Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H7XYngHuBQNTmkpr5hvIuZkMNZn+rx9d102PeFqk7LwWyZqlM2f0GJYZgFDoAW7f m1phuKkEPOVV0h4J3VpLgQ== 0001193125-03-008452.txt : 20030605 0001193125-03-008452.hdr.sgml : 20030605 20030605151322 ACCESSION NUMBER: 0001193125-03-008452 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20030605 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BEACHUM GRAHAM C III CENTRAL INDEX KEY: 0001238377 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 8409 PICK WICK LANE CITY: DALLAS STATE: TX ZIP: 75225 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AXTIVE CORP CENTRAL INDEX KEY: 0001015172 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133778895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-49607 FILM NUMBER: 03734062 BUSINESS ADDRESS: STREET 1: 1445 ROSS AVENUE STREET 2: SUITE 4500 CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 214.397.0200 MAIL ADDRESS: STREET 1: 1445 ROSS AVENUE STREET 2: SUITE 4500 CITY: DALLAS STATE: TX ZIP: 75202 FORMER COMPANY: FORMER CONFORMED NAME: EDGE TECHNOLOGY GROUP INC DATE OF NAME CHANGE: 20000912 FORMER COMPANY: FORMER CONFORMED NAME: VISUAL EDGE SYSTEMS INC DATE OF NAME CHANGE: 19960604 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

Axtive Corporation

(Name of Issuer)

Common Stock

(Title of Class of Securities)

05462 R1 00

(CUSIP Number)

Randall G. Ray, Gardere Wynne Sewell LLP, 1601 Elm Street, Suite 3000, Dallas, Texas 75201, (214) 999-3000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

May 23, 2003

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §240.13d-1(e), §240.13d-1(f) or §240.13d-1(g), check the following box ¨.

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 05462 R1 00		PAGE 2 OF 7 PAGES

1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON G. C. Beachum III

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) x __________________________________________

3 SEC USE ONLY __________________________________________

4 SOURCE OF FUNDS* PF __________________________________________

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨ __________________________________________

6 CITIZENSHIP OR PLACE OF ORGANIZATION United States __________________________________________

NUMBER OF	7 SOLE VOTING POWER 5,666,424 __________________________________________
NUMBER OF
BENEFICIALLY
OWNEDBY	8 SHARED VOTING POWER 0 __________________________________________
EACH
REPORTING
PERSON	9 SOLE DISPOSITIVE POWER 5,666,424 __________________________________________
WITH
SHARES
SHARES	10 SHARED DISPOSITIVE POWER 0 __________________________________________

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,666,424 __________________________________________

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* __________________________________________		¨

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.3% __________________________________________

14 TYPE OF REPORTING PERSON* IN __________________________________________

*SEE INSTRUCTIONS BEFORE FILLING OUT!

INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7

(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.

Item

1. Security and Issuer.

This Schedule 13D (this “Filing”) relates to the Common Stock, par value $0.01 per share (the “Common Stock”), and voting and other contractual rights relating thereto, of Axtive Corporation, a Delaware corporation formerly known as Edge Technology Group, Inc. (the “Company”), which has its principal executive offices located at 1445 Ross Avenue, Suite 4500, Dallas, Texas 75202. The purpose of this Filing is to reflect the beneficial ownership of Common Stock by G. C. Beachum III (the “Reporting Person”).

Item 2. Identity and Background.

(a)

G. C. Beachum III

(b)

1445 Ross Avenue, Suite 4500, Dallas, Texas 75202

(c)

G. C. Beachum III is Vice President and General Manager of the Company.

(d)

G. C. Beachum III has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

G. C. Beachum III has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in or subjecting him to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)

G. C. Beachum III is a citizen of the United States.

Item 3. Source and Amount of Funds or Other Consideration.

On January 19, 2001, the Reporting Person was granted options to purchase 750,000 shares of Common Stock at an exercise price of $1.50 per share. The options vest in five annual installments: options to purchase 187,500 shares of Common Stock became exercisable on January 19, 2001; options to purchase 140,625 shares of Common Stock became exercisable on January 19, 2002; options to purchase 140,625 shares of Common Stock became exercisable on January 19, 2003; options to purchase 140,625 shares of Common Stock will become exercisable on January 19, 2004; and options to purchase 140,625 shares of Common Stock will become exercisable on January 19, 2005. Unless exercised, the options will expire on January 19, 2011. Accordingly, options to purchase 468,750 shares of Common Stock are reflected in the Reporting Person’s total beneficial ownership.

On June 21, 2002, pursuant to that certain Bill of Sale and Asset Purchase Agreement, dated as of June 21, 2002, by and between Axtive Software Corporation (“Axtive Software”) and the Company (the “Asset Purchase Agreement”), Axtive Software, a Texas corporation now known as TSTC International Holding Company whose sole shareholder is the Reporting Person (“TSTC”), acquired 400,000 shares of Common Stock and the right to acquire up to 297,674 shares of Common Stock in exchange for certain assets of Axtive Software. If the market price per share of the Common Stock has not traded at or above $0.75 during the one-year period beginning on the date of the Asset Purchase Agreement, TSTC is entitled to be issued, without additional consideration, up to 297,674 shares of Common Stock. Since the right to acquire the 297,674 shares of Common Stock is exercisable by TSTC on June 21, 2003, all of such shares, in addition to the 400,000 shares of Common Stock held by TSTC, are reflected in the Reporting Person’s total beneficial ownership. The Reporting Person is also the sole director of TSTC and as sole director and sole shareholder has sole voting and dispositive power with respect to such shares.

On May 23, 2003, pursuant to that certain Subscription and Securities Purchase Agreement, dated as of May 22, 2003, by and among the Company, the Reporting Person, and certain other persons (the “Purchase Agreement”), the Reporting Person (i) purchased 125 shares (the “Preferred Shares”) of the Company’s Series A Convertible Preferred Stock, $0.01 par value per share (the “Preferred Stock”), at a price per share of $1,000, (ii) acquired a warrant to purchase 250,000 shares of Common Stock at a per share exercise price of $0.20 (the “Warrant”), (iii) is obligated to purchase an additional 50 shares of Preferred Stock (the “Additional Shares”) at a price per share of $1,000, and, (iv) upon purchase of the Additional Shares, will acquire an additional warrant to purchase 100,000 shares of Common Stock (the “Additional Warrant”), at a per share exercise price of $0.20. The obligation to purchase the Additional Shares is further evidenced by that certain irrevocable Subscription Agreement dated May 22, 2003 by and between the Company and the Reporting Person (the “Subscription Agreement”). Each share of Preferred Stock is currently convertible into 10,000 shares of Common Stock. The initial conversion price of the

Preferred Stock is $0.10, which is subject to future adjustment. Conversion is determined by dividing the liquidation price with respect to the Preferred Stock, which is equal to the issuance price of $1,000 per share plus any accrued, but unpaid dividends, by the conversion price. There are currently no accrued, but unpaid dividends. Accordingly, 1,250,000 shares of Common Stock, which represents the conversion of the Preferred Shares, are included in the Reporting Person’s beneficial ownership. Since neither the Warrant nor the Additional Warrant is exercisable by the Reporting Person within 60 days of the date hereof, the shares of Common Stock represented by the Warrant and the Additional Warrant are not reflected in the Reporting Person’s total beneficial ownership. Additionally, since the Reporting Person has not yet purchased the Additional Shares and, therefore, does not currently have the right to convert the Additional Shares into shares of Common Stock, the Additional Shares are not reflected in the Reporting Person’s total beneficial ownership. The Reporting Person funded his purchase of the Preferred Shares, and intends to fund his purchase of the Additional Shares, with personal funds.

On May 23, 2003, pursuant to the Purchase Agreement, Beachum Investments, LLC, a Texas limited liability company in which the Reporting Person owns a membership interest (“Beachum Investments”), purchased 360 shares of Preferred Stock at a price per share of $1,000 and a warrant to purchase 720,000 shares of Common Stock at a per share exercise price of $0.20. By virtue of the Reporting Person’s 34.72% membership interest in Beachum Investments, 125 shares of the Preferred Stock purchased by Beachum Investments are indirectly beneficially owned by the Reporting Person. Accordingly, the 1,250,000 shares of Common Stock issuable upon conversion of such shares of Preferred Stock are included in the Reporting Person’s total beneficial ownership. Since the warrant purchased by Beachum Investments is not exercisable by it until May 23, 2004, none of the shares of Common Stock represented by such warrant are included in the Reporting Person’s total beneficial ownership. The Reporting Person is not a manager of Beachum Investments and, therefore, has no voting or dispositive power with respect to such shares or warrants. The Reporting Person funded his investment in Beachum Investments with personal funds.

On May 23, 2003, the Reporting Person was granted options to purchase 3,000,000 shares of Common Stock at an exercise price of $0.10 per share. The options vest in three installments: options to purchase 2,000,000 shares of Common Stock became exercisable on May 23, 2003; options to purchase 500,000 shares of Common Stock will become exercisable on May 23, 2004; and options to purchase 500,000 shares of Common Stock will become exercisable on May 23, 2005. Unless exercised, the options will expire on May 23, 2013. Accordingly, options to purchase 2,000,000 shares of Common Stock are reflected in the Reporting Person’s total beneficial ownership.

Item 4. Purpose of Transaction.

It is anticipated that the Reporting Person will be elected by the Company’s Board of Directors as an executive officer of the Company on June 3, 2003.

Other than as described above, the Reporting Person does not have any specific plans or proposals that relate to or would result in any extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Company or any of its subsidiaries; a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; any change in the present board of directors or management of the Company; any change in the present capitalization or dividend policy of the Company; any other material change in the Company’s business or corporate structure; changes in the Company’s charter, bylaws, or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; a class of securities of the Company becoming eligible for termination or registration pursuant to Section 12(g)(4) of the Act; or any action similar to any of those enumerated above; provided, however, that the Reporting Person reserves the right to propose or undertake or participate in any of the foregoing actions in the future.

Item 5. Interest in Securities of the Issuer.

(a)

The following chart reflects the number of shares of Common Stock beneficially owned by the Reporting Person and the percentage of the outstanding Common Stock such shares represent:

Name		Shares		Percentage
G. C. Beachum III		5,666,424		23.3	%

Includes (1) options to purchase an aggregate of 2,468,750 shares of Common Stock, which are currently exercisable and (2) 2,500,000 shares of Common Stock issuable upon the conversion of shares of Preferred Stock, which are currently convertible. The percentage calculation is based upon 19,039,622 shares of Common Stock outstanding on May 23, 2003, which is the number of shares of Common Stock reported in the Company’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002, and filed with the Commission on November 14, 2002.

(b)

The Reporting Person has sole voting and dispositive power over 4,416,424 shares of Common Stock. This number includes the 400,000 shares of Common Stock owned by TSTC and TSTC’s right to acquire 297,674 shares of Common Stock by virtue of the Reporting Person’s 100% stock ownership in and position as sole director of TSTC.

The 1,250,000 shares of Common Stock issuable upon conversion of the 125 shares of Preferred Stock owned by Beachum Investments are treated as being beneficially owned by the Reporting Person by virtue of his membership interest in Beachum Investments. The Reporting Person has no voting or dispositive power with respect to such shares

(c)

See Item 3.

(d)

None.

(e)

Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On June 21, 2002, pursuant to that certain Bill of Sale and Asset Purchase Agreement, dated as of June 21, 2002, by and between Axtive Software and the Company, the Reporting Person purchased 400,000 shares of Common Stock and the right to acquire 297,674 shares of Common Stock in exchange for certain assets of Axtive Software.

On May 23, 2003, pursuant to the Purchase Agreement, the Reporting Person (i) purchased the Preferred Shares, at a price per share of $1,000, (ii) acquired the Warrant, (iii) is obligated to purchase the Additional Shares at a price per share of $1,000, and, (iv) upon purchase of the Additional Shares, will acquire the Additional Warrant, at a per share exercise price of $0.20. The obligation to purchase the Additional Shares is further evidenced by the Subscription Agreement

Pursuant to that certain Acknowledgement of Discharge of Indebtedness, Release of Claims and Agreement, dated as of May 22, 2003, by and among the Reporting Person, the Company, and Graham C. Beachum II (the “Acknowledgement”), the Reporting Person and Graham C. Beachum II acknowledged and agreed that certain scheduled indebtedness owing from the Company to either of the Reporting Person or Graham C. Beachum II was discharged in full as the date thereof. Pursuant to the Acknowledgement, the Reporting Person and Graham C. Beachum II also released the Company and its affiliates from any and all claims, liability, losses, and damages with respect to all obligations, covenants, or commitments of the Company to or in favor of either of the Reporting Person or Graham C. Beachum II arising under such indebtedness. Such acknowledgment and release were granted as partial consideration for the Company’s issuance of shares of Preferred Stock to the Reporting Person pursuant to the Purchase Agreement.

Item 7. Material to be Filed as Exhibits.

Bill of Sale and Asset Purchase Agreement, dated as of June 21, 2002, by and between Axtive Software Corporation and Edge Technology Group, Inc. (incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, and filed with the Commission on

August 19, 2002).

Acknowledgement of Discharge of Indebtedness, Release of Claims and Agreement, dated as of May 22, 2003, by and among Graham C. Beachum II, Graham C. Beachum III, and Axtive Corporation (incorporated by reference to Exhibit 1 to the Schedule 13D dated May 23, 2003, and filed by Graham C. Beachum II with the Commission on June 2, 2003).

