Espotting Signs Merger Agreement with

10th Feb 2004

Espotting Media announced today the signing
of an amended agreement to merge with Nasdaq listed The merger is intended to create an international
leader in performance-based Internet marketing with combined operations and
partnerships across the globe.
Under the proposed terms of the transaction, which was approved by the board
of directors of each company, Espotting stockholders will receive 7.0
million shares of common stock and approximately $20.0 million
in cash. The amount of cash Espotting stockholders will receive may vary
based upon Espotting’s net assets on the closing date. will
also issue options and warrants to purchase an estimated 800,000 shares of common stock to Espotting employees and affiliates.

At’s closing share price on February 6, 2004, the transaction
values Espotting at approximately $170 million (£92 million / Euro 134
million). As a result of the merger, the combined company would have
approximately 33.5 million shares outstanding on a fully diluted basis, with’s stockholders, employees, and affiliates beneficially owning
approximately 25.7 million shares, and Espotting’s stockholders, employees,
and affiliates beneficially owning approximately 7.8 million shares.

Daniel Ishag, founder and CEO of Espotting, said:  “We now have been in
discussions with on a merger of our two companies for over a
year, and we have never wavered from our belief that we can create
significantly greater value for all of our constituencies as one, combined
organization. We continue to feel that with this single transaction both
companies achieve a step change in scale which should allow us to capitalize
fully on the rapid expansion in performance-based online marketing. We
continue to view the combination as a ‘merger of the bests,’ allowing the
two companies to bring together the best of their respective talents. A
critical component of both companies’ strategy is to understand the
specific, cultural needs of each market we serve, and we are extremely
excited about the opportunity to create one company that has such local
expertise on three continents.”

The merger agreement provides that upon closing of the merger, two nominees
from Espotting will join’s board of directors. has
secured voting agreements from Espotting’s principal stockholders and
certain directors and officers. The merger agreement includes post-closing
indemnification provisions by Espotting, and an escrow of a portion of the
transaction value.


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