Parent
      or
      either Buyer shall have reasonably determined that, after Parent or Buyer has
      had the opportunity to meet or speak to representatives of the largest
      advertisers of Seller pursuant to Section 5.2, all such advertisers will provide
      Buyer terms for the purchase of advertising as favorable to Buyer as the terms
      provided to Seller.

     

    (g) Buyer
      will have entered into an agreement, in form and substance satisfactory to
      it,
      with one or more banks and/or credit card companies, pursuant to which, from
      and
      after the Closing, said banks and/or credit card companies will process said
      Buyer’s credit card arrangements for the Business or a letter (in form and
      substance satisfactory to Buyer) from each existing bank or credit card company
      of Seller that Buyer may continue to process credit card arrangements pursuant
      to the agreements of Seller with respect thereto until such time as Buyer enters
      into its own agreements with such banks and/or credit card
      companies.

     

    
      
        
        

      

      
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    (h) Parent
      shall have received all Seller Consents (including any required consents of
      the
      landlords under the Office Leases), in form and substance reasonably
      satisfactory to Parent, and no such Seller Consent shall have been
      revoked.

     

    (i) Seller
      shall have delivered to Parent documents satisfactory to Parent to evidence
      the
      release of all Liens on any portion of the assets of Seller and the filing
      of
      appropriate UCC-3 Termination Statements.

     

    (j) Each
      of
      Benzaken, Albert Esses and Rafael Chemtob shall have entered into and delivered
      to Parent an employment agreement with Buyer substantially in the form attached
      hereto as Exhibits
      C-1,
      C-2,
      C-3,
      respectively (collectively, the “Employment Agreements”), and the same shall be
      in full force and effect.

     

    (k) Each
      of
      the Members shall have entered into and delivered to Parent a restrictive
      covenant agreements with Buyer substantially in the form attached hereto as
      Exhibit
      D,
      (collectively, the “Restrictive Covenant Agreements”), and the same shall be in
      full force and effect.

     

    (l) None
      of
      Seller (excluding Excluded Liabilities), Skynet or Zylonet shall have any
      Indebtedness, other than Indebtedness of Seller to Skynet.

     

    (m) The
      aggregate Adjusted Tangible Assets of Seller (excluding any Excluded Assets),
      Skynet and Zylonet shall exceed their aggregate liabilities (but excluding
      any
      Excluded Liabilities) by at least the amount of the Minimum Required
      EBITDA.

     

    8.3. Conditions
      to Obligations of Seller.
      In
      addition to the terms and provisions of Section 2.10, the obligation of Seller
      to consummate the Closing is subject to the satisfaction, or the waiver at
      Seller’s discretion, of all the following further conditions:

     

    (a) (i)
      Parent and Buyer shall have performed in all material respects all of their
      respective obligations hereunder required to be performed by it at or prior
      to
      the Closing Date, (ii) the representations and warranties of Parent contained
      in
      this Agreement, the Additional Agreements and in any certificate or other
      writing delivered by Parent or Buyer pursuant hereto, disregarding all
      qualifications and expectations contained therein relating to materiality,
      shall
      be true and correct in all material respects at and as of the Closing Date,
      as
      if made at and as of such date, (iii) there shall have been no event, change
      or
      occurrence which individually or together with any other event, change or
      occurrence, could reasonably be expected to have a material adverse effect,
      regardless of whether it involved a known risk, on the business, assets,
      condition (financial or otherwise), liabilities, result of operations of
      prospects of the Parent, and (iv) each Member shall have received a certificate
      signed by an authorized officer of Parent and Buyer to the foregoing
      effect.

     

    
      
        
        

      

      
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    (b) Seller
      shall have received (i) a copy of the certificate of incorporation of the Parent
      and Buyer, (ii) copies of the bylaws of each of Parent and Buyer as effective
      on
      the date hereof; (iii) copies of resolutions duly adopted by the Board of
      Directors of Parent and Buyer and by the unanimous vote or consent of Buyer’s
      shareholders authorizing this Agreement and the Additional Agreements and the
      transaction contemplated hereby and thereby, (iv) a certificate of the Secretary
      or Assistant Secretary of Parent and each Buyer certifying each of the foregoing
      and as to signatures of the officer(s) authorized to execute this Agreement
      and
      any certificate or document to be delivered pursuant hereto, together with
      evidence of the incumbency of such Secretary or Assistant Secretary, and (v)
      a
      recent good standing certificate regarding Parent and Buyer from the office
      of
      the Secretary of State of its respective jurisdiction of organization and each
      other jurisdiction in which Seller is qualified to do business.

     

    (c) Seller
      shall have delivered to each of Benzaken, Albert Esses and Rafael Chemtob a
      duly
      executed copy of their respective Employment Agreements.

     

    (d) The
      transactions contemplated in the Merger Agreement shall have been consummated
      simultaneous with the Closing.

     

    ARTICLE
      IX

     

    RELIANCE
      ON REPRESENTATIONS AND WARRANTIES

     

    9.1. Reliance
      on Representations and Warranties of Seller and the
      Members.
      Notwithstanding any right of Parent and Buyer to fully investigate the affairs
      of Seller and notwithstanding any knowledge of facts determined or determinable
      by Parent and Buyer pursuant to such investigation or right of investigation,
      Parent and Buyer shall have the right to rely fully upon the representations,
      warranties, covenants and agreements of Seller and the Members contained in
      this
      Agreement.

     

    9.2. Reliance
      on Representations and Warranties of Parent.
      Seller
      and the Members shall have the right to rely fully on Parent’s representations,
      warranties, covenants and agreements herein, notwithstanding any investigation
      by Seller or the Members and notwithstanding any knowledge of facts determined
      or determinable by Seller or the Members pursuant to such investigation or
      right
      of investigation.

     

    
      
        
        

      

      
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    ARTICLE
      X

     

    INDEMNIFICATION

     

    10.1. Indemnification
      of Parent, Buyer.

     

    (a) Seller
      and each Member hereby jointly and severally agree to indemnify and hold
      harmless Parent, Buyer and their Affiliates (including, after the Closing,
      Zylonet and Skynet) and each of their respective directors, officers, employees,
      shareholders, attorneys and agents and permitted assignees (collectively, the
      “Purchaser Indemnitees,” provided,
      however,
      the
      term “Purchaser Indemnitees” shall not include any of the Members regardless of
      their capacity), against and in respect of any and all loss, payments, demand,
      penalty, liability, judgment, damage, diminution in value, claim or
      out-of-pocket costs and expenses (including actual costs of investigation and
      attorneys’ fees and other costs and expenses) (all of the foregoing
      collectively, “Losses”) incurred or sustained by any Purchaser Indemnitee as a
      result of (i) any breach, inaccuracy or nonfulfillment or the alleged
      breach, inaccuracy or nonfulfillment of any of the representations, warranties
      and covenants of Seller or any of the Members contained herein or in the
      Additional Agreements (but not the Employment Agreements) or any certificate
      or
      other writing delivered pursuant hereto or of Skynet or Zylonet or of the
      Shareholders (ii) the failure to pay any claims by any third parties (including
      breach of contract claims, violations of warranties, trademark infringement,
      for
“spamming”, privacy violations, torts or consumer complaints) with respect to
      the business of Seller or Skynet or Zylonet for any period prior to the Closing
      Date, (iii) the violation of any Laws by any of Seller or Skynet or Zylonet
      prior to the respective Closing, or (iv) the failure to pay any Taxes incurred
      prior to the Closing to any Tax Authority or to file any Tax Return with any
      Tax
      Authority; provided,
      that
      Losses in connection with Sections 10.1(ii), (iii) and (iv) shall be deemed
      to
      include any amounts payable after the Closing pursuant to or otherwise in
      connection with any of the matters listed on Schedule 3.19 to the Merger
      Agreement. The total payments made by Seller and the Members to the Purchaser
      Indemnitees with respect to Losses shall not exceed the sum of Purchase Price
      plus the Merger Consideration under the Merger Agreement (the “Maximum
      Indemnification”); provided,
      however,
      that no
      Purchaser Indemnitee shall be entitled to indemnification pursuant to this
      Section 10.1 unless and until the aggregate amount of Losses to all Purchaser
      Indemnitees equals at least $50,000, at which time, subject to the foregoing
      cap
      on the maximum amount payable, the Purchaser Indemnitees shall be entitled
      to
      indemnification for the total amount of such Losses; provided,
      further,
      that
      any amounts paid as Indemnification for Losses under the Merger Agreement shall
      be applied against the foregoing Maximum Indemnification; provided,
      further,
      however, solely in the case of Rafael Chemtob, his liability under this Section
      10.1 shall not exceed his pro rata share of the Purchase Price or include any
      Losses in connection with Skynet or Zylonet. Notwithstanding anything set forth
      in this Section 10.1, any Loss incurred by any Purchaser Indemnitee: (i) arising
      out of Buyer’s or any Member’s breach of or failure to perform any covenant or
      obligation to be performed by Seller or any Member at or after the Closing,
      including the failure to pay any Taxes, or (ii) pursuant to or otherwise in
      connection with any of the matters listed on Schedule 3.19 of the Merger
      Agreement, shall not be subject to or applied against the minimum amount of
      Losses or the cap set forth in the previous sentence. Notwithstanding anything
      set forth in this Section 10.1, no Member shall be liable for a Loss in
      connection with any other Member's breach of any of the terms and conditions
      set
      forth under Article VII or Restrictive Covenant Agreements.

