Lease Agreement - C2 GLOBAL TECHNOLOGIES INC - 8-20-2001 by COBT-Agreements

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									Exhibit 10.4

LEASE AGREEMENT No. This LEASE AGREEMENT, is effective on June 2, 2001 between TELECOMMUNICATIONS FINANCE GROUP OF SIEMENS CARRIER NETWORKS LLC (hereinafter "Lessor"), and WORLDXCHANGE CORP., a Delaware corporation with its principal office located at 9775 Business Park Avenue, San Diego, California 92131, (hereinafter "Lessee"). 1. LEASE. Lessor, subject to the conditions set forth in Section 25 hereof, agrees to lease to Lessee and Lessee agrees to lease from Lessor hereunder, those items of personal property (the "equipment") which are described on the schedule(s) attached to the Certificate(s) of Delivery and Acceptance (hereinafter "Schedule") and amendments to such Schedule. Lessee agrees to execute and deliver to Lessor a Certificate of Delivery and Acceptance immediately after Acceptance of the equipment, and such execution shall constitute Lessee's irrevocable acceptance of such items of equipment for all purposes of this Lease. 2. DEFINITIONS. "ACCEPTANCE" shall mean that point in time when the equipment installation personnel complete testing of the equipment and Lessee concurs that the installation effort is complete, or when the equipment is placed into service, whichever first occurs. "AMORTIZATION DEDUCTIONS" as defined in Section 11 (b) (i) hereof. "APPRAISAL PROCEDURE" shall mean the following procedure for determining the Fair Market Sale Value of any item of equipment. If either Lessor or Lessee shall request by notice (the "Appraisal Request") to the other that such value be determined by the Appraisal Procedure, (i) Lessor and Lessee shall, within 15 days after the Appraisal Request, appoint an independent appraiser mutually satisfactory to them, or (ii) if the parties are unable to agree on a mutually acceptable appraiser within such time, Lessor and Lessee shall each appoint one independent appraiser (PROVIDED that if either party hereto fails to notify the other party hereto of the identity of the independent appraiser chosen by it within 30 days after the Appraisal Request, the determination of such value shall be made by the independent appraiser chosen by such other party), and (iii) if such appraisers cannot agree on such value within 20 days after their appointment and if one appraisal is not within 5% of the other appraisal, Lessor and Lessee shall choose a third independent appraiser mutually satisfactory to them (or, if they fail to agree upon a third appraiser within 25 days after the appointment of the first two appraisers, such third independent appraiser shall within 20 days thereafter be appointed by the American Arbitration Association), and such value shall be determined by such third independent appraiser within 20 days after his appointment, after consultation with the other two independent appraisers. If the first two appraisals are within 5% of each other, then the average of the two appraisals shall be the Fair Market Sale Value. The fees and expenses of all appraisers shall be paid by Lessee. "BUSINESS DAY" shall mean a day other than a Saturday, Sunday or legal holiday under the laws of the State of Florida. "CERTIFICATE OF DELIVERY AND ACCEPTANCE" as defined in Section 1 hereof. "CODE" shall mean the Internal Revenue Code of 1954, as amended, or any comparable successor law. "COMMENCEMENT DATE" as defined in Section 3 hereof. "DEFAULT" shall mean any event or condition which after the giving of notice or lapse of time or both would become an Event of Default. "EQUIPMENT" as defined in Section 1 hereof. "EVENT OF DEFAULT" as defined in Section 18 hereof.

"EVENT OF LOSS" shall mean, with respect to any item of equipment, the actual or constructive total loss of such item of equipment or the use thereof, due to theft, destruction, damage beyond repair or rendition thereof permanently unfit for normal use from any reason whatsoever, or the condemnation, confiscation or seizure of, or requisition of title to or use of, such item of equipment. "FAIR MARKET SALE VALUE" shall, at any time with respect to any item of equipment, be equal to the sale value

of such item of equipment which would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer-user (other than a lessee currently in possession or a used equipment or scrap dealer). For purposes of Section 7(b) hereof, Fair Market Sale Value shall be determined by (i) an independent appraiser (at Lessee's expense) selected by Lessor or (ii) by the Appraisal Procedure if the Appraisal Request is made at least 90 days (but not more than 360 days) prior to the termination or expiration of the Lease Term, as the case may be, which determination shall be made (a) without deduction for any costs or expenses of dismantling or removal; and (b) on the assumption that such item of equipment is free and clear of all Liens and is in the condition and repair in which it is required to be returned pursuant to Section 7 (a) hereof but shall be no greater than 10.5% of the leased equipment value. For purposes of Section 19(c) hereof, Fair Market Sale Value shall be determined (at Lessee's expense) by an independent appraiser selected by Lessor, on an "as-is, where-is" basis, without regard to the provisions of clauses (a) and (b) above; PROVIDED that if Lessor shall have sold any item of equipment pursuant to Section 19(b) hereof prior to giving the notice referred to in Section 19(c) hereof, Fair Market Sale Value of such item of equipment shall be the net proceeds of such sale after deduction of all costs and expenses incurred by Lessor in connection therewith; PROVIDED FURTHER, that if for any reason Lessor is not able to obtain possession of any item of equipment pursuant to Section 19(a) hereof, the Fair Market Sale Value of such item of equipment shall be zero. "IMPOSITION" as defined in Section 11 (a) hereof. "INDEMNITEE" as defined in Section 17 hereof. "LATE CHARGE RATE" shall mean an interest rate per annum equal to the higher of two percent (2%) over the Reference Rate or eighteen percent (18%), but not to exceed the highest rate permitted by applicable law. "LEASE" and the terms "hereof", "herein", "hereto" and "hereunder", when used in this Lease Agreement, shall mean and include this Lease Agreement, Schedules, and Exhibits hereto as the same may from time to time be amended, modified or supplemented. "LEASE TERM" shall mean, with respect to any item of equipment, the term of the lease of such item of equipment hereunder specified in Section 3 hereof. "LESSEE" as defined in the introductory paragraph to this Lease. "LESSOR" as defined in the introductory paragraph of this Lease. "LESSOR'S VALUE" shall mean, with respect to any item of equipment and installation if applicable, the total amount set forth in the Schedule hereto. "LESSOR'S LIENS" shall mean (i) any mortgage, pledge, lien, security interest, charge, encumbrance, financing statement, title retention or any other right or claim of any person claiming through or under Lessor, not based upon or relating to ownership of the equipment or the lease thereof hereunder and (ii) any mortgage, pledge, lien, security interest, charge, encumbrance, financing statement, title retention or any other right or claim of Owner (other than Lessor) claiming through or under Lessor in connection with the transactions described in Section 21 (b) hereof. "LIENS" shall mean any mortgage, pledge, lien, security interest, charge, encumbrance, financing statement, title retention or any other right or claim of any person, other than any Lessor's Lien. "LOSS PAYMENT DATE" shall mean with respect to any item of equipment the date on which payment, as described in Section 16 (b) hereof, is made to the Lessor by the Lessee as the result of an Event of Loss with respect to such item. The Loss Payment Date shall be within ninety (90) days of the said Event of Loss. "OWNER" shall mean the entity or person having ownership interest to the equipment as contemplated by the provisions of Section 21(b) hereof and may be a person other than Lessor. "OWNER'S ECONOMICS" shall mean the after-tax yield and periodic after-tax cash flow anticipated by Owner as of the date of this Lease, in connection with the transactions contemplated by this Lease as determined

by Owner unless Lessor shall have transferred its interest in the equipment to another person as contemplated by the provisions of Section 21(b) hereof in which case "Owner's Economics" shall mean the after-tax yield and periodic after-tax cash flow anticipated by such person as of the date of the lease between such person and Lessor contemplated by said provisions, in connection with the transactions contemplated by such lease as determined by such person.

"RECOVERY DEDUCTIONS" as defined in Section 11 (b) (i) hereof. "REFERENCE RATE" shall mean the rate of interest publicly announced by Citibank, N.A. in New York, New York from time to time as its prime rate. The reference rate is not intended to be the lowest rate of interest charged by Citibank, N.A. in connection with extensions of credit to debtors. The Reference Rate shall be determined at the close of business on the 15th day of each calendar month (if the 15th day is not a Business Day, then on the first preceding Business Day) and shall become effective as of the first day of the calendar month succeeding such determination and shall continue in effect to, and including, the last day of said calendar month. "RENT PAYMENT DATE" shall mean each date on which an installment of rent is due and payable pursuant to Section 5(a) hereof. "STIPULATED LOSS VALUE" shall mean, with respect to any item of equipment, the amount determined by multiplying the Lessor's Value of such item of equipment by the percentage set forth in Schedule A hereto opposite the applicable Rent Payment Date; provided, that for purposes of Sections 16 (b) and 19 (c) hereof, any determination of Stipulated Loss Value as of a date occurring after the final Rent Payment Date with respect to such item of equipment, shall be made as of such final Rent Payment Date. "TAX BENEFITS" shall mean the right to claim such deductions, credits, and other benefits as are provided by the Code to an owner of property, including the Recovery Deductions and Amortization Deductions. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. 3. LEASE TERM. The term of the lease of the equipment hereunder shall commence on the Commencement Date specified in the Certificate of Delivery and Acceptance ("Commencement Date") and, unless earlier terminated pursuant to the provisions hereof or at law or equity, shall continue for a term of forty-eight (48) months from such Commencement Date. The Commencement Date specified in the Certificate of Delivery and Acceptance shall be the 2nd day of the month following the date on which Acceptance occurs at a site provided by Lessee in accordance with the provisions of Section 4 hereof. 4. INSTALLATION. Lessee acknowledges installation is complete. 5. RENT; UNCONDITIONAL OBLIGATIONS. (a) Lessee agrees to pay to Lessor, at the address specified in Section 24 hereof or at such other address as Lessor may specify, rent as shown in the lease payment schedule for the initial equipment, as set forth in the Schedule dated June 2, 2001, (plus applicable sales or use taxes) per month, in forty-eight (48) consecutive monthly installments, with the first installment of rent being due on the first day of the month following the Commencement Date, and succeeding installments being due on the same date of each month thereafter. In the event of any additions to the initially leased equipment, the rent for the additional equipment will be the rent as shown on the amendment to the lease payment schedule. (b) Lessee shall also pay to Lessor, after 3 days prior notice and Lessee's failure to pay, interest at the Late Charge Rate on any installment of rent and on any other amount owing hereunder which is not paid on its due date, for any period for which the same shall be overdue. Each payment made under this Lease shall be applied first to the payment of interest then owing and then to rent or other amounts owing hereunder. Interest shall be computed on the basis of a 360-day year and actual days elapsed. (c) This Lease is a net lease, and Lessee's obligation to pay all rent and all other amounts payable hereunder is ABSOLUTE AND UNCONDITIONAL under any and all circumstances and shall not be affected by any circumstances of any character whatsoever, including, without limitation, (i) any set-off, counterclaim,

recoupment, defense, abatement or reduction or any right which Lessee may have against Lessor, the manufacturer or supplier of any of the equipment or anyone else for any reason whatsoever; (ii) any defect in the title, condition, design, or operation of, or lack of fitness for use of, or any damage to, or loss of, all or any part of the equipment from any cause whatsoever; (iii) the existence of any Liens with respect to the equipment; (iv) the invalidity, unenforceability or disaffirmance of this Lease or any other document related hereto; or (v) the prohibition of or interference with the use or possession by Lessee of all or any part of the equipment, for any reason whatsoever, including without limitation, by reason of (1) claims for patent, trademark or copyright infringement; (2) present or future governmental laws,

