ASSET PURCHASE AND SALE AGREEMENT Dated as of August 23, 2002 between VERTAPORT, INC. and ASSET PURCHASE AND SALE AGREEMENT

(a)

Any and all Technological Assets, Intellectual Property Rights, Trade Secrets and Confidential Information of Seller, defined as follows:

"Technological Assets" as used herein shall include:

1.

"Patents" meaning any patents, or patents that may issue from the patent applications, together with any patents that may issue from the Technology, and any patents which may issue from any divisional, continuation, reissue or substitute application based thereon, including any patents which issue from applications not yet made as of the date of this Agreement.

2.

"Technology" meaning any Trade Secret, Intellectual Property Rights, Confidential Information, Software, know-how or invention developed by or for Seller, or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement or other information based thereon or related thereto. "Technology" shall also include all regulatory clearances and marketing approvals related to the Assets.

3.

"Software" meaning all Computer Program(s), data compilation(s) and/or other intellectual property of intangible nature developed by or for Seller hereto that are expressed in Object Code and shall consist of the Source Code, Binary Code and Object Code therefor as of the date hereof.

4.

"Computer Program" meaning a list of steps or list of statements and/or instructions which are capable when incorporated in a machine-readable medium of causing a computer to indicate, perform or achieve particular functions, tasks or results.

5.

"Source Code" meaning the Computer Programs in human readable form.

6.

"Object Code" meaning the fully compiled or assembled series of Computer Programs in machine language in either printed form or as stored in software media.

7.

"Binary Code" meaning Computer Program code that loads and executes without further processing by a software compiler or linker, or that results when Source Code is processed by a software compiler.

8.

"Future Improvements" meaning any and all regulatory clearances and marketing approvals, discoveries, inventions and improvements in processes, manufacturing techniques and the like, relative to the articles falling within the scope of the Patents and Technology.

9.

All notes, drawings, designs, formulas, prototypes, business plans, market research, business research, legal research, technical research, ideas, inventions, invention disclosures, and other works, whether or not reduced to practice, developed or commercialized in connection with the development or commercialization of the Patents and Technology including, without limitation, all intellectual property and work product produced by Seller or its Affiliates and their respective contractors.

10.

"Intellectual Property Rights" means intellectual property or proprietary rights, including, but not limited to, copyright rights, patent rights (including patent applications and disclosures), rights of priority, Trade Secrets and Technological Assets of Seller, recognized in any country or jurisdiction in the world.

11.

"Trade Secrets" include, but shall not be limited to, any and all written material, instruction manuals, blueprints, technical specifications, account information, customer records, procedures, detail drawings, graphic designs, Technological Assets of Seller, inventions, discoveries, computer programs (both source and object codes) their organization, structure, sequence, logic, coherence, look and feel, subroutines, formulas, design, concept and know-how, and any other material owned or produced by or for Seller, whether or not patented or patentable and whether or not copyrighted or copyrightable, Seller's business plan, marketing strategy, clients and customers, consultants and employees, formats, projections, suppliers, dealers and distributors."

12.

"Confidential Information" includes all Trade Secrets, information, knowledge, design specifications, design criteria, inventions, discoveries, know-how, Patents and Patent rights of Seller, processes and concepts embodied or incorporated in or manifested or represented by any of the Technological Assets of Seller hereto, and all other information that has been marked confidential or is known to be proprietary, whether or not patented or patentable and whether or not copyrighted or copyrightable.