     

    
      
        
        

      

      
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    10.2. Indemnification
      of Members.
      Parent
      and Buyer hereby agrees to indemnify and hold harmless Members (the “Seller
      Indemnitees”) against and in respect of any Losses incurred or sustained by
      Seller Indemnitees as a result of any breach, inaccuracy or nonfulfillment
      or
      the alleged breach, inaccuracy or nonfulfillment of any of the representations,
      warranties and covenants of Parent or Buyer contained herein or any certificate
      or other writing delivered pursuant hereto. The total payments made by Parent
      and Buyer to Seller Indemnitees with respect to Losses shall not exceed the
      Purchase Price; provided,
      however,
      Seller
      Indemnitees shall not be entitled to indemnification pursuant to this Section
      10.2 unless and until the aggregate amount of Losses to Seller Indemnitees
      equals at least $50,000, at which time, subject to the foregoing cap on the
      maximum amount payable, the Seller Indemnitees shall be entitled to
      indemnification for the total amount of such Losses. Notwithstanding anything
      set forth in this Section 10.2, any Loss incurred by any Members arising out
      of
      Parent’s or Buyer’s breach or failure to perform any covenant or obligation to
      be performed by Parent or Buyer at or after the Closing Date, shall not be
      subject to or applied against the minimum amount of Losses or the cap set forth
      in the previous sentence.

     

    10.3. Procedure.
      The
      following shall apply with respect to all claims by either a Purchaser
      Indemnitee or a Seller Indemnitee (together, “Indemnified party”) for
      indemnification:

     

    (a) An
      Indemnified party shall give the Representative or Parent, or Buyer, as
      applicable (either, “Indemnifying parties”), prompt notice (an “Indemnification
      Notice”) of any third-party claim, investigation, action, suit, hearing or
      proceeding with respect to which such Indemnified party seeks indemnification
      pursuant to Section 10.1 or 10.2 (a “Third-party Claim”), which shall
      describe in reasonable detail the loss, liability or damage that has been or
      may
      be suffered by the Indemnified party. The failure to give the Indemnification
      Notice shall not impair any of the rights or benefits of such Indemnified party
      under Section 10.1 or 10.2, except to the extent such failure materially and
      adversely affects the ability of the Indemnifying parties to defend such claim
      or increases the amount of such liability.

     

    (b) In
      the
      case of any Third-party Claims as to which indemnification is sought by any
      Indemnified party, such Indemnified party shall be entitled, at the sole expense
      and liability of the Indemnifying parties, to exercise full control of the
      defense, compromise or settlement of any Third-party Claim unless the
      Indemnifying parties, within a reasonable time after the giving of an
      Indemnification Notice by the Indemnified party (but in any event within 20
      days
      thereafter), shall (i) deliver a written confirmation to such Indemnified party
      that the indemnification provisions of Section 10.1 or 10.2 are applicable
      to
      such claim, investigation, action, suit, hearing or proceeding and the
      Indemnifying parties will indemnify such Indemnified party in respect of such
      claim, investigation, action or proceeding pursuant to the terms of Section
      10.1
      or 10.2 and, notwithstanding anything to the contrary, shall do so without
      asserting any challenge, defense, limitation on the Indemnifying parties
      liability for Losses, counterclaim or offset, (ii) notify such Indemnified
      party
      in writing of the intention of the Indemnifying parties to assume the defense
      thereof, and (iii) retain legal counsel reasonably satisfactory to such
      Indemnified party to conduct the defense of such Third-party Claim.

     

    
      
        
        

      

      
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    (c) If
      the
      Indemnifying parties assume the defense of any such Third-party Claim then
      the
      Indemnified party shall cooperate with the Indemnifying parties in any manner
      reasonably requested in connection with the defense, compromise or settlement
      thereof. If the Indemnifying parties so assume the defense of any such
      Third-party Claim the Indemnified party shall have the right to employ separate
      counsel and to participate in (but not control) the defense, compromise, or
      settlement thereof, but the fees and expenses of such counsel employed by the
      Indemnified party shall be at the expense of such Indemnified party unless
      (i)
      the Indemnifying parties have agreed to pay such fees and expenses, or (ii)
      the
      named parties to any such Third-party Claim (including any impleaded parties)
      include an Indemnified party and an Indemnifying party and such Indemnified
      party shall have been advised by its counsel that there may be a conflict of
      interest between such Indemnified party and the Indemnifying parties in the
      conduct of the defense thereof, and in any such case the reasonable fees and
      expenses of such separate counsel shall be borne by the Indemnifying
      parties.

     

    (d) If
      the
      Indemnifying parties elect to direct the defense of any Third-party Claim,
      the
      Indemnified party shall not pay, or permit to be paid, any part of any claim
      or
      demand arising from such asserted liability unless the Indemnifying parties
      withdraw from or fail to vigorously prosecute the defense of such asserted
      liability, or unless a judgment is entered against the Indemnified party for
      such liability. If the Indemnifying parties do not elect to defend, or if,
      after
      commencing or undertaking any such defense, the Indemnifying parties fail to
      prosecute or withdraw such defense, the Indemnified party shall have the right
      to undertake the defense or settlement thereof, at the Indemnifying parties’
expense. Notwithstanding anything to the contrary, the Indemnifying parties
      shall not be entitled to control, but may participate in, and the Indemnified
      party (at the expense of the Indemnifying parties) shall be entitled to have
      sole control over, the defense or settlement of (x) that part of any Third
      party
      Claim (i) that seeks a temporary restraining order, a preliminary or permanent
      injunction or specific performance against the Indemnified party, or (ii) to
      the
      extent such Third party Claim involves criminal allegations against the
      Indemnified party or (y) the entire Third party Claim if such Third party Claim
      could impose liability on the part of the Indemnified party in an amount which
      is greater than the amount as to which the Indemnified party is entitled to
      indemnification under this Agreement. In the event the Indemnified party retains
      control of the Third party Claim, the Indemnified party will not settle the
      subject claim without the prior written consent of the Indemnifying party,
      which
      consent will not be unreasonably withheld or delayed.

     

    (e) If
      the
      Indemnified party assumes the defense of any such Third-party Claim pursuant
      to
      Section 10.1 or 10.2 and proposes to settle the same prior to a final judgment
      thereon or to forgo appeal with respect thereto, then the Indemnified party
      shall give the Indemnifying parties prompt written notice thereof and the
      Indemnifying parties shall have the right to participate in the settlement,
      assume or reassume the defense thereof or prosecute such appeal, in each case
      at
      the Indemnifying parties’ expense. The Indemnifying parties shall not, without
      the prior written consent of such Indemnified party settle or compromise or
      consent to entry of any judgment with respect to any such Third-party Claim
      (i)
      in which any relief other than the payment of money damages is or may be sought
      against such Indemnified party or (ii) which does not include as an
      unconditional term thereof the giving by the claimant, person conducting such
      investigation or initiating such hearing, plaintiff or petitioner to such
      Indemnified party of a release from all liability with respect to such
      Third-party Claim and all other claims or causes of action (known or unknown)
      arising or which might arise out of the same facts.

     

    10.4. Periodic
      Payments.
      Any
      indemnification required by Section 10.1 or 10.2 for costs, disbursements or
      expenses of any Indemnified party in connection with investigating, preparing
      to
      defend or defending any claim, action, suit, hearing, proceeding or
      investigation shall be made by periodic payments by the Indemnifying parties
      to
      each Indemnified party during the course of the investigation or defense, as
      and
      when bills are received or costs, disbursements or expenses are
      incurred.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    10.5. Right
      of Set Off.
      In the
      event that Parent or Buyer is entitled to any indemnification pursuant to this
      Article, Parent or Buyer shall be entitled to set off any amounts owed to (x)
      Seller pursuant to Sections 2.6 and/or (y) the Shareholders pursuant to
      Section 2.3 under the Merger Agreement against the amount of such
      indemnification. In the event of such a set-off, the set-off will first be
      allocated to: (i) any cash to which Seller is otherwise entitled pursuant to
      this Agreement and then to (ii) the shares of Parent Class C Common Stock to
      which Seller is otherwise entitled pursuant to this Agreement at $3.50 per
      share. Any such set-off will be treated as an adjustment to the Purchase
      Price.