rules or orders; (3) the insolvency, bankruptcy or reorganization of any person; and (4) any other cause whether similar or dissimilar to the foregoing, any present or future law to the contrary notwithstanding. Lessee hereby waives, to the extent permitted by applicable law, any and all rights which it may now have or which may at any time hereafter be conferred upon it, by statute or otherwise, to terminate, cancel, quit or surrender the lease of any equipment. If for any reason whatsoever this Lease or any Supplement, other than pursuant to Section 16 (b) hereof, shall be terminated in whole or in part by operation of law or otherwise, Lessee will nonetheless pay to Lessor an amount equal to each installment of rent at the time such installment would have become due and payable in accordance with the terms hereof. Each payment of rent or other amount paid by Lessee hereunder shall be final and Lessee will not seek to recover all or any part of such payment for Lessor for any reason whatsoever. 6. WARRANTY DISCLAIMER; ASSIGNMENT OF WARRANTIES. (a) LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND LESSEE HEREBY EXPRESSLY WAIVES ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE, FREEDOM FROM INTERFERENCE OR INFRINGEMENT OR THE LIKE, OR AS TO THE TITLE TO OR LESSOR'S OR LESSEE'S INTEREST IN THE EQUIPMENT OR AS TO ANY OTHER MATTER RELATING TO THE EQUIPMENT OR ANY PART THEREOF. LESSEE CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT AND EACH PART THEREOF ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY LESSOR. LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE ACCORDED TO THE TRANSACTIONS CONTEMPLATED BY THIS LEASE OR AS TO ANY TAX CONSEQUENCES AND/OR TAX TREATMENT THEREOF. (b) LESSOR HEREBY ASSIGNS TO LESSEE SUCH RIGHTS AS LESSOR MAY HAVE (TO EXTENT LESSOR MAY VALIDLY ASSIGN SUCH RIGHTS) UNDER ALL MANUFACTURERS' AND SUPPLIERS' WARRANTIES WITH RESPECT TO THE EQUIPMENT; PROVIDED, HOWEVER, THAT THE FOREGOING RIGHTS SHALL AUTOMATICALLY REVERT TO LESSOR UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT HEREUNDER, OR UPON THE RETURN OF THE EQUIPMENT TO LESSOR. LESSEE AGREES TO SETTLE ALL CLAIMS WITH RESPECT TO THE EQUIPMENT DIRECTLY WITH THE MANUFACTURERS OR SUPPLIERS THEREOF, AND TO GIVE LESSOR PROMPT NOTICE OF ANY SUCH SETTLEMENT AND THE DETAILS OF SUCH SETTLEMENT. HOWEVER, IN THE EVENT ANY WARRANTIES ARE NOT ASSIGNABLE, THE LESSOR AGREES TO ACT ON BEHALF OF THE LESSEE IN SETTLING CLAIMS ARISING UNDER THE WARRANTY WITH THE MANUFACTURER OR SUPPLIER. (c) IN NO EVENT SHALL LESSOR BE LIABLE FOR LOSS OF REVENUE OR PROFITS, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR FROM ANY CAUSE EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 7. DISPOSITION OF EQUIPMENT. (a) RETURN. Lessee shall, upon the expiration or earlier termination of the Lease Term of each item of equipment, subject to paragraph (b) below, return such item of equipment to Lessor at such place within the continental United States of America as Lessor shall designate in writing to Lessee. Until such item of equipment is returned to Lessor pursuant to the provisions of this Section, all of the provisions of this Lease with respect thereto shall continue in full force and effect. Lessee shall pay all the costs and expenses in connection with or incidental to the return of the equipment, including, without limitation, the cost of removing, assembling, packing, insuring and transporting the equipment. At the time of such return, the equipment shall be in the condition and repair required to be

maintained by Section 12 hereof and free and clear of all Liens. (b) PURCHASE OPTION. So long as no Default or Event of Default shall have occurred and be continuing, Lessee may, by written notice given to Lessor at least 120 days (but not more than 360 days) prior to the expiration date of the Lease Term of any item of equipment (which notice shall be irrevocable), elect to purchase such item of equipment on such expiration date for a cash purchase price equal to the Fair Market Sale Value of such item of equipment determined as of such expiration date, plus an amount equal to all taxes (other than income taxes on any gain on such sale), costs and expenses (including legal fees and expenses) incurred or paid by Lessor in connection with such sale. Upon payment by Lessee of such purchase price, and of all other amounts then due and payable by Lessee, Lessor

shall transfer title, if any, to such items of equipment except computer software to Lessee on an "as-is, where-is" basis, without recourse and without representation or warranty of any kind, express or implied, other than a representation and warranty that such item of equipment is free and clear of any Lessor's Liens. 8. REPRESENTATION AND WARRANTIES. In order to induce Lessor to enter into this Lease and to lease the equipment to Lessee hereunder, Lessee represents and warrants that: (a) ORGANIZATION. Lessee is duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in the State in which the equipment will be located. (b) POWER AND AUTHORITY. Lessee has full power, authority and legal right to execute, deliver and perform this Lease, and the execution, delivery and performance hereof has been duly authorized by Lessee's governing body or officer(s). (c) ENFORCEABILITY. This Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligation of Lessee enforceable in accordance with its terms. (d) CONSENTS AND PERMITS. The execution, delivery and performance of this Lease does not require any approval or consent of any trustee, shareholder, partner, sole proprietor, or holders of any indebtedness or obligations of Lessee, and will not contravene any law, regulation, judgment or decree applicable to Lessee, or the certificate of partnership or incorporation or by-laws of Lessee, or contravene the provisions of, or constitute a default under, or result in the creation of any Lien upon any property of Lessee under any mortgage, instrument or other agreement to which Lessee is a party or by which Lessee or its assets may be bound or affected; and no authorization, approval, license, filing or registration with any court or governmental agency or instrumentality is necessary in connection with the execution, delivery, performance, validity and enforceability of this Lease. (e) FINANCIAL CONDITION OF THE LESSEE. The financial statements and any other financial information of Lessee heretofore furnished to Lessor are complete and correct and fairly present the financial condition of Lessee and the results of its operations for the respective periods covered thereby, there are no known contingent liabilities or liabilities for taxes of Lessee which are not reflected in said financial statements and since the date thereof, there has been no material adverse change in such financial condition or operations. (f) NO LITIGATION. There is no action, suit, investigation or proceeding by or before any court, arbitrator, administrative agency or other governmental authority pending or threatened against or affecting Lessee (A) which involves the transactions contemplated by this Lease or the equipment; or (B) which, if adversely determined, could have a material adverse effect on the financial condition, business or operations of Lessee. (g) UNITED STATES SOURCE INCOME. No items of equipment shall be used in a way that results in the creation of an item of income to Lessor, the source of which for Federal Income Tax purposes is without the United States. 9. LIENS. Lessee will not directly or indirectly create, incur, assume, suffer, or permit to exist any Lien on or with respect to

the equipment. 10. INSURANCE. Lessee shall maintain at all times on the equipment, at its expense, property damage, direct damage and liability insurance in such amounts, against such risks, in such form and with such insurers as shall be reasonably satisfactory to Lessor and any other Owner; provided, that the amount of direct damage insurance shall not on any

date be less than the greater of the full replacement value or the Stipulated Loss Value of the equipment as of such date. Each insurance policy will, among other things, name Lessor and any other Owner as an additional insured or as loss payee (as the case may be) as their interests may appear, require that the insurer give Lessor and any such Owner at least thirty (30) days prior written notice of any alteration in or cancellation of the terms of such policy, and require that the interest of Lessor and any such Owner continue to be insured regardless of any breach of or violation by Lessee of any warranties, declarations or conditions contained in such insurance policy. Lessee shall furnish to Lessor and such Owner a certificate or other evidence satisfactory to Lessor that such insurance coverage is in effect provided, however, that Lessor and such Owner shall be under no duty to ascertain the existence or adequacy of such insurance. 11. TAXES. (a) GENERAL TAX PROVISIONS. Lessee shall timely pay, and shall indemnify and hold Lessor harmless from and against, all fees, taxes (whether sales, use, excise, personal property or other taxes), imposts, duties, withholdings, assessments and other governmental charges of whatever kind or character, however designated (together with any penalties, fines or interest thereon), all of the foregoing being herein collectively called "Impositions", which are at any time levied or imposed against Lessor, Lessee, this Lease, the equipment or any part thereof by any Federal, State, or Local Government or taxing authority in the United States or by any foreign government or any subdivision or taxing authority thereof upon, with respect to, as a result of or measured by (i) the equipment (or any part thereof), or this Lease or the interests of the Lessor therein; or (ii) the purchase, ownership, delivery, leasing, possession, maintenance, use, operation, return, sale or other disposition of the equipment or any part thereof; or (iii) the rentals, receipts or earnings payable under this Lease or otherwise arising from the equipment or any part thereof; EXCLUDING, HOWEVER, taxes based on or measured by the net income of Lessor that are imposed by (1) the United States of America, or (2) the State of Florida or any political subdivision of the State of Florida, or (3) any other State of the United States of America or any political subdivision of any such State in which Lessor is subject to Impositions as the result (whether solely or in part) of business or transactions unrelated to this Lease. In case any report or return is required to be filed with respect to any obligation of Lessee under this Section or arising out of this Section, Lessee will notify Lessor of such requirement and make such report or return in such manner as shall be satisfactory to Lessor; PROVIDED, that the payment of any use taxes shall be made in such manner as specified by Lessor in writing to Lessee; or (iv) The provisions of this Section shall survive the expiration or earlier termination of this Lease. (b) SPECIAL TAX PROVISIONS. (i) The Owner of the items of equipment, shall be entitled to take into account in computing its Federal income tax liability, Current Tax Rate and such deductions, credits, and other benefits as are provided by the Code to an owner of property, including, without limitation: (A)Recovery deductions ("Recovery Deductions") under Section 168 (a) of the Code for each item of equipment in an amount determined, commencing with the 2001 taxable year, by multiplying the Owner's Cost of such item of equipment by the percentages applicable under Section 168 (b) of the Code with respect to "(5)-year property" within the meaning of Section 168 (c) (2) of the Code; (B) Amortization of expenses ("Amortization Deductions") paid or to be paid by Owner in connection with this Lease at a rate no less rapid than straight line over the Lease Term. (ii) For the purposes of this Subsection 11 (b) only, the term "Owner" shall include the "common parent" and all other corporations included in the affiliated group, within the meaning of Section 1504 of the Code (or any other successor section thereto), of which Owner is or becomes a member. 12. COMPLIANCE WITH LAWS; OPERATION AND MAINTENANCE. (a) Lessee will use the equipment in a careful and proper manner, will comply with and conform to all governmental laws, rules and regulations relating thereto, and will cause the equipment to be operated in accordance with the manufacturer's or supplier's instructions or manuals.

(b) Lessee will, at its own expense, keep and maintain the equipment in good repair, condition and working order and furnish all parts, replacements, mechanisms, devices and servicing required therefor so that the value, condition and operating efficiency therefor will at all times be maintained and preserved, reasonable wear and tear excepted. Lessee will, at its own expense, perform all required acts necessary to maintain any manufacturer's warranties and guarantees respecting the equipment. All such repairs, parts, mechanisms, devices and replacements shall immediately, without further act, become the property of Lessor and part of the equipment.