(b)

Any and all documentation, user manuals, and other writings or drawings related to any of the foregoing Technological Assets, Intellectual Property Rights, Trade Secrets and Confidential Information;

(c)

Supplier or manufacturer identity and contracts, marketing and sales plans, product agreements, strategic contractual relationships, financial information, cost forecasts, pricing information, product research and development and all other concepts or ideas involving or reasonably related to the Business or prospective business of the Seller;

(d)

All other intangible assets used solely in the conduct of the Business including, without limitation, any and all domain names, websites, prospects lists, databases, marketing scripts, procedures and practices;

(e)

All contracts and licenses used solely in the conduct of the Business and assumed by the Buyer pursuant to Section 2.4, including, without limitation, contracts and licenses with vendors, suppliers, manufacturers, distributors, publishers, programmers, consultants and collaborators; all contracts and licenses, all confidentiality, invention and similar contracts with employees and consultants; all sales orders and contracts and all contracts for the purchase or sale of products;

(f)

All of Seller's development assets used solely in the conduct of the Business, including, without limitation, all pre-publication, sales, marketing, advertising and promotional materials, transcripts, catalogs, brochures, mailers, edited works in process, mechanicals, camera copy, flats, plates, intermediate film, final plate-making film, magnetic disks, artwork, photographs and transparencies, and other sales, advertising and promotional materials and rights associated therewith;

(g)

All mailing, client and customer lists used in the conduct and operation of the Business;

(a)

Cash and cash equivalents as of the Effective Date; and

(b)

All business, tax and accounting records.

(c)

All inventories of the Business of every nature whatsoever, including, but not limited to, parts and accessories;

(d)

All accounts receivable of the Business of every nature whatsoever, including trade and other receivables;

(e)

Seller's furniture, fixtures, office machinery and equipment and other tangible property used in the operation of the Business, including, without limitation, all computer systems, hardware and software, and telephone systems;

(f)

All prepaid expenses of the Business including, without limitation, royalty, contract, catalog expense or lease advances or deposits and other similar types of advances to vendors, suppliers, lessors and others;

(g)

All third party software licensed by Seller that is either nonassignable or not specifically assigned to Buyer in accordance with Seller's obligations pursuant to any such license.

(a)

At Closing, Buyer shall issue to Seller an aggregate of 7,000,000 shares of Common Stock, $.0001 par value, of Seller (the "Purchase Shares"). Such shares shall be "restricted securities" under the Securities Act of 1933 and the certificate evidencing same shall bear the Buyer's customary restrictive legend;

(b)

At Closing, Buyer shall also issue to Seller Class A Warrants exercisable to purchase until December 31, 2005 (the "Warrant Expiration Date") an additional 7,000,000 shares of Common Stock at an exercise price of $.50 per share;

(c)

At Closing, the Buyer shall also issue to the Seller Class B Warrants exercisable until the Warrant Expiration Date to purchase an additional 2,500,000 shares of the Buyer's Common Stock at an exercise price of $1.00 per share; and

(d)

Buyer shall grant to Seller certain registration rights with respect to the PurchaseShares, and shares of Common Stock issuable upon exercise of the Class A Warrants and Class B Warrants to be issued to Seller in consideration of the transfer of the Assets, which registration rights shall be set forth in the Registration Rights Agreement substantially in the form of Exhibit 3.1(d) hereto.

(a)

On the Closing Date, Buyer shall deliver to Seller certificates representing 50% of the Purchase Shares (an aggregate of 3,500,000 shares), 50% of the Class A Warrants (Class A Warrants exerciseable to purchase an aggregate of 3,500,000 shares) and 50% of the Class B Warrants (Class B Warrants exerciseable to purchase an aggregate of 1,250,000 shares) deliverable as payment of the Purchase Price in accordance with Section 3.1 above.

(b)

On the Closing Date, certificates representing the balance of the Purchase Price (3,500,000 Purchase Shares, Class A Warrants exerciseable to purchase 3,500,000 shares and Class B Warrants exerciseable to purchase 1,250,000 shares (hereafter collectively referred to as the "Holdback Securities")) shall be retained by Buyer and shall be delivered to Seller concurrently with the delivery by Seller to Buyer of the Legal Opinion described in Section 4.5(j) of this Agreement.

(c)

It is agreed that until such time as Seller delivers to Buyer the Legal Opinion described in Section 4.5(j) of this Agreement and Buyer concurrently delivers the Holdback Securities to Seller, the Holdback Securities shall not be deemed issued and/or outstanding for any purpose and shall not vest in Seller any rights or entitlements with respect thereto.