Subscription and Securities Purchase Agreement, dated as of May 22, 2003, by and among Axtive Corporation, Demand Aggregation Solutions, LLC, Beachum Investments, LLC, Sandera Partners, L.P., GCA Strategic Investment Fund Limited, Kerry Osborne, and Graham C. Beachum III.

Subscription Agreement, dated May 22, 2003, by and between Axtive Corporation and Graham C. Beachum III.

Warrant to Purchase Common Stock of Axtive Corporation, dated as of May 23, 2003, executed by Axtive Corporation and issued to Graham C. Beachum III.

Warrant to Purchase Common Stock of Axtive Corporation, dated as of May 23, 2003, executed by Axtive Corporation and issued to Beachum Investments III.

SIGNATURE

After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.


June 3, 2003				/s/ G. C. Beachum III
				G. C. Beachum III, Individually

Exhibit Index


1		Bill of Sale and Asset Purchase Agreement, dated as of June 21, 2002, by and between Axtive Software Corporation and Edge Technology Group, Inc. (incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, and filed with the Commission on August 19, 2002).

2		Acknowledgement of Discharge of Indebtedness, Release of Claims and Agreement, dated as of May 22, 2003, by and among Graham C. Beachum II, Graham C. Beachum III, and Axtive Corporation (incorporated by reference to Exhibit 1 to the Schedule 13D dated May 23, 2003, and filed by Graham C. Beachum II with the Commission on June 2, 2003).

3		Subscription and Securities Purchase Agreement, dated as of May 22, 2003, by and among Axtive Corporation, Demand Aggregation Solutions, LLC, Beachum Investments, LLC, Sandera Partners, L.P., GCA Strategic Investment Fund Limited, Kerry Osborne, and Graham C. Beachum III.

4		Subscription Agreement, dated May 22, 2003, by and between Axtive Corporation and Graham C. Beachum III.

5		Warrant to Purchase Common Stock of Axtive Corporation, dated as of May 23, 2003, executed by Axtive Corporation and issued to Graham C. Beachum III.

6		Warrant to Purchase Common Stock of Axtive Corporation, dated as of May 23, 2003, executed by Axtive Corporation and issued to Beachum Investments III.

EX-3 3 dex3.htm SUBSCRIPTION AND SECURITIES PURCHASE AGREEMENT Subscription and Securities Purchase Agreement

Exhibit 3

SUBSCRIPTION AND

SECURITIES PURCHASE AGREEMENT

dated as of

May 22, 2003

by and between

AXTIVE CORPORATION

as the Issuer,

and

The Several Purchasers Named in Schedule I

and Set Forth on the Signature Pages Hereto

CLOSING DATE: MAY 23, 2003

SUBSCRIPTION AND

SECURITIES PURCHASE AGREEMENT

AGREEMENT, dated as of May 22, 2003, between Axtive Corporation, a Delaware corporation formerly known as Edge Technology Group, Inc. (the “Company”), and the several purchasers (each, individually, a “Purchaser” and, collectively, the “Purchasers”) named on Schedule I attached hereto and incorporated herein for all purposes; and among the Company, each of the Purchasers, and the escrow agent named in Section 2.3 below, solely with respect to the matters covered by Section 2.3.

R E C I T A L S:

WHEREAS, the Company wishes to issue and sell to the Purchasers, for a purchase price of $1,000 per share, an aggregate of 2,385 shares of the Company’s 15,000 authorized Series A Convertible Preferred Stock, $0.01 par value per share (the “Preferred Shares” or “Preferred Stock”), of which 4,440 Preferred Shares are already issued and outstanding as of the date of this Agreement;

WHEREAS, in connection with the issuance of the Preferred Shares to the Purchasers, the Company and Purchasers contemplate that ThinkSpark Corporation, a Delaware corporation (“ThinkSpark”), shall merge with and into a newly formed subsidiary of the Company (the “Merger”), and that in connection with the Merger the Company will issue to Merrill Lynch Business Financial Services, Inc., one or more warrants exercisable for restricted common stock of the Company valued at approximately $1,000,000 (the “Merger Issuance”);

WHEREAS, Demand Aggregation Solutions, LLC, a Texas limited liability company (“DAS”), one of the Purchasers, desires to reserve the right to distribute certain of the Preferred Shares that it will acquire pursuant to this Agreement to certain members of DAS (“DAS Members”); and

WHEREAS, the Purchasers, severally, wish to purchase the Preferred Shares on the terms and subject to the conditions set forth in this Agreement.

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

DEFINITIONS

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

“Affiliate” means, with respect to any Person (the “Subject Person”), (i) any other Person (a “Controlling Person”) that directly, or indirectly through one or more intermediaries, Controls the Subject Person or (ii) any other Person (other than the Subject Person or a Consolidated Subsidiary of the Subject Person) which is Controlled by or is under common Control with a Controlling Person.

“Agreement” means this Subscription and Securities Purchase Agreement, as amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Balance Sheet Date” has the meaning set forth in Section 3.7.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to close.

“Certificate of Designation” means the First Restated Certificate of Designation, Preference and Rights of Series A Convertible Preferred Stock of Axtive Corporation, dated the date hereof and substantially in the form set forth in Exhibit A attached hereto (as further described in Section 2.6).

“Closing Bid Price” shall mean for any security as of any date, the lowest closing bid price as reported by Bloomberg, L.P. (“Bloomberg”) on the principal securities exchange or trading market where such security is listed or traded or, if the foregoing does not apply, the lowest closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no lowest trading price is reported for such security by Bloomberg, then the average of the bid prices of any market makers for such securities as reported in the “Pink Sheets” by the National Quotation Bureau, Inc. If the lowest closing bid price cannot be calculated for such security on such date on any of the foregoing bases, the lowest closing bid price of such security on such date shall be the fair market value as mutually determined by Purchaser and the Company for which the calculation of the closing bid price requires, and in the absence of such mutual determination, as determined by the Board of Directors of the Company in good faith.

“Closing” and “Closing Date” means the first Business Day upon which all the conditions set forth in Article 5 have been are fulfilled or deemed to be fulfilled (or such other date unanimously agreed by the parties), and upon which this Agreement becomes unconditional.

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

“Commission” means the Securities and Exchange Commission or any entity succeeding to all of its material functions.

“Common Stock” means common stock, $.01 par value per share, of the Company.

“Company” means Axtive Corporation, a Delaware corporation formerly known as Edge Technology Group, Inc., and its successors.

“Company Corporate Documents” means the articles of incorporation (as amended, supplemented or restated) and bylaws of the Company.

“Control” (including, with correlative meanings, the terms “Controlling,” “Controlled by” and under “common Control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

“Conversion Date” shall mean the date of delivery (including delivery via telecopy) of a Notice of Conversion for all or a portion of the shares of Preferred Stock by the holder thereof to the Company.

“Conversion Price” has the meaning set forth in the terms of the Certificate of Designation.

“Conversion Shares” means the shares of common stock issuable upon conversion of the Preferred Shares and the exercise of the Warrants.

Each of “DAS” and “DAS Members” has the respective meaning given to such term in the recitals to this Agreement.

“DAS Distribution” has the meaning set forth in Section 4.1.

“Derivative Securities” has the meaning set forth in Section 7.2.

“Directors” means the individuals then serving on the Board of Directors of the Company or similar management council of the Company.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of Hazardous Materials into the environment, including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials or the cleanup or other remediation thereof.

“Escrow Agent” shall have the meaning set forth in Section 2.3.

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

“GAAP” has the meaning set forth in Section 1.2.

“Hazardous Materials” means any hazardous materials, hazardous wastes, hazardous constituents, hazardous or toxic substances or petroleum products (including crude oil or any derivative or fraction thereof), defined or regulated as such in or under any Environmental Laws.

“Intellectual Property” has the meaning set forth in Section 3.17.

“Lien” means any lien, mechanic’s lien, materialmen’s lien, lease, easement, charge, encumbrance, mortgage, conditional sale agreement, title retention agreement, agreement to sell or convey, option, claim, title imperfection, encroachment or other survey defect, pledge, restriction, security interest or other adverse claim, whether arising by contract or under law or otherwise (including, without limitation, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction in respect of any of the foregoing).

“Majority Purchasers” means at any time after the Closing, the holders of more than fifty percent (50%) of the shares of Preferred Stock then held by all Purchasers.

“Market Price” means the Closing Bid Price of the Common Stock preceding the date of determination.

“Material Adverse Effect” means any material adverse effect on the operations, results of operations, properties, assets or condition (financial or otherwise) of the Company or the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

“Merger” has the meaning set forth in the recitals to this Agreement.

“Merger Issuance” has the meaning set forth in the recitals to this Agreement.

“Minimum Offering Amount” has the meaning set forth in Section 2.2.

“Nasdaq Stock Market” means the Nasdaq Stock Market’s National Market System.

“National Market” means the Nasdaq Stock Market, the Nasdaq Small Cap Market, the New York Stock Exchange, Inc. or the American Stock Exchange, Inc.

“Notice of Conversion” means the notice to be delivered by a holder of Preferred Shares upon conversion of all or a portion thereof to the Company.

“Notice of Exercise” means the notice to be delivered by a holder of the Warrant upon exercise of all or a portion thereof to the Company.

“Offering Materials” has the meaning set forth in Section 4.7.

“Officer’s Certificate” shall mean a certificate executed by the President and Chief Executive Officer, and Chief Financial Officer, of the Company as contemplated by Section 5.1 hereof.

“OTC Bulletin Board” means the over-the-counter bulletin board operated by the NASD.

“Permits” means all domestic and foreign licenses, franchises, grants, authorizations, permits, easements, variances, exemptions, consents, certificates, orders and approvals necessary to own, lease and operate the properties of, and to carry on the business of the Company and the Subsidiaries.

“Person” means an individual, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or any agency or political subdivision thereof) or other entity of any kind.

“Preferred Shares” or “Preferred Stock” has the meaning set forth in the recitals to this Agreement.

“Purchase Price” means, with respect to each Purchaser, the aggregate purchase price set forth opposite such Purchaser’s name on Schedule I.

“Purchasers” means the several entities named in the attached Schedule I, and their successors and permitted assigns, including holders from time to time of the Preferred Shares.

“Registration Rights Agreement” means the agreement between the Company and each of the Purchasers, to be executed and delivered on or before the Closing Date, substantially in the form set forth in Exhibit C attached hereto.

“Reverse Stock Split” means the contemplated amendment of the Company’s Amended and Restated Certificate of Incorporation for the purpose of effecting a 1-for-10 reverse stock split of the issued and outstanding shares of Common Stock while maintaining the par value of the Common Stock at $0.01 per share, which amendment has been approved by the Company’s Board of Directors as of the date of this Agreement but remains subject to the approval of the stockholders of the Company pursuant to the General Corporation Law of the State of Delaware.

“SEC Reports” has the meaning set forth in Section 3.2.

“Securities” means the Preferred Shares, the Warrants, the Warrant Shares and the Conversion Shares.

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

“Subsidiary” means, with respect to any Person, any corporation or other entity of which (x) a majority of the capital stock or other ownership interests having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions are at the time directly or indirectly owned by such Person or (y) the results of operations, the assets and the liabilities of which are consolidated with such Person under GAAP.

“Subsidiary Corporate Documents” means the certificates of incorporation and bylaws of each Subsidiary.

“Taxes” has the meaning set forth in Section 3.10.

“Trading Day” shall mean any Business Day in which the OTC Bulletin Board, National Market or other automated quotation system or exchange on which the Common Stock is then traded is open for trading for at least 4 hours.

“Transfer” means any disposition of the Securities that would constitute a sale thereof under the Securities Act or otherwise result in a violation of the Securities Act.

“Warrant” shall have the meaning set forth in Section 2.5.

“Warrant Shares” means shares of Common Stock of the Company issued upon conversion of the Warrant.

1.2 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles as in effect from time to time, applied on a consistent basis (except for changes concurred in by the Company’s independent public accountants) (“GAAP”). All references to “dollars,” “Dollars” or “$” are to United States dollars unless otherwise indicated.

PURCHASE AND SALE OF SECURITIES

2.1 Purchase and Sale of Preferred Shares. Subject to the terms hereof, the Company agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees to purchase from the Company, the number of Preferred Shares, at a purchase price of one thousand dollars ($1,000.00) per share, set forth opposite the name of such Purchaser under the heading “Number of Preferred Shares to be Purchased” on Schedule I. The Purchase Price to be paid to the Company by each Purchaser is set forth opposite the name of such Purchaser under the heading “Aggregate Purchase Price for Preferred Shares” on Schedule I.

2.2 Minimum Offering Amount Required for Closing.

(a) The Company covenants that no Purchaser subscription(s) for Preferred Shares will be accepted unless the aggregate proceeds from Purchaser subscriptions received by the Company as of the Closing Date equals or exceeds TWO MILLION THREE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($2,385,000) (the “Minimum Offering Amount”).

(b) Unless otherwise agreed by all of the parties hereto, each of the Purchasers hereby covenants to the Company, severally and not jointly, that, it shall pay into escrow, in accordance with the provisions of the following Section 2.3, its respective Purchase Price, in full, on or before May 23, 2003 (the “Escrow Closing Date”).