     

    10.6. Payment
      of Indemnification by Members.
      In the
      event that Parent or Buyer is entitled to any indemnification pursuant to this
      Article and Parent or Buyer are unable to set off such indemnification pursuant
      to Section 10.5, the Members shall pay the amount of the indemnification
      (subject to the limitation set forth in Section 10.1) first in cash up to the
      amount of cash received by the Members as part of the Purchase Price, and then
      in shares of Parent Class C Common Stock at $3.50 per share. Any payments by
      Seller or Members to a Purchaser Indemnitee will be treated as an adjustment
      to
      the Purchase Price.

     

    10.7. Insurance.
      Any
      indemnification payments hereunder shall take into account any insurance
      proceeds or other third party reimbursement actually received.

     

    10.8. Survival
      of Indemnification Rights.
      Except
      for the representations and warranties in (i) Sections 3.1, 3.2, 3.9, 3.10
      and 3.15, which shall survive until the sixth anniversary of the Closing Date
      and (ii) Sections 3.19, 3.26, 3.27, 3.28 and 3.29, which shall survive until
      the
      expiration of the statue of limitations with respect thereto, the
      representations and warranties of Seller, Members and Parent shall survive
      until
      the fourth anniversary of the Closing Date. The indemnification to which any
      Indemnified party is entitled from the Indemnifying parties pursuant to Section
      10.1 or 10.2 for Losses shall be effective so long as it is asserted prior
      to
      (x) the sixth anniversary of the Closing Date, in the case of Section 10.8(i);
      (y) the expiration of the applicable statute of limitations, in the case of
      Section 10.8(ii) and the breach or the alleged breach of any covenant or
      agreement of Seller or any Indemnifying party; and (z) the fourth anniversary
      of
      the Closing Date, in the case of all other representations and warranties of
      Seller, Members and Parent hereunder. The obligations of Seller (but not of
      the
      Members) in Articles V and VI shall terminate upon the Closing.

     

    ARTICLE
      XI

     

    DISPUTE
      RESOLUTION

     

    11.1. Arbitration.

     

    (a) The
      parties shall promptly submit any dispute, claim, or controversy arising out
      of
      or relating to this Agreement, or any Additional Agreement (including with
      respect to the meaning, effect, validity, termination, interpretation,
      performance, or enforcement of this Agreement or any Additional Agreement)
      or
      any alleged breach thereof (including any action in tort, contract, equity,
      or
      otherwise), to binding arbitration before one arbitrator (“Arbitrator”). The
      parties agree that binding arbitration shall be the sole means of resolving
      any
      dispute, claim, or controversy arising out of or relating to this Agreement
      or
      any Additional Agreement (including with respect to the meaning, effect,
      validity, termination, interpretation, performance or enforcement of this
      Agreement or any Additional Agreement) or any alleged breach thereof (including
      any claim in tort, contract, equity, or otherwise).

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      parties cannot agree upon the Arbitrator, the Arbitrator shall be selected
      by
      the New York City chapter head of the American Arbitration Association upon
      the
      request of either side. The Arbitrator shall be selected within 30 days of
      request.

     

    (c) The
      laws
      of the State of New York shall apply to any arbitration hereunder. In any
      arbitration hereunder, this Agreement and any agreement contemplated hereby
      shall be governed by the laws of the State of New York applicable to a contract
      negotiated, signed, and wholly to be performed in the State of New York, which
      laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall
      issue a written decision, setting forth findings of fact and conclusions of
      law,
      within sixty (60) days after he shall have been selected. The Arbitrator shall
      have no authority to award punitive or other exemplary damages.

     

    (d) The
      arbitration shall be held in New York City, New York in accordance with and
      under the then-current provisions of the rules of the American Arbitration
      Association, except as otherwise provided herein.

     

    (e) On
      application to the Arbitrator, any party shall have rights to discovery to
      the
      same extent as would be provided under the Federal Rules of Civil Procedure,
      and
      the Federal Rules of Evidence shall apply to any arbitration under this
      Agreement; provided, however, that the Arbitrator shall limit any discovery
      or
      evidence such that his decision shall be rendered within the period referred
      to
      in Section 11.1(c).

     

    (f) The
      Arbitrator may, at his discretion and at the expense of the party who will
      bear
      the cost of the arbitration, employ experts to assist him in his determinations.
      

     

    (g) The
      costs
      of the arbitration proceeding and any proceeding in court to confirm any
      arbitration award or to obtain relief as provided in Section 6.5, as applicable
      (including actual attorneys’ fees and costs), shall be borne by the unsuccessful
      party and shall be awarded as part of the Arbitrator’s decision, unless the
      Arbitrator shall otherwise allocate such costs, for the reasons set forth,
      in
      such decision. The determination of the Arbitrator shall be final and binding
      upon the parties and not subject to appeal.

     

    (h) Any
      judgment upon any award rendered by the Arbitrator may be entered in and
      enforced by any court of competent jurisdiction. The parties expressly consent
      to the exclusive jurisdiction of the courts (Federal and state) in New York
      City, New York to enforce any award of the Arbitrator or to render any
      provisional, temporary, or injunctive relief in connection with or in aid of
      the
      Arbitration. The parties expressly consent to the personal and subject matter
      jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted
      to arbitration hereunder. None of the parties hereto shall challenge any
      arbitration hereunder on the grounds that any party necessary to such
      arbitration (including the parties hereto) shall have been absent from such
      arbitration for any reason, including that such party shall have been the
      subject of any bankruptcy, reorganization, or insolvency
      proceeding.

     

    (i) The
      parties shall indemnify the Arbitrator and any experts employed by the
      Arbitrator and hold them harmless from and against any claim or demand arising
      out of any arbitration under this Agreement or any agreement contemplated
      hereby, unless resulting from the willful misconduct of the person
      indemnified.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (j) This
      arbitration clause shall survive the termination of this Agreement and any
      agreement contemplated hereby.

     

    11.2. Waiver
      of Jury Trial; Exemplary Damages.
      ALL
      PARTIES HEREBY WAIVE THEIR RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE
      ARISING UNDER THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT. No party shall be
      awarded punitive or other exemplary damages respecting any dispute arising
      under
      this Agreement or any Additional Agreement. 

     

    11.3. Attorneys’
      Fees.
      The
      unsuccessful party to any court or other proceeding arising out of this
      Agreement that is not resolved by arbitration under Section 11.1 shall pay
      to
      the prevailing party all attorneys’ fees and costs actually incurred by the
      prevailing party, in addition to any other relief to which it may be entitled.
      As used in this Section 11.3 and elsewhere in this Agreement, “actual
      attorneys’ fees” or “attorneys’ fees actually incurred” means the full and
      actual cost of any legal services actually performed in connection with the
      matter for which such fees are sought, calculated on the basis of the usual
      fees
      charged by the attorneys performing such services, and shall not be limited
      to
“reasonable attorneys’ fees” as that term may be defined in statutory or
      decisional authority.

     

    ARTICLE
      XII

     

    TERMINATION

     

    12.1. Termination
      Without Default.
      In the
      event that the Closing of the transactions contemplated hereunder has not
      occurred by the Outside Closing Date and no material breach of this Agreement
      by
      the party seeking to terminate this Agreement shall have occurred or have been
      made (as provided in Section 12.2 hereof) Parent and Buyer or any four Members,
      acting together, shall have the right, at its sole option, to terminate this
      Agreement without liability to the other side. Such right may be exercised
      by
      Parent and Buyer, on the one hand, or any four Members on the other, as the
      case
      may be, giving written notice to the other at any time after the Scheduled
      Closing Date.

     

    12.2. Termination
      Upon Default.

     

    (a) Parent
      and Buyer may terminate this Agreement by giving notice to Seller or any of
      the
      Members on or prior to the Closing, without prejudice to any rights or
      obligations Parent and Buyer may have, if Seller or any Member shall have
      materially breached any representation or warranty or breached any agreement
      or
      covenant contained herein or in any Additional Agreement to be performed prior
      to Closing and such breach shall not be cured within the earlier of the
      Scheduled Closing Date and five (5) days following receipt by Seller or the
      Members of a notice describing in reasonable detail the nature of such breach.
      

     

    (b) Seller
      may terminate this Agreement by giving prior written notice to Parent, without
      prejudice to any rights or obligations Seller or the Members may have, if Parent
      or Buyer shall have materially breached any of its covenants, agreements,
      representations, and warranties contained herein to be performed prior to
      Closing and such breach shall not be cured within the earlier of the Scheduled
      Closing Date and five (5) days following receipt by Parent of a notice
      describing in reasonable detail the nature of such breach.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    12.3. Survival.
      The
      provisions of Sections 7.2 and 10.4 shall survive any termination hereof
      pursuant to Article XII. 

