ADSLOT LTD. — M&A Activity 2010

Oct 26, 2010

Webfirm Group Limited ABN: 70 001 287 510 ASX: WFM

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23 Union St, South Melbourne www.webfirmgroup.com Victoria 3250 Australia T: +61 (0) 3 8695 9199 E: info@webfirmgroup.com F: +61 (0) 3 9696 0700

A S X A N N O U N C E M E N T

27 October 2010

QDC Acquisition Agreement

• Adslot and QDC IP Technologies execute Sale and Purchase Agreement

• Original terms revised to provide increased value for Webfirm Group shareholders

On 12 August 2010 Webfirm Group Limited (ASX: WFM) announced that it had entered into a heads of agreement to acquire all of the shares of QDC IP Technologies Pty Ltd (QDC).

The directors are pleased to announce that a Share Sale and Purchase Agreement has been executed by QDC and Webfirm’s wholly owned subsidiary Adslot Pty Ltd.

Webfirm Group CEO David Burden commented, “Completion of this transaction will provide Webfirm with powerful display ad creation technology required for the Adslot Direct Platform”.

The QDC technology will be integrated into Webfirm’s Adslot Direct Platform and will allow advertisers to:

• quickly and easily build display ads in the web browser, using a vast ad template library; and

• automatically create personalised display and video ads that are unique for each website visitor.

The higher than anticipated level of subscriptions to the Webfirm Share Purchase Plan (refer announcement 25 October 2010) have fortuitously enabled Webfirm to offer the QDC shareholders the option of taking cash in lieu of the Webfirm shares they would otherwise have acquired as consideration. As such, the base purchase consideration has now been changed to $801,818.18 in cash and the issue of 29,309,091 Webfirm shares (previously nil cash and the issue of 40,000,000 Webfirm shares).

The impact for Webfirm of the revised agreement terms is that Webfirm will use some of its cash as part consideration, and reduce by approximately 25% the number of ordinary shares that it is required to issue. The purchase price remains unchanged at $3,000,000.

The acquisition of QDC remains subject to Webfirm shareholder approval which will be sought at Webfirm’s Annual General Meeting to be held on 30 November 2010. Completion of the transaction will occur shortly thereafter.

-ends-

Media: David Burden Chief Executive Officer Phone: 0407 443 344 Email: david.burden@webfirmgroup.com

Investor Relations: Damian Element Company Secretary Phone: 0416 286 642 Email: damian.element@webfirmgroup.com

M E L B O U R N E

S Y D N E Y

B R I S B A N E

P E R T H

About the Webfirm Group

Webfirm Group Limited (ASX: WFM) is an innovative Internet technology and marketing company that maximises online profitability for its customers. The company operates two main divisions.

The Adslot division provides patented advertising sales automation services that reduce selling costs and increase premium advertising revenue for its publisher clients.

The company’s Webfirm division offers the complete spectrum of online marketing services including web design and development, website optimisation, hosting, search and social marketing and e-commerce services; the division also delivers premium quality search monetisation solutions.

With more than 60 staff across Melbourne, Sydney and Perth, the Webfirm Group continues to develop innovative products and services aimed at helping customers maximise their online investment.

More information at www.webfirmgroup.com

About QDC IP Technologies Pty Ltd

QDC IP Technologies Pty Ltd (QDC) is the owner of various technologies and intellectual property (IP) that specialises in both display and video ad creation and personalisation tools. The core IP is currently the subject of a number of world-wide patents pending (one awarded), and has been developed over the last ten years at a cost of more than $6 million.

QDC’s two core pieces of technology are:

1. Display Ad Builder – an automated content creation tool that allows end users (advertisers) to customise online display ads using professionally-designed ad templates, and then output the customised ads in multiple IAB ad sizes.

2. Personalised Video Ad Platform – a video personalisation tool that enables advertisers to seamlessly create and customise personalised versions of video and rich media ads to fit the profile and preferences of individuals.

IMPORTANT NOTE FOR SHAREHOLDERS / INVESTORS

Adrian Giles and Andrew Barlow are executive directors of Webfirm, and indirect shareholders of both Webfirm and QDC IP Technologies Pty Ltd (“QDC”). In accordance with the appropriate standards of corporate governance, neither Mr Giles nor Mr Barlow took part on behalf of either Webfirm or QDC in any discussions or negotiations between Webfirm and QDC nor in the decisions by Webfirm or QDC respectively to enter into the acquisition agreement.

The other directors of Webfirm are David Burden, Chris Morris, Anthony Du Preez and Adrian Vanzyl (Independent Directors), none of whom is a shareholder or officer of QDC. The decision by Webfirm to acquire QDC, and the terms on which that acquisition is to take place, was made solely by the Independent Directors and only after they had satisfied themselves that the agreement with QDC was in the best interests of Webfirm and commercial terms were fair and reasonable to Webfirm.

The entry by Webfirm into the Heads of Agreement follows several months of negotiations between the parties and the completion of an extensive technical due diligence investigation by Webfirm. Relevantly, as a precursor to being given the exclusive opportunity to undertake a formal due diligence review of the QDC technology and business, Webfirm was required by QDC to agree the key indicative terms of the proposed acquisition. The above terms for the acquisition of QDC reflect the indicative terms proposed by Webfirm in June 2010. At that time, the market price of Webfirm shares was 7.0 cents and the number of Webfirm shares to be issued was determined based on a Webfirm share price of 7.5 cents.

In the subsequent period prior to the entry by Webfirm into the Heads of Agreement, trading in Webfirm shares on ASX has firmed. The closing market price of Webfirm shares on 11 August 2010, the day immediately preceding the QDC announcement, was 14.0 cents.

Despite the significant increase in the market price of Webfirm shares, the independent directors of Webfirm have remained at all times of the opinion that it continues to be in the interests of the Webfirm shareholders to proceed with the QDC acquisition on the basis of the originally proposed indicative terms.

As contemplated by both the original indicative terms and the Heads of Agreement, completion of the QDC acquisition is subject to a number of conditions precedent, including the approval of the Webfirm shareholders at the Company’s Annual General Meeting to be held in November 2010.

Further, as entities associated with the Webfirm Executive Chairman, Adrian Giles, and Executive Director, Andrew Barlow, are each passive shareholders (holding 9.1% and 26.7% respectively) of QDC, Webfirm has commissioned Grant Thornton to provide an independent expert's report on the fairness and reasonableness of the QDC acquisition terms to the non-associated Webfirm shareholders. The Independent Expert’s report on the QDC acquisition will be forwarded to shareholders with the Notice of Meeting, and other explanatory materials, for the general meeting.

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