(a)

Accuracy of Representations and Warranties. The representations and warranties made by Seller in this Agreement shall be correct in all material respects on and as of the Closing date with the same force and effect as though such representations and warranties had been made on the Closing date.

(b)

Compliance with Covenants. All covenants which Seller is required to perform or comply with on or before the Closing date shall have been fully complied with or performed in all material respects.

(c)

Corporate Approvals. The Board of Directors and Shareholders of the Seller shall have approved and ratified this Agreement and shall have authorized the appropriate officers of the Seller to execute same and fully perform its terms.

(d)

Consents and Approvals. To the extent that any material lease, mortgage, deed of trust, contract or agreement to which Seller is a party shall require the consent of any person to the purchase and sale of the Assets or any other transaction provided for herein, such consent shall have been obtained; provided, however, that the Seller shall not make, as a condition for the obtaining of any such consent, any agreements or undertakings not approved in writing by Buyer to the extent that such condition otherwise has an effect on Buyer.

(e)

No Governmental Actions. No action or proceeding before any Governmental Authority shall have been instituted or threatened to restrain or prohibit the transactions contemplated by this Agreement, and the Buyer and Seller shall have delivered to each other certificates dated as of the Closing and executed by such parties, stating that to their Best Knowledge, no such items exist. No Governmental Authority shall have taken any other action as a result of which the management of any of the Buyer and Seller, in its sole discretion, reasonably deems it inadvisable to proceed with the transactions contemplated by this Agreement.

(f)

Other Documents. Seller shall have delivered or caused to be delivered all other documents, agreements, resolutions, certificates or declarations as Buyer or its attorneys may have reasonably requested.

(g)

No Adverse Information. The investigations with respect to the Parties, the assets and the respective businesses performed by each Company's respective professional advisors and other representatives shall not have revealed any information concerning the other Company, its assets or its business that has not been made known to the discovering Companyprior to the date of this Agreement and that, in the opinion of such party and its advisors, materially and adversely affects the business or assets of the other party or the viability of the transaction contemplated by this Agreement.

(h)

Liens. Seller shall have delivered to Buyer a reasonably current lien and judgment search (both state and county levels in each jurisdiction where the party is qualified to or is doing business or owns material assets) confirming the absence of any judicial liens, security interests, tax liens and similar such liens affecting any of its business or assets. Each and every lien or encumbrance of any nature, if any, relating to the assets, business, or the shares of common stock of such Company shall have been terminated and released, and proof thereof delivered to the other.

(i)

Other Obligations. Seller shall have delivered to Buyer an accurate list, as of the Closing Date, showing all other commitments and/or obligations of Seller not otherwise disclosed to Buyer in writing. It is understood that Buyer is not assuming any such commitments and/or obligations, all of which shall be and remain the obligation of Seller, and Seller agrees to indemnify and hold harmless Buyer, Seller from any liability with respect thereto.

(j)

Legal Opinion. Seller shall deliver to Buyer an opinion of legal counsel, in form satisfactory to the Buyer and its legal counsel, confirming the validity and enforceability of the Seller's Technological Assets, Intellectual Property Rights and Trade Secrets and the legal capacity of the Seller to convey such rights and Assets to the Buyer free and clear of liens or claims of third parties. It is agreed that the opinion provided for in this Section 4.5(j) shall be delivered after the Closing Date but before September 30, 2002.

(a)

Corporate Approvals. Buyer shall have approved and ratified this Agreement and shall have authorized the appropriate parties to execute same and fully perform its terms.

(b)

Consents and Approvals. To the extent that any material lease, mortgage, deed of trust, contract or agreement to which Seller is a party shall require the consent of any person to the purchase and sale of Assets or any other transaction provided for herein, such consent shall have been obtained; provided, however, that Seller shall not make, as a condition for the obtaining of any such consent, any agreements or undertakings not approved in writing by Buyer to the extent that such condition otherwise has an effect on the Seller or Buyer.

(a)

To be delivered by Seller (in duplicate original):

(i)

Bills of Sale, assignments and other documents of conveyance transferring to Buyer the Assets with general warranty of title.