     

    ARTICLE
      XIII

     

    MISCELLANEOUS

     

    13.1. Notices.
      All
      notices, requests, demands and other communications to any party hereunder
      shall
      be in writing and shall be given to such party at its address or telecopier
      number set forth below, or such other address or telecopier number as such
      party
      may hereinafter specify by notice to each other party hereto:

     

    if
      to
      Parent and Buyer, to:

     

    c/o
      Accoona Corp.

    101
      Hudson Street

    Jersey
      City, New Jersey 07302

    Attn:
      President 

    Telecopy:
      201-557-9377

     

    with
      a
      copy to:

     

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Attention:
      Andrew M. Ross, Esq.

    Telecopy:
      (212) 407-4990

     

    if
      to
      Seller or any Members:

    

    c/o
      Internet Media Group LLC

    481
      Kings
      Highway

    Brooklyn,
      NY 11223

    Attention:
      Allen Benzaken

    Telecopy:
      (718) 234-9345

     

    with
      a
      copy to:

    Silverman
      Sclar Shin & Byrne PLLC

    381
      Park
      Avenue South

    New
      York,
      New York 10016

    Attention:
      John Shin, Esq. 

    Telecopy:
      (212) 779-8858

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    Each
      such
      notice, request or other communication shall be effective (i) if given by
      telecopy, when such telecopy is transmitted to the telecopy number specified
      herein and the appropriate answer back is received or, (ii) if given by
      certified mail, 72 hours after such communication is deposited in the mails
      with
      first class postage prepaid, properly addressed or, (iii) if given by any other
      means, when delivered at the address specified herein.

     

    13.2. Amendments;
      No Waivers. 

     

    (a) Any
      provision of this Agreement may be amended or waived if, and only if, such
      amendment or waiver is in writing and signed, in the case of an amendment,
      by
      each party hereto (or in the case of the Member, the Representative), or in
      the
      case of a waiver, by the party against whom the waiver is to be
      effective.

     

    (b) No
      failure or delay by any party hereto in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof nor shall any single or partial
      exercise thereof preclude any other or further exercise thereof or the exercise
      of any other right, power or privilege. The rights and remedies herein provided
      shall be cumulative and not exclusive of any rights or remedies provided by
      law.

     

    13.3. Ambiguities.
      The
      parties acknowledge that each party and its counsel has materially participated
      in the drafting of this Agreement and consequently the rule of contract
      interpretation that, and ambiguities if any in, the writing be construed against
      the drafter, shall not apply.

     

    13.4. Publicity.
      Except
      as required by law, the parties agree that neither they nor their agents shall
      issue any press release or make any other public disclosure concerning the
      transactions contemplated hereunder without the prior approval of the other
      party hereto.

     

    13.5. Expenses.
      All
      costs and expenses incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the party incurring such
      cost
      or expense.

     

    13.6. Successors
      and Assigns.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns; provided,
      that
      (i) neither Seller nor Member may assign, delegate or otherwise transfer
      any of its rights or obligations under this Agreement without the prior written
      consent of Parent; and (ii) in the event Parent assigns its rights and
      obligations under this Agreement to an Affiliate, Parent shall continue to
      remain liable for its obligations hereunder.

     

    13.7. Governing
      Law.
      This
      Agreement has been entered into in the State of New Jersey. Notwithstanding
      the
      foregoing, this Agreement shall be construed in accordance with and governed
      by
      the laws of the State of New York, without giving effect to the conflict of
      laws
      principles thereof.

     

    13.8. Counterparts;
      Effectiveness.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original and all of which shall be deemed to be one and the same instrument,
      with the same effect as if the signatures thereto and hereto were upon the
      same
      instrument.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    13.9. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      subject matter hereof and supersedes all prior agreements, understandings and
      negotiations, both written and oral, among the parties with respect to the
      subject matter of this Agreement. No representation, inducement, promise,
      understanding, condition or warranty not set forth herein has been made or
      relied upon by any party hereto. Neither this Agreement nor any provision hereof
      is intended to confer upon any Person other than the parties hereto any rights
      or remedies hereunder other than Indemnified parties as set forth in Section
      10.1 and 10.2 hereof, which shall be a third party beneficiary
      hereof.

     

    13.10. Severability.
      If
      any
      one or more provisions of this Agreement shall, for any reasons, be held to
      be
      invalid, illegal or unenforceable in any respect, such invalidity, illegality
      or
      unenforceability shall not affect any other provision of this Agreement, but
      this Agreement shall be construed as if such invalid, illegal or unenforceable
      provision had never been contained herein.

     

    13.11. Captions.
      The
      captions herein are included for convenience of reference only and shall be
      ignored in the construction or interpretation hereof.

     

    13.12. Construction.

     

    (a) All
      references in this Agreement to “including” shall be deemed to mean “including,
      without limitation”.

     

    (b) For
      the
      avoidance of any doubt, all references in this Agreement to “the knowledge or
      best knowledge of Seller” or similar terms shall be deemed to include the
      knowledge or best knowledge of any Member.

     

    (c) Where
      the
      context or construction requires, all words applied in the plural shall be
      deemed to have been used in the singular, and vice versa; the masculine shall
      include the feminine and neuter, and vice versa; and the present tense shall
      include the past and future tense, and vice versa.

     

    13.13. Members’
      Representative.

     

    (a) Each
      Member hereby appoints Benzaken, as such Member’s representative to act as
      Representative for all purposes of this Agreement and the transactions
      contemplated hereby, with the right, in such capacity, in his discretion, to
      do
      any and all things and to execute any and all documents in such Member’s place
      and stead, in any way which such Member could do if personally present, in
      connection with this Agreement and the transactions contemplated thereby,
      including the authority on behalf of such Member, without giving notice to
      such
      Member, to take any of the following actions:

     

    (i) to
      accept
      on such Member’s behalf any amount payable to such Member under this
      Agreement;

     

    (ii) to
      negotiate and otherwise deal with Parent, in all respects;

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    (iii) to
      accept
      and give service of process and all other notices and other communications
      relating to this Agreement;

     

    (iv) to
      settle
      any dispute relating to the terms of this Agreement;

     

    (v) to
      execute any instrument or document that the Representative may determine is
      necessary or desirable in the exercise of his authority under this Agreement
      and
      power-of-attorney; and

     

    (vi) to
      act in
      connection with all matters relating to this Agreement and the transactions
      contemplated thereby, including the power to employ auditors, attorneys and
      other Persons in connection therewith.

     

    (b) Each
      Member further agrees, as follows:

     

    (i) such
      Member recognizes the inherent conflict of interest of Benzaken as the
      Representative and as a continuing employee of Buyer and waives any claims
      with
      respect thereto;

     

    (ii) the
      Representative (A) shall not incur any personal liability for acting in such
      capacity if in doing so he acts upon advice of counsel or otherwise acts in
      good
      faith, (B) shall not incur any personal liability for acting in such capacity
      in
      the absence of his willful misconduct, (C) may act upon any instrument or
      signature believed by him to be genuine and may assume that any Person
      purporting to give any notice or instruction under this Agreement or under
      any
      other related agreement or document believed by him to be authorized has been
      authorized to do so (D) shall not be responsible for the investment of any
      payments received from Parent for the benefit of the Members, and (E) shall
      be
      promptly reimbursed by the Members, pro rata in proportion to their ownership
      of
      Units immediately prior to the Closing, for out-of-pocket expenses incurred
      by
      him in his capacity of Representative, and such expenses shall first be
      satisfied from any Closing Payment or Earnout Payment paid by Parent and
      received by the Representative for the benefit of the Shareholders, prior to
      distribution of such payments to the Shareholders; and

     

    (c) If
      Benzaken is unable to serve or resigns as the Representative, the Members may
      appoint from among their ranks a substitute Representative to replace Benzaken
      which individual shall have all the powers and authority granted to Benzaken
      by
      this Section 13.13. Buyer shall accept such substitute Representative without
      objection; provided,
      however,
      that
      Benzaken shall continue to serve as the Representative until such substitute
      Representative has been appointed by the Members.

     

    (d) At
      and
      after Closing, Buyer shall be entitled to deal exclusively with the Seller
      and
      the Representative on all matters relating to this Agreement and the
      transactions contemplated hereby involving the Members, or any of them, and
      shall be entitled to rely conclusively (without further evidence of any kind
      whatsoever) on any statements made by the Seller or the Representative or
      documents executed or purported to be executed on behalf of any Member by the
      Representative, and on any other action taken or purported to be taken on behalf
      of any Member by the Representative including, without limitation, the
      appropriate communication or delivery to the Members.