(c) Notwithstanding the provisions of Sections 2.2(a) and 2.2(b) above, or any other provision of this Agreement to the contrary, the amount of non-cash consideration set forth opposite the name of any Purchaser on Schedule I under the heading “Non-Cash Consideration,” when such non-cash consideration has been delivered to the Escrow Agent (defined herein) in proper form, shall be credited toward payment of such Purchaser’s respective Purchase Price (such credit to be made on a dollar-for-dollar basis), and further shall be credited toward the Minimum Offering Amount on the same basis.

2.3 Escrow Agreement.

(a) Unless otherwise agreed by all of the parties hereto, each Purchaser shall deliver to Gardere Wynne Sewell LLP (the “Escrow Agent”) its respective Purchase Price, in one or more payments, by check or wire transfer payable to “Gardere Wynne Sewell LLP, as escrow agent” (and, as applicable in accordance with the terms of Section 2.2(c) and Schedule I, by delivery of properly executed and valid instruments evidencing any non-cash consideration

contemplated therein). Each such payment shall be accompanied by a list showing the name and address of such Purchaser, the notation “Attention: W. Robert Dyer, Jr.,” and the Escrow Agent notice information set forth immediately below. The Escrow Agent is hereby directed to collect said payments and to deposit the proceeds thereof (the “Escrowed Funds”) in a trust account of the Escrow Agent (or, with respect to any delivery of non-cash consideration, to secure such non-cash consideration in its offices). Should the Escrow Agent receive any check or instrument of payment hereunder that is uncollectible, or returned to it for insufficient funds, the Escrow Agent shall so inform the Company and deliver the returned check or instrument to the applicable Purchaser. When on or before the Escrow Closing Date (or such later date on or prior to May 23, 2003, to which the parties to this Agreement shall have mutually agreed to extend the Escrow Closing Date, and promptly so informed the Escrow Agent; any such agreed upon later date to thereafter be deemed the Escrow Closing Date) the Escrow Agent shall have received (i) payments (and, as applicable in accordance with the terms of Section 2.2(c) and Schedule I, delivery of properly executed and valid instruments evidencing any non-cash consideration) from the Purchaser’s in an aggregate amount at least equal to the Minimum Offering Amount, and (ii) written instructions from an authorized officer of the Company and an authorized officer of DAS (each a “Closing Notice”), in each case stating that all conditions to Closing have been met in accordance with the provisions of this Agreement and setting the time and place upon which the Closing is to occur (which time and place must be the same in each of Closing Notices), the Escrow Agent shall disperse the Escrowed Funds (and all documents evidencing any non-cash consideration delivered in lieu of funds in accordance with the terms of Section 2.2(c) and Schedule I) to the Company at the Closing.

(b) All deliveries and notices to the Escrow Agent shall be addressed and/or directed as follows:

Gardere Wynne Sewell LLP

Bank Name: Bank of America

901 Main Street

Dallas, Texas

ABA: 111000025

Acct Name: Gardere Wynne Sewell LLP Trust Account

Account #: 125-267-244-8

Ref: #127487-2

Attention: W. Robert Dyer, Jr.

(c) If the Escrow Agent has not received both (i) the Minimum Offering Amount from the Purchasers, and (ii) the requisite Closing Notices prior to the Escrow Closing Date (as such date may be extended from time to time in accordance with the applicable provisions of Section 2.3(a)), the Escrow Agent is directed to return to each Purchaser on the Escrow Closing Date the amount of the Escrowed Funds that were funded by such Purchaser, free of any interest (which, the parties agree shall not accrue on any portion of the Escrowed Funds), and any documents evidencing non-cash consideration delivered to the Escrow Agent by such Purchaser.

(d) Each of the Company and the Purchasers hereby acknowledges and agrees that the Escrow Agent undertakes to perform only such duties as are expressly set forth herein. The

Escrow Agent may rely, and shall be protected in acting, upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by an authorized officer of the Company or any Purchaser. The Escrow Agent, in the performance of its duties hereunder, shall not be liable for (i) any error of judgment, act done or step taken, or omitted by it in good faith, (ii) any mistake of fact or law or (iii) anything that it may do or refrain from doing in connection herewith, except for its own gross negligence. Should the Escrow Agent desire to terminate its obligations as Escrow Agent under this Agreement for any reason whatsoever, it may do so by giving 30 days’ written notice to the Company and each Purchaser; and it shall continue to hold the Escrowed Funds until a successor escrow agent shall have been appointed, at which time the Escrow Agent shall deliver the Escrowed Funds, and any documents evidencing non-cash consideration delivered to the Escrow Agent, to such successor escrow agent. Each of the Company and the Purchasers hereby agrees to indemnify the Escrow Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence or bad faith on the part of the Escrow Agent, arising out of or in connection with its performance as Escrow Agent and the carrying out its duties hereunder, including the costs and expenses of defending itself against any claim or liability. IT IS THE EXPRESS INTENT OF THE COMPANY AND EACH OF THE PURCHASERS TO INDEMNIFY AND HOLD HARMLESS THE ESCROW AGENT FROM ANY NEGLIGENT ACTS OR OMISSIONS OF THE ESCROW AGENT, OTHER THAN ANY ACT OR OMISSION RESULTING FROM THE ESCROW AGENT’S GROSS NEGLIGENCE.

2.4 Further Closings. From and after the Closing, the Company contemplates continuing its efforts to issue additional Preferred Shares (each a “Future Closing”) up to an aggregate maximum of proceeds of $15 million from such issuances of Preferred Shares, inclusive of all amounts paid for Preferred Stock as of the Closing Date.

2.5 Warrants. In consideration for, and as an inducement to, each Purchaser’s purchase of the Preferred Shares hereunder, the Company will issue to each Purchaser upon Closing, in connection with and in addition to the applicable number of Preferred Shares, a Warrant (in the form attached hereto as Exhibit B, each a “Warrant” and, collectively, the “Warrants”) to purchase the number of shares of the Company’s Common Stock set forth opposite such Purchaser’s name under the heading “Number of Warrants” on Schedule I.

2.6 Adoption of First Restated Certificate of Designation. The Company shall adopt and file a First Restated Certificate of Designation, Preference and Rights of Series A Convertible Preferred Stock of Axtive Corporation in substantially the form attached hereto as Exhibit A (the “Certificate of Designation”) with the Secretary of State of the State of Delaware on or promptly following the Closing Date. The terms of the Certificate of Designation, among other things, provide that upon the consummation of a “Qualified Future Financing” which contains a “Superior Right” (as each of those terms is defined in the Certificate of Designation), the terms and conditions of such Superior Right shall be automatically incorporated into the rights contained in the Certificate of Designation and will supersede any provisions in the Certificate of Designation relating to such Superior Right that would conflict with the exercise or application of such Superior Right; provided, however, that any such Superior Right may be waived by the holders of the Preferred Stock in accordance with the applicable provisions of the Certificate of Designation. If the Company provides any consideration to the holders of any equity or convertible debt instrument issued in connection with such Qualified Future Financing

that is in addition to the consideration provided to the Purchasers (such as, for purposes of illustration, a warrant agreement other than a warrant substantially identical to the Warrants offered in this Agreement and issued in similar denominations and for substantially identical consideration provided or a registration rights agreement providing additional registration rights), then the Company will take all lawful and reasonable steps necessary to ensure that the Purchasers also receive such additional consideration.

REPRESENTATIONS AND WARRANTIES.

The Company represents and warrants to each Purchaser, as of the Closing Date, except as set forth in the Offering Materials (as that term is defined in Section 4.7, including, without limitation, the Company’s draft 10-KSB for the year ended December 31, 2002) delivered to each Purchaser on or prior to the date of execution of this Agreement, the following:

3.1 Organization and Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The Company is qualified to conduct business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where such failure would not have a Material Adverse Effect. The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of the Company and no further consent or authorization of the Company, its Board of Directors or its shareholders is required. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against it in accordance with its terms, subject to bankruptcy or insolvency laws affecting creditors’ rights generally and to general principles of equity.

3.2 SEC Filings. The Company makes periodic filings with the Commission available at www.sec.gov. All such forms, reports and other documents filed by the Company, including those that may be filed between the execution of this Agreement until the Closing, but expressly excluding any filing made at any time by any Person other than the Company, are referred to herein as the “SEC Reports.” Except to the extent the SEC Reports have been modified by the non-public information delivered to the Purchasers included within the Offering Materials, all of the SEC Reports (a) were or will be filed on a timely basis (except (1) where noted in the SEC Reports, (2) the Company’s Form 10-KSB for the period ended December 31, 2002, a draft version of which has been included in the Offering Materials), and (3) the Company’s Form 10-QSB for the period ended March 31, 2003, which has not yet been filed and, when filed, will not have been filed on a timely basis), (b) were or will be prepared in compliance in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to such SEC Reports, and (c) did not or will not at the time they were or are filed contain any untrue statement of a material fact or omit to state a material fact required to be stated in such SEC Reports or necessary in order to make the statements in such SEC Reports, in the light of the circumstance under which they were made, not misleading.

3.3 Capitalization. As of the date hereof, the authorized, issued and outstanding capital stock of the Company is as set forth in the Offering Materials and except as set forth therein or in connection

with the Merger Issuance no other shares of capital stock of the Company will be outstanding as of the Closing Date. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. No shares of capital stock of the Company are subject to preemptive rights or similar rights of the shareholders of the Company (other than those rights in favor of holders of the Preferred Stock, or described in the Offering Materials) or any liens or encumbrances imposed through the actions or failure to act of the Company. Other than as set forth in the Offering Materials or in connection with the Merger and the Merger Issuance, as of the date hereof, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, and (ii) except for registration rights of the existing holders of Preferred Stock as of the date of this Agreement, the Registration Rights Agreement contemplated hereby, and registration rights to be granted in connection with the Merger Issuance, if any, there are no agreements or arrangements under which the Company or any of its Subsidiaries are obligated to register the sale of any of its or their securities under the Securities Act and (iii) except for the anti-dilution rights and price adjustment provisions in favor of the existing holders of Preferred Stock as of the date of this Agreement, there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities. The Company has furnished to each Purchaser true and correct copies of the Company’s Corporate Documents, and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

3.4 Governmental Authorization. The execution and delivery by the Company of this Agreement does not and will not, the issuance and sale by the Company of the Securities does not and will not, and the consummation of the transactions contemplated hereby will not, require any action by or in respect of, or filing with, any governmental body, agency or governmental official except (a) such actions or filings that have been undertaken or made prior to the date hereof and that will be in full force and effect (or as to which all applicable waiting periods have expired) on and as of the date hereof or which are not required to be filed on or prior to the Closing Date, (b) such actions or filings required to consummate the Merger and the Merger Issuance that are contemplated by agreements relating thereto to which the Company is a party, (c) the filing of a “Form D” in connection with the issuance of the Preferred Shares and Warrants, and (d) such actions or filings that, if not obtained, would not result in a Material Adverse Effect.

3.5 Issuance of Common Stock; Reservation of Shares. Upon conversion in accordance with the terms of the Certificate of Designation and exercise of any Warrant, the applicable Conversion Shares shall be duly and validly issued and outstanding, fully paid and nonassessable, free and clear of any Taxes, Liens and charges with respect to issuance and shall not be subject to preemptive rights or similar rights of any other shareholders of the Company (other than those rights in favor of holders of Preferred Stock, or described in Offering Materials). Assuming the representations and warranties of the Purchasers contained herein are true and correct in all material respects, each of the Securities will have been issued in material compliance with all applicable United States federal and state securities laws. Subject to the effectiveness of the Company’s Reverse Stock Split, the Company shall have a sufficient number of shares of Common Stock authorized and reserved to provide for the conversion of the Preferred Shares into the Company’s Common Stock and for the exercise of the Warrants.

3.6 No Conflicts. The execution and delivery by the Company of this Agreement and the Registration Rights Agreement contemplated hereby, the issuance and sale by the Company of the Securities, and the consummation of the transactions contemplated hereby, does not and will not, contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, (ii) the Company Corporate Documents, (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Company or any Subsidiary or any of their respective assets, or result in the creation or imposition of any Lien on any asset of the Company or any Subsidiary. The Company and each Subsidiary is in compliance with and conforms to all statutes, laws, ordinances, rules, regulations, orders, restrictions and all other legal requirements of any domestic or foreign government or any instrumentality thereof having jurisdiction over the conduct of its businesses or the ownership of its properties, except where such failure would not have a Material Adverse Effect.

3.7 Financial Information. Except as disclosed in the Offering Materials, since December 31, 2002 (the “Balance Sheet Date”), there has been (i) no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company and its Subsidiaries, whether as a result of any legislative or regulatory change, revocation of any license or rights to do business, fire, explosion, accident, casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God, public force or otherwise and (ii) no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company and its Subsidiaries except in the ordinary course of business; and no fact or condition exists or is contemplated or threatened which might cause such a change in the future. The audited and unaudited consolidated balance sheets of the Company and its Subsidiaries as set forth in the SEC Reports, and the related consolidated statements of income, changes in shareholders’ equity and changes in cash flows as set forth in the SEC Reports for the respective periods referenced therein, including the footnotes thereto, except as indicated therein, (x) complied in all material respects with applicable accounting requirements and (y) have been prepared in accordance with GAAP consistently applied throughout the periods indicated, except that the unaudited financial statements do not contain notes and may be subject to normal audit adjustments and normal annual adjustments. Such financial statements fairly present the financial condition of the Company and its Subsidiaries at the dates indicated and the consolidated results of their operations and cash flows for the periods then ended and, except as indicated therein, reflect all claims against and all indebtedness and liabilities of the Company and its Subsidiaries, fixed or contingent.

