RECISSION AGREEMENT
THIS
AGREEMENT IS AMONG THE
PARTIES ENUMERATED IN
THE SIGNATURE BLOC
AT
THE END OF THIS DOCUMENT AND IS DATED AS OF THE 27TH DAY OF
DECEMBER 2005.
REFERENCE
IS MADE to an
Agreement for Merger (the "Merger Agreement")
dated as of June 30,
2005 among Dialog
Group, Inc., a Delaware corporation
("DGI"), AdValiant
Acquisition Corp.
("Acquisition"), a
Delaware corporation,
AdValiant Inc., a corporation organized under the Ontario
Business Corporations
Act ("AdValiant"), AdValiant USA, Inc. a Delaware corporation
("AdValiant USA"),
and Empire Media, Inc., a Delaware corporation, Matthew Wise, and Jivan Manhas
(the last three are collectively referred to as the
"Shareholders").
FURTHER REFERENCE IS MADE to several agreements among the same parties
executed pursuant
to Sections 2.01(d) and 8.01 of the Merger Agreement,
specifically the
Voting and Exchange Trust Agreement (the "Voting Trust
Agreement"), the Support Agreement, and the Escrow Agreement.
RECITALS
1.
The
parties desire to reverse the effects of
the Merger and return
to the status quo anti.
2.
DGI has
agreed with the Shareholders to sell control of AdValiant to
its original owners in
exchange for the
cancellation of the
right to exchange
AdValiant Exchangeable Shares for Dialog Group Common Stock,
cancellation of the
Exchangeable Shares, return of the DGI Preferred Voting Shares, and
repayment of
both $185,000 of funds
advanced by
Commodore Factors and $57,000 of
expenses
incurred by DGI in the transaction.
3.
All terms
used in the above
referenced
agreements
shall have the
same meaning herein.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
contained in this Agreement, and for other good and valuable
consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Parties agree that
the Recitals and References set forth above are true and correct
and
incorporated herein as if fully set forth and further agree as
follows:
AGREEMENT
ARTICLE I - THE ADVALIANT STOCK
Section 1.01 Transfer of AdValiant Class A
Subject to
the delivery and
settlement of the Notes and the cancellation
of the Exchangeable Shares, AdValiant USA hereby transfers all
of the AdValiant
Class A shares owned by it to the Shareholders.
Section 1.02 Cancellation of the AdValiant Exchangeable Shares
The
AdValiant Exchangeable shares shall be cancelled
and the AdValiant
corporate documents
amended to reflect
their return and cancellation. The
Shareholders
acknowledge that, upon cancellation of the Voting Trust
Agreement,
they no longer retain the right to exchange their AdValiant
Exchangeable
shares
for DGI Common Stock.
AdValiant agrees to cancel the Exchangeable Shares as
promptly as possible.
<PAGE>
Section 1.03 Transfer of the DGI Preferred Voting Shares
The
Shareholders hereby transfer all of the DGI Preferred Voting Shares
to
DGI for cancellation.
The Shareholders
acknowledge that they
no longer retain
the right to vote their DGI Preferred Voting Shares. DGI agrees to cancel the
DGI Preferred Voting Shares as promptly as possible.
Section 1.04 Directions to the Trustee and the Escrow Agent
DGI, the
Shareholders, and AdValiant hereby jointly direct the Trustee
and
the Escrow Agent to return the DGI Preferred Voting Shares to DGI and to
return
the Exchangeable
Shares to AdValiant after receiving certification of the
cancellation of the
Exchangeable
Shares from the Ontario authorities. The
Trustee and the Escrow Agent agree to so do.
ARTICLE II - THE AGREEMENTS
Section 2.01 Cancellation
Notwithstanding any
provisions therein,
the Voting Trust Agreement, the
Support Agreement,
and the Escrow
Agreement are hereby cancelled and shall
hereafter be void
and of no further effect. The Shareholders specifically
relinquish their
rights to exchange
their AdValiant
Exchangeable
shares for
shares of DGI Common Stock.
ARTICLE III - CONSIDERATION
Section 3.01 Amount and Payment Terms
As
additional
consideration for the
AdValiant Class A, the
Shareholders
agree to repay $185,000 of funds advanced by Commodore Factors to AdValiant and
$57,000 of expenses incurred by DGI in the transaction. Payment is
to be made as
follows:
(a)
With respect to
the funds advanced:
(i)
$5,000 plus
$1,850 of interest on the date hereof;
(ii)
On the tenth of each
month commencing
February 2006 and
continuing
thro