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Parent, Buyer and Seller have caused this Agreement to be
      duly
      executed by their respective authorized officers and the Members and the
      Representative have executed this Agreement as of the day and year first above
      written.

     

    
      	 	 	 
	 	Accoona
              Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Stuart
              Kauder
	 	
              
Stuart
              Kauder

              Chief
                Executive Officer

            

    

     

    
      	 	 	 
	 	BE
              Acquisition Corp.
	 
 	 
 	 
 
	 	By:  	/s/ Stuart
              Kauder
	 	
              
Stuart
              Kauder
	 	Title 

    

     

    
      	 	 	 
	 	
              Internet
                Media Group LLC

            
	 
 	 
 	 
 
	 	By:  	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken
President
	 	Title 

    

     

    
      	 	 	 
	 	
              Members

            
	 
 	 
 	 
 
	 	      	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken

    

     

    
      	 	 	 
	 	       	/s/ Raymond
              Benzaken
	 	
              
Raymond
              Benzaken

    

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	      	/s/ Jack
              Benzaken 
	 	
              
Jack
              Benzaken 

    

     

    
      	 	 	 
	 	      	/s/ Albert
              Esses
	 	
              
Albert
              Esses

    

     

    
      	 	 	 
	 	     	/s/ Charles
              Cytryn
	 	
              
Charles
              Cytryn

    

     

    
      	 	 	 
	 	By:  	/s/ Rafael
              Chemtob
	 	
              
Rafael
              Chemtob

    

     

    
      	 	 	 
	 	Representative:
	 
 	 
 	 
 
	 	By:  	/s/ Allen
              Benzaken
	 	
              
Allen
              Benzaken

    

     

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    Schedule
      I 

     

    

      
        	
                Internet
                  Media Group LLC

              
	 	 	 
	
                Shareholders

              	 	
                Number
                  of Units

              
	
                Allen
                  Benzaken

              	 	
                21.25

              
	
                Raymond
                  Benzaken

              	 	
                21.25

              
	
                Jack
                  Benzaken

              	 	
                21.25

              
	
                Albert
                  Esses

              	 	
                10.63

              
	
                Charles
                  Cytryn

              	 	
                10.63

              
	
                Rafael
                  Chemtob

              	 	
                10.63

              

      

       

       

      
        
          
          

        

        
          59ACCOONA
      CORP.

     

    2004
      EQUITY INCENTIVE PLAN

     

    

     

    1.  Purpose.
      Accoona
      Corp., a Delaware corporation formerly named ‘China Communications Corp.’
(“Accoona”), desires to attract and retain the best available talent and to
      encourage the highest level of performance. The Accoona Corp. 2004 Equity
      Incentive Plan (the “Plan”)
      is
      intended to contribute significantly to the attainment of these objectives
      by
      affording eligible employees and independent contractors of Accoona and its
      affiliates (whether or not incorporated) (collectively, with Accoona, the
“Company”)
      the
      opportunity to acquire a proprietary interest in Accoona through the grant
      of
      stock options (“Options”)
      to
      purchase shares of common stock, $.001 par value per share, of Accoona (the
      “Common
      Stock”)
      and
      through the grant of restricted shares of the Common Stock (“Restricted
      Stock”).

     

    2.  Administration.

     

    (a)  In
      General.
      Subject
      to paragraph (b) hereof, the Plan shall be administered by the board of
      directors of Accoona (the “Board”).
      The
      Board shall have plenary authority in its discretion, to the maximum extent
      permissible by law, subject to and not inconsistent with the express provisions
      of the Plan, to make all Option and/or Restricted Stock awards (“Awards”)
      under
      the Plan, to select from among eligible persons those individuals who will
      be
      receiving Awards, to determine whether each Award should be a Stock Option
      or
      Restricted Stock, to determine the number of shares of Common Stock covered
      by
      each Award, the Option exercise price per share of Common Stock covered by
      each
      Option (and, in connection therewith, determine the Fair Market Value of the
      Common Stock for purposes of the Plan), and the restrictions, if any, which
      shall apply to the Common Stock subject to an Award, to determine the terms
      and
      conditions of each Award, to approve the form of each Option agreement (an
      “Option
      Agreement”)
      and
      each Restricted Stock agreement (a “Restricted
      Stock Agreement”),
      to
      amend any such Option Agreement or Restricted Stock Agreement from time to
      time,
      to construe and interpret the Plan and all Option Agreements and Restricted
      Stock Agreements executed thereunder and to make all other determinations
      necessary or advisable for the administration of the Plan. In exercising its
      authority to set the terms and conditions of Options and Restricted Stock,
      and
      subject only to the limits of applicable law, the Board shall be under no
      obligation or duty to treat similarly situated grantees of an Option Agreement
      (“Optionees”)
      or
      similarly situated grantees of an Restricted Stock Agreement (“Restricted
      Stock Awardees”)
      (collectively, “Awardees”,
      and
      each individually an “Awardee”)
      in the
      same manner, and any action taken by the Board with respect to the grant of
      an
      Award to one Awardee shall in no way obligate the Board to take the same or
      similar action with respect to any other Awardee. The Board may exercise its
      discretion in a manner such that Awards that are granted to individuals who
      are
      foreign nationals or who are employed or provide services outside the United
      States, contain terms and conditions that are different from the provisions
      otherwise specified in the Plan but that are consistent with the tax and other
      laws of foreign jurisdictions applicable to the Awardee and which are designed
      to provide the Awardee with benefits that are consistent with the Company’s
      objectives in establishing the Plan. The Board may adopt such rules as it deems
      necessary or advisable in order to carry out the purpose of the Plan. All
      questions of interpretation, administration and application of the Plan shall
      be
      determined by a majority of the members of the Board then in office, except
      that
      the Board may authorize any one or more of its members, or any officer of the
      Company, to execute and deliver documents (including any applicable Option
      Agreement or Restricted Stock Agreement) on behalf of the Board or Accoona.
      Any
      interpretation or determination made by the Board pursuant to the foregoing
      shall be conclusive and binding upon any person having or claiming any interest
      under the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Appointment
      of Committee.
      Notwithstanding paragraph (a), the Board may appoint a committee of not fewer
      than two members of the Board (the “Committee”)
      and
      transfer to the Committee some or all of its authority hereunder. If the Board
      creates a Committee, the Board may from time to time appoint members of the
      Committee in substitution for or in addition to members previously appointed
      and
      may fill vacancies, however caused, in the Committee. If and when the Common
      Stock is registered under Section 12 of the Securities Exchange Act of 1934,
      as
      amended (the “Act”),
      to
      the extent necessary to comply with Rule 16b-3
      under the Act with respect to Awards to officers and directors, each member
      of
      the Committee shall be a “non-employee director” within the meaning of Rule
      16b-3 and, to the extent necessary to exclude Awards granted under the Plan
      from
      the calculation of the income tax deduction limit under Section 162(m) of the
      Internal Revenue Code of 1986, as amended (the “Code”),
      each
      member of the Committee shall be an “outside director” within the meaning of
      Code Section 162(m). To the extent necessary to be consistent with the
      provisions of this paragraph (b), any reference in the Plan, an Option
      Agreement, or a Restricted Stock Agreement to a decision, determination or
      action of the Board shall be read and understood as referring to a decision,
      determination or action of the Committee.

     

    (c)  Liability
      of Board and Committee Members.
      Except
      as otherwise required by law, no member of the Board or the Committee shall
      be
      liable for anything whatsoever in connection with the administration of the
      Plan
      other than such member’s own willful misconduct. Under no circumstances shall
      any member of the Board or the Committee be liable for any act or omission
      of
      any other member of the Board or the Committee. In the performance of its
      functions with respect to the Plan, the Board and the Committee shall be
      entitled to rely upon information and advice furnished by Accoona’s officers,
      Accoona’s accountants, Accoona’s legal counsel and any other party the Board and
      Committee deems necessary, and no member of the Board or Committee shall be
      liable for any action taken or not taken in reliance upon any such
      advice.

     

    3.  Eligible
      Persons.
      Subject
      in the case of ISOs (as defined in Section 5) to Section 14(a), Awards may
      be
      granted only to employees and independent contractors of the Company. For
      purposes hereof, the term “independent contractors” shall include consultants,
      advisors and directors of the Company. In determining the persons to whom Awards
      shall be made and the number of shares to be covered by each Award, the Board
      shall take into account the duties of the respective persons, their present
      and
      potential contributions to the success of the Company and such other factors
      as
      the Board, in its discretion, shall deem relevant in connection with
      accomplishing the purposes of the Plan.