3.8 Litigation. Except as set forth in the Offering Materials, there is no action, suit or proceeding pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary, before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company or which challenges the validity of this Agreement.

3.9 Environmental Matters. The costs and liabilities associated with Environmental Laws (including the cost of compliance therewith) are unlikely to have a Material Adverse Effect. Each of the Company and the Subsidiaries conducts its businesses in compliance in all material respects with all applicable Environmental Laws.

3.10 Taxes. Except as set forth in the Offering Materials, all United States federal, state, county, municipality, local or foreign income tax returns and all other material tax returns (including foreign tax returns) which are required to be filed by or on behalf of the Company and each Subsidiary have been filed and all material Taxes due pursuant to such returns or pursuant to any assessment received by the Company and each Subsidiary have been paid except those being disputed in good faith and for which adequate reserves have been established. The charges, accruals and reserves on the books of the Company and each Subsidiary in respect of Taxes and other governmental charges have been established in accordance with GAAP.

3.11 Not an Investment Company. Neither the Company nor any Subsidiary is an “Investment Company” within the meaning of Investment Company Act of 1940, as amended.

3.12 Full Disclosure. The Company’s unaudited draft Form 10-KSB for the period ending December 31, 2002 (as included in the Offering Materials and as revised and by the Company and delivered to the Purchasers from time to time, the “Draft Form 10-KSB”), and any other information furnished by the Company or any Subsidiary to any Purchaser for purposes of or in connection with this Agreement or any transaction contemplated hereby does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading.

The Draft Form 10-KSB and other financial information furnished by the Company or any Subsidiary to any Purchaser for purposes of or in connection with this Agreement or any transaction contemplated hereby fairly present the financial condition of the Company and its Subsidiaries (or, in the case of any financial information regarding ThinkSpark, fairly reflects information made available to the Company by ThinkSpark and/or the Company’s understanding of such information); provided, however, that the pro forma financial information provided by the Company to the Purchasers has not been prepared in conformity with GAAP. Each of the Purchasers has had the opportunity to ask questions of, and receive answers from, the Company or its authorized representatives concerning the deviations from GAAP contained within the pro forma financial information presented by the Company to the Purchasers for purposes of or in connection with this Agreement or any transaction contemplated hereby, and the information provided by the Company and its authorized representatives in response to such questions (whether verbally or in written materials) has not contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make such information not misleading.

For the purposes of the representations and warranties contained in this Section 3.12, the parties acknowledge and agree that the Offering Materials and any other information provided by the Company or any Subsidiary to any Purchaser relating to this Agreement and the transactions contemplated hereby shall be deemed, with respect to any information or portion of information contained therein that subsequently is revised, amended, supplemented or otherwise modified, to reflect (i) the latest such revised, amended, supplemented or modified information or portion of information that has been provided by the Company or any Subsidiary to the Purchasers and (ii) any such information that is included in any SEC Report subsequently filed by the Company.

3.13 No Solicitation; Integration with Other Offerings. Except as set forth in the Offering Materials, no form of general solicitation or general advertising was used by the Company or, to the best

of its actual knowledge, any other Person acting on behalf of the Company, in connection with the offer and sale of the Securities. Neither the Company, nor, to its knowledge, any Person acting on behalf of the Company, has, either directly or indirectly, sold or offered for sale to any Person any of the Securities or, within the six months prior to the date hereof, any other similar security of the Company except only offers and sales to existing holders of the Preferred Stock as of the date of this Agreement, as contemplated by this Agreement, and in connection with the Merger and the Merger Issuance, and the Company represents that neither itself nor any Person authorized to act on its behalf (except that the Company makes no representation as to any existing holder of Preferred Stock as of the date of this Agreement, any Purchaser, any recipient of capital stock and/or securities convertible into or exchangeable for capital stock of the Company pursuant to the Merger Issuance, or any of their respective Affiliates) will sell or offer for sale any such security to, or solicit any offers to buy any such security from, or otherwise approach or negotiate in respect thereof with, any Person or Persons so as thereby to cause the issuance or sale of any of the Securities to be in violation of any of the provisions of Section 5 of the Securities Act.

3.14 Permits. (a) Each of the Company and its Subsidiaries has all material Permits; (b) all such Permits are in full force and effect, and each of the Company and its Subsidiaries has fulfilled and performed all material obligations with respect to such Permits; (c) no event has occurred which allows, or after notice of lapse of time would allow, revocation or termination by the issuer thereof or which results in any other material impairment of the rights of the holder of any such Permit; and (d) the Company has no reason to believe that any governmental body or agency is considering limiting, suspending or revoking any such Permit.

3.15 Absence of Any Undisclosed Liabilities or Capital Calls. There are no liabilities of the Company or any Subsidiary of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which would reasonably be expected to result in such a liability, other than (i) those liabilities provided for in the Offering Materials, (ii) liabilities and obligations incurred in the ordinary course of business since the Balance Sheet Date, (iii) liabilities and obligations incurred in connection with the Merger and the Merger Issuance, (iv) liabilities and obligations contemplated hereby, and (v) other undisclosed liabilities which, individually or in the aggregate, would not have a Material Adverse Effect.

3.16 Proprietary Information of Third Parties. Except as set forth in the Offering Materials, to the best of the Company’s knowledge, no Person has claimed or has reason to claim that any employee of the Company or any Subsidiary has (a) violated or may be violating any of the terms or conditions of his employment, non-competition or non-disclosure agreement with such Person, (b) disclosed or may be disclosing or utilized or may be utilizing any trade secret or proprietary information or documentation of such Person or (c) interfered or may be interfering in the employment relationship between such Person and any of its present or former employees. No Person has requested information from the Company which suggests that such a claim might be contemplated. To the best of the Company’s knowledge, no employee of the Company or any Subsidiary has employed or proposes to employ any trade secret or any information of documentation proprietary to any former employer, and to the best of the Company’s knowledge, no employee of the Company or any Subsidiary has violated any confidential relationship which such Person may have had with any Person, in connection with the development or sale of any service or proposed service of the Company or any Subsidiary, and the Company or any Subsidiary has no reason to believe there will be any such employment or violation. To

the best of the Company’s knowledge, none of the execution or delivery of this Agreement, or the carrying on of the business of the Company or any Subsidiary as officer, employee or agent by any officer, director or key employee of the Company or any Subsidiary, or the conduct or proposed conduct of the business of the Company or any Subsidiary, will conflict with or result in a breach of the terms, conditions or provisions of or constitute a default under any contract, covenant or instrument under which any such Person is obligated.

3.17 Intellectual Property Rights. Each of the Company and its Subsidiaries owns, or is licensed under, and has the rights to use, all patents, patent applications, trademarks, trademark applications, trade names, copyrights, technology, know-how and processes, service marks, service mark applications, trade secrets, and customer lists (collectively, “Intellectual Property”) used in, necessary for or proposed to be used in the conduct of its business; no claims have been asserted by any Person to the use of any such Intellectual Property or challenging or questioning the validity or effectiveness of any license or agreement related thereto. To the best of the Company’s knowledge, there is no valid basis for any such claim and the use of such Intellectual Property by the Company and its Subsidiaries will not infringe upon the rights of any Person.

3.18 Insurance. Except as set forth in the Offering Materials, the Company and its Subsidiaries maintain, with financially sound and reputable insurance companies, insurance in at least such amounts and against such risks such that any uninsured loss would not have a Material Adverse Effect, and all insurance coverages of the Company and its Subsidiaries are in full force and effect.

3.19 Title to Properties. The Company and its Subsidiaries have good and marketable title to all their respective properties reflected in the Offering Materials, free and clear of all Liens, other than as disclosed in the Offering Materials.

3.20 Internal Accounting Controls. The Company and each of its Subsidiaries maintains a system of internal accounting controls sufficient, in the judgment of the Company’s Board of Directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

3.21 Foreign Practices. Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any Subsidiary has made any payments of funds of the Company or Subsidiary, or received or retained any funds, in each case in violation of any law, rule or regulation.

3.22 Brokers. The Company has no contract, arrangement or understanding with any broker, finder or similar agent with respect to the transactions contemplated by this Agreement.

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Each Purchaser, severally but not jointly, represents and warrants to the Company, on the date hereof and as of the Closing Date, the following:

4.1 Shares for Account of Purchaser.

(a) Except as expressly set forth in Section 4.1(b), the Securities are being acquired for the respective accounts of the Purchasers (or if any Purchaser is a trust or other entity, solely for the beneficiaries thereof) for investment purposes only, and are not being purchased with a view to or for the resale, distribution or fractionalization thereof, and no Purchaser has any contract, undertaking, agreement or arrangement with, and has no present plan to enter into any contract, undertaking, agreement or arrangement with any Person to sell, Transfer or pledge the Securities or any portion thereof.

(b) DAS has represented to the Company that DAS may distribute to certain DAS Members certain of the Securities acquired by DAS pursuant to this Agreement (any such distribution to any DAS Member being hereinafter referred to as a “DAS Distribution”). DAS hereby represents, warrants and covenants to the Company that, prior to any DAS Distribution:

(i) DAS shall notify the Company of its intention to consummate such DAS Distribution such that the Company may advise DAS of any material disclosures necessary in order to update make the statements contained in the Offering Materials received by DAS as of the Closing not misleading (which advice and information, if any, shall be provided to DAS by the by the Company for purposes of this Section 4.1(b));

(ii) each acquiring DAS Member shall be furnished with copies of all Offering Materials received by DAS and any other non-public information necessary in order to make the statements in such Offering Materials, in the light of the circumstance under which they were made, not misleading;

(iii) each acquiring DAS Member shall be an “accredited investor” as that term is defined in Rule 501(a) of Regulation D as adopted by the Commission;

(iv) each acquiring DAS Member shall have executed and delivered to DAS representations and warranties substantially similar to those set forth in this Section 4 (other than those set forth in this Section 4.1(b)), which representations and warranties shall be made available for inspection by the Company and its counsel; and

(v) DAS shall, and cause each of the acquiring DAS Members to, comply with all reasonable requests of the Company to ensure that such DAS Distribution is exempt from the registration requirements of the Securities Act and otherwise in compliance with all applicable federal and state securities laws.

4.2 Securities Not Registered Under Securities Laws. Each Purchaser has been informed and understands that: THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES OR OTHER REGULATORY AUTHORITY, NOR HAS ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF SUCH SECURITIES OR THE ACCURACY OR ADEQUACY OF ANY DISCLOSURES RELATED THERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE; AND THE SECURITIES HAVE NOT BEEN, AND PURCHASERS IN SUCH SECURITIES HAVE NO RIGHT, OTHER THAN AS PROVIDED FOR IN THE REGISTRATION RIGHTS AGREEMENT DELIVERED IN CONNECTION WITH THE ISSUANCE OF THE SECURITIES, TO REQUIRE THAT THEY BE, REGISTERED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND SUCH SECURITIES ARE BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS AVAILABLE UNDER SUCH LAWS.

4.3 Limitation on Transferability of Securities. Each Purchaser has been informed and understands and agrees that:

(a) THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTIONS THEREFROM. A LEGEND RESTRICTING THE TRANSFER OF SUCH SECURITIES SHALL BE PLACED ON THE CERTIFICATES REPRESENTING THE SECURITIES.

(b) Each Purchaser must bear the economic risk of its or his investment in the Securities for an indefinite period of time, because the Securities have not been registered under the Securities Act, or the securities laws of any state and, therefore, cannot be sold unless they are subsequently registered under the Securities Act and any applicable state securities laws or unless an exemption from registration is available. Each Purchaser further understands that only the Company can take action to register the Securities.

(c) No offer, sale, Transfer or other disposition of the Securities may be made unless such Securities have theretofore been effectively registered under the Securities Act and applicable state securities laws, or the Company has received the written opinion of counsel satisfactory to the Company that the transaction will not violate or require registration under such laws and obtains warranties similar to those set forth herein from the proposed transferee.

(d) Each Purchaser shall pay all expenses and costs, if any, incurred by the Company for legal or accounting services in connection with reviewing any proposed sale or other Transfer of the Securities by such Purchaser and issuing opinions in connection therewith.

(e) In the event of any sale or other Transfer of any Securities, the selling Purchaser shall be required and it shall be the sole responsibility of such Purchaser to comply with the restrictions of the transferability of such Securities imposed under applicable federal and state securities laws and regulations.

4.4 Status of Purchaser. Each Purchaser is (and each Purchaser shall check the applicable blank adjacent to its signature hereto) either:

(a) a natural person who has an individual net worth, or joint net worth with that person’s spouse, of more than $1,000,000; or

(b) a natural person who individually had actual income in excess of $200,000 in each of the two most recent years and who reasonably expects income in excess of $200,000 in the current year; or is a natural person who, jointly with such person’s spouse, had income in excess of $300,000 in each of the two most recent years and who reasonably expects joint income in excess of $300,000 in the current year; or

(d) a trust, with total assets in excess of $5.0 million, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in the Securities Act; or

(e) a corporation or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5.0 million; or

(f) otherwise an Accredited Investor as defined in Section 501(a) of Regulation D as adopted by the Commission.

