AGREEMENT AND PLAN OF MERGER
 
This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as
of September 4, 2007, by and among CaminoSoft Corp., a California corporation
(“Parent”), CC Merger Corp., a Nevada corporation and a wholly-owned subsidiary
of Parent (“Merger Sub”), and Shea Development Corp., a Nevada corporation (the
“Company”). Parent, Merger Sub and the Company are collectively referred to
herein as the “Parties,” and each is a “Party”. Capitalized terms used and not
otherwise defined herein have the meanings set forth in Article 1.
 
RECITALS
 
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have deemed it advisable and in the best interests of their respective
corporations and shareholders that Parent, Merger Sub and the Company enter into
a business combination transaction;
 
WHEREAS, in furtherance thereof, the respective Boards of Directors of Parent,
Merger Sub and the Company each have approved and declared advisable this
Agreement and the merger of Merger Sub with and into the Company (the “Merger”),
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the provisions of the Nevada Revised Statutes (the “NRS”);
 
WHEREAS, the respective Boards of Directors of Parent and the Company have
determined to recommend to their respective shareholders the approval and
adoption of this Agreement and the Merger; and
 
WHEREAS, in connection with the Merger, the parties desire to make certain
representations, warranties, covenants and agreements and also to prescribe
various conditions to the Merger, upon the terms and subject to the conditions
contained herein.
 
NOW, THEREFORE, in consideration of the covenants, promises, representations and
warranties set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:
 
ARTICLE 1
DEFINITIONS
 
1.1 Certain Definitions. The following terms shall, when used in this Agreement,
have the following meanings:
 
“Affiliate” means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling or holding with power to vote ten percent (10%)
or more of the outstanding voting securities of such other Person (other than
passive or institutional investors); (ii) any Person ten percent (10%) or more
of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote, by such other Person; (iii) any Person
directly or indirectly controlling, controlled by or under common control with
such other Person; and (iv) any officer, director or partner of such other
Person. “Control” for the foregoing

 
 

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purposes shall mean 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 or voting interests, by
contract or otherwise;
 
“Agreement” shall have the meaning set forth in the Recitals of this Agreement;
 
“Business Day” means any day other than Saturday, Sunday or a day on which
banking institutions in Los Angeles, California, are required or authorized to
be closed;
 
“Alternative Acquisition” shall have the meaning set forth in Section 5.12 of
this Agreement;
 
“Capital Increase” shall have the meaning set forth in Section 5.4 of this
Agreement;
 
“Certificates” shall have the meaning set forth in Section 2.9 of this
Agreement;
 
“Change of Control,” with respect to any Person, means (i) a liquidation or
dissolution of such Person; (ii) a merger or consolidation of such Person with
or into another corporation or entity in which such Person is not the surviving
corporation or other business entity (other than a merger with a wholly owned
subsidiary); (iii) a merger or consolidation of such Person (or a triangular
merger involving a subsidiary of the Company) where such Person is the surviving
corporation but with respect to which the shareholders of such Person
immediately prior to the merger or consolidation hold less than 50% of the
outstanding Common Stock of such Person immediately following the merger or
consolidation; or (iv) an underwritten initial public offering by such Person of
its common stock;
 
“Closing” shall have the meaning set forth in Section 2.2 of this Agreement;
 
“Closing Date” shall have the meaning set forth in Section 2.2 of this
Agreement;
 
“Collateral Documents” means the Confidential Disclosure Schedules to this
Agreement;
 
“Company” shall have the meaning set forth in the preamble of this Agreement;
 
“Company Common Stock” shall have the meaning ascribed to it in Section 2.7 of
this Agreement;
 
“Company Option Plan” shall have the meaning ascribed to it in Section 2.7 of
this Agreement;
 
“Company Preferred Stock” shall mean, collectively, the Company Series A
Preferred Stock and Company Series B Preferred Stock;
 
“Company Series A Preferred Stock” shall mean the 3,800,000 shares of the
Company’s Series A Preferred Stock issued and outstanding;
 
“Company Series B Preferred Stock” shall mean the 4,600,000 shares of the
Company’s Series B Preferred Stock issued and outstanding;
 

 
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“Company Financial Statement Date” shall have the meaning set forth in Section
3.8 of this Agreement;
 