(c) Lessee will not make or authorize any improvement, change, addition or alteration to the equipment (i) if such improvement, change, addition or alteration will impair the originally intended function or use of the equipment or impair the value of the equipment as it existed immediately prior to such improvement, change, addition or alteration; or (ii) if any parts installed in or attached to or otherwise becoming a part of the equipment as a result of any such improvement, change, addition or alteration shall not be readily removable without damage to the equipment. Any part which is added to the equipment without violating the provisions of the immediately preceding sentence and which is not a replacement or substitution for any property which was a part of the equipment, shall remain the property of Lessee and may be removed by Lessee at any time prior to the expiration or earlier termination of the Lease Term. All such parts shall be and remain free and clear of any Liens. Any such part which is not so removed prior to the expiration or earlier termination of the Lease Term shall, without further act, become the property of Lessor. 13. INSPECTION. Upon prior notice, Lessor or its authorized representatives may at any reasonable time or times inspect the equipment when it deems it necessary to protect its interest therein. 14. IDENTIFICATION. Lessee shall, at its expense, attach to each item of equipment a notice satisfactory to Lessor disclosing Owner's ownership of such item of equipment. 15. PERSONAL PROPERTY. Lessee represents that the equipment shall be and at all times remain separately identifiable personal property. Lessee shall, at its expense, take such action (including the obtaining and recording of waivers) as may be necessary to prevent any third party from acquiring any right to or interest in the equipment by virtue of the equipment being deemed to be real property or a part of real property or a part of other personal property, and if at any time any person shall claim any such right or interest, Lessee shall, at its expense, cause such claim to be waived in writing or otherwise eliminated to Lessor's satisfaction within 30 days after such claim shall have first become known to Lessee. 16. LOSS OR DAMAGE. (a) All risk of loss, theft, damage or destruction to the equipment or any part thereof, however incurred or occasioned, shall be borne by Lessee and, unless such occurrence constitutes an Event of Loss pursuant to paragraph (b) of this Section, Lessee shall promptly give Lessor written notice hereof and shall promptly cause the affected part or parts of the equipment to be replaced or restored to the condition and repair required to be maintained by Section 12 hereof. (b) If an Event of Loss with respect to any item of equipment shall occur, Lessee shall promptly give Lessor written notice thereof, and Lessee shall pay to Lessor as soon as it receives insurance proceeds with respect to said Event of Loss but in any event no later than 90 days after the occurrence of said Event of Loss an amount equal to the sum of (i) the Stipulated Loss Value of such item of equipment computed as of the Rent Payment Date with respect to such item of equipment on or immediately preceding the date of the occurrence of such Event of Loss; and (ii) all rent and other amounts due and owing hereunder for such item of equipment on or prior to the Loss Payment Date. Upon payment of such amount to Lessor, the lease of such item of equipment hereunder shall terminate, and Lessor will transfer within forty days to Lessee, Lessor's right, title, if any, and interest in and to such item of equipment, on an "as-is, where-is" basis, without recourse and without representation or warranty, express or implied, other than a representation and warranty that such item of equipment is free and clear of any Lessor's Liens. (c) Any payments received at any time by Lessor or Lessee from any insurer with respect to loss or damage to the equipment shall be applied as follows: (i) if such payments are received with respect to an Event of Loss they shall be paid to Lessor, but to the extent received by Lessor, they shall reduce or discharge, as the case may be, Lessee's obligation to pay the amounts due to Lessor under Section 16 (b) hereof with respect to such Event of Loss; or (ii) if such payments are received with respect to any loss of or damage to the equipment other than an Event of Loss, such payments shall, unless a Default or Event of Default shall have occurred and be continuing,

be paid over to Lessee to reimburse Lessee for its payment of the costs and expenses incurred by Lessee in replacing or restoring pursuant to Section 16 (a) hereof the part or parts of the equipment which suffered such loss or damage. 17. GENERAL INDEMNITY. Lessee assumes liability for, and shall indemnify, protect save and keep harmless Lessor, the partners comprising Lessor, its and their directors, officers, employees, agents, servants, successors and assigns (an

"Indemnitee") from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses (other than customary internal administrative costs and expenses associated with the Lease, which shall be borne by the party incurring them), including reasonable legal expenses, of whatsoever kind and nature, imposed on, incurred by or asserted against any Indemnitee, in any way relating to or arising out of this Lease or the enforcement hereof, or the manufacture, purchase, acceptance, rejection, ownership, possession, use, selection, delivery, lease, operation, condition, sale, return or other disposition of the equipment or any part thereof (including, without limitation, latent or other defects, whether or not discoverable by Lessee or any other person, any claim in tort whether or not for strict liability and any claim for patent, trademark, copyright or other intellectual property infringement); provided, however, that Lessee shall not be required to indemnify any Indemnitee for loss or liability arising from acts or events which occur after the equipment has been returned to Lessor in accordance with the Lease, or for loss or liability resulting solely from the willful misconduct or gross negligence of such Indemnitee. The provisions of this Section shall survive the expiration or earlier termination of this Lease. 18. EVENTS OF DEFAULT. The following events shall each constitute an event of default (herein called "Event of Default") under this Lease: (i) Lessee shall fail to execute and deliver to Lessor (or Lessor's agent) the "Certificate of Delivery and Acceptance" within twenty-four (24) hours of Acceptance of the equipment by Lessee. (ii) Lessee shall fail to commence lease payments on the first day of the month following the Commencement Date, or such other initiation of lease payments as specified in Section 5 of this Lease and Lessee fails to cure such non-payment after 3 days written notice. (iii) Lessee shall fail to make any payment of rent or other amount owing hereunder or otherwise after notice has been given that payment is past due and Lessee fails to cure such non-payment after 3 days written notice; or (iv) Lessee shall fail to maintain the insurance required by Section 10 hereof or to perform or observe any of the covenants contained in Sections 21 or 22 hereof; or (v) Lessee shall fail to perform or observe any other covenant, condition or agreement to be performed or observed by it with respect to this Lease or any other agreement between Lessor and Lessee and such failure shall continue unremedied for 30 days after the earlier of (a) the date on which Lessee obtains, or should have obtained knowledge of such failure; or (b) the date on which written notice thereof shall be given by Lessor to Lessee; or (vi) Any representation or warranty made by Lessee herein or in any document, certificate or financial or other statement now or hereafter furnished Lessor in connection with this Lease shall prove at any time to have been untrue, incomplete or misleading in any material respect as of the time when made; or (vii) The entry of a decree or order for relief by a court having jurisdiction in respect of Lessee, adjudging Lessee a bankrupt or insolvent, or approving as properly filed a petition seeking a reorganization, arrangement, adjustment or composition of or in respect of Lessee in an involuntary proceeding or case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of Lessee or of any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 30 days; or (viii) The institution by Lessee of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the commencement by Lessee of a voluntary proceeding or case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or state bankruptcy, insolvency or other similar law, or the consent by it to the filing of any such petition or to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of Lessee or of any substantial part of its property, or the making by it of any assignment for the benefit of creditors or the admission by it of its inability to pay its debts generally as they become due or its willingness to be adjudicated a bankrupt or the failure of Lessee generally to pay its debts as they become due or the taking of corporate action by Lessee in furtherance of any of the foregoing.

(ix) Substantial change (sale or transfer of 50% or more of the controlling interests, i.e., shares, partnership interest. etc. of Lessee) in the ownership of the Lessee without first obtaining the written approval of Lessor, which approval shall not be unreasonably withheld. 19. REMEDIES.

If an Event of Default specified in Subsection 18(vii) or (viii) above shall occur, then, and in any such event, Lessor shall not be obligated to purchase or lease any of the equipment and this Lease shall, without any declaration or other action by Lessor, be in default. If an Event of Default, other than an Event of Default specified in Subsection 18(vii) or (viii) above, shall occur, Lessor may, at its option, declare this Lease to be in default. At any time after this Lease is in default under the first sentence of this Section 19, Lessor has declared this Lease to be in default under the second sentence of this Section 19, Lessor and/or its representative may do any one or more of the following with respect to all of the equipment or any part thereof as Lessor in its sole discretion shall elect, to the extent permitted by applicable law then in effect: (a) demand that Lessee, and Lessee shall at its expense upon such demand, return the equipment promptly to Lessor at such place in the continental United States of America as Lessor shall specify, or Lessor and/or its agents, at its option, may with or without entry upon the premises where the equipment is located and disable the equipment, or make the equipment inoperable permanently or temporarily in Lessor's sole discretion, and/or take immediate possession of the equipment and remove the same by summary proceedings or otherwise, all without liability for or by reason of such entry or taking of possession, whether for the restoration of damage to property caused by such taking or for disabling or otherwise; (b) sell the equipment at public or private sale, with or without notice, advertisement or publication, as Lessor may determine, or otherwise dispose of, hold, use, operate, lease to others or keep idle the equipment as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee and without any duty to account to Lessee with respect to such action or inaction or for any proceeds with respect thereto; (c) by written notice to Lessee specifying a payment date which shall be not earlier than 20 days after the date of such notice, demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the payment date specified in such notice, as liquidated damages for loss of a bargain and not as a penalty, all accrued and unpaid rent for the equipment due on all Rent Payment Dates up to and including the payment date specified in such notice PLUS an amount (together with interest on such amount at the Late Charge Rate, from the payment date specified in such notice to the date of actual payment) equal to the excess, if any, of the Stipulated Loss Value of the equipment as of the payment date specified in such notice over the Fair Market Sale Value of the equipment as of such date; (d) Lessor may exercise any other right or remedy which may be available to it under applicable law or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof or to rescind this Lease. Lessor is entitled to recover any amount that fully compensates the Lessor for any damage to or loss of the Lessor's residual interest in the equipment caused by the Lessee's default. In the event any present value discounting is applied, the discount rate used shall be the Federal Reserve Board Discount Rate. In addition, Lessee shall be liable for any and all unpaid rent and other amounts due hereunder before or during the exercise of any of the foregoing remedies and for all reasonable legal fees and other costs and expenses incurred by reason of the occurrence of any Event of Default or the exercise of Lessor's remedies with respect thereto, including all reasonable costs and expenses incurred in connection with the placing of the equipment in the condition required by Section 12 hereof. No remedy referred to in this Section 19 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to herein or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all such other remedies. No express or implied waiver by Lessor of an Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default. To the extent permitted by applicable law, Lessee hereby waives any rights now or hereafter conferred by statute or otherwise which may require Lessor to sell or lease or otherwise use the equipment in mitigation of Lessor's damages or losses or which may otherwise limit or modify any of Lessor's rights or remedies under this Lease. 20. LESSOR'S RIGHT TO PERFORM. IF LESSEE FAILS TO MAKE ANY PAYMENT, OTHER THAN RENT DUE HEREUNDER, REQUIRED TO BE MADE BY IT HEREUNDER OR FAILS TO PERFORM OR COMPLY WITH ANY OF ITS OTHER AGREEMENTS CONTAINED HEREIN, LESSOR MAY ITSELF MAKE SUCH PAYMENT OR

PERFORM OR COMPLY WITH SUCH AGREEMENT, AND THE AMOUNT OF SUCH PAYMENT AND THE AMOUNT OF THE REASONABLE EXPENSES OF LESSOR INCURRED IN CONNECTION WITH SUCH PAYMENT OR THE PERFORMANCE OF OR COMPLIANCE WITH SUCH AGREEMENT, AS THE CASE MAY BE, TOGETHER WITH INTEREST THEREON AT THE LATE CHARGE RATE, SHALL BE DEEMED TO BE ADDITIONAL RENT, PAYABLE BY LESSEE WITHIN 30 DAYS OF NOTICE. 21. LOCATION; ASSIGNMENT OR SUBLEASE; TITLE TRANSFER.