(ii)

Copy of corporate resolutions of Seller's Board of Directors and Shareholders authorizing the execution of this Agreement, and the consummation by Seller of the transactions contemplated by this Agreement.

(iii)

A certificate of the President or Chairman of Seller stating that the representations and warranties of Seller set forth in this Agreement are true and correct. Said certificate shall further verify and affirm that all consents or waivers, if any, which may be necessary to execute and deliver this Agreement have been obtained and are in full force and effect.

(iv)

A certificate dated the Closing Date, signed by the Chairman of Seller in form and substance satisfactory to the other parties and their legal counsel, certifying that all conditions precedent set forth in this Agreement to the obligations of Seller to close, have been fulfilled, and that no event of default hereunder and no event which, with the giving of notice or passage of time, or both, would be an event of default, has occurred as of such date.

(v)

Certificates dated the Closing Date, signed by the Secretary of Seller, (i) certifying resolutions duly adopted by the Board of Directors and Shareholders of Seller, authorizing the execution of this Agreement and all of the other transactions to be consummated pursuant thereto; (ii) certifying the names and incumbency of the officers of Seller who are empowered to execute the foregoing documents for and on behalf of such company; and (iii) certifying the authenticity of a reasonably current Certificate of Good Standing in Delaware.

(vi)

Legal Opinion described in Section 4.5(j) hereto, to be delivered after the Closing Date but before September 30, 2002.

(b)

To be delivered by Buyer (in duplicate original):

(i)

Certificates representing 50% of the Purchase Shares, Class A Warrants and Class B Warrants; with the Holdback Securities to be retained by Buyer in accordance with Section 3.2(b) hereof.

(ii)

Registration Rights Agreement;

(iii)

Copy of corporate resolution certified by Buyer's Secretary authorizing the execution of this Agreement and the consummation by Buyer of the transactions contemplated by this Agreement.

(a)

conflict with or result in a breach of any provision of its Articles of Incorporation or By-Laws;

(b)

result in a default (or give rise to any right of termination, cancellation, or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which either Seller is a party, or by which any of its properties or assets may be bound except for such default (or right of termination, cancellation, or acceleration) as to which requisite waivers or consents shall either have been obtained by the Seller prior to the Closing Date or the obtaining of which shall have been waived by the other parties hereto; or

(c)

violate any order, writ, injunction, decree or, to the Seller's Best Knowledge, any statute, rule or regulation applicable to the Seller or any of its properties or assets. No consent or approval by any Governmental Authority is required in connection with the execution and delivery by the Seller of this Agreement or the consummation by the Seller of the transactions contemplated hereby, except for possible notice under plant closing laws.

(a)

The Seller has filed (or have obtained extensions for filing) all income, excise, sales, corporate franchise, property, payroll and other tax returns or reports required to be filed by it, as of the date hereof by the United States of America, any state or other political subdivision thereof or any foreign country and has paid all Taxes or assessments relating to the time periods covered by such returns or reports;

(b)

The Seller has paid all tax liabilities imposed or assessed by any governmental authority for all periods prior to the Closing Date for which such taxes have become due and payable and has received no notice from any such governmental authority of any deficiency or delinquency with respect to such obligation. The Seller is not currently undergoing any audit conducted by any taxing authority and have received no notice of audit covering any prior period for which taxes have been paid or are or will be due and payable prior to the Closing Date. There are no present disputes as to taxes of any nature payable by Seller.

(a)

Except as described in Exhibit 5.9 hereto, the Seller and/or its subsidiaries are not obligated or under any liability whatever to make any payments by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, the Technological Assets and Intellectual Property Rights of Seller and its subsidiaries with respect to the foregoing, both domestic and foreign, claimed by the Seller or its subsidiaries or used or proposed to be used by the Seller and/or its subsidiaries in the conduct of their business including, without limitation, the name "VertaPort," (collectively herein, "Rights") or all or any Trade Secret, know-how, process, formula, discovery, development, research, design, technique, customer and supplier list, contracts, product development plans, product development concepts, author contracts, marketing and purchasing strategy, invention, and any other matter required for, incident to, or related to the conduct of their businesses (hereafter collectively the "Proprietary Information") with respect to the use thereof in the conduct of their businesses or otherwise.