“Continuing Employees” shall have the meaning set forth in Section 5.2 of this
Agreement;
 
“Contracts” shall have the meaning set forth in Section 3.16 of this Agreement;
 
“Dissenting Shares” shall have the meaning set forth in Section 2.15 of this
Agreement;
 
“Effective Time” shall have the meaning set forth in Section 2.3 of this
Agreement;
 
“Effective Date” shall have the meaning set forth in Section 2.3 of this
Agreement;
 
“Eligible Warrant” shall have the meaning set forth in Section 2.7(b) of this
Agreement;
 
“Eligible Warrant Agreements” shall have the meaning set forth in Section 2.9 of
this Agreement;
 
“Encumbrance” means any material mortgage, pledge, lien, encumbrance, charge,
security interest, security agreement, conditional sale or other title retention
agreement, limitation, option, assessment, restrictive agreement, restriction,
adverse interest, restriction on transfer or exception to or material defect in
title or other ownership interest (including but not limited to restrictive
covenants, leases and licenses);
 
“Equity Equivalents” shall have the meaning set forth in Section 3.3(b) of this
Agreement;
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended;
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended;
 
“Exchange Ratio” shall have the meaning set forth in Section 2.7(c) of this
Agreement;
 
“GAAP” means U.S. generally accepted accounting principles consistently applied,
as in effect from time to time;
 
“Indemnified Party” shall have the meaning set forth in Section 7.3 of this
Agreement;
 
“Indemnifying Party” shall have the meaning set forth in Section 7.3 of this
Agreement;
 
“Intellectual Property” means all trademarks and trademark rights, trade names
and trade name rights, service marks and service mark rights, service names and
service name rights, patents and patent rights, utility models and utility model
rights, copyrights, mask work rights, brand names, trade dress, product designs,
product packaging, business and product names, logos, slogans, rights of
publicity, trade secrets, inventions (whether patentable or not), invention
disclosures, improvements, processes, formulae, industrial models, processes,
designs, specifications, technology, methodologies, computer software (including
all source code and

 
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object code), firmware, development tools, flow charts, annotations, all Web
addresses, sites and domain names, all data bases and data collections and all
rights therein, any other confidential and proprietary right or information,
whether or not subject to statutory registration, and all related technical
information, the information set forth in manufacturing, engineering and
technical drawings, know-how and all pending applications for and registrations
of patents, utility models, trademarks, service marks and copyrights, and the
right to sue for past infringement, if any, in connection with any of the
foregoing;
 
“Joint Proxy-Registration Statement” shall have the meaning set forth in Section
5.4 of this Agreement;
 
“Key Employees” shall have the meaning set forth in Section 5.1 of this
Agreement;
 
“Key Employee Agreements” shall have the meaning set forth in Section 5.1 of
this Agreement;
 
“Legal Requirements” means any statute, ordinance, law, rule, regulation, code,
injunction, judgment, order, decree, ruling, or other requirement enacted,
adopted or applied by any Regulatory Authority, including judicial decisions
applying common law or interpreting any other Legal Requirement;
 
“Losses” shall mean all damages, awards, judgments, assessments, fines,
sanctions, penalties, charges, costs, expenses, payments, diminutions in value
and other losses, however suffered or characterized, all interest thereon, all
costs and expenses of investigating any claim, lawsuit or arbitration and any
appeal there from, all actual attorneys’, accountants’ investment bankers’ and
expert witness’ fees incurred in connection therewith, whether or not such
claim, lawsuit or arbitration is ultimately defeated and, subject to Section
7.4, all amounts paid incident to any compromise or settlement of any such
claim, lawsuit or arbitration;
 
“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, properties or business of the Parties, (ii) the validity, binding
effect or enforceability of this Agreement or the Collateral Documents or (iii)
the ability of any Party to perform its obligations under this Agreement and the
Collateral Documents; provided, however, that none of the following shall
constitute a Material Adverse Effect on the Company: (i) the filing, initiation
and subsequent prosecution, by or on behalf of shareholders of any Party, of
litigation that challenges or otherwise seeks damages with respect to the
Merger, this Agreement and/or transactions contemplated thereby or hereby, (ii)
occurrences due to a disruption of a Party’s business as a result of the
announcement of the execution of this Agreement or changes caused by the taking
of action required by this Agreement, (iii) general economic conditions, or (iv)
any changes generally affecting the industries in which a Party operates;
 