(a) LESSEE WILL NOT REMOVE THE EQUIPMENT FROM THE LOCATION SPECIFIED IN THE SCHEDULE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD, EXCEPT REMOVAL OUTSIDE THE CONTINENTAL U.S. IS NOT PERMITTED. THE EQUIPMENT SHALL AT ALL TIMES BE IN THE SOLE POSSESSION AND CONTROL OF LESSEE AND LESSEE WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, ASSIGN THIS LEASE OR ANY INTEREST HEREIN OR SUBLEASE OR OTHERWISE TRANSFER ITS INTEREST IN ANY OF THE EQUIPMENT, AND ANY ATTEMPTED ASSIGNMENT, SUBLEASE OR OTHER TRANSFER BY LESSEE IN VIOLATION OF THESE PROVISIONS SHALL BE VOID. (b) LESSOR AND LESSEE ACKNOWLEDGE THAT LESSOR (i) MAY TRANSFER ITS INTEREST IN THE EQUIPMENT TO AN OWNER OTHER THAN LESSOR. LESSOR MAY CONTEMPORANEOUSLY THEREWITH LEASE THE EQUIPMENT BACK FROM SUCH OWNER, AND (ii) MAY ASSIGN THIS LEASE. LESSEE HEREBY CONSENTS TO EACH OF THE ABOVEDESCRIBED TRANSACTIONS. FURTHER LESSEE DOES HEREBY ACKNOWLEDGE (i) THAT ANY SUCH TRANSFER AND/OR ASSIGNMENT BY LESSOR DOES NOT MATERIALLY CHANGE LESSEE'S DUTIES AND OBLIGATIONS HEREUNDER, (ii) THAT SUCH TRANSFER AND/OR ASSIGNMENT DOES NOT MATERIALLY INCREASE THE BURDENS OR RIGHTS IMPOSED ON THE LESSEE, AND (iii) THAT THE ASSIGNMENT IS PERMITTED EVEN IF THE ASSIGNMENT COULD BE DEEMED TO MATERIALLY AFFECT THE INTEREST OF THE LESSEE. 22. STATUS CHANGES IN LESSEE. (a) Lessee will not, without Lessor's prior written consent, which consent shall not be unreasonably withheld: (i) enter into any transaction of merger or consolidation unless it is the surviving corporation; (ii) change the form of organization of its business; (iii) liquidate, dissolve or take any such similar action; or (iv) sell, transfer or otherwise dispose of all or any substantial part of its assets. (b) In the event that (i) the majority of the voting stock of Lessee is transferred to persons other than existing shareholders of Lessee as of the date of this lease ("Existing Shareholders") or relatives or affiliates of Existing Shareholders; or (ii) a sale, exchange or transfer (other than a transfer in trust or to a subsidiary or affiliate) occurs of all or substantially all of the assets of Lessee, then in such event Lessee shall be required to pay off the unamortized lease balance, any billed but unpaid interest and any late charges and applicable property taxes, prior to or concurrently with the closing of the sales transaction. 23. FURTHER ASSURANCES; FINANCIAL INFORMATION. (a) Lessee will, at its expense, promptly and duly execute and deliver to Lessor such further documents and assurances and take such further action as Lessor may from time to time reasonably request in order to establish and protect the rights, interests and remedies created or intended to be created in favor of Lessor hereunder, including, without limitation, the execution and filing of Uniform Commercial Code financing statements covering the equipment and proceeds therefrom in the jurisdictions in which the equipment is located from time to time. To the extent permitted by applicable law, Lessee hereby authorizes Lessor to file any such financing statements without the signature of Lessee. (b) Lessee will qualify to do business and remain qualified in good standing, in each jurisdiction in which the equipment is from time to time located. (c) Lessee will furnish to Lessor as soon as available, but in any event not later than 90 days after the end of each fiscal year of Lessee, a consolidated balance sheet of Lessee as at the end of such fiscal year, and consolidated statements of income and changes in financial position of Lessee for such fiscal year, all in reasonable detail, prepared in accordance with generally accepted accounting principles applied on a basis consistently maintained throughout the period involved. These reports will not be disclosed to anyone other than the Lessor and/or the Owner as provided in Section 21 (b). 24. NOTICES. All notices, demands and other communications hereunder shall be in writing, and shall be deemed to have been

given or made when deposited in the United States mail, first class postage prepaid, addressed as follows or to such other address as any of the authorized representatives of the following entities may from time to time designate in writing to the other listed below:
Lessor: TELECOMMUNICATIONS FINANCE GROUP OF SIEMENS CARRIER NETWORKS LLC Attn: Director, Credit & Leasing 400 Rinehart Road Lake Mary, Florida 32746

TELECOMMUNICATIONS FINANCE GROUP OF SIEMENS CARRIER NETWORKS LLC Attn: General Counsel 900 Broken Sound Parkway Boca Raton, Florida 33487 Lessee: WORLDXCHANGE CORP. Attn: Legal Dept. 9775 Business Park Avenue San Diego, California 92131 I-LINK INCORPORATED Attn: General Counsel 13751 South Wadsworth Park Drive Draper, UT 84020

25. CONDITIONS PRECEDENT: (a) Lessor shall not be obligated to lease the items of equipment described herein to Lessee hereunder unless: (i) Such Uniform Commercial Code financing statements covering equipment and proceeds therefrom and landlord and/or mortgagee waivers or disclaimers and/or severance agreements with respect to the items of equipment covered by this Lease as Lessor shall deem necessary or desirable in order to perfect and protect its interests therein shall have been duly executed and filed, at Lessee's expense, in such public offices as Lessor shall direct; (ii) All representations and warranties of Lessee contained herein or in any document or certificate furnished Lessor in connection herewith shall be true and correct on and as of the date of this Lease with the same force and effect as if made on and as of such date; no Event of Default or Default shall be in existence on such date or shall occur as a result of the lease by Lessee of the equipment specified in the Schedule; (iii) In the sole judgment of Lessor, there shall have been no material adverse change in the financial condition or business of Lessee; (iv) All proceedings to be taken in connection with the transactions contemplated by this Lease, and all documents incidental thereto, shall be satisfactory in form and substance to Lessor and its counsel; (v) Lessor shall have received from Lessee, in form and substance satisfactory to it, such other documents and information as Lessor shall reasonably request; (vi) All legal matters in connection with the transactions contemplated by this Lease shall be satisfactory to Lessor's counsel; and (vii) No Change in Tax Law, which in the sole judgment of Lessor would adversely affect Lessor's Economics, shall have occurred or shall appear, in Lessor's good faith judgment, to be imminent. 26. SOFTWARE LICENSE. Reference is made to the form of Software Product License Agreement attached hereto as Exhibit B (the "License Document"). Lessor has arranged for the equipment manufacturer to grant Lessee a license to use the Software as defined in the License Document in conjunction with the equipment leased hereunder in accordance with the terms of the License Document. The original license fee is contained in the lease rate. To avail itself of the license grant, Lessee must execute the License Document, upon Commencement of the Lease. "Buyer" and "Licensee" as used in the License Document are synonymous with lessee. 27. LIMITATION OF LIABILITY. LESSOR SHALL NOT BE LIABLE FOR LOST PROFITS OR REVENUE, SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE OR FROM ANY CAUSE WHETHER BASED IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR OTHER LEGAL THEORY EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH

DAMAGES. LESSEE HEREBY AGREES THAT LESSOR WILL NOT BE LIABLE FOR ANY LOST PROFITS OR REVENUE OR FOR ANY CLAIM OR DEMAND AGAINST

LESSEE BY ANY OTHER PARTY. 28. MISCELLANEOUS. (a) Any provision of this Lease which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable law, Lessee hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in any respect. (b) No terms or provisions of this Lease may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge or termination is sought. No delay or failure on the part of Lessor to exercise any power or right hereunder shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof, or the exercise of any other power or right. After the occurrence of any Default or Event of Default, the acceptance by Lessor of any payment of rent or other sum owed by Lessee pursuant hereto shall not constitute a waiver by Lessor of such Default or Event of Default, regardless of Lessor's knowledge or lack of knowledge thereof at the time of acceptance of any such payment, and shall not constitute a reinstatement of this Lease, if this Lease shall have been declared in default by Lessor pursuant to Section 18 hereof or otherwise, unless Lessor shall have agreed in writing to reinstate the Lease and to waive the Default or Event of Default. In the event Lessee tenders payment to Lessor by check or draft containing a qualified endorsement purporting to limit or modify Lessee's liability or obligations under this Lease, such qualified endorsement shall be of no force and effect even if Lessor processes the check or draft for payment. (c) This Lease with exhibits contains the full, final and exclusive statement of the agreement between Lessor and Lessee relating to the lease of the equipment. (d) This Lease shall constitute an agreement of an operating lease, and nothing herein shall be construed as conveying to Lessee any right, title or interest in the equipment except as Lessee only. (e) This Lease and the covenants and agreements contained herein shall be binding upon, and inure to the benefit of, Lessor and its successors and assigns and Lessee and, to the extent permitted by Section 21 hereof, its successors and assigns. (f) The headings of the Sections are for convenience of reference only, are not a part of this Lease and shall not be deemed to affect the meaning or construction of any of the provisions hereof. (g) This Lease may be executed by the parties hereto on any number of separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. (h) This Lease is deemed made and entered into in the State of Florida and shall be governed by and construed under and in accordance with the laws of the State of Florida as if both parties were residents of Florida. (i) Lessee hereby irrevocably consents and agrees that any legal action, suit, or proceeding arising out of or in any way in connection with this Lease shall be instituted or brought in the courts of the State of Florida, or the United States Courts for the District of Florida, and by execution and delivery of this Lease, Lessee hereby irrevocably accepts and submits to, for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of any such court, and to all proceedings in such courts. Lessee irrevocably consents to service of any summons and/or legal process by registered or certified United States mail, postage prepaid, to Lessee at the address set forth in Section 24 hereof, such method of service to constitute, in every respect, sufficient and effective service of process in any legal action or proceeding. Nothing in this Lease shall affect the right to service of process in any other manner permitted by law or limit the right of Lessor to bring actions, suits or proceedings in the court of any other jurisdiction. Lessee further agrees that final judgment against it in any such legal action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, within or outside the United States of America, by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence

of the fact and the amount of the liability. In the event legal action is taken by Lessor or Lessee to enforce their respective rights under this Lease, all costs and expenses, including without limitation reasonable attorneys' fees, incurred by the prevailing party shall be paid by the non-prevailing party. IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be duly executed as of the day and year first above written and by its signature below Lessee expressly acknowledges that this Lease may not be

modified unless done so in a writing signed by each of the parties hereto or their successors in interest. WORLDXCHANGE CORP. (Lessee) By: ______________________________ (Name & Title) Date Signed: _____________________ TELECOMMUNICATIONS FINANCE GROUP OF SIEMENS CARRIER NETWORKS LLC (Lessor) By: ______________________________ JEFFREY D. BOGGS Authorized Representative Date Signed: _____________________

EXHIBIT 10.5

AGREEMENT AND PLAN OF MERGER This AGREEMENT AND PLAN OF MERGER (the "Agreement") is dated as of April 17, 2001 by and among WebToTel, Inc., a Delaware corporation (the "Company"), Counsel Communications LLC, a Delaware limited liability company ("Counsel"), I-Link Incorporated, a Florida corporation (the "Purchaser"), I-Link Acquisition Corp., a Delaware corporation (the "Merger Sub"), and the other shareholders of the Company as listed on the signature pages hereof. W I T N E S S E T H: WHEREAS, the respective Boards of Directors of the Company, the Purchaser and Merger Sub have approved and adopted the merger of the Company with and into Merger Sub on the terms and subject to the conditions set forth herein; and WHEREAS, pursuant to the Merger, the outstanding shares of the common stock of the Company, $0.001 par value per share (the "Company Common Stock") will be converted into the right to receive the consideration described below. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I Certain Definitions Section 1.1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms have the respective meanings set forth below. "Affiliate" means, with respect to any Person, any other Person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlled" and "controlling" have meanings correlative thereto. "Code" means the Internal Revenue Code of 1986, as amended. "GAAP" means generally accepted accounting principles as in effect in the United States on the date of this Agreement. "Governmental Authority" means any national, federal, state, provincial, county, municipal or local government, foreign or domestic, or the government of any political subdivision of any of the foregoing, or any entity, authority, agency, ministry or other similar body exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established to perform any of such functions. "Material Adverse Change" means, with respect to any Person, a material adverse change in the business, financial condition or results of operations of such Person. "Person" means an individual, partnership, limited liability company, corporation, joint stock company, unincorporated organization or association, trust or joint venture, or a governmental agency or political subdivision thereof.