(b)

Except as described in Exhibit 5.9 hereto, the Seller owns and has the unrestricted right to use the Rights and Proprietary Information required for or incident to the design, development, manufacture, operation, sale and use of all products and services sold or rendered or proposed to be sold or rendered by the Seller and/or its subsidiaries or relating to the conduct or proposed conduct of their businesses free and clear of any right, title, interest, equity or claim of others. Except as described in Exhibit 5.9 hereto, the Seller and/or its subsidiaries have taken all necessary steps (including without limitation entering into appropriate confidentiality, assignment of rights and non-competition agreements with all officers, directors, employees and consultants of the Seller and/or its subsidiaries and others with access to or knowledge of the Proprietary Information) to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, the Proprietary Information and all related documentation and intellectual property rights therein necessary for the conduct or proposed conduct of their businesses.

(c)

Except as described in Exhibit 5.9 hereto, the Seller and/or its subsidiaries have not sold, transferred, assigned, licensed or subjected to any right, lien, encumbrance or claim of others, any Proprietary Information, including without limitation any Right, or any interest therein, related to or required for the design, development, manufacture, operation, sale or use of any product or service currently under development or manufactured, or proposed to be developed, sold or manufactured, by them. Exhibit 5.9 contains a true and complete list and description of all licenses of Proprietary Information granted to the Seller by others or to others by the Seller and/or its subsidiaries. Except as described in Exhibit 5.9 hereto, there are no claims or demands of any person pertaining to, or any proceedings that are pending or threatened, which challenge the rights of the Seller and/or its subsidiaries in respect of any Proprietary Information used in the conduct of their businesses.

(d)

Except as described in Exhibit 5.9 hereto, the Seller and/or its subsidiaries own and on the Closing Date shall own, have, and hold, exclusively all right, title and interest in the Rights, free and clear of all liens, encumbrances, restrictions, claims and equities of any kind whatsoever, has and shall have the exclusive right to use, sell, license or dispose of, and has and shall have the exclusive right to bring action for the infringement of the Rights and the Proprietary Information. The marketing, promotion, distribution or sale by the Seller and/or its subsidiaries of any products or services subject to the Rights or making use of Proprietary Information shall not constitute an infringement of any patent, copyright, trademark, service ▇▇▇▇ or misappropriation or violation of any other party's proprietary rights or a violation of any license or agreement by the Seller and/or its subsidiaries. Except as described in Exhibit 5.9 hereto, to the knowledge of the Seller after due inquiry no facts or circumstances exist that could result in the invalidation of any of the Rights.

(a)

All contracts, leases, agreements, covenants, licenses, instruments or commitments of Seller and its subsidiaries pertaining to the Assets or which are otherwise material to the Assets, including, without limitation, the following:

(i)

Executory contracts for the sale of products utilizing or incorporating the Assets;

(ii)

Executory contracts for the purchase, sale or lease of any Assets;

(iii)

Management or consulting contracts;

(iv)

All sales, agency, distributorship, license or franchise agreements; and

(vi)

Any other contracts not in the ordinary course of business related to the Assets.

(b)

All instruments evidencing any liens or security interest securing any indebtedness of Seller and its subsidiaries covering any asset of Seller and its subsidiaries.

(a)

preserve intact the present business organization of Seller;

(b)

maintain its Property and Assets, and those of its subsidiaries, in their present state of repair, order and condition, reasonable wear and tear excepted;

(c)

preserve and protect the goodwill and advantageous relationships of Seller and its subsidiaries with their customers and all other persons having business dealings with Seller and its subsidiaries;

(d)

preserve and maintain in force all licenses, permits, registrations, franchises, patents, trademarks, trade names, trade secrets, service marks, copyrights, bonds and other similar rights of Seller and its subsidiaries; and

(e)

comply with all laws applicable to the conduct of its business.