4.5 Financial Ability of Purchaser. Each Purchaser (a) has the financial ability to bear the economic risk of his, her or its investment in the Securities (including the possible loss of the entire amount thereof), (b) has adequate means for providing for his, her or its current and future needs and personal contingencies notwithstanding (i) such Purchaser’s investment in the Securities, (ii) the unavailability of any tax, financial or other benefits from such Purchaser’s investment in or ownership of the Securities, or (iii) the complete loss of such Purchaser’s entire investment in the Securities, and (c) has no need for liquidity with respect to his, her or its investment in the Securities.

4.6 Purchaser Sophistication. Each Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and has obtained sufficient information from the Company to enable him, her or it to evaluate the risks of an investment in the Securities.

4.7 Receipt of Other Information. Each Purchaser acknowledges and agrees that he, she or it:

(a) has been furnished with copies of certain non-public information of the Company under a written confidentiality agreement, including, without limitation, financial projections and pro forma financial information prepared by the Company and relating to the Company, and the unaudited Draft Form10-KSB (together with the SEC Reports available to the Purchasers via the world-wide web, the “Offering Materials”), has carefully read the Offering Materials and has evaluated and understands the risks of an investment in the Securities, and, except as indicated in Sections 4.7 (b) and (c), has relied solely upon the information contained in the Offering Materials;

(b) is aware that the Company has not timely filed either (i) its Form 10-KSB for the period ended December 31, 2002, or (ii) its Form 10-QSB for the period ended March 31, 2003 (each of which, when filed, will not have been filed on a timely basis);

(c) has been provided an opportunity to obtain any additional information concerning the Offering, to the extent the Company or its authorized representatives possess the same or could acquire it without unreasonable effort or expense; and

(d) has had the opportunity to ask questions of, and receive answers from, the Company or its authorized representatives concerning the terms and conditions of the Offering and other matters pertaining to an investment in the Securities and, to the extent the Company or its authorized representatives possess the same or could acquire it without unreasonable effort or expense, to obtain such additional information as such Purchaser considers necessary to verify the accuracy of the information contained in the Offering Materials or that which was otherwise provided in order for him or her to evaluate the merits or risks of an investment in the Securities, and has not been furnished any other offering literature or prospectus except as mentioned herein or in the Offering Materials.

4.8 Suitability of Investment. Each Purchaser has determined that the Securities are a suitable investment for him, her or it and that, at this time, he, she or it is able to bear a complete loss of his, her or its investment in the Securities.

4.9 Independent Investment Decision. In making a decision to invest in the Securities, each Purchaser has relied solely upon independent investigations made by him, her or it and is not relying on the Company or its authorized representatives or any references in the Offering Materials to any legal opinion with respect to tax or other economic considerations involved in an investment in the Securities.

4.10 Authority. The execution, delivery, and performance of this Agreement have been duly authorized by each Purchaser. The execution and delivery of this Agreement and the purchase of the Securities do not conflict with or breach any provision of the organizational documents of any Purchaser or any law, ruling, regulation, statute or agreement to which it is subject.

4.11 No Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee

in connection with any of the transactions contemplated by this Agreement as a result of arrangements entered into by any Purchaser.

4.12 Reliance on Representations and Warranties. It is understood and agreed that Company has relied and will rely upon the representations and warranties of the Purchasers contained in this Agreement for purposes of determining whether each Purchaser meets the Purchaser suitability standards imposed under state and federal securities laws and regulations in order to enable the Company to decide whether the offer and sale of the Securities may be made without registration under applicable federal and state securities laws and regulations in reliance upon exemptions provided thereunder.

CONDITIONS PRECEDENT TO PURCHASE OF SECURITIES

5.1 Conditions Precedent to Purchasers’ Obligations to Purchase. The obligation of each Purchaser hereunder to purchase the Preferred Shares is subject to the satisfaction of each of the following conditions (or the waiver thereof in writing by each Purchaser):

(a) The Company shall have duly executed this Agreement, the Registration Rights Agreement contemplated hereby, and delivered a counterpart of each thereof to each Purchaser;

(b) Except as expressly provided to the contrary in Schedule I, the Company shall have delivered to each Purchaser (i) a duly executed certificate representing the number of Preferred Shares for which such Purchaser has remitted payment to the Company at the purchase price of $1,000 per share and (ii) a duly executed Warrant exercisable for the applicable number of shares to which such Purchaser shall be entitled in accordance with the provisions of Section 2.5;

(c) That certain Management Services Agreement, dated February 14, 2003, by and between the Company and DAS (the “Management Services Agreement”), shall be in full force and effect, and the Company shall have delivered to DAS the “Initial Advance” described therein;

(d) Each Purchaser shall have remitted to the Escrow Agent not less than its respective Purchase Price in accordance with the provisions of Section 2.2(c) and Schedule I;

(e) The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for representations and warranties that speak as of a specified date, which representations and warranties shall have been true and correct as of such specified date), and the Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing. Each Purchaser shall have received a counterpart Officer’s Certificate executed by appropriate officers of the Company, dated as of the date delivered, to the foregoing effect, and further certifying (i) the incumbency of each officer of the Company executing such certificate, this Agreement and any other document contemplated hereunder, (ii) the correctness and completeness of the attached copies of (A) the Company Corporate Documents, (B) the resolution(s) of the Company’s Board of Directors authorizing the

transactions contemplated herein, and (C) a reasonably detailed chart depicting the capitalization of the Company after giving effect to the Merger Issuance and other transactions contemplated hereby, and (iii) the enforceability of this Agreement against the Company, upon the Company’s execution and delivery hereof, in accordance with its terms, subject to bankruptcy or insolvency laws affecting creditors’ rights generally and to general principles of equity.

(f) The Company shall have received all governmental, Board of Directors, shareholders and third party consents and approvals necessary or desirable in connection with the issuance and sale of the Securities and the consummation of the transactions contemplated by this Agreement;

(g) The Company Corporate Documents and the Subsidiary Corporate Documents, if any, shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior written consent of each Purchaser;

(h) The Merger and Merger Issuance shall have occurred (or shall occur simultaneously with the Closing) on terms and conditions substantially similar to those terms and conditions set forth in draft documentation approved in advance by each Purchaser (which approval shall not be unreasonably withheld), and the Company shall have delivered (or shall deliver at the Closing) to each Purchaser, or its counsel, such copies of the agreements, instruments, certificates and other documents executed and delivered by the Company relating to each of the Merger and Merger Issuance as such Purchaser shall reasonably request; and

(i) The Purchasers shall have received all other resolutions, certificates, instruments, agreements or other documents required by this Agreement to be delivered by the Company at or prior to the Closing.

5.2 Conditions to the Company’s Obligations. The obligations of the Company to issue and sell the Securities to the Purchasers pursuant to this Agreement are subject to the satisfaction of each of the following conditions (or the waiver thereof in writing by the Company):

(a) The representations and warranties of each Purchaser contained herein shall be true and correct in all material respects (except for representations and warranties that speak as of a specified date, which representations and warranties shall have been true and correct as of such specified date), and each Purchaser shall have performed and complied in all material respects with all agreements required by this Agreement to be performed or complied with by such Purchaser at or prior to the Closing;

(b) The issue and sale of the Securities by the Company shall not be prohibited by any applicable law, court order or governmental regulation;

(c) The receipt by the Company of duly executed counterparts of this Agreement and the Registration Rights Agreement contemplated hereby;

(d) Each of the Merger and the Merger Issuance shall have occurred (or shall occur simultaneously with the Closing) in accordance with the terms of the related agreements to which the Company is a party;

(e) The Management Services Agreement shall be in full force and effect; and

(f) The aggregate purchase price received by the Escrow Agent from all of the Purchasers for the Preferred Shares shall be not less than the Minimum Offering Amount (as calculated in accordance with applicable provisions of this Agreement).

AFFIRMATIVE COVENANTS

Unless such obligation is waived by the Majority Purchasers, the Company hereby agrees that, from and after the date hereof:

6.1 Information. The Company will make available to each holder of the Preferred Shares:

(a) promptly upon the filing thereof, copies of (i) all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent), and (ii) all SEC Reports;

(b) promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed and any other document generally distributed to shareholders; and

(c) promptly following the commencement thereof, notice and a description in reasonable detail of any litigation or proceeding to which the Company or any Subsidiary is a party in which the amount involved is $250,000 or more and not covered by insurance or in which injunctive or similar relief is sought.

6.2 Payment of Obligations. The parties to this Agreement acknowledge and agree that the Company has certain matured, short-term, obligations that are unpaid as of the Closing. The Company hereby covenants to the Purchasers that such short-term obligations will be paid in full within 10 days after the Closing. Additionally, the parties to this Agreement acknowledge and agree that the Company has certain other unpaid obligations incurred prior to March 1, 2001 in connection with the Company’s former golf video operations, which obligations have been accrued in the Company’s financial statements. The Company believes that the claims underlying these obligations are dormant and not likely to be pursued against the Company, does not intend to pay such obligations, and intends to contest such obligations if they are pursued against the Company. Subject to the foregoing provisions of this Section 6.2, the Company will, and will cause each Subsidiary to, pay and discharge, at or before maturity, all their respective material obligations, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings and will maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same.

6.3 Maintenance of Property; Insurance. The Company will, and will cause each Subsidiary to, keep all property useful and necessary in its business in good working order and condition, ordinary

wear and tear excepted. In addition, the Company and each Subsidiary will maintain insurance in at least such amounts and against such risks as it has insured against as of the Closing Date.

6.4 Maintenance of Existence. The Company will, and will cause each Subsidiary to, continue to engage in business of the same general type as now conducted by the Company and such Subsidiaries, and will preserve, renew and keep in full force and effect its respective corporate existence and their respective material rights, privileges and franchises necessary or desirable in the normal conduct of business.

6.5 Compliance with Laws. The Company will, and will cause each Subsidiary to, comply, in all material respects, with all United States federal, state, municipal, local or foreign applicable laws, ordinances, rules, regulations, municipal by-laws, codes and requirements of governmental authorities except (i) the filing of the Company’s Form 10-KSB for the period ended December 31, 2002, which has not yet been filed and, when filed, will not have been filed on a timely basis, (ii) the filing of the Company’s Form 10-QSB for the period ended March 31, 2003, which has not yet been filed and, when filed, will not have been filed on a timely basis, (iii) where compliance therewith is contested in good faith by appropriate proceedings or (iv) where non-compliance therewith could not reasonably be expected, in the aggregate, to have a Material Adverse Effect.

6.6 Inspection of Property, Books and Records. The Company will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to their respective businesses and activities; and will permit, during normal business hours, a representative of each Purchaser or an affiliate thereof, as representatives of Purchaser, to visit and inspect any of their respective properties, upon reasonable prior notice, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective executive officers and independent public accountants (and by this provision the Company authorizes its independent public accountants to disclose and discuss with each Purchaser the affairs, finances and accounts of the Company and its Subsidiaries in the presence of a representative of the Company; provided, however, that such discussions will not result in any unreasonable expense to the Company, without Company consent), all at such reasonable times as any Purchaser shall arrange with the Company in advance.

6.7 Investment Company Act. The Company will not be or become an open-end investment trust, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940, as amended.

6.8 Compliance with Terms and Conditions of Material Contracts. The Company will, and will cause each Subsidiary to, comply, in all respects, with all terms and conditions of all material contracts to which it is subject.

6.9 Reserved Shares and Listings.

(a) Subject to the effectiveness of the Company’s Reverse Stock Split (or, failing consummation thereof, other corporate action undertaken by the Company to authorize and reserve a sufficient number of shares of Common Stock to provide for the conversion of the Preferred Shares into the Company’s Common Stock and for the exercise of the Warrants), the

Company shall at all times thereafter have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to provide for the full conversion of the outstanding Preferred Shares and exercise of the Warrants (based on the conversion price of the Preferred Shares in effect from time to time and the exercise price of the Warrant). The Company will use its best lawful efforts to cause the Reverse Stock Split (or other corporate action undertaken to authorize and reserve a sufficient number of shares of Common Stock) to be consummated and effective within 120 days after Closing. If at any time following the effectiveness of the Company’s Reverse Stock Split (or other corporate action undertaken to authorize and reserve a sufficient number of shares of Common Stock) the number of shares of Common Stock authorized and reserved for issuance falls below the number of Conversion Shares issued or issuable upon conversion of the Preferred Shares and exercise of the Warrants, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares. The Company will obtain any authorization, consent, approval or other action by or make any filing with any court or administrative body that may be required under applicable state securities laws in connection with the issuance of shares of Common Stock upon conversion of the Preferred Shares.

(b) The Company will use its best lawful efforts to maintain or, if lost, to restore, the listing and trading of its Common Stock on a National Market or the OTC Bulletin Board. To the extent applicable, the Company will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers, Inc. (the “NASD”) and such exchanges, as applicable. The Company shall promptly provide to each Purchaser copies of any notices it receives regarding the continued eligibility of the Common Stock for listing on any National Market or the OTC Bulletin Board.