"Purchaser Common Stock" means the common stock, par value $0.007 per share, of the Purchaser. "RESTRICTED STOCK" MEANS ANY SHARES OF COMMON STOCK OF THE PURCHASER ISSUED IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. "Securities Act" means the Securities Act of 1933 or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Taxes" means any and all taxes, charges, fees, levies or other like assessments (and all related interest, additions to tax and penalties), including, income, transfer, gains, gross receipts, excise, inventory, property (real, personal or intangible), customs duty, sales, use, license, withholding (including backup withholding), payroll, employment, capital stock or franchise taxes and escheat liability, imposed by the United States, or any state, local or foreign government, or any subdivision or agency of any of the foregoing, whether computed on a unitary, combined or any other basis. "Tax Return" means any report, return, information reports or returns or other information with respect to Taxes (including any attached schedules or any amendments to such report return or other information) required to be filed with or supplied to any taxing authority. Section 1.2. INTERPRETATION. Unless otherwise indicated to the contrary herein by the context or use thereof: (i) the words, "herein," "hereto," "hereof" and words of similar import refer to this Agreement as a whole and not to any particular Section or paragraph hereof; (ii) words importing the masculine gender shall also include the feminine and neutral genders, and vice versa; and (iii) words importing the singular shall also include the plural, and vice versa. ARTICLE II The Merger Section 2.1. THE MERGER. Upon the terms and subject to the conditions of this Agreement, at the Effective Time (as defined in Section 2.2), the Merger Sub shall be merged with and into the Company (the "Merger") and the separate corporate existence of the Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger and shall continue to be governed by the Delaware General Corporation Law (the "DGCL"). The separate corporate existence of the Company with all its rights, privileges, powers and franchises shall continue unaffected by the Merger. The Merger shall have the effects specified in the DGCL. From and after the Effective Time, the Company is sometimes referred to herein as the "Surviving Corporation." Section 2.2. CERTIFICATE OF MERGER. On the Closing Date (as defined in Section 2.13), the parties hereto shall cause a certificate of merger (the "Certificate of Merger"), meeting the requirements of Section 251 of the DGCL, to be properly executed and filed in accordance with the DGCL. The Merger shall be effective at the time and on the date of the filing of the Certificate of Merger in accordance with the DGCL, or at such other time and date specified in the Certificate of Merger (the "Effective Time"). Section 2.3. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of the Company in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with applicable law. Section 2.4. BY-LAWS. The by-laws of the Company in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until amended in accordance with applicable law. Section 2.5. OFFICERS. The officers of the Surviving Corporation from and after the Effective Time shall be designated by the Purchaser and will hold office until their successors are duly elected or appointed and qualify in the manner provided in the certificate of incorporation or by-laws of the Surviving Corporation or as otherwise provided by law, or until their earlier death, resignation or removal.

Section 2.6. DIRECTORS. The directors of the Surviving Corporation from and after the Effective Time shall be designated by the Purchaser and will serve until their successors are duly elected or appointed and qualify in the manner provided in the certificate of incorporation or by-laws of the Surviving Corporation or as otherwise provided by law, or until their earlier death, resignation or removal. Section 2.7. CONVERSION OF SHARES. The aggregate amount of consideration payable pursuant to this Section 2.7 is hereinafter referred to as the "Merger Consideration," and is calculated based on a $0.56 per share valuation of Purchaser Common Stock to be delivered as the Merger Consideration (with the result that the shareholders of the Company will own 17,454,333 shares of the outstanding Purchaser Common Stock immediately following the Merger. Subject to the terms and conditions of this Agreement, as of the Effective Time (and as elected by each stockholder of the Company prior to the Effective Time), by virtue of the Merger and without any action on the part of the Merger Sub, the Company or the holder of any shares of the Company Common Stock, the following shall occur: (a) EACH SHARE OF COMPANY COMMON STOCK ISSUED AND OUTSTANDING IMMEDIATELY PRIOR TO THE EFFECTIVE TIME (OTHER THAN SHARES HELD IN THE COMPANY'S TREASURY), SHALL, BY VIRTUE OF THE MERGER AND WITHOUT ANY ACTION ON THE PART OF THE HOLDERS THEREOF, BE CONVERTED INTO THE RIGHT TO RECEIVE 0.1313 (THE "EXCHANGE RATIO") OF A SHARE OF PURCHASER COMMON STOCK (SUBJECT TO ADJUSTMENT AS PROVIDED HEREIN), SUCH THAT IMMEDIATELY AFTER THE EFFECTIVE TIME 17,454,333 SHARES OF THE PURCHASER WILL BE OWNED BY THE COMPANY'S SHAREHOLDERS, AS INDICATED ON EXHIBIT A ATTACHED HERETO. (b) All shares of Company Common Stock converted in accordance with Section 2.7(a) shall, when so converted, no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of Company Common Stock (a "Certificate") shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration payable with respect thereto. Each share of Company Stock held in the treasury of the Company shall, by virtue of the Merger and without any action on the part of the holders thereof, be canceled, retired and cease to exist and no payment shall be made with respect thereto. (c) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of Merger Sub or the Purchaser, be converted into one share of common stock of the Surviving Corporation. Section 2.8. PAYMENT OF MERGER CONSIDERATION. On the Closing Date, the Purchaser shall deliver the Merger Consideration payable to Counsel and the other Company shareholders registered in their respective names. The Merger Consideration is subject to adjustment as set forth in Section 2.9. Section 2.9. ADJUSTMENTS. In the event that, subsequent to the date of this Agreement and prior to the Effective Time, the outstanding shares of Purchaser Common Stock or Company Common Stock shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities through reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other like changes in the Purchaser's or the Company's capitalization, then an appropriate and proportionate adjustment shall be made in the terms of the consideration provided for in this Article II. Section 2.10 FRACTIONAL SHARES. No fraction of a share of Purchaser Common Stock will be issued, but in lieu thereof, each holder of shares of Company Common Stock who would otherwise be entitled to a fraction of a share of Purchaser Common Stock (after aggregating all fractional shares of Purchaser Common Stock to be received by such holder) shall be entitled to receive from Purchaser an amount of cash (rounded down to the nearest whole cent) equal to the product of (i) such fraction, multiplied by (ii) the value ascribed to each share of Company Common Stock pursuant to this Agreement. Section 2.11. EXCHANGE OF CERTIFICATES.

(a) AT THE CLOSING, COUNSEL AND THE OTHER COMPANY SHAREHOLDERS SHALL SURRENDER ITS CERTIFICATE OR CERTIFICATES, WITH SUCH STOCK POWERS EXECUTED IN BLANK OR OTHERWISE IN PROPER FORM FOR TRANSFER TO THE PURCHASER AS THE PURCHASER MAY REASONABLY REQUEST IN EXCHANGE FOR THE PORTION OF THE MERGER CONSIDERATION INTO WHICH THE SHARES OF COMPANY COMMON STOCK REPRESENTED BY SUCH CERTIFICATE OR CERTIFICATES SHALL HAVE BEEN CONVERTED PURSUANT TO THIS AGREEMENT. UPON SUCH SURRENDER, COUNSEL AND THE OTHER COMPANY SHAREHOLDERS SHALL BE ENTITLED TO RECEIVE IN EXCHANGE THEREFOR THE MERGER CONSIDERATION TO WHICH COUNSEL AND THE OTHER COMPANY SHAREHOLDERS SHALL HAVE BECOME ENTITLED PURSUANT TO THE PROVISIONS OF THIS ARTICLE II AND THE CERTIFICATE SO SURRENDERED SHALL FORTHWITH BE CANCELED. NO INTEREST WILL BE PAID OR ACCRUED ON ANY CASH CONSTITUTING MERGER CONSIDERATION AND ANY UNPAID DIVIDENDS AND DISTRIBUTIONS, IF ANY, PAYABLE TO HOLDERS OF CERTIFICATES. UNTIL SURRENDERED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 2.11, EACH CERTIFICATE (OTHER THAN CERTIFICATES CANCELED PURSUANT TO SECTION 2.7(b)) SHALL REPRESENT FOR ALL PURPOSES ONLY THE RIGHT TO RECEIVE THE MERGER CONSIDERATION PROVIDED FOR BY THIS AGREEMENT, WITHOUT INTEREST. (b) No dividends or other distributions declared after the Effective Time with respect to the Purchaser Common Stock and payable to the holders of record thereof shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II. After the surrender of a Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to shares of the Purchaser Common Stock, if any, represented by such Certificate. (c) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration as provided for, and in accordance with, the provisions of this Section 2.11. (d) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Purchaser, the posting by such person of a bond in such amount as the Purchaser reasonably may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Purchaser will issue in exchange for such lost, stolen or destroyed Certificate the cash and shares of Purchaser Common Stock deliverable in respect thereof pursuant to this Agreement. Section 2.12. CLOSING. The closing of the transactions contemplated hereby (the "Closing") shall take place as soon as practicable following the satisfaction or waiver (to the extent waivable) of the conditions set forth in Article VI or at such other time and place (including via exchange of facsmile documents) as the parties may agree. The time and date of the Closing is herein referred to as the "Closing Date." ARTICLE III Representations and Warranties Regarding the Company The Company hereby represents and warrants to the Purchaser and the Merger Sub that: Section 3.1. ORGANIZATION AND GOOD STANDING. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full power and authority, corporate and other, to own, lease and operate its properties and assets and to carry on its business as currently conducted. Section 3.2. AUTHORIZATION. The Company has full power and authority (corporate and other) and legal capacity to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Company in connection with the consummation of the

transactions contemplated by this Agreement (this Agreement, together with all such other agreements, documents, instruments and certificates required to be executed by the Company being referred to herein, collectively, as the "COMPANY DOCUMENTS"), and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement by the Company has been duly authorized by the Board of Directors of the Company, and no further corporate action on the part of the Company or its shareholders is necessary to authorize this Agreement and the performance of the transactions contemplated hereby. This Agreement has been, and each of the other Company Documents will be at or prior to Closing, duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the other Company Documents when so executed and delivered will constitute, legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). Section 3.3. CAPITALIZATION. (a) As of the date hereof: (i) all of the issued and outstanding shares of capital stock of the Company were duly authorized for issuance and are validly issued, fully paid and non-assessable; (ii) EXHIBIT A fully and accurately describes the capital structure of the Company and, except as set forth on EXHIBIT A, there are no outstanding securities of the Company convertible into or evidencing the right to purchase or subscribe for any shares of capital stock of the Company, there are no outstanding or authorized options, warrants, calls, subscription rights, commitments or other agreements of any character requiring, and there are no securities outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional shares of capital stock of the Company or other equity securities of the Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock of the Company or other equity securities of the Company, or any stock appreciation rights, phantom stock or similar equity equivalent rights issued by or binding upon the Company; (iii) there are no voting trusts or other voting agreements with respect to the capital stock of the Company or other ownership interests of the Company or any agreement relating to the issuance, sale, redemption, transfer or other disposition of any such interests of the Company to which the Company is a party, or of which the Company has knowledge.; and (iv) the Company controls the voting capital stock of Nexbell Communications, Inc. ("Nexbell") and CPT-1 Holdings Inc. Section 3.4. CORPORATE RECORDS; CONFLICTS; CONSENTS. The execution and delivery by the Company of this Agreement and the other Company Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by the Company with any of the provisions hereof or thereof will not (i) conflict with, or result in the breach of, any provision of the Articles of Incorporation or Bylaws of the Company; (ii) conflict with, violate, result in the breach or termination of, or constitute a default under any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Company is a party or by which the Company or its properties or assets are bound; (iii) violate any statute, rule, regulation, order or decree of any Governmental Authority by which the Company is bound; or (iv) result in the creation of any Lien (except as contemplated herein) upon the properties or assets of the Company except, in case of clauses (ii), (iii) and (iv), for such violations, breaches or defaults as would not, individually or in the aggregate, have a Material Adverse Change. No consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any Person, including without limitation any Governmental Authority, is required on the part of the Company in connection with the execution, delivery and performance of this Agreement or the other Company Documents, or the compliance by the Company with any of the provisions hereof or thereof.