     

    4.  Common
      Stock Available for Awards.

     

    (a)  Subject
      to adjustment under Section 18 below, Awards may be made under the Plan for
      up
      to Four Million (4,000,000) shares of Common Stock. If any Award in respect
      of
      shares of Common Stock expires or is terminated unexercised or is forfeited
      for
      any reason or settled in a manner that results in fewer shares outstanding
      than
      were initially Awarded, the shares subject to such Award or so surrendered,
      as
      the case may be, to the extent of such expiration, termination, forfeiture
      or
      decrease, shall again be available for award under the Plan, subject, however,
      in the case of ISOs, to any limitation required under the Code. If an Option
      is
      exercised in whole or in part by an Optionee by tendering previously owned
      shares of Common Stock, or if any shares are withheld in connection with the
      exercise of its Option to satisfy the Optionee’s tax liability, the full number
      of shares in respect of which the Option has been exercised shall be applied
      against the limit set forth in this Section 4(a). Shares issued under the
      Plan may consist in whole or in part of authorized but unissued shares or
      treasury shares of Common Stock.

     

    
      
        
        

      

      
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    (b)  Subject
      to adjustment under Section 18 below, if and when the Company is a “publicly
      held corporation” within the meaning of Code Section 162(m), the maximum number
      of shares of Common Stock as to which Awards may be granted to a single
      individual in any year shall not exceed One Million (1,000,000).

     

    (c)  The
      Board
      may grant Awards under the Plan in substitution for stock and stock based awards
      held by employees of another corporation who concurrently become employees
      of
      the Company as a result of a merger or consolidation of the employing
      corporation with the Company or the acquisition by the Company of property
      or
      stock of the employing corporation. The substitute Awards shall be granted
      on
      such terms and conditions as the Board considers appropriate in the
      circumstances. The shares which may be delivered under such substitute Awards
      shall be in addition to the maximum number of shares provided for in Section
      4(a).

     

    5.  Type
      of Options.
      Options
      granted under the Plan may be either incentive stock options (“ISOs”)
      intended to meet the requirements of Code Section 422 or nonqualified stock
      options (“NSOs”)
      which
      are not intended to meet such Code requirements.

     

    6.  Term
      of Options.
      The
      term of each Option shall be fixed by the Board and specified in the applicable
      Option Agreement, but in no event shall it be more than five years from the
      date
      of grant, subject to earlier termination as provided in Section 8. Subject
      in
      the case of ISOs to Section 14, the term of an Option may be extended from
      time
      to time by the Board, provided that no such extension shall extend the term
      beyond ten years from the date of grant.

     

    7.  Vesting.
      The
      Board shall determine the vesting schedule applicable to a particular Option
      grant and specify the vesting schedule in the applicable Option Agreement.
      Notwithstanding the foregoing the Board may accelerate the vesting of an Option
      at any time.

     

    8.  Termination
      of Relationship to the Company.
      

     

    (a)  Options
      Granted To Employees.
      With
      respect to an Option granted to an individual who is an employee of the Company
      at the time of Option grant, unless the Option Agreement expressly provides
      to
      the contrary, (i) the Option shall terminate immediately upon the Optionee’s
      termination of employment for Cause (as defined in Section 24); (ii) in the
      event that the Optionee’s employment with the Company shall terminate by reason
      of death or Disability (as hereinafter defined), the unvested portion of the
      Option shall terminate immediately and the vested portion of the Option shall
      terminate one year following such termination of employment (but shall not
      continue to vest during such one year period); and (iii) in the event that
      the
      Optionee’s employment with the Company shall terminate for any other reason, the
      unvested portion of the Option shall terminate immediately and the vested
      portion of the Option shall terminate three months after such termination of
      employment (but shall not continue to vest during such three month period);
      provided, however, that in the event that the Optionee is subject to any
      non-compete or confidentiality agreement which he or she violates, the Option
      shall immediately terminate upon such violation. Notwithstanding anything herein
      to the contrary, in no event shall an Option remain exercisable beyond the
      expiration date specified in the applicable Option Agreement. An Option
      Agreement may contain such provisions as the Board shall approve with reference
      to the determination of the date employment terminates for purposes of the
      Plan
      and the effect of leaves of absence, which provisions may vary from one Option
      Agreement to another. For purposes hereof, the Optionee shall be deemed to
      have
      a “Disability” if the Optionee is permanently and totally disabled, within the
      meaning of Section 22(e) of the Code.

     

    
      
        
        

      

      
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    (b)  Options
      Granted to Independent Contractors.
      With
      respect to an Option granted to an individual who is not an employee of the
      Company at the time of Option grant, the Board shall determine and specify
      in
      the applicable Option Agreement the consequences, if any, of the termination
      of
      the Optionee’s relationship with the Company.

     

    9.  Option
      Exercise Price.
      Subject
      in the case of ISOs to Section 14, the Option exercise price per share of Common
      Stock covered by an Option shall be established by the Board.

     

    10.  Exercise
      of Options.

     

    (a)  An
      Option
      may be exercised at any time and from time to time, in whole or in part, as
      to
      any or all full shares as to which the Option is then exercisable; provided,
      however, that if so specified in the Option Agreement, the Option may not,
      in a
      single exercise, be exercised for fewer than the minimum number of shares
      specified in the Option Agreement, unless the exercise is for all of the shares
      as to which the Option is then exercisable. An Option may not be exercised
      with
      respect to a fractional share. If an Option is exercised with respect to all
      of
      the whole shares as to which the Option is exercisable, and the Option remains
      exercisable with respect to less than one share of Common Stock, the Option
      shall immediately and without any further action by the Company or the Optionee
      be cancelled with respect to the remaining fractional share, without any
      consideration being paid by the Company. An Optionee (or other person who,
      pursuant to Section 13, may exercise the Option) shall exercise the Option
      by
      delivering to Accoona at the address provided in the Option Agreement a written,
      signed notice of exercise, stating the number of shares of Common Stock with
      respect to which the option exercise is being made, and satisfy the requirements
      of paragraph (b) of this Section 10. Upon receipt by Accoona of any notice
      of
      exercise, the exercise of the Option as set forth in that notice shall be
      irrevocable.

     

    (b)  Upon
      exercise of an Option the Optionee shall pay to Accoona the Option exercise
      price per share of Common Stock multiplied by the number of full shares as
      to
      which the Option is then exercised. An Optionee may pay the Option exercise
      price by tendering or causing to be tendered in cash, by delivery of shares
      of
      Common Stock owned by the Optionee for at least six months preceding the date
      of
      exercise of the Option (or such shorter or longer period as the Board may
      approve or require from time to time) having a Fair Market Value equal to the
      exercise price or other property permitted by law and acceptable to the Board
      or
      any other method of payment that is satisfactory to the Board (including, if
      so
      specified in the Option Agreement, a cashless exercise), or any combination
      thereof. Without limiting the foregoing, after the Common Stock becomes Publicly
      Traded (as defined in Section 24), payment of the exercise price may be
      facilitated by an outside broker.

     

    (c)  An
      Optionee shall, upon notification of the amount due and prior to or concurrently
      with delivery of the certificate representing the shares as to which the Option
      has been exercised, promptly pay or cause to be paid the amount determined
      by
      the Board as necessary to satisfy all applicable tax and other withholding
      requirements. An Optionee may satisfy his withholding requirement in any manner
      satisfactory to the Board.

     

    (d)  If
      at the
      time of Option exercise (i) the Common Stock is not Publicly Traded and (ii)
      the
      Optionee is so requested by Accoona, prior to or concurrently with delivery
      of
      the certificate representing the shares as to which the Option has been
      exercised, the Optionee shall become a party to a stockholders agreement between
      stockholders of Accoona and Accoona (a “Stockholders Agreement”).

     

    
      
        
        

      

      
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    (e)  The
      certificate representing the shares as to which an Option has been exercised
      shall bear an appropriate legend setting forth the restrictions applicable
      to
      such shares.

     

    11.  Option
      Agreement.
      The
      terms and conditions of each Option shall be set forth in an Option Agreement
      in
      the form approved by the Board. Each Option Agreement shall be executed by
      Accoona and the Optionee. Each Option Agreement shall, at a minimum, specify
      (i) the number of shares of Common Stock subject to the Option,
      (ii) whether the Option is intended to be an ISO or NSO, (iii) the
      provisions related to vesting and exercisability of the Option, including the
      Option exercise price, and (iv) that the Option is subject to the terms and
      provisions of the Plan and that in the event of any conflict between the Option
      Agreement and the Plan, the Plan shall control. The Option Agreement may also
      contain such other terms and conditions as the Board determines to be necessary
      or advisable. Option Agreements may vary from one to another.

     

    12.  No
      Stockholder Rights.
      No
      Optionee shall have the rights of a stockholder with respect to shares covered
      by an Option until such person becomes the holder of record of such shares.
      If
      in connection with an exercise of the Option the Optionee pays all or a portion
      of the Option exercise price with shares of Common Stock, the Optionee shall
      continue to be the stockholder of record with respect to the shares which he
      has
      tendered as exercise payment until the Optionee becomes the holder of record
      of
      the shares of Common Stock to be acquired upon such exercise. 