6.10 Transfer Agent Instructions. Upon receipt of a Notice of Conversion or Notice of Exercise, as applicable, the Company shall immediately direct the Company’s transfer agent to issue certificates, registered in the name of Purchaser or its nominee, for the Conversion Shares, in such amounts as specified from time to time by Purchaser to the Company upon proper conversion of the Preferred Shares or exercise of the applicable Warrant. Upon conversion of any Preferred Shares in accordance with the terms of the Certificate of Designation and/or exercise of any Warrant in accordance with its terms, the Company will, and will use its best lawful efforts to cause its transfer agent to, issue as promptly and reasonably practicable one or more certificates representing shares of Common Stock in such name or names and in such denominations specified by the applicable Purchaser in a Notice of Conversion or Notice of Exercise, as the case may be (which certificates shall contain a restrictive legend substantially similar to the legend set forth in Section 4.3(a) above).

6.11 Maintenance of Reporting Status; Supplemental Information. So long as any of the Securities are outstanding, the Company shall use its best lawful efforts to timely file all reports required to be filed with the Commission pursuant to the Exchange Act (it being understood and acknowledged by the parties that neither the Company’s Form 10-KSB for the period ended December 31, 2002, a draft version of which has been included in the Offering Materials, nor the Company’s Form 10-QSB for the period ended March 31, 2003, has been timely filed as of the date of this Agreement, and neither, when filed, will have been timely filed). The Company shall not terminate its status as an issuer required to file reports under the Exchange Act, even if the Exchange Act or the rules and regulations thereunder would permit such termination. If at anytime the Company is not subject to the requirements of Section

13 or 15(d) of the Exchange Act, the Company will promptly furnish at its expense, upon request, for the benefit of the holders from time to time of Securities, and prospective purchasers of Securities, information satisfying the information requirements of Rule 144 under the Securities Act.

6.12 Form D; Blue Sky Laws. The Company agrees to file a “Form D” with respect to the Securities as required under Regulation D of the Securities Act and to provide a copy thereof to the applicable Purchaser promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to Purchasers at the Closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to Purchasers on or prior to the Closing Date.

NEGATIVE COVENANTS

Without the prior written consent of the holders of the Majority Purchasers, the Company agrees that after the date hereof and for the benefit of each Purchaser:

7.1 Transactions with Affiliates. The Company and each Subsidiary will not enter into any material transactions with any Affiliate, except where such transaction is on terms which are, to the Company or such Subsidiary, no less favorable than terms that could be obtained by the Company or such Subsidiary from a Person that is not an Affiliate of the Company upon negotiation at arm’s length, as determined in good faith by the Board of Directors of the Company.

7.2 Prohibition on Floating Conversion Rate Equity Offerings; Registration Rights.

(a) Except with respect to equity securities that may be issuable upon the exercise or conversion of Derivative Securities (as defined below) outstanding as of the Closing Date, the Company agrees that it will not issue any of its equity securities (or securities convertible into or exchangeable or exercisable for equity securities (the “Derivative Securities”)) for which the conversion price at the time of conversion is based on a floating rate (such as a percentage of the Company’s Closing Bid Price over a Trading Day average calculated from time to time).

(b) Except with respect to equity securities that may be issuable upon the exercise or conversion of Derivative Securities outstanding as of the Closing Date, the Company agrees it will not issue any of its equity securities (or Derivative Securities), unless such securities are “restricted securities.” As used herein, “restricted securities” shall mean securities that may not be sold publicly or otherwise Transferred (except in a private transaction) prior to 12 months following the date of issuance of such securities.

(c) The restrictions contained in this Section 7.2 shall not apply to the issuance by the Company of (or the agreement to issue) Common Stock or Derivative Securities in connection with (i) the acquisition (including by merger) of a business or of assets contemplated or otherwise permitted under this Agreement, or (ii) stock option or other compensatory plans.

7.3 Limitation on Stock Repurchases. Except as otherwise set forth in the Certificate of Designation (as the some may be amended, supplemented, restated or otherwise modified from time to

time in accordance with Delaware law and the provisions of the Company Corporate Documents) and the Warrants, the Company shall not redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) any shares of capital stock of the Company or any warrants, rights or options to purchase or acquire any such shares, except that the Company may redeem, repurchase or otherwise acquire any shares of capital stock of the Company from (i) any terminated employee or consultant of the Company; or (ii) any holder of a warrant (or replacement thereof) originally issued to a holder of Preferred Stock, pursuant to such terms and conditions as were contained in such warrant when issued to such holder of Preferred Stock, or (iii) any future investors acquiring Derivative Securities (“Future Investors”) which have redemption rights (provided, if any such rights are so granted to such Future Investors, then each Purchasers shall automatically, and without further action, be deemed to have been granted identical redemption rights as the Future Investors, on a pari passu basis, with respect to such Purchasers’ shares of Preferred Stock).

OTHER AGREEMENTS

8.1 Registration Rights. The Preferred Shares shall have the registration rights set forth in the Registration Rights Agreement, attached as Exhibit C hereto.

8.2 Reverse Stock Split. The Purchasers and the Company acknowledge that the Company is contemplating a reverse stock split at a future date, and that the holders of more than fifty percent (50%) of the then outstanding shares of Preferred Stock shall have the right to approve any reverse stock split of the Company that is approved and authorized by the Board of Directors and thereafter submitted to the stockholders of the Company for a vote (whether at a meeting, by proxy or by written consent).

8.3 Use of Proceeds. The Company shall use the proceeds received from the issuance of the Preferred Shares for working capital and other general corporate purposes as determined in the discretion of the Board of Directors of the Company, including, without limitation, to repay certain existing indebtedness of the Company reflected in the SEC Reports (other than any indebtedness satisfied in exchange for Preferred Shares at the Closing), transaction costs and expenses, accounts payable of the Company, consummation of the Merger, and future potential acquisitions and related transactions as described in the Offering Materials.

8.4 Right of First Offer. The Company shall offer to the Purchasers, from time to time, a right of first offer to participate in any Qualified Future Financing (as contemplated by Section 2.6 above), in addition to, and not in lieu of, the rights afforded to the Purchasers under Section 2.6 above and in the Certificate of Designation associated with such Qualified Future Financing. In addition thereto, and not in lieu thereof, such right of first offer shall also apply in the event the Company offers to consummate any debt or equity financing (including the issuance of securities exercisable or convertible into securities of the Company) from and after the expiration of the Qualified Future Financing (i.e., after the Company raises $15,000,000 in capital in the aggregate, including the Preferred Shares issued at the Closing), which, by its terms, would result in the Purchasers being afforded a reduction to their Conversion Price as contemplated by Section 4(g) of the Certificate of Designation (i.e., issuances below the Conversion Price specified by the terms of the Certificate of Designation) (and any exercise of such right shall not otherwise diminish the Purchasers’ rights to adjust the Conversion Price under the Certificate of Designation). If the terms of this Section 8.4 shall conflict with, or otherwise fail to comport with, the terms of any other agreement regarding the subject matter hereof to

which the Company is a party, the provisions of this Section 8.4 shall control. The Majority Purchasers may waive any right set forth in this Section 8.4 (or shorten the 20-day time period) with respect to any particular transaction, by written notice to the Company.

MISCELLANEOUS

9.1 Notices. All notices, demands and other communications to any party hereunder shall be in writing (including telecopier or similar writing) and shall be given to such party at its address set forth on the signature pages hereof, or such other address as such party may hereafter specify for the purpose to the other parties. Each such notice, demand or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified on the signature page hereof, (ii) if given by mail, 4 days after such communication is deposited in the mail with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address specified in or pursuant to this Section 9.1.

9.2 No Waivers; Amendments.

(a) No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

(b) Unless specifically noted to the contrary, any provision of this Agreement may be amended, supplemented or waived after the Closing if, but only if, such amendment, supplement or waiver is in writing and is signed by the Company and the Majority Purchasers.

9.3 Indemnification.

(a) The Company agrees to indemnify and hold harmless each Purchaser, its respective Affiliates, and each Person, if any, who controls such Purchaser, or any of its respective Affiliates, and the respective partners, agents, employees, officers and Directors of such Purchaser, their Affiliates and any such Controlling Person (each an “Indemnified Party”) and collectively, the “Indemnified Parties”), from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation and as incurred, reasonable costs of investigating, preparing or defending any such claim or action, whether or not such Indemnified Party is a party thereto, provided that the Company shall not be obligated to advance such costs to any Indemnified Party unless it has received from such Indemnified Party an undertaking to repay to the Company the costs so advanced if it should be determined by final judgment of a court of competent jurisdiction that such Indemnified Party was not entitled to indemnification hereunder with respect to such costs) which may be incurred by such Indemnified Party in connection with any administrative or judicial proceeding brought or threatened that relates to or arises out of, or is in connection with a breach of any of the Company’s representations and warranties or covenants contained herein; provided that the Company will not be responsible for any claims, liabilities, losses, damages or expenses that are determined by final judgment of a court of competent jurisdiction to result from such Indemnified Party’s negligence, willful misconduct or bad faith.

(b) If any action shall be brought against an Indemnified Party with respect to which indemnity may be sought against the Company under this Agreement, such Indemnified Party shall promptly notify the Company in writing and the Company, at its option, may, assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party and payment of all reasonable fees and expenses. The failure to so notify the Company shall not affect any obligations the Company may have to such Indemnified Party under this Agreement or otherwise unless the Company is materially adversely affected by such failure. Such Indemnified Party shall have the right to employ separate counsel in such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the Company has failed to assume the defense and employ counsel or (ii) the named parties to any such action (including any impleaded parties) include such Indemnified Party and the Company, and such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Company, in which case, if such Indemnified Party notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Party; provided, however, that the Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the reasonable fees and expenses of more than one such firm of separate counsel, in addition to any local counsel, which counsel shall be designated by the applicable Purchaser(s). The Company shall not be liable for any settlement of any such action effected without the written consent of the Company (which shall not be unreasonably withheld) and the Company agrees to indemnify and hold harmless each Indemnified Party from and against any loss or liability by reason of settlement of any action effected with the consent of the Company. In addition, the Company will not, without the prior written consent of the applicable Purchaser(s), settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in respect to which indemnification or contribution may be sought hereunder (whether or not any Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination includes an express unconditional release of the applicable Purchaser(s) and the other Indemnified Parties, satisfactory in form and substance to the applicable Purchaser(s), from all liability arising out of such action, claim, suit or proceeding.

(c) The indemnification, contribution and expense reimbursement obligations set forth in this Section 8.3 (i) shall be in addition to any liability the Company may have to any Indemnified Party at common law or otherwise; (ii) shall survive the Closing Date for a period of 4 years, and (iii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Purchaser or any other Indemnified Party.

(d) Each Purchaser acknowledges such Purchaser’s understanding of the representations, warranties and covenants set forth herein and that the Company relied upon such representations, covenants and warranties and each Purchaser agrees to indemnify, defend and save harmless the Company, its directors, officers, agents and employees, and each of them, from and against any and all loss, liability, claim, damage and expense (including, but not limited to, any and all expenses reasonably incurred in investigating, preparing or defending

against any litigation commenced or threatened or any claim whatsoever), arising out of or based upon any false representation or warranty or breach or failure by such Purchaser to comply with any covenant or agreement made by such Purchaser herein or in any other document furnished by such Purchaser to any of the foregoing in connection with such Purchaser’s investment in the Securities.

9.4 Expenses. Except for a fee to be paid to Global Capital Advisors, Ltd., in the amount of $5,000 for out-of-pocket expenses in connection with the issuances described herein, the parties hereto shall each bear their own legal, financial and other expenses incurred in relation to the execution of this Agreement and the related transactions thereto. The referenced fee to Global Capital Advisors, Ltd., will be paid promptly upon Closing.

9.5 Successors and Assigns. This Agreement shall be binding upon the Company and each Purchaser and its respective successors and assigns; neither the Company nor any Purchaser may transfer or assign this Agreement or any right, title or interest in, to or under this Agreement without the prior written consent of the other applicable party, and any attempted assignment without such consent shall be void and without further force or effect.

9.6 Governing Law. This Agreement shall be governed by and controlled in accordance with the laws substantive of the State of Texas without regard to conflict of law provisions.

9.7 Entire Agreement. This Agreement, the Exhibits or Schedules hereto, which include, but are not limited to the Certificate of Designation and the Registration Rights Agreement set forth the entire agreement and understanding of the parties relating to the subject matter hereof and supercedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written relating to the subject matter hereof. The terms and conditions of all Exhibits and Schedules to this Agreement are incorporated herein by this reference and shall constitute part of this Agreement as is fully set forth herein.

9.8 Survival; Severability. All representations, warranties, covenants, acknowledgments and agreements contained herein shall survive (a) changes in the transactions, documents and instruments described in the Offering Materials, (b) the acceptance of this Agreement and the Closing and the delivery of the Securities and the Conversion Shares, and (c) with respect to any Purchaser, the death, disability, incompetency, termination, bankruptcy, insolvency or dissolution of such Purchaser. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

9.9 Title and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

9.10 Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement and all Exhibits shall be Bloomberg, or any successor thereto. The

written mutual consent of the holders of more than fifty percent (50%) of the then outstanding shares of Preferred Stock and the Company shall be required to employ any other reporting entity.