Section 3.5. REPORTS AND FINANCIAL STATEMENTS. (a) The Company and its subsidiaries have been and are in compliance with all federal, state and local laws, statutes, ordinances, rules and regulations (including without limitation the Securities Act and the Securities Exchange Act of 1934, as amended) as of the date hereof, the failure to comply with which could materially adversely affect the business, assets, operations, earnings, prospects or condition (financial or otherwise) of the Company or which would subject any officer or director of the Company to civil or criminal penalties or imprisonment. The Company has materially complied with the rules and regulations of all governmental agencies having authority over its business or its operations, including without limitation, agencies concerned with intra-state and interstate commerce, occupational safety, environmental protection and employment practices, except where the failure to comply would not have a material adverse effect on the business, operations, earnings, assets or condition (financial or otherwise) of the Company. The Company has no knowledge of and has not received any notice of violation of any such rule or regulation during the two years prior to the date hereof which could result in any liability of the Company for penalties of damages or which could subject the Company to any injunction or government writ, order or decree. To the best of the Company's knowledge, there are no facts, events or conditions that could interfere with, prevent continued compliance with or give rise to any material liability under any federal, state or local governmental laws, statutes, ordinances or regulations applicable to the business, operations, earnings, assets or condition (financial or otherwise) of the Company. (b) The audited financial statements of Nexbell for the year ended July 31, 2000 and any unaudited interim financial statements of Nexbell through and including January 31, 2001 (collectively, the "COMPANY FINANCIAL STATEMENTS") have been prepared in accordance with the United States generally accepted accounting principles ("GAAP") applied on a basis consistent with prior periods and fairly presented the consolidated financial position of Nexbell as of the dates thereof (subject, in the case of unaudited interim statements to normal year-end adjustments and the absence of certain footnote disclosures). (c) As of the date of this Agreement, except as set forth in the Company Financial Statements or as previously disclosed in writing to the Purchaser and prior to the date of this Agreement, to the Company's knowledge neither the Company nor any of its subsidiaries is a party to or bound by (i) any "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or (ii) any non-competition agreement or any other agreement or arrangement that materially limits the Company or any of its subsidiaries or any of their respective affiliates, or that would, after the date hereof similarly limit Nexbell or the Company or any successor thereto, from engaging or competing in any line of business or in any geographic area after giving effect to the transactions contemplated hereby. Section 3.6. ABSENCE OF UNDISCLOSED LIABILITIES; AFFILIATE TRANSACTIONS. (a) Except for matters reflected or reserved against in the balance sheet as of July 31, 2000 and January 31, 2001 included in the Company Financial Statements or as previously disclosed in writing to the Purchaser, neither the Company nor any of the Company Subsidiaries had at such date or has incurred since that date any liabilities, obligations (whether absolute, accrued, contingent or otherwise) or contingencies of any nature, except (i) liabilities, obligations or contingencies (A) which are accrued or reserved against in the Company Financial Statements or reflected in the notes thereto or (B) which were incurred after July 31, 2000 and January 31, 2001 in the ordinary course of business and consistent with past practices; or (ii) liabilities, obligations or contingencies which are of a nature not required to be reflected in the consolidated financial statements of the Company and the Company Subsidiaries prepared in accordance with GAAP consistently applied and which were incurred in the ordinary course of business. The Company and its subsidiaries are current in the payment of all taxes. (b) There are no other transactions, agreements, arrangements or understandings between the Company or the Company Subsidiaries, on the one hand, and the Company's affiliates (other than wholly-owned

subsidiaries of the Company) or other Persons, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Securities Act. Section 3.7. INTELLECTUAL PROPERTY. The Company owns, or has the right to use (or believes, after due inquiry, that it can obtain the right to use on reasonable commercial terms), all patents, patent applications, trademarks, service names, trade names, copyrights, licenses, trade secrets or other proprietary rights necessary to conduct its business as now being conducted and as proposed to be conducted to the Company's knowledge without any conflict or infringement of the rights of others and, except as set forth on Schedule 3.7 the Company has not received a notice that it is infringing upon or otherwise acting adversely to the right or claimed right of any person under or with respect to any of the foregoing, and to the Company's knowledge there is no basis for any such claim. The Company has no patents or patent applications issued, pending or issuable. The Company is not aware of any violation by a third party of any of the Company's or its subsidiaries' patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights. The Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company's business as now being conducted and as proposed to be conducted. Neither the execution nor delivery of this Agreement, nor the conduct of the Company's business will, to the Company's knowledge, 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 employee is now obligated. Section 3.8. LEGAL PROCEEDINGS. There are no legal proceedings pending or, to the knowledge of the Company or its Affiliates, threatened that are reasonably likely to prohibit or restrain the ability of the Company or its Affiliates to enter into this Agreement or consummate the transactions contemplated hereby or which otherwise would result in a Material Adverse Change. Section 3.9. NO MISREPRESENTATION. This Agreement (including the Exhibits hereto) as of the date hereof contains no untrue statement of a material fact nor omits a material fact necessary in order to make the statements contained herein not misleading. ARTICLE IV Representations and Warranties Regarding the Purchaser and the Merger Sub The Purchaser and the Merger Sub, jointly and severally, hereby represent and warrant to the Company that: Section 4.1. ORGANIZATION AND GOOD STANDING. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and the Merger Sub is a corporation duly organized existing and in good standing under the laws of Delaware. The Purchaser and Merger Sub have full power and authority (corporate and other) to own, lease and operate its properties and assets and to carry on their business as currently conducted. Section 4.2. AUTHORIZATION. The Purchaser and Merger Sub have full power and authority (corporate and other) and legal capacity to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Purchaser and/or the Merger Sub in connection with the consummation of the transactions contemplated by this Agreement (this Agreement, together with all such other agreements, documents, instruments and certificates required to be executed by the Purchaser and the Merger Sub being referred to herein, collectively, as the "PURCHASER AND MERGER SUB DOCUMENTS"), and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement by the Purchaser and the Merger Sub have been duly authorized by the Board of Directors of the

Purchaser and Merger Sub, and no further corporate action on the part of the Purchaser and the Merger Sub or its shareholders is necessary to authorize this Agreement and the performance of the transactions contemplated hereby. This Agreement has been, and each of the other Purchaser and Merger Sub Documents will be at or prior to Closing, duly and validly executed and delivered by the Purchaser and the Merger Sub and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the other Purchaser and the Merger Sub Documents when so executed and delivered will constitute, legal, valid and binding obligations of the Purchaser and the Merger Sub, enforceable against the Purchaser and the Merger Sub in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). Section 4.3. CAPITALIZATION. (a) As of the date hereof: (i) all of the issued and outstanding shares of capital stock of the Purchaser and the Merger Sub were duly authorized for issuance and are validly issued, fully paid and non-assessable; (ii) EXHIBIT B fully and accurately describes the capital structure of the Purchaser and the Merger Sub and, except as set forth on EXHIBIT B, there are no outstanding securities of the Purchaser and the Merger Sub convertible into or evidencing the right to purchase or subscribe for any shares of capital stock of the Purchaser and the Merger Sub, there are no outstanding or authorized options, warrants, calls, subscription rights, commitments or other agreements of any character requiring, and there are no securities outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional shares of capital stock of the Purchaser and the Merger Sub or other equity securities of the Purchaser and the Merger Sub or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock of the Purchaser and the Merger Sub or other equity securities of the Purchaser, or any stock appreciation rights, phantom stock or similar equity equivalent rights issued by or binding upon the Purchaser and the Merger Sub; and (ii) there are no voting trusts or other voting agreements with respect to the capital stock of the Purchaser and/or the Merger Sub or other ownership interests of the Purchaser and the Merger Sub or any agreement relating to the issuance, sale, redemption, transfer or other disposition of any such interests of the Purchaser and/or the Merger Sub to which the Purchaser and/or the Merger Sub are parties, or of which the Purchaser and the Merger Sub have knowledge. (b) Upon the consummation of the transactions contemplated hereby, all of the Purchaser Common Stock issued as Merger Consideration hereunder will have been and will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all liens. All shares of Purchaser Common Stock shall have been issued in material compliance with all applicable federal and state securities laws and regulations. Section 4.4. CORPORATE RECORDS; CONFLICTS; CONSENTS. Except as set forth in the attached Schedule 4.4, the execution and delivery by the Purchaser and the Merger Sub of this Agreement and the other Purchaser and the Merger Sub Documents, the consummation of the transactions contemplated hereby or thereby, or compliance by the Purchaser and the Merger Sub with any of the provisions hereof or thereof will not (i) conflict with, or result in the breach of, any provision of the Articles of Incorporation or Bylaws of the Purchaser or the Merger Sub; (ii) conflict with, violate, result in the breach or termination of, or constitute a default under any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Purchaser or the Merger Sub is a party or by which the Purchaser or the Merger Sub or their properties or assets are bound; (iii) violate any statute, rule, regulation, order or decree of any Governmental Authority by which the Purchaser and/or the Merger Sub is bound; or (iv) result in the creation of any Lien (except as contemplated herein) upon the properties or assets of the Purchaser and/or the Merger Sub except, in case of clauses (ii), (iii) and (iv), for such violations, breaches or defaults as would not, individually or in the aggregate, have a Material Adverse Change. No consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any Person, including without limitation any Governmental Authority, is required on the part of the Purchaser and/or the Merger Sub in