     

    13.  Nontransferability.

     

    (a)  Subject
      to paragraphs (b) and (c), Options granted under the Plan shall not be
      assignable or transferable other than by will or the laws of descent and
      distribution and Options may be exercised during the lifetime of the Optionee
      only by the Optionee or by the Optionee’s guardian or legal representative. In
      the event of any attempt by an Optionee to transfer, assign, pledge, hypothecate
      or otherwise dispose of an Option or any right thereunder, except as provided
      for herein, or in the event of the levy of any attachment, execution or similar
      process upon the rights or interest hereby conferred, Accoona may terminate
      the
      Option by notice to the Optionee and it shall thereupon become null and
      void.

     

    (b)  Notwithstanding
      paragraph (a), if and only if (and on the terms) so provided in the applicable
      Option Agreement, an Optionee may transfer a NSO, by gift or a domestic
      relations order, to a Family Member of the Awardee (as defined in Section 24).
      If a NSO is transferred in accordance with this subparagraph, the Option shall
      be exercisable solely by the transferee, but the determination of the
      exercisability of the Option shall be based solely on the activities and state
      of affairs of the Optionee. Thus, for example, if after a transfer the Optionee
      ceases to be an employee of the Company, such termination shall trigger the
      provisions of Section 8 hereof. Conversely, if after a transfer the transferee
      ceases to be an employee of the Company, such termination shall not trigger
      the
      provisions of Section 8 hereof.

     

    
      
        
        

      

      
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    (c)  Notwithstanding
      paragraph (a) an Optionee may transfer an NSO with the express, written consent
      of the Board (which consent may be withheld for any reason or for no
      reason).

     

    14.  ISO
      Provisions.

     

    (a)  Employment
      Requirement.
      ISOs
      may only be awarded to employees of Accoona or a corporation which, with respect
      to Accoona, is a “parent corporation” or “subsidiary corporation” within the
      meaning of Code Sections 424(e) and (f), respectively. Furthermore, except
      as
      otherwise provided in Code Section 422, if an Optionee is no longer employed
      by
      Accoona or a parent corporation or subsidiary corporation of Accoona, the
      Optionee’s Option shall cease to be treated as an ISO.

     

    (b)  Option
      Exercise Price.
      Subject
      to paragraph (c), the Option exercise price per share of Common Stock covered
      by
      an ISO shall be no less than the Fair Market Value of a share of Common Stock
      on
      the date of grant of the Option.

     

    (c)  10%
      Stockholders.
      In the
      case of an individual who at the time the Option is granted owns stock
      possessing more than 10% of the total combined voting power of all classes
      of
      the stock of Accoona or of a parent or subsidiary corporation of Accoona, (i)
      the Option exercise price of the Common Stock covered by any ISO granted to
      such
      person shall in no event be less than 110% of the Fair Market Value of the
      Common Stock on the date the ISO is granted and (ii) the term of an ISO granted
      to such person may not exceed five years from the date of grant.

     

    (d)  $100,000
      Limit.
      The
      aggregate Fair Market Value (determined at the time an ISO is granted) of the
      Common Stock covered by ISOs exercisable for the first time by an employee
      during any calendar year (under all plans of the Company) may not exceed
      $100,000.

     

    (e)  Options
      Which Do Not Satisfy ISO Requirements.
      To the
      extent that any Option which is issued under the Plan exceeds the limit set
      forth in paragraph (d) or otherwise does not comply with the requirements of
      Code Section 422, it shall be treated as a NSO.

     

    15.  Restricted
      Stock Grants.

     

    (a)  In
      lieu
      of granting a Stock Option hereunder, the Board may grant a Restricted Stock
      Award entitling the award recipient to acquire shares of Common Stock, subject
      to the right of the Company to repurchase all or part of such shares at their
      purchase price (or to require forfeiture of such shares if awarded at no cost)
      from the Restricted Stock Awardee in the event that the conditions specified
      by
      the Board in the applicable Restricted Stock Agreement are not satisfied prior
      to the end of the vesting period established by the Board for such Award.
      Conditions for repurchase (or forfeiture) may be based on continuing employment
      or service or achievement of pre-established performance or other goals and
      objectives. A Restricted Stock Award may be conditioned on (i) the recipient
      becoming a party to a Stockholders Agreement, and/or (ii) the recipient making
      a
      timely election under Section 83(b) of the Code.

     

    
      
        
        

      

      
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    (b)  Restricted
      Stock Awards may only be made hereunder to persons to whom Options may be
      granted, pursuant to Section 4, and shall be from the shares of Common Stock
      authorized for issuance under the Plan, pursuant to Section 5.

     

    (c)  Shares
      of
      Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
      encumbered, except as permitted by the Board, before they vest. Shares of
      Restricted Stock shall be evidenced in such manner as the Board may determine.
      Any certificates issued in respect of shares of Restricted Stock shall (i)
      be
      registered in the name of the Restricted Stock Awardee, (ii) unless otherwise
      determined by the Board, be deposited, together with a stock power endorsed
      in
      blank, with the Company (or its designee) and (iii) bear a legend reflecting
      limitations and restrictions applicable to such shares.

     

    (d)  At
      the
      expiration of the vesting period, the Company (or such designee) shall deliver
      such certificates to the Restricted Stock Awardee or, if the Restricted Stock
      Awardee has died, to the executor of the Restricted Stock Awardee’s estate.
      After they vest, shares of Restricted Stock shall remain subject to such
      restrictions as are set forth in the applicable Restricted Stock Agreement
      and,
      if the recipient is a party to a Stockholders Agreement, the Stockholders
      Agreement, as well as restrictions applicable under the securities law (and,
      if
      they are listed on an exchange, applicable listing requirements).

     

    (e)  The
      purchase price for each share of Restricted Stock shall be determined by the
      Board and may be zero. Any purchase price may be paid in cash or such other
      lawful consideration as is determined by the Board, including past
      services.

     

    (f)  A
      Restricted Stock Awardee shall pay to the Company, or make provision
      satisfactory to the Board for payment of, any taxes required by law to be
      withheld in respect of a Restricted Stock Award no later than the date of the
      event creating the tax liability. In the Board’s discretion, and subject to such
      conditions as the Board may establish, such tax obligations may be paid in
      whole
      or in part in shares of Common Stock, including shares retained from the Award
      creating the tax obligation, valued at their Fair Market Value. The Company
      may,
      to the extent permitted by law, deduct any such tax obligations from any payment
      of any kind otherwise due to the Participant.

     

    16.  Compliance
      with Law; Registration of Shares.

     

    (a)  The
      Plan
      and any grant hereunder shall be subject to all applicable laws, rules, and
      regulations of any applicable jurisdiction or authority or agency thereof and
      to
      such approvals by any regulatory or governmental authority or agency or
      securities exchange which, in the opinion of Company’s counsel, may be required
      or appropriate.

     

    (b)  Notwithstanding
      any other provision of the Plan or Option Agreements or Restricted Stock
      Agreements made pursuant hereto, the Company shall not be required to issue
      or
      deliver any certificate or certificates for shares of Common Stock under the
      Plan prior to fulfillment of all of the following conditions:

     

    i.  Effectiveness
      of any registration or other qualification of such shares of the Company under
      any law or regulation of any applicable jurisdiction or authority or agency
      thereof which the Board shall, in its absolute discretion or upon the advice
      of
      counsel, deem necessary or advisable; and

     

    
      
        
        

      

      
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    ii.  Grant
      of
      any other consent, approval or permit from any applicable jurisdiction or
      authority or agency thereof or securities exchange which the Board shall, in
      its
      absolute discretion or upon the advice of counsel, deem necessary or
      advisable.

     

    The
      Company shall use all reasonable efforts to obtain any consent, approval or
      permit described above; provided, however, that except to the extent as may
      be
      specifically required in an Option Agreement or Restricted Stock Agreement
      with
      respect to any particular Award, the Company shall be under no obligation to
      register or qualify any shares subject to an Award under any federal or state
      securities law or on any exchange.

     

    17.  No
      Restriction on the Right of Accoona to Effect Corporate Changes.
      The
      Plan and the Options granted hereunder shall not affect in any way the right
      or
      power of Accoona or its stockholders to make or authorize any or all
      adjustments, recapitalization, reorganizations or other changes in Accoona’s or
      the Company’s capital structure or its business, or any merger or consolidation
      of Accoona or the Company, or any issue of stock or of options, warrants or
      rights to purchase stock or of bonds, debentures, preferred or prior preference
      stocks whose rights are superior to or affect the Common Stock or the rights
      of
      holders thereof or which are convertible into or exchangeable for Common Stock,
      or the dissolution or liquidation of Accoona or the Company, or any sale or
      transfer of all or any part of its assets or business, or any other corporate
      act or proceeding, whether of a similar character or otherwise.