9.11 Confidentiality. Each Purchaser acknowledges that certain of the information provided to such Purchaser is confidential and non-public and agrees that all such information shall be kept in confidence by such Purchaser and neither used by such Purchaser to such Purchaser’s personal benefit (other than in connection with this Agreement) nor disclosed to any Person not a party to this Agreement for any reason; provided, that this obligation shall not apply to any such information which (i) is or becomes part of the public knowledge or literature and readily accessible (except as a result of violation of any confidentiality agreements); or (ii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements including, but not limited to, any Agreement they may have with the Company).

9.12 Powers and Remedies Cumulative. No right or remedy herein conferred upon or reserved to Purchaser is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Every power and remedy given by the Preferred Shares or by law may be exercised from time to time, and as often as shall be deemed expedient, by Purchaser.

(Signature page follows)

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

AXTIVE CORPORATION

By:		/s/ DAVID N. PILOTTE
Name:		David N. Pilotte
Title:		Executive Vice President, Chief Financial Officer and Secretary

Address: 1445 Ross Avenue, Suite 4500 Dallas, Texas 75202 Fax: 214-397-0228 Tel.: 214-397-0200

PURCHASERS:

DEMAND AGGREGATION SOLUTIONS, LLC,

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

¨ a trust, with total assets in excess of $5.0 million, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in the Securities Act; or

¨ a corporation or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5.0 million; or

x otherwise an Accredited Investor as defined in Section 501(a) of Regulation D as adopted by the Securities and Exchange Commission

Address: 1445 Ross Avenue, Suite 4500

Dallas, Texas 75202

Fax: 214-397-0228

Tel.: 214-397-0200


By:		/s/ RON BENEKE
Name:		Ron Beneke, Member of the Management Committee of DAS, and Acknowledging the “accredited investor” status of each of the members of DAS other than Axtive Corporation

BEACHUM INVESTMENTS, LLC,

a Texas limited liability company

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

¨ a corporation or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5.0 million; or

x otherwise an Accredited Investor as defined in Section 501(a) of Regulation D as adopted by the Securities and Exchange Commission

Address:

4209 Lakeside Drive

Dallas, Texas 75219-2301

Fax: 214 999 3574

Tel.: 214 999 4574


By:		IPL Management Company, a Texas corporation, its Manager

By:		/s/ W. ROBERT DYER, JR.
Name:		W. Robert Dyer, Jr., President of IPL Management Company and Acknowledging the “accredited investor” status of each of the members of Beachum Investments, LLC

SANDERA PARTNERS, L.P.,

a Texas limited partnership

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

¨ a corporation or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5.0 million; or

x otherwise an Accredited Investor as defined in Section 501(a) of Regulation D as adopted by the Securities and Exchange Commission

Address: 1601 Elm Street, Suite 4000 Dallas, Texas 75201 Fax: 214-720-1612 Tel.: 214-720-1600	By:	Sandera Capital Management, L.P., its sole general partner
		By:	Sandera Capital, L.L.C., its sole general partner
		By:	/s/ J. KEITH BENEDICT
		Name:	J. Keith Benedict
		Title:	Vice President

GCA STRATEGIC INVESTMENT FUND LIMITED,

a Bermuda corporation

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

¨ a corporation or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5.0 million; or

x otherwise an Accredited Investor as defined in Section 501(a) of Regulation D as adopted by the Securities and Exchange Commission

Address:

227 King Street

Frederiksted, St. Croix, USVI 00840

Attn:		Lewis N. Lester
Fax:		340-719-3974
Tel.:		340-772-7772


By:		/s/ LEWIS N. LESTOR
Name:		Lewis N. Lester
Title:		Director

/s/ KERRY OSBORNE

Kerry Osborne

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

¨ a natural person who has an individual net worth, or joint net worth with that person’s spouse, of more than $1,000,000; or

x a natural person who individually had actual income in excess of $200,000 in each of the two most recent years and who reasonably expects income in excess of $200,000 in the current year; or is a natural person who, jointly with such person’s spouse, had income in excess of $300,000 in each of the two most recent years and who reasonably expects joint income in excess of $300,000 in the current year; or

¨ a director or executive officer of the Company

Address:		853 Shady Lane
		Southlake, TX 76092

Fax: 972 490 9439

Tel.: 817 481 5152

/s/ GRAHAM C. BEACHUM III

Graham C. Beachum III

(check applicable box to specify nature of representation and warranty contained in Section 4.4)

x a natural person who has an individual net worth, or joint net worth with that person’s spouse, of more than $1,000,000; or

¨ a natural person who individually had actual income in excess of $200,000 in each of the two most recent years and who reasonably expects income in excess of $200,000 in the current year; or is a natural person who, jointly with such person’s spouse, had income in excess of $300,000 in each of the two most recent years and who reasonably expects joint income in excess of $300,000 in the current year; or

x a director or executive officer of the Company

Address:		8409 Pickwick Lane, #240
		Dallas, Texas 75225

Fax: (214) 722-0194

Tel.: (214) 219-3525

AFFIRMED AND AGREED,

SOLELY WITH RESPECT TO

THE SUBJECT MATTER CONTAINED IN SECTION 2.3:

ESCROW AGENT:

GARDERE WYNNE SEWELL LLP


By:		/s/ RANDALL G. RAY
Name:		Randall G. Ray, Partner

LIST OF EXHIBITS

Exhibit A - First Restated Certificate of Designation

Exhibit B - Form of Warrant

Exhibit C - Registration Rights Agreement

SCHEDULE I

to Subscription and Securities Purchase Agreement

Purchaser	Number of Preferred Shares to be Purchased	Aggregate Purchase Price	Non-Cash Consideration	Number of Warrant Shares

Demand Aggregation Solutions, LLC	1,200	$1,200,000	N/A	2,400,000

Beachum Investments, LLC	360	$360,000	N/A	720,000

Sandera Partners, L.P.	250	$250,000	Discharge of Indebtedness in favor of Sandera Partners, L.P., equal to $19,072.00	500,000

GCA Strategic Investment Fund Limited	250	$250,000	N/A	500,000

Kerry Osborne	150	$150,000	N/A	300,000

G.C. Beachum III	125	$125,000	Discharge of Indebtedness in favor of Graham Beachum III equal to $65,171.00	250,000

G.C. Beachum III	50 (to be issued upon payment as described herein)	$50,000	Written Subscription for 50 Shares of Preferred Stock and commitment to pay the Company $50,000 for same within 45 days after Closing	100,000 (to be issued upon payment as described herein)

Totals	2,385	$2,385,000	Aggregate Discharge of Company Indebtedness in lieu of cash consideration equal to $84,243.00	4,770,000

EX-4 4 dex4.htm SUBSCRIPTION AGREEMENT Subscription Agreement

Exhibit 4

AXTIVE CORPORATION

SUBSCRIPTION AGREEMENT

Axtive Corporation

1445 Ross Avenue, Suite 4500

Dallas, Texas 75202

Dated: May 22, 2003

The undersigned purchaser (“Purchaser”) hereby irrevocably subscribes for fifty (50) shares of the Series A Convertible Preferred Stock, par value $0.01 per share (the “Subscribed Shares”), of Axtive Corporation, a Delaware corporation (the “Company”), for a purchase price per share of $1,000, or an aggregate purchase price of $50,000 (the “Purchase Price”).

Purchaser hereby agrees with and covenants to the Company that Purchaser shall deliver the Purchase Price, in cash in full, to the Company on or before 45 days after the date of this Subscription Agreement (such 45-day period being hereinafter referred to as the “Subscription Period”).

The Company hereby agrees with and covenants to the Purchaser that, unless this subscription shall be rejected by the Company in accordance with the terms hereof, upon Purchaser’s payment of the Purchase Price in accordance with the terms of this Agreement the Purchaser shall be entitled to receive from the Company (i) a duly executed certificate representing the Subscribed Shares and (ii) as additional consideration for, and as an inducement to, the Purchaser’s purchase of the Subscribed Shares, a duly executed warrant exercisable for 100,000 shares of the Company’s common stock, par value $0.01 per share, at a per share exercise price of $0.20 (the “Warrant”).

Purchaser agrees that this subscription may be accepted or rejected in whole or in part by the Company in its reasonable discretion at any time during the Subscription Period, regardless whether Purchaser shall already have paid all or any portion of the Purchase Price to the Company. Upon a rejection of the subscription, the Company shall be obligated to promptly return to the Purchaser any portion of the Purchase Price already paid to the Company. This subscription may not be revoked by Purchaser except as provided by state law.

§ 1 REPRESENTATIONS, WARRANTIES AND COVENANTS

Purchaser makes the following representations, acknowledgments, warranties and covenants in order to permit the Company to determine his suitability as a purchaser of the Subscribed Shares and the Warrant (including any securities into which the Subscribed Shares may be convertible or exercisable, the “Securities”) and to determine that the exemption from registration relied upon by the Company under Regulation D of the United States Securities Act of 1933, as amended (the “Securities Act”) is available to it.

(a) Purchaser has received and has read, understands and is fully familiar with the Offering Materials provided to the Purchaser by the Company (including the Company’s periodic filings and other documents filed with the Securities and Exchange Commission available at www.sec.gov. Purchaser has received adequate information concerning all matters that he considers material to a decision to invest in the Company. The Purchaser covenants to the Company that he will read and use all best efforts to familiarize himself with all such forms, reports and other documents filed by the Company, including those that may be filed between the execution of this Subscription Agreement until the Purchaser’s payment of the Purchase Price and the issuance to the Purchaser of the Securities.

(b) The Securities will be acquired solely by and for Purchaser’s account, for investment, and not for resale or distribution. Purchaser’s financial condition is such that he has no need for liquidity with respect to this investment and no need to dispose of any portion of the Securities to satisfy any existing or contemplated undertaking or indebtedness.

(c) Purchaser has such knowledge and experience in financial, investment and business matters that he is capable of evaluating the merits and risks of this investment, without the assistance of an adviser.

§ 2 ACCREDITED INVESTOR STATUS

Purchaser understands that the Securities may be bought only by persons who are “accredited investors” as defined in Regulation D of the Securities Act. Purchaser represents that he is an accredited investor because he meets one or more of the accredited investor categories set forth below, and that he has initialed each category that applies to him:

GCB (a)

An individual whose net worth, or joint net worth with the individual’s spouse, exceeds $1,000,000 as of the date of this Agreement.

GCB (b)

An individual whose individual gross income exceeded $200,000 in each of the two most recent calendar years, or whose joint gross income with the individual’s spouse exceeded $300,000 in each of the two most recent calendar years and, in either case, the person has reasonable expectation of his single or joint gross income, respectively, reaching the same level in the current year.

GCB (c)

A director or executive officer of the Company.

§ 3 INDEMNIFICATION

Purchaser shall indemnify the Company, its officers, directors, stockholders, employees, affiliates or agents from and against any loss, damage, liability or expense (including reasonable attorneys’ fees and expenses) they incur as a result of Purchaser’s breach of any representation or

covenant herein. This indemnification shall survive Purchasers death, disability or disposition of the Securities.

§ 4 MISCELLANEOUS

All information provided by Purchaser herein is accurate and complete as of the date hereof and shall be accurate and complete on such date as the Purchaser shall have paid the Purchase Price in full, unless Purchaser has advised the Company of any such inaccuracy or incompleteness, and may be relied upon by the Company and its agents. Purchaser agrees to notify the Company of any material change in such information occurring prior to payment of the Purchase Price. This Agreement shall be binding upon Purchaser’s heirs, executors, administrators and other successors. This Agreement shall be construed under and governed by the internal laws of the State of Texas.

This subscription may be accepted or rejected by the Company in whole or in part, in its reasonable discretion. If accepted, the Securities will be issued only in the name of the Purchaser. This Agreement and any documents submitted herewith shall survive: (a) non-material changes in the transactions, documents and instruments described in the offering materials provided to the Purchaser by the Company; (b) Purchaser’s death or disability; and (c) the acceptance of this subscription by the Company.

PURCHASER:

/s/ GRAHAM C. BEACHUM III		Date: May 22, 2003
Graham C. Beachum III

BY SIGNING HERE AND DELIVERING THIS DOCUMENT TO THE COMPANY OR ITS AGENT, YOU ARE AGREEING TO BE LEGALLY BOUND BY THIS SUBSCRIPTION AGREEMENT.

AGREED AND ACCEPTED as of the date set forth below:

AXTIVE CORPORATION

By:		/s/ DAVID N. PILOTTE
Name:		David N. Pilotte
Title:		Executive Vice President, Chief Financial Officer and Secretary

EX-5 5 dex5.htm WARRANT TO PURCHASE COMMON STOCK Warrant to Purchase Common Stock

Exhibit 5

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAW, AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.

WARRANT

To Purchase Common Stock of

AXTIVE CORPORATION

a Delaware corporation formerly known as

Edge Technology Group, Inc.

1. Issuance. This Warrant, dated as of May 23, 2003 (the “Issuance Date”), is issued to Graham C. Beachum III, an individual resident of Texas (“Beachum III”), by Axtive Corporation, a Delaware corporation formerly known as Edge Technology Group, Inc. (hereinafter with its successors called the “Company”). The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange herefor or therefor as provided herein.

2. Exercise of Warrant.

(a) Exercise Price; Number of Shares. This Warrant represents the right to purchase from the Company TWO HUNDRED FIFTY THOUSAND (250,000) shares (the “Warrant Shares”) of the Company’s common stock, $0.01 par value (“Common Stock”), at an initial exercise price of Twenty Cents ($0.20) per share (the “Exercise Price”). Until such time as this Warrant is exercised in full or expires, the Exercise Price and the Warrant Shares are subject to adjustments pursuant to the procedures described in Section 8 below.