connection with the execution, delivery and performance of this Agreement or the other Purchaser and the Merger Sub Documents, or the compliance by the Purchaser and the Merger Sub with any of the provisions hereof or thereof. Section 4.5. REPORTS AND FINANCIAL STATEMENTS. (a) Since January 1, 1996, the Purchaser has filed with the Securities and Exchange Commission (the "SEC") all forms, statements, reports and documents (including all exhibits, post-effective amendments and supplements thereto) required to be filed by it under each of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the respective rules and regulations promulgated thereunder, all of which, as amended (if applicable), complied in all material respects, when filed with all applicable requirements of the appropriate act and the rules and regulations thereunder. The Purchaser has previously delivered or made available to Company copies (including all exhibits, post-effective amendments and supplements thereto) of its (i) Annual Reports on Form 10-K for the years ended December 31, 2000, December 31, 1999 and December 31, 1998, as filed with the SEC; (ii) definitive proxy and information statements relating to all meetings of its stockholders (whether annual or special) from December 31, 1998 until the date hereof; and (iii) all other reports, including quarterly reports, and registration statements filed by the Purchaser with the SEC since December 31, 1998 (other than registration statements filed on Form S-8) (the documents referred to in clauses (i), (ii) and (iii) being referred to as the "PURCHASER SEC REPORTS"). As of their respective dates (or to the extent amended or superseded by a subsequent filing, with respect to the information in such subsequent filing, or as of the date of the subsequent filing), the Purchaser SEC Reports did not or will not (as the case may be) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The audited consolidated financial statements of the Purchaser included in the Purchaser's Annual Report on Form 10-K for the years ended December 31, 2000, December 31, 1999 and December 31, 1998 (collectively, the "PURCHASER FINANCIAL STATEMENTS") have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a basis consistent with prior periods and fairly presented the consolidated financial position of the Purchaser and the Purchaser Subsidiaries as of the dates thereof and the related consolidated statement of operations, cash flows and stockholders' equity included in the Purchaser SEC Reports fairly presented the consolidated results of operations of the Purchaser and the Purchaser Subsidiaries for the respective periods then ended (subject, in the case of unaudited interim statements to normal year-end adjustments and the absence of certain footnote disclosures). (c) The audited consolidated financial statements of the Purchaser included in the Purchaser's Annual Report on Form 10-K for the years ended December 31, 2000, December 31, 1999 and December 31, 1998 and any interim financial statements of the Purchaser since December 31, 2000 (collectively, the "PURCHASER FINANCIAL STATEMENTS") have been prepared in accordance with the United States generally accepted accounting principles ("GAAP") applied on a basis consistent with prior periods and fairly presented the consolidated financial position of the Purchaser as of the dates thereof and the related consolidated statement of operations, cash flows and stockholders' equity included in the Purchaser SEC Reports fairly presented the consolidated results of operations of the Purchaser for the respective periods then ended (subject, in the case of unaudited interim statements to normal year-end adjustments and the absence of certain footnote disclosures). (d) As of the date of this Agreement, except as set forth in the Purchaser's Annual Report for the year ended December 31, 2000 or in any other Purchaser SEC Report filed since that Annual Report or as previously disclosed in writing to the Company and prior to the date of this Agreement, neither the Purchaser nor any of its subsidiaries is a party to or bound by (i) any "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or (ii) any non-competition agreement or any other agreement or arrangement that limits the Purchaser or any of its subsidiaries or any of their respective affiliates, or that would, after the date hereof similarly limit the Purchaser or the Company or any successor thereto, from engaging or

competing in any line of business or in any geographic area after giving effect to the transactions contemplated hereby. Section 4.6. ABSENCE OF UNDISCLOSED LIABILITIES; AFFILIATE TRANSACTIONS. (a) Except for matters reflected or reserved against in the balance sheet for the period ended December 31, 2000 included in the Purchaser Financial Statements or as previously disclosed in writing to the Company, neither the Purchaser nor any of the Purchaser Subsidiaries (including the Merger Sub) had at such date or has incurred since that date any liabilities, obligations (whether absolute, accrued, contingent or otherwise) or contingencies of any nature, except (i) liabilities, obligations or contingencies (A) which are accrued or reserved against in the Purchaser Financial Statements or reflected in the notes thereto or (B) which were incurred after December 31, 2000 in the ordinary course of business and consistent with past practices; or (ii) liabilities, obligations or contingencies which are of a nature not required to be reflected in the consolidated financial statements of the Purchaser and the Purchaser Subsidiaries prepared in accordance with GAAP consistently applied and which were incurred in the ordinary course of business. The Purchaser and the Merger Sub are current in the payment of all taxes. (e) Except as specifically disclosed in the Purchaser SEC Reports filed prior to the date of this Agreement or as previously disclosed in writing to the Company, there are no other transactions, agreements, arrangements or understandings between the Purchaser or the Purchaser Subsidiaries (including the Merger Sub), on the one hand, and the Purchaser's affiliates (other than wholly-owned subsidiaries of the Purchaser) or other Persons, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Securities Act. Section 4.7. INTELLECTUAL PROPERTY. The Purchaser and the Merger Sub own, or have the right to use (or believes, after due inquiry, that it can obtain the right to use on reasonable commercial terms), all patents, patent applications, trademarks, service names, trade names, copyrights, licenses, trade secrets or other proprietary rights necessary to conduct their business as now being conducted and as proposed to be conducted to the Purchaser's and Merger Sub's knowledge without any conflict or infringement of the rights of others and the Purchaser, except as disclosed on Schedule 4.7, has not received a notice that it is infringing upon or otherwise acting adversely to the right or claimed right of any person under or with respect to any of the foregoing, and to the Purchaser's and the Merger Sub's knowledge there is no basis for any such claim. The Purchaser and the Merger Sub have disclosed to Counsel a complete list of patents and pending patent applications of the Purchaser and the Merger Sub. Neither the Purchaser nor the Merger Sub is aware of any violation by a third party of any of the Purchaser's or Merger Sub's patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights. Neither the Purchaser nor the Merger Sub is aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Purchaser and/or the Merger Sub or that would conflict with the Purchaser's and the Merger Sub's business as now being conducted and as proposed to be conducted. Neither the execution nor delivery of this Agreement, nor the conduct of the Purchaser's and Merger Sub's businesses will, to the Purchaser's and Merger Sub's knowledge, 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 employee is now obligated. Section 4.8. LEGAL PROCEEDINGS. Except as set forth in the attached Schedule 4.8, there are no Legal Proceedings pending or, to the knowledge of the Purchaser and the Merger Sub, threatened that are reasonably likely to prohibit or restrain the ability of the Purchaser and the Merger Sub to enter into this Agreement or consummate the transactions contemplated hereby or which otherwise would result in a Material Adverse Change.

Section 4.9. NO MISREPRESENTATION. Neither this Agreement (including the Exhibits hereto), nor (as of the date hereof) any Purchaser SEC Report contains any untrue statement of a material fact nor omits a material fact necessary in order to make the statements contained herein or therein not misleading. ARTICLE V Covenants and Agreements Section 5.1. ACCESS AND INFORMATION. Prior to the Closing, each of the parties shall be entitled to make or cause to be made such investigation of the other party hereto, and the financial and legal condition thereof, as such investigating party deems reasonably necessary or advisable, and the other party hereto shall cooperate with any such investigation. In furtherance of the foregoing, but not in limitation thereof, each party shall permit the other party hereto and its agents and representatives or cause them to be permitted to have full and complete access to its premises, books and records upon reasonable notice during regular business hours and shall furnish such financial and operating data, projections, forecasts, business plans, strategic plans and other data relating to itself and its business as the other party hereto shall reasonably request from time to time. Prior to the Closing, the parties hereto agree that except as otherwise required by law, any and all public announcements or other communications concerning this Agreement and the transactions contemplated hereby shall be subject to the prior written approval of each of the parties hereto. Section 5.2. COMPANY AFFIRMATIVE COVENANTS. Prior to the Closing, except as otherwise expressly provided herein, the Company shall, except as otherwise contemplated by this Agreement, conduct its business only in the ordinary and regular course of business. Section 5.3. COMPANY NEGATIVE COVENANTS. Prior to the Closing, without the prior written consent of the Purchaser, except as otherwise expressly provided herein, the Company shall not enter into any contract, agreement or commitment (other than in the ordinary course of business) which, if entered into prior to the date of this Agreement, would cause any representation or warranty of the Company or Counsel to be untrue in any material respect or be required to be disclosed on any Schedule delivered pursuant to Article III hereof. Section 5.4 PURCHASER AND MERGER SUB NEGATIVE COVENANTS. Prior to the Closing, without the prior written consent of the Company, except as otherwise expressly provided herein, the Purchaser will conduct its business only in the ordinary and regular course of business consistent with past practices and the Merger Sub will not conduct any material business or incur any material liabilities. Section 5.5. CLOSING DOCUMENTS. The Company shall, prior to or on the Closing Date, execute and deliver, or cause to be executed and delivered to the Purchaser, the documents or instruments described in Section 6.2. The Purchaser and Merger Sub shall, prior to or on the Closing Date, execute and deliver, or cause to be executed and delivered, to the Company, the documents or instruments described in Section 6.3. Section 5.6. BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto shall use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. Each of the parties hereto will use its respective best efforts to obtain consents of all Governmental Authorities and third parties necessary to the consummation of the transactions contemplated by this Agreement. In the event that at any time after Closing any further action is reasonably necessary to carry out the purposes of this Agreement, each of the parties hereto shall take all such action without any further consideration therefor. Section 5.7. REORGANIZATION TREATMENT. Neither the Purchaser nor the Company shall intentionally take, or fail to take or cause to be taken or not be taken, any action within its control, whether before or after the Effective Time, which it has reason to believe after consultation with its advisors would disqualify the Merger as a "reorganization" within the meaning of Section 368(a) of the Code.

Section 5.8. APPROVAL BY PURCHASER. The Purchaser, in its capacity as the sole stockholder of Merger Sub, shall vote the shares of Merger Sub to approve and adopt the Merger, this Agreement and the transactions contemplated hereby, and shall cause Merger Sub to take any and all actions as may be necessary or appropriate to consummate the Merger and the other transactions contemplated hereby in accordance with the terms hereof. Section 5.9. REGISTRATION RIGHT AND OTHER BENEFITS. Counsel shall be afforded the same registration rights and other benefits with respect to the Restricted Stock issued by the Purchaser hereunder as are set forth in the Securities Support Agreement dated as of March ___, 2001 by and among Counsel and the Purchaser, including the Exhibits attached thereto. Section 5.10 EXPENSE REIMBURSEMENT. Promptly upon demand, whether prior to, or subsequent to, the Closing, the Purchaser hereby agrees to reimburse Counsel and its Affiliates for their expenses in connection with this transaction and any and all out-of-pocket expenses incurred by Counsel and its Affiliates with respect to the Company and/or the Purchaser on an ongoing basis in the course of their activities as Affiliates with the Purchaser, provided however that amounts related to engagements by Counsel of third party advisors related to activities of the Company, where such amounts are in excess of $5,000, shall be pre-approved by the Purchaser. ARTICLE VI Conditions to Closing Section 6.1. MUTUAL CONDITION. The respective obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to Closing of the condition that no Governmental Authority of competent jurisdiction shall have (i) enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order which is in effect; or (ii) commenced or threatened any action or proceeding, which in the case of either clause (i) or (ii) would prohibit consummation of the transactions contemplated by this Agreement. Section 6.2. CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND MERGER SUB. The obligations of the Purchaser and Merger Sub to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment prior to or at Closing of each of the following conditions: (a) All representations and warranties made by the Company and Counsel in this Agreement and the Schedules hereto shall be true, correct and complete on the date hereof and as of the Closing Date as though such representations and warranties were made as of the Closing Date (except for representations and warranties made as of a specified date, which shall have been true, correct and complete as of such specified date), and the Company shall have duly performed or complied with all of the covenants, obligations and conditions to be performed or complied with by them under the terms of this Agreement on or prior to or at Closing. (b) The Purchaser shall have received a certificate from the Secretary or the Assistant Secretary of the Company in form reasonably satisfactory to the Purchaser attesting to the matters described in clause (a) above. (c) The Company shall have delivered such other closing documents as shall be requested by the Purchaser in form and substance reasonably acceptable to the Purchaser's counsel, including the following: (i) a certificate of the Secretary or Assistant Secretary of the Company, dated the Closing Date, as to the incumbency of any officer of the Company executing this Agreement or any document related thereto and covering such other matters as the Purchaser may reasonably request; (ii) a certified copy of (A) the Certificate of Incorporation and by-laws of the Company and all amendments thereto, (B) the resolutions of the Company's Board of Directors