(a)

sell, mortgage, pledge or encumber or agree to sell, mortgage, pledge or encumber, any of its property or assets, other than in the ordinary course of business;

(b)

incur any obligation (contingent or otherwise) to purchase, acquire, transfer, or convey, all or part of the Assets or enter into any contract or commitment concerning the Assets other than is contemplated herein;

(c)

discuss, solicit, negotiate or enter into an agreement concerning any merger, consolidation or sale of all or substantially all of its assets except as contemplated by this Agreement.

(a)

Except in connection with the transactions contemplated by this Agreement, Seller shall not, nor shall it permit any of its subsidiaries to, nor shall it authorize or permit any officer, director or employee of or any investment banker, attorney or other advisor or representative of, Seller or any of its subsidiaries to, (i) solicit, initiate or encourage the submission of, any takeover proposal, (ii) enter into any agreement with respect to any takeover proposal or (iii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any takeover proposal. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any executive officer of Seller or any of its subsidiaries or any investment banker, attorney or other advisor or representatives of Seller or any of its subsidiaries or otherwise, shall be deemed to be a breach of this Section by Seller. For purposes of this Agreement, "takeover proposal" means any proposal for a merger, consolidation or reorganization or other business combination involving Seller or any of its subsidiaries or any proposal or offer to acquire in any manner, directly or indirectly, an equity interest in, any voting securities of, or options, rights, warrants or other interests convertible or exercisable for or into such voting securities, or a substantial or material portion of the assets or business of Seller or any of its subsidiaries, other than the transactions contemplated by this Agreement.

(b)

Except upon a material breach of this Agreement by Buyer or following termination hereof, except for action permitted or contemplated by this Agreement, including a party's right to terminate this Agreement under certain circumstances, neither the Board of Directors of Seller nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to Buyer, the approval or recommendation by such Board of Directors of any such committee of this Agreement or (ii) approve or recommend, or propose to approve or recommend, any takeover proposal.

(c)

Seller promptly shall advise Buyer orally and in writing of any takeover proposal or any inquiry with respect to or which could lead to any takeover proposal and the identity of the person making any such takeover proposal or inquiry. Seller will keep Buyer fully informed of the status and details of any such takeover proposal or inquiry.

(d)

The provisions of this Section 7.6 shall not be construed to prevent any investment banker, attorney or other advisor or representative of Seller to engage in discussions with third parties in the ordinary course of business with respect to transactions not involving the parties to this Agreement.

(a)

At any time until the Closing Date by the mutual agreement of the Seller and Buyer.

(b)

By either Buyer or 0Seller, if for any reason the parties have failed to close this Agreement on or before September 30, 2002, provided that neither Buyer nor Seller is then in default thereunder.

(a)

Any inaccuracy in a representation or breach of a warranty made by the Seller in this Agreement or in any document or instrument delivered to the Buyer in connection with this Agreement; or

(b)

The failure of the Seller to comply with, or the breach by the Seller of, any of the covenants contained in this Agreement or in any document or instrument delivered to the Buyer in connection with this Agreement, to be performed by the Seller; or

(c)

Any liability now or subsequently existing arising out of or in connection with the Business relating to periods prior to the Effective Date, except to the extent that any such liability is expressly assumed by the Buyer pursuant to this Agreement.

(a)

Any inaccuracy in a representation or breach of a warranty made by the Buyer in this Agreement or in any document or instrument delivered to the Seller in connection with this Agreement; or

(b)

The failure of the Buyer to comply with, or the breach by the Buyer of, any of the covenants contained in this Agreement or in any document or instrument delivered to the Seller in connection with this Agreement, to be performed by the Buyer; or

(c)

Any liability now or subsequently existing arising out of or in connection with the Business, solely to the extent that such liabilities and/or obligations relate to the acts or omissions of the Buyer subsequent to the Effective Date; except to the extent that any such liability is expressly retained by the Seller pursuant to this Agreement.