     

    18.  Certain
      Adjustments.

     

    (a)  In
      the
      event that Accoona or the division, subsidiary or other affiliated entity for
      which an Optionee performs services is sold (including a stock or an asset
      sale), spun off, merged, consolidated, reorganized or liquidated, the Board
      may
      determine that (i) the Option shall be assumed, or a substantially equivalent
      Option shall be substituted, by an acquiring or succeeding entity (or an
      affiliate thereof) on such terms as the Board determines to be appropriate;
      (ii)
      upon written notice to the Optionee, provide that the Option shall terminate
      immediately prior to the consummation of the transaction unless exercised by
      the
      Optionee within a specified period following the date of the notice; (iii)
      in
      the event of a sale or similar transaction under the terms of which holders
      of
      Common Stock receive a payment for each share of Common Stock surrendered in
      the
      transaction (the “Sales
      Price”),
      make
      or provide for a payment to each Optionee equal to the amount by which (A)
      the
      Sales Price times the number of shares of Common Stock subject to the Option
      (to
      the extent such Option is then exercisable) exceeds (B) the aggregate exercise
      price for all such shares of Common Stock; or (iv) may make such other equitable
      adjustments as the Board deems appropriate.

     

    (b)  In
      the
      event of any stock dividend or split, recapitalization, combination, exchange
      or
      similar change affecting the Common Stock, or any other increase or decrease
      in
      the number of issued shares of Common Stock effected without receipt of
      consideration by the Company, the Board shall make any or all of the following
      adjustments as it deems appropriate to equitably reflect such event:
      (i) adjust the aggregate number of shares (or such other security as is
      designated by the Board) which may be acquired pursuant to the Plan,
      (ii) adjust the option price to be paid for any or all such shares subject
      to the then outstanding Options, (iii) adjust the number of shares of
      Common Stock (or such other security as is designated by the Board) subject
      to
      any or all of the then outstanding Awards and (iv) make any other equitable
      adjustments or take such other equitable action as the Board, in its discretion,
      shall deem appropriate. For purposes hereof, the conversion of any convertible
      securities of the Company shall not be deemed to have been “effected without
      receipt of consideration.”

     

    
      
        
        

      

      
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    (c)  Any
      and
      all adjustments or actions taken by the Board pursuant to this Section shall
      be
      conclusive and binding for all purposes.

     

    19.  No
      Right to Continued Employment.
      Neither
      the Plan nor any action taken hereunder shall be construed as giving any
      employee or any independent contractor any right to continue in the employ
      of or
      to be engaged as an independent contractor by the Company or affect the right
      of
      the Company to terminate such person’s employment or other relationship with the
      Company at any time.

     

    20.  Amendment;
      Early Termination.
      The
      Board may at any time and from time to time alter, amend, suspend or terminate
      the Plan in whole or in part; provided, however, that no amendment requiring
      stockholder approval by law, rules or regulations, or by the rules of any stock
      exchange, inter-dealer quotation system, or other market in which shares of
      Common Stock are traded, shall be effective unless and until such stockholder
      approval has been obtained in compliance with such rule or law; and provided,
      further, that no such amendment shall materially adversely affect the rights
      of
      an Awardee in any Award previously granted under the Plan without the Awardee’s
      written consent.

     

    21.  Effective
      Date.
      The
      Plan shall be effective as of October 1, 2004 (the “Effective
      Date”),
      subject to the approval thereof by the stockholders of Accoona entitled to
      vote
      thereon within 12 months of such date. In the event that such stockholder
      approval is not obtained within such time period, the Plan and any Award granted
      under the Plan on or prior to the expiration of such 12 month period shall
      be
      void and of no further force and effect.

     

    22.  Termination
      of Plan.
      Unless
      terminated earlier by the Board in accordance with Section 20 above, the Plan
      shall terminate on, and no further Awards may be granted after, the tenth
      anniversary of the Effective Date.

     

    23.  Severability.
      In the
      event that any one or more provisions of the Plan an Option Agreement, or a
      Restricted Stock Agreement, or any action taken pursuant to the Plan or an
      Option Agreement or Restricted Stock Agreement, should, for any reason, be
      unenforceable or invalid in any respect under the laws of the United States,
      any
      state of the United States or any other jurisdiction, such unenforceability
      or
      invalidity shall not affect any other provision of the Plan, Option Agreement,
      or Restricted Stock Agreement, but in such particular jurisdiction and instance
      the Plan, Option Agreement and/or Restricted Stock Agreement, as applicable,
      shall be construed as if such unenforceable or invalid provision had not been
      contained therein or if the action in question had not been taken
      thereunder.

     

    24.  Definitions.

     

    (a)  Cause.
      The
      term “Cause” when used herein in conjunction with termination of employment (or
      other service relationship) means (i) if the Awardee is a party to an employment
      or similar agreement with the Company which defines “cause” (or a similar term),
      the meaning set forth in such agreement (other than death or Disability), or
      (ii) otherwise, termination by the Company of the employment (or other service
      relationship) of the Awardee by reason of the Awardee’s (1) intentional failure
      to perform reasonably assigned duties, (2) dishonesty or willful misconduct
      in
      the performance of his duties, (3) involvement in a transaction which is
      materially adverse to the Company, (4) breach of fiduciary duty involving
      personal profit, (5) willful violation of any law, rule, regulation or court
      order (other than misdemeanor traffic violations and misdemeanors not involving
      misuse or misappropriation of money or property), (6) commission of an act
      of
      fraud or intentional misappropriation or conversion of any asset or opportunity
      of the Company, or (7) material breach of any provision of the Plan, the
      Awardee’s Option Agreement or Restricted Stock Agreement or any other written
      agreement between the Awardee and the Company, in each case as determined in
      good faith by the Board, whose determination shall be final, conclusive and
      binding on all parties.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)  Fair
      Market Value.
      As used
      herein, the term “Fair Market Value” means, with respect to Common Stock on any
      given date, the closing sales price of the Common Stock for such date (or,
      in
      the event that the Common Stock is not traded on such date, on the immediately
      preceding trading date) on the Nasdaq Stock Market or a domestic or foreign
      national securities exchange (including London’s Alternative Investment Market)
      on which the Common Stock may be listed, as reported in The Wall Street Journal.
      If the Common Stock is not listed on the Nasdaq Stock Market or on a national
      securities exchange, but is quoted on the OTC Bulletin Board or by the National
      Quotation Bureau, the Fair Market Value of the Common Stock shall be the mean
      of
      the bid and asked prices per share of the Common Stock for such date. If the
      Common Stock is not quoted or listed as set forth above, Fair Market Value
      shall
      be determined by the Board in good faith by any fair and reasonable means (which
      means, with respect to a particular Option grant, may be set forth with greater
      specificity in the applicable Option agreement). The Fair Market Value of
      property other than Common Stock shall be determined by the Board in good faith
      by any fair and reasonable means.

     

    (c)  Family
      Member of the Awardee.
      As used
      herein, “Family Member of the Awardee” means the Awardee’s lineal descendant,
      stepchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
      niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
      brother-in-law, or sister-in-law, including adoptive relationships, any person
      sharing the Awardee’s household (other than a tenant or employee), a trust in
      which the Awardee and/or these persons have more than 50% of the beneficial
      interest, a foundation in which these persons (or the Awardee) control the
      management of assets, and any other entity in which these persons (or the
      Awardee) own more than 50% of the voting interests.

     

    (d)  Publicly
      Traded.
      As used
      herein, Common Stock is “Publicly Traded” if stock of that class is listed or
      admitted to unlisted trading privileges on a domestic or foreign national
      securities exchange (including London’s Alternative Investment Market) or on the
      Nasdaq National Market or if sales or bid and offer quotations are reported
      for
      that class of stock in the automated quotation system operated by the National
      Association of Securities Dealers, Inc.

     

    25.  Transfers
      to and from Affiliates.
      For all
      Plan purposes, a transfer of an employee from Accoona to an Accoona affiliate
      or
      visa versa, or a transfer from one Accoona affiliate to another, will not be
      treated as a termination of employment.

     

    26.  Headings.
      The
      headings of sections and subsections herein are included solely for convenience
      of reference and shall not affect the meaning of any of the provisions of the
      Plan.

     

    27.  Governing
      Law.
      This
      Plan and all rights hereunder shall be construed in accordance with and governed
      by the internal laws of the State of New York, except to the extent that the
      General Corporation Law of the State of Delaware is mandatorily
      applicable.

     

    
      
        
        

      

      
        10

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