(b) Exercise Procedure. Subject to the terms and conditions of this Warrant, the registered holder of this Warrant (the “Holder”), is entitled to exercise this Warrant during the Exercise Period, in whole or in part, upon surrender of this Warrant together with payment of the Exercise Price and delivery of the subscription form (as annexed hereto as Addendum A, the “Subscription Form”) duly executed, to be presented at the office of the Company, 1445 Ross Avenue, Suite 4500, Dallas, Texas 75202, or such other office in the United States as the Company shall notify the Holder of in writing.

(c) Exercise Period. This Warrant may be exercised at any time after the second anniversary of the Issuance Date until the earlier of (i) the fourth anniversary of the Issuance Date or (ii) the date of a Deemed Liquidation, as defined below (the “Exercise Period”); provided, however, that the Company shall not effect a Deemed Liquidation without compliance with the provisions of Section 2(d) below.

(d) Deemed Liquidation. For purposes of this Warrant, a “Deemed Liquidation” shall mean (i) any liquidation, dissolution or winding up of the Company, (ii) any sale, conveyance or disposition of all or substantially all of its property or business, (iii) any merger or consolidation with any other corporation or entity (other than a wholly owned subsidiary) or (iv) any other transaction or series of related transactions in which more than fifty percent (50%) of

the voting power of the Company will not immediately after such acquisition or transaction be held by the company’s stockholders of record as constituted immediately prior to such acquisition or transaction, provided that a merger effected exclusively for the purpose of changing the domicile of the Company shall not constitute a Deemed Liquidation.

(i) Notice of Transaction. The Company shall give each Holder written notice of a Deemed Liquidation (a “Notice of Liquidation Event”) not later than 10 days prior to the stockholders’ meeting called to approve such transaction, or 10 days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2(d), and the Company shall thereafter give such Holders prompt notice of any material changes. The transaction shall in no event take place sooner than 10 days after the Company has given the first notice provided for herein or sooner than 5 days after the Company has given notice of any material changes provided for herein; provided, however, that such periods may be shortened upon the written consent of all of the Holders.

(ii) Effect of Noncompliance. In the event the requirements of this Section 2(d) are not complied with, the Company shall forthwith either cause the closing of the transaction to be postponed until such requirements have been complied with, or cancel such transaction.

(iii) Election to Exercise. Upon receipt of a Notice of Liquidation Event, the Holder shall have the right to elect to exercise this Warrant, in whole or in part, as provided for in this Section 2, notwithstanding the prohibition on exercise prior to the second anniversary of the Issuance Date set forth in Section 2(c) above.

3. Payment of Exercise Price. The Holder may make payment of the Exercise Price in cash or by certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to the account of the Company.

4. Cashless Exercise of Warrants.

(a) Notwithstanding the provisions of Section 3 above, if the Fair Market Value is greater than the Exercise Price (at the date of calculation, as set forth below), in lieu of exercising the Warrant as permitted in Section 2.1(b), the Holder may elect to receive shares of Common Stock equal to the value (as determined below) of the Warrant (or the portion thereof being canceled) by surrender of the Warrant, together with the Subscription Form duly executed, to the Company at its office referred to in Section 2(b) hereof, in which event the Company shall issue to the Holder that number of shares of Common Stock computed using the following formula:

CS = WCS x (FMV - EP)

FMV

Warrant—Page 2

Where:

CS equals the number of shares of Common Stock to be issued to the holder of the Warrant;

WCS equals the number of shares of Common Stock purchasable under the Warrant being exercised (at the date of such calculation);

FMV equals the Fair Market Value of one share of the Common Stock (at the date of such calculation); and

EP equals the Exercise Price (as adjusted to the date of such calculation).

(b) For purposes of Rule 144 under the Securities Act, 17 C.F.R. ss. 230.144, as amended, the parties hereto agree that the exercise of this Warrant in accordance with this Section 2.2 shall be deemed to be a conversion of such Warrant, pursuant to the terms of this Warrant, into Common Stock.

(c) For purposes of this Section 4, “Fair Market Value” shall mean with respect to every share of Common Stock on any date in question (i) the average of the closing bid prices per share of the Common Stock for the previous 15 consecutive trading days (A) on the principal securities exchange or trading market where the Common Stock is listed or traded or, if the foregoing does not apply, (B) in the over-the-counter market on the electronic bulletin board for the Common Stock or (ii), if, and only if, no trading price is reported for the Common Stock, then its Fair Market Value shall be as determined, in good faith by the board of directors of the Company. If the Holder shall object in writing within 5 days of notification of the determination of the Company’s board of directors, then the Fair Market Value shall be determined by an investment banking firm or appraisal firm (which firm shall own no securities of, and shall not be an affiliate, subsidiary or a related person of, the Company or any Holder) of recognized national standing retained by the Company and acceptable to the Holder.

5. Partial Exercise. This Warrant may be exercised in part, and the Holder shall be entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of Warrant Shares in respect of which this Warrant shall not have been exercised.

6. Issuance Date. The person or persons in whose name or names any certificate representing Warrant Shares is issued hereunder shall be deemed to have become the holders of record of such shares represented thereby as at the close of business on the date this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company shall be closed. As soon as practicable after the exercise of this Warrant, the Company at its expense (including the payment of any applicable taxes) will use its best lawful efforts to cause the Company’s transfer agent to issue and deliver to Holder a certificate for the number of fully paid nonassessable shares of Common Stock to which such Holder is entitled.

7. Reserved Shares; Valid Issuance. The Company covenants that it will reserve and keep available at all times from and after the date hereof such number of its authorized shares of Common

Warrant—Page 3

Stock, free from all preemptive or similar rights therein, as will be sufficient to permit the exercise of this Warrant in full. The Company further covenants that such shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

8. Adjustment Provision.

(a) Subdivisions, Split-ups, Combinations and Stock Dividends. If after the Issuance Date the Company shall subdivide the Common Stock, by split up or otherwise, or combine such shares, or issue additional shares in payment of a stock dividend on such shares, the number of shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination, and the Exercise Price shall forthwith be proportionately decreased in the case of a subdivision or stock dividend, or proportionately increased in the case of a combination.

(b) Reclassifications. If after the Issuance Date there shall be any reclassification, capital reorganization or change of the Common Stock (other than as a result of a subdivision, combination or stock dividend provided for in Section 8 (a) hereof), then, as a condition of such reclassification, reorganization or change, lawful provisions shall be made, and duly executed documents evidencing the same from the Company shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a total price not to exceed that payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization or change, by holders of the number of shares of Common Stock which might have been purchased by the Holder immediately prior to such reclassification, reorganization or change, and in such case appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including, without limitation, provisions for the adjustment of the Exercise Price and the number of shares issuable hereunder) shall thereafter be applicable in relation to any shares of stock or other securities and property thereafter deliverable upon exercise hereof.

9. Fractional Shares. In no event shall any fractional share of Common Stock be issued upon any exercise of this Warrant and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share.

10. Certificate of Adjustment. Whenever the Exercise Price or the number of shares issuable hereunder is adjusted, as herein provided, the Company shall promptly deliver to the Holder a certificate of the Company’s Chief Financial Officer setting forth the number of shares issuable hereunder and the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

11. Notices of Record Date. In the event of:

(a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right,

Warrant—Page 4

(b) any reclassification of the capital stock of the Company, capital reorganization of the Company, or

(c) any transaction which would constitute a Deemed Liquidation, then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reclassification, reorganization, conveyance or Deemed Liquidation is to take place, and the time, if any is to be fixed, as of which the holders of record in respect of such event are to be determined. Such notice shall be mailed at least 10 days prior to the date specified in such notice on which any such action is to be taken.

12. Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the Holder.

13. Warrant Register; Transfers.

(a) The Company will maintain a register containing the names and addresses of the registered holders of the Warrants. The Holder may change his or its address as shown on the warrant register by written notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder may be given by certified mail or delivered to the Holder at his or its address as shown on the warrant register.

(b) Subject to compliance with applicable federal and state securities laws, this Warrant may be transferred by the Holder with respect to any or all of the Warrant Shares purchasable hereunder. Upon surrender of this Warrant to the Company, together with the assignment hereof (in form substantially similar to Addendum B annexed hereto) properly endorsed for transfer of this Warrant as an entirety by the Holder, the Company shall issue a new warrant of the same denomination to the assignee. Upon surrender of this Warrant to the Company, together with the assignment hereof properly endorsed by the Holder for transfer with respect to a portion of the Warrant Shares purchasable hereunder, the Company shall issue a new warrant to the assignee, in such denomination as shall be requested by the Holder hereof, and shall issue to such Holder a new warrant covering the number of shares in respect of which this Warrant shall not have been transferred.

(c) In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft or destruction of such Warrant (including a reasonably detailed affidavit with respect to the circumstances of any loss, theft or destruction) and of indemnity reasonably satisfactory to the Company.

14. No Impairment. The Company will not, by amendment of its Charter or by-laws or through any reclassification, capital reorganization, consolidation, merger, sale or conveyance of assets, dissolution, liquidation, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith

Warrant—Page 5

assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder.

15. Governing Law. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of State of Texas, without giving effect to principles of conflicts law.

16. Successors and Assigns. This Warrant shall be binding upon the Company’s successors and assigns and shall inure to the benefit of each of the Holder’s successors, legal representatives and permitted assigns.

[Remainder of Page Intentionally Left Blank]

Warrant—Page 6

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as an instrument under seal by its duly authorized officer as of the date first above written.

AXTIVE CORPORATION

By:		/s/ GRAHAM C. BEACHUM II
		Graham C. Beachum II President and Chief Executive Officer

Attest:

/s/ David N. Pilotte

David N. Pilotte, Secretary

Warrant—Page 7

ADDENDUM A

(Form of Subscription)

Date:

The undersigned hereby subscribes for:

shares of Common Stock covered by that certain Warrant issued by Axtive Corporation, dated , to the undersigned.

The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

Signature

Name for Registration

Mailing Address

Warrant—Page 8

ADDENDUM B

(Form of Assignment)

For value received hereby sells, assigns and transfers unto

(Please print or typewrite name and address of Assignee)

the within Warrant, and does hereby irrevocably constitute and appoint its attorney to transfer the within Warrant on the books of the within named Company with full power of substitution in the premises.

Dated:

In the Presence of:

Warrant—Page 9

EX-6 6 dex6.htm WARRANT TO PURCHASE COMMON STOCK Warrant to Purchase Common Stock

Exhibit 6

WARRANT

To Purchase Common Stock of

AXTIVE CORPORATION

a Delaware corporation formerly known as

Edge Technology Group, Inc.

1. Issuance. This Warrant, dated as of May 23, 2003 (the “Issuance Date”), is issued to Beachum Investments, LLC, a Texas limited liability company (“Beachum”), by Axtive Corporation, a Delaware corporation formerly known as Edge Technology Group, Inc. (hereinafter with its successors called the “Company”). The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange herefor or therefor as provided herein.

2. Exercise of Warrant.

(a) Exercise Price; Number of Shares. This Warrant represents the right to purchase from the Company SEVEN HUNDRED TWENTY THOUSAND (720,000) shares (the “Warrant Shares”) of the Company’s common stock, $0.01 par value (“Common Stock”), at an initial exercise price of Twenty Cents ($0.20) per share (the “Exercise Price”). Until such time as this Warrant is exercised in full or expires, the Exercise Price and the Warrant Shares are subject to adjustments pursuant to the procedures described in Section 8 below.

4. Cashless Exercise of Warrants.

CS = WCS x (FMV - EP)

FMV

Warrant—Page 2

Where:

CS equals the number of shares of Common Stock to be issued to the holder of the Warrant;

WCS equals the number of shares of Common Stock purchasable under the Warrant being exercised (at the date of such calculation);

FMV equals the Fair Market Value of one share of the Common Stock (at the date of such calculation); and

EP equals the Exercise Price (as adjusted to the date of such calculation).

7. Reserved Shares; Valid Issuance. The Company covenants that it will reserve and keep available at all times from and after the date hereof such number of its authorized shares of Common

Warrant—Page 3

8. Adjustment Provision.

11. Notices of Record Date. In the event of:

Warrant—Page 4

(b) any reclassification of the capital stock of the Company, capital reorganization of the Company, or

12. Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the Holder.

13. Warrant Register; Transfers.

Warrant—Page 5

assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder.

[Remainder of Page Intentionally Left Blank]

Warrant—Page 6

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as an instrument under seal by its duly authorized officer as of the date first above written.

AXTIVE CORPORATION

By:		/s/ GRAHAM C. BEACHUM II
		Graham C. Beachum II President and Chief Executive Officer

Attest:

/s/ DAVID N. PILOTTE

David N. Pilotte, Secretary

Warrant—Page 7

ADDENDUM A

(Form of Subscription)

Date:

The undersigned hereby subscribes for:

shares of Common Stock covered by that certain Warrant issued by Axtive Corporation, dated , to the undersigned.

The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

Signature

Name for Registration

Mailing Address

Warrant—Page 8

ADDENDUM B

(Form of Assignment)

For value received hereby sells, assigns and transfers unto

(Please print or typewrite name and address of Assignee)

Dated:

In the Presence of:

Warrant—Page 9

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