authorizing the execution, delivery and consummation of this Agreement and the transactions contemplated hereby and thereby and (C) the written consent of a majority of the holders of Company Common Stock authorizing the execution, delivery and consummation of this Agreement and the Merger; (iii) such other documents or instruments as the Purchaser reasonably requests to effect the authorization and validity of the transactions contemplated hereby. Section 6.3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of the Company to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to the Closing of each of the following conditions: (a) All representations and warranties made by the Purchaser and Merger Sub in this Agreement shall be true, correct and complete on the date hereof and as of the Closing Date as though such representations and warranties were made as of the Closing Date except for representations and warranties as of a specified date, which shall have been true, correct and complete as of such specified date), and the Purchaser and Merger Sub shall have duly performed or complied with all of the covenants, obligations and conditions to be performed or complied with by it under the terms of this Agreement on or prior to or at the Closing. (b) The Company shall have received a certificate from a duly authorized officer of the Purchaser and the Merger Sub in form reasonably satisfactory to the Company attesting to the matters described in clause (a) above. (c) Prior to or at the Closing, the Purchaser and the Merger Sub shall have delivered to the Company such closing documents as shall be reasonably requested by the Company in form and substance reasonably acceptable to its counsel, including the following: (i) certificates of the Secretary or Assistant Secretary of each of the Purchaser and Merger Sub, dated the Closing Date, as to the incumbency of any officer of the Purchaser or Merger Sub, as applicable, executing this Agreement or any document related thereto and covering such other matters as the Company may reasonably request; (ii) certified copies of (1) the Certificate of Incorporation and by-laws of each of the Purchaser and Merger Sub and all amendments thereto, and (2) the resolutions of the Board of Directors of each of the Purchaser and Merger Sub authorizing the execution, delivery and consummation of this Agreement and the transactions contemplated hereby and thereby; and (iii)such other documents or instruments as the Company reasonably requests to effect the transactions contemplated hereby. ARTICLE VII Termination Section 7.1. TERMINATION. This Agreement may be terminated at any time prior to Closing as follows: (a) by joint consent of the Company and the Purchaser; (b) by the Company, if the Purchaser or Merger Sub shall breach in any material respect any of their respective representations, warranties or obligations contained in this Agreement; (c) by the Purchaser if the Company and Counsel shall breach in any material respect any of their

respective representations, warranties or obligations contained in this Agreement; (d) by either the Purchaser or the Company, if any authorization, consent, waiver or approval required for the consummation of the transactions contemplated hereby shall impose any condition or requirement, which condition or requirement such party determines, in its good faith judgment, to be materially burdensome or to deny to such party in any material respect the benefits intended to be obtained by such party pursuant to the transactions contemplated by this Agreement; or (e) by either the Purchaser or the Company if the transactions contemplated by this Agreement shall not have been consummated on or before the date that is ninety (90) days from the date of this Agreement (or such later date as may be agreed upon in writing by the parties hereto). Section 7.1. EFFECT OF TERMINATION. If this Agreement is terminated pursuant to Section 7.1 hereof, all rights and obligations of the parties hereunder shall terminate and no party shall have any liability to the other party, except for obligations of the parties hereto in Sections 5.1 and 9.2, which shall survive the termination of this Agreement, and except nothing herein will relieve any party from liability for any breach of any representation, warranty, agreement or covenant contained herein prior to such termination. ARTICLE VIII Survival of Representations and Warranties; Indemnification Section 8.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties provided for in this Agreement shall survive the Closing for a period of three (3) years (the "Survival Period"). Section 8.2. INDEMNIFICATION. (a) Counsel shall indemnify and hold harmless the Purchaser, its Affiliates, officers, directors, employees, agents, counsel and representatives, and any Person claiming by or through any of them, against and in respect of any and all claims, costs, expenses, damages, liabilities, losses or deficiencies (including, without limitation, counsel's fees and other costs and expenses incident to any suit, action or proceeding) (the "Damages") arising out of, resulting from or incurred in connection with any inaccuracy in any representation or the breach of any warranty made by the Company in this Agreement for the applicable Survival Period (disregarding, for this purpose, any materiality limitation contained therein). (b) The Purchaser shall indemnify and hold harmless, each of the Company and Counsel and the other holders of Company Common Stock, their respective Affiliates, agents , counsel and representatives, and any Person claiming by or through any of them, against and in respect of any and all Damages arising out of, resulting from or incurred in connection with (i) any inaccuracy in any representation or the breach of any warranty made by the Purchaser; or the Merger Sub in this Agreement for the applicable Survival Period, (disregarding, for this purpose, any materiality limitation contained therein), or (ii) the breach by the Purchaser or the Merger Sub of any covenant or agreement to be performed by either of them hereunder. (c) Any Person providing indemnification pursuant to the provisions of this Section 8.2 is hereinafter referred to as an "Indemnifying Party" and any Person entitled to be indemnified pursuant to the provisions of this Section 8.2 is hereinafter referred to as an "Indemnified Party." Section 8.3. PROCEDURES FOR THIRD PARTY CLAIMS. In the case of any claim for indemnification arising from a claim of a third party (a "Third Party Claim"), an Indemnified Party shall give prompt written notice to the Indemnifying Party of any claim or demand of which such Indemnified Party has knowledge and as to which it may request indemnification hereunder. Notwithstanding the provisions of this Section 8.3, the Indemnifying Party's and its Affiliates' aggregate liability for any such Third Party Claim shall in any event be limited to the amount set forth in Section 8.4 of this Agreement. The Indemnifying Party shall have the right to defend and to direct the defense against any such Third Party Claim, in its name or in the name of the Indemnified Party, as the case may be, at the expense of the Indemnifying Party, and with counsel selected by the Indemnifying Party unless (i) such Third Party

Claim seeks an order, injunction or other equitable relief against the Indemnified Party, or (ii) the Indemnified Party shall have reasonably concluded that (x) there is a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim or (y) the Indemnified Party has one or more defenses not available to the Indemnifying Party. Notwithstanding anything in this Agreement to the contrary, the Indemnified Party shall, at the expense of the Indemnifying Party, cooperate with the Indemnifying Party, and keep the Indemnifying Party fully informed, in the defense of such Third Party Claim. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel employed at its own expense; PROVIDED, HOWEVER, that, in the case of any Third Party Claim described in clause (i) or (ii) of the second preceding sentence or as to which the Indemnifying Party shall not in fact have employed counsel to assume the defense of such Third Party Claim, the reasonable fees and disbursements of such counsel shall be at the expense of the Indemnifying Party. The Indemnifying Party shall have no indemnification obligations with respect to any Third Party Claim which shall be settled by the Indemnified Party without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. Section 8.4. PROCEDURES FOR INTER-PARTY CLAIMS. In the event that an Indemnified Party determines that it has a claim for Damages against an Indemnifying Party hereunder (other than as a result of a Third Party Claim), the Indemnified Party shall give prompt written notice thereof to the Indemnifying Party, specifying the amount of such claim and any relevant facts and circumstances relating thereto. The Indemnified Party shall provide the Indemnifying Party with reasonable access to its books and records for the purpose of allowing the Indemnifying Party a reasonable opportunity to verify any such claim for Damages. The Indemnified Party and the Indemnifying Party shall negotiate in good faith regarding the resolution of any disputed claims for Damages. Promptly following the final determination of the amount of any Damages claimed by the Indemnified Party, the Indemnifying Party shall pay such Damages to the Indemnified Party by wire transfer or check made payable to the order of the Indemnified Party, without interest. In the event that the Indemnified Party is required to institute legal proceedings in order to recover Damages hereunder, the cost of such proceedings (including costs of investigation and reasonable attorneys' fees and disbursements) shall be added to the amount of Damages payable to the Indemnified Party. No Indemnifying Party's and its Affiliates' aggregate liability, i.e. the amount of Damages payable, under this Section 8.4, shall exceed $ (excluding (i) liabilities for taxes (ii) liabilities arising from knowing misrepresentations or fraud and (iii) claims for breach of the representations and warranties contained in Section 3.5). Section 8.5. PAYMENT OF DAMAGES. To the extent that Counsel is liable for any Damages as the Indemnifying Party hereunder, such Damages be shall be funded solely from Merger Shares returned by Counsel in an amount such that the total Merger Shares so returned by Counsel shall equal the amount of such Damages, with the value of such shares to be the higher of the fair market value thereof or $0.56 per share. ARTICLE IX Miscellaneous Section 9.1. NOTICES. All notices or other communications required or permitted hereunder shall be in writing and shall be delivered personally, by facsimile or sent by certified, registered or express air mail, postage prepaid, and shall be deemed given when so delivered personally, or by facsimile, or if mailed, five days after the date of mailing, as follows:
If to the Purchaser: I-Link Incorporated 13751 S. Wadsworth Park Drive Suite 200 Draper, Utah 84020 Telephone: (801) 576-5000 Facsimile: (801) 576 4295 Attention: John Edwards, President De Martino Finkelstein Rosen & Virga

With a copy to:

Suite 400, 1818 N Street, N.W. Washington, District of Columbia 20036 Telephone: (202)659-0494 Facsimile: (202) 659-1290 Attention: Ralph De Martino If to the Company: WebToTel Inc. c/o Counsel Corporation 280 Park Avenue, 28th Floor New York, New York 10017 Telephone: (212) 286-5000 Facsimile: (212) 867-3226 Attention: Allan Silber, Chairman Wollmuth Maher & Deutsch LLP 500 Fifth Avenue, Suite 1200 New York, New York 10110 Telephone: (212) 382-3300 Facsimile: (212) 382-0050 Attention: Mason H. Drake, Esq.

With a copy to:

or to such other address as any party hereto shall notify the other parties hereto (as provided above) from time to time. Section 9.2. EXPENSES. Except as otherwise specifically provided in this Agreement (including, without limitation, Section 5.10 hereof, which provides for payment by the Purchaser of Counsel's and its Affiliates' expenses), each party will pay its own expenses incident to this Agreement and the transactions contemplated hereby, including legal and accounting fees and disbursements. Any payments for sales, transfer or other taxes or fees applicable to the conveyance and transfer to the holders of Company Common Stock of the Merger Consideration shall be borne by the Purchaser. The provisions of this Section shall survive any termination of this Agreement. Section 9.3. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without reference to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Section 9.4. ASSIGNMENT; SUCCESSORS AND ASSIGNS; NO THIRD PARTY RIGHTS. Except as otherwise provided herein, this Agreement may not be assigned by operation of law or otherwise, and any attempted assignment shall be null and void. The Purchaser may assign all of its rights under this Agreement to any Affiliate; PROVIDED such Affiliate assumes all of the obligations of the Purchaser hereunder; and PROVIDED further that the Purchaser shall remain liable for such Affiliate's failure to meet any of the obligations of Purchaser hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, assigns and legal representatives. This Agreement shall be for the sole benefit of the parties to this Agreement and their respective heirs, successors, assigns and legal representatives and is not intended, nor shall be construed, to give any Person, other than the parties hereto and their respective heirs, successors, assigns and legal

representatives, any legal or equitable right, remedy or claim hereunder. Section 9.5. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original agreement, but all of which together shall constitute one and the same instrument. Section 9.6. TITLES AND HEADINGS. The headings in this Agreement are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. Section 9.7. ENTIRE AGREEMENT. This Agreement, including the Schedules and Exhibits attached thereto, constitutes the entire agreement among the parties with respect to the matters covered hereby and supersedes all previous written, oral or implied understandings among them with respect to such matters. Section 9.8. AMENDMENT AND MODIFICATION. This Agreement may only be amended or modified in writing signed by the party against whom enforcement of such amendment or modification is sought. Section 9.9 WAIVER. Any of the terms or conditions of this Agreement may be waived at any time by the party or parties entitled to the benefit thereof, but only by a writing signed by the party or parties waiving such terms or conditions. Section 9.10. SEVERABILITY. The invalidity of any portion hereof shall not affect the validity, force or effect of the remaining portions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by law. Section 9.11.NO STRICT CONSTRUCTION. Each party hereto acknowledges that this Agreement has been prepared jointly by the parties hereto, and shall not be strictly construed against either party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

I-LINK INCORPORATED By:______________________________ Title: I-LINK ACQUISITION CORP. By:______________________________ Title: WEBTOTEL INC. By:______________________________ Title: COUNSEL COMMUNICATIONS LLC By:______________________________ Title:


								
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