(i)

any breach of any of the representations and warranties of Seller contained in this Agreement, the schedules or exhibits hereto or any instrument, agreement or certificate delivered by Seller pursuant to this Agreement insofar as such breach constitutes or results in a breach of Seller's warranty of title to the Assets; or

(ii)

any claim, lien or encumbrance constituting a breach of the warranty of title of Seller with respect to the Assets or any qualification, limitation or exception contained in the Legal Opinion delivered by VertaPort pursuant to Section 4.5(j) hereof respecting title to the Assets or warranty of title with respect to such Assets.

(a)

"Claims" shall mean all claims asserted pursuant to this Section 9, whether or not arising as a result of a Third Party Claim.

(b)

"Indemnified Person" shall mean any Buyer Indemnitee or any Seller Indemnitee, as the context requires.

(c)

"Indemnifying Person" shall mean any person obligated to indemnify an Indemnified Person pursuant to this Section 9, as the context requires.

(d)

"Third Party Claims" shall mean any Claim asserted by any person not a party to this Agreement (including without limitation any governmental authority), asserting that an Indemnified Person is liable for monetary or other obligations which may constitute or result in Damages for which such Indemnified Person may be entitled to indemnification pursuant to this Section 9.

(e)

All Claims shall be made in writing and shall set forth with reasonable specificity the facts and circumstances of the Claim, as well as the basis upon which indemnification pursuant to this Section 9 is sought. Notwithstanding the foregoing, no delay or failure by any Indemnified Person to provide notification of any Claim shall preclude any Indemnified Person from recovering for Damages pursuant to this Section 9, except to the extent that such delay or failure materially compromises the rights of any Indemnifying Person under this Section 9.

(f)

Within ten (10) days after receipt by an Indemnifying Person of any notification of a Claim, the Indemnifying Person may, upon written notice thereof to the Indemnified Person, assume (at the Indemnifying Person's expense) control of the defense of such action, suit or proceeding with counsel reasonably satisfactory to the Indemnified Person, provided the Indemnifying Person acknowledges in writing to the Indemnified Person that any Damages that may be assessed against the Indemnified Person in connection with such action, suit or proceeding constitute Damages for which the Indemnified Person shall be entitled to indemnification pursuant to this Section 9. If the Indemnifying Person does not so assume control of such defense, the Indemnified Person shall control such defense, but in so doing shall not waive or limit its right to recover under this Section 9 for any Damages that may be assessed against the Indemnified Person in connection with such action, suit or proceeding. The party not controlling such defense may participate therein at its own expense; provided that if the Indemnifying Person assumes control of such defense, and the Indemnified Person has been advised in writing by outside legal counsel that under the applicable standards of professional conduct, the Indemnifying Person and the Indemnified Person may not be represented by the same counsel with respect to such action, suit or proceeding, the reasonable fees and expenses of one law firm for the Indemnified Person shall be paid by the Indemnifying Person. The party controlling such defense shall keep the other party advised of the status of such action, suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the other party with respect thereto. The Indemnified Person shall not agree to any settlement of such action, suit or proceeding without the prior written consent of the Indemnifying Person, which (with respect to an action, suit or proceeding as to which the Indemnifying Person has not elected to assume control of the defense) shall not be unreasonably withheld. The Indemnifying Person shall not agree to any settlement of such action, suit or proceeding without the prior written consent of the Indemnified Person, which shall not be unreasonably withheld so long as the settlement includes a complete release of the Indemnified Person from all liability and does not contain or contemplate any payment by, or injunctive or other equitable relief binding upon, the Indemnified Person.

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With copies to:

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▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

XML - GLOBAL TECHNOLOGIES, INC.

ATTEST:

___________________________________
Secretary

By:__________________________________
    ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer

VERTAPORT, INC.

___________________________________
Secretary

By:________________________________
Title: ______________________________ 

Agreed with respect to the provisions of Section 9.3:

PARADIGM GROUP II, L.L.C.

By: ______________________________
Name: ____________________________
          Its Managing Member