“Merger” shall have the meaning set forth in the Recitals of this Agreement;
 
“Merger Consideration” shall have the meaning set forth in Section 2.7 (b) of
this Agreement;
 
“Merger Options” shall have the meaning set forth in Section 2.7 (b) of this
Agreement;

 
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“Merger Sub” shall have the meaning set forth in the preamble to this Agreement;
 
“New Parent Warrants” shall have the meaning set forth in Section 2.8 of this
Agreement;
 
“NRS” shall have the meaning set forth in the preamble of this Agreement;
 
“Order” means any writ, judgment, decree, ruling, injunction or similar order of
any Regulatory Authority (in each such case whether preliminary or final);
 
“Parent” shall have the meaning set forth in the preamble to this Agreement;
 
“Parent Common Stock” means the shares of common stock of Parent, no par value
per share;
 
“Parent Financial Statements” shall have the meaning set forth in Section 4.8 of
this Agreement;
 
“Parent Financial Statement Date” shall have the meaning set forth in Section
4.8 of this Agreement;
 
“Parent Preferred Stock” shall have the meaning set forth in Section 2.7(b) of
this Agreement;
 
“Parent Series A Preferred Stock” shall have the meaning set forth in Section
2.7(b) of this Agreement;
 
“Parent Series B Preferred Stock” shall have the meaning set forth in Section
2.7(b) of this Agreement;
 
“Parent Warrants” shall have the meaning set forth in Section 2.7(e) of this
Agreement;
 
“Participating Company Shares” means all issued and outstanding shares of
Company Common Stock and Company Preferred Stock immediately prior to the
Effective Time plus all shares of Company Common Stock deemed to be issued upon
exercise of all Company options granted under the Company Option Plan and
Eligible Warrants;
 
“Party” or “Parties” shall have the meaning set forth in the preamble to this
Agreement;
 
“Permit” means any license, franchise, certificate, declaration, waiver,
exemption, variance, permit, consent, approval, registration, authorization,
qualification or similar right granted by a Regulatory Authority;
 
“Person” means any natural person, individual, firm, corporation, including a
non-profit corporation, partnership, trust, unincorporated organization,
association, limited liability company, labor union, Regulatory Authority or
other entity;
 
“Regulatory Authority” means: any (i) federal, state, local, municipal or
foreign government; (ii) governmental or quasi-governmental authority of any
nature (including without

 
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limitation any governmental agency, branch, department, official,
instrumentality or entity and any court or other tribunal; (iii) multi-national
organization or body; or (iv) body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulation or taxing
authority or power of any nature;
 
“Representatives” shall have the meaning set forth in Section 5.12 of this
Agreement;
 
“Reverse Split” shall have the meaning set forth in Section 2.5 of this
Agreement;
 
“SEC” means the United States Securities and Exchange Commission;
 
“Securities Act” means the Securities Act of 1933, as amended;
 
“SEC Reports” with respect to each of Parent and the Company, means such Party’s
Annual Report on Form 10-KSB and all interim reports filed with the SEC under
the Exchange Act after the date of the Form 10-KSB filing.
 
“Securities Filings” means the filings with the SEC of a Party.
 
“Subsidiary” of a specified Person means (a) any Person if securities having
ordinary voting power (at the time in question and without regard to the
happening of any contingency) to elect a majority of the directors, trustees,
managers or other governing body of such Person are held or controlled by the
specified Person or a Subsidiary of the specified Person; (b) any Person in
which the specified Person and its subsidiaries collectively hold a fifty
percent (50%) or greater equity interest; (c) any partnership or similar
organization in which the specified Person or subsidiary of the specified Person
is a general partner; or (d) any Person the management of which is directly or
indirectly controlled by the specified Person and its Subsidiaries through the
exercise of voting power, by contract or otherwise;
 
“Surviving Corporation” shall have the meaning set forth in Section 2.1 of this
Agreement;
 
“Taxes” means any U.S. or non U.S. federal, state, provincial, local or foreign
(i) income, corporation gross income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, intangible property, recording, occupancy, sales, use, transfer,
registration, value added minimum, ad valorem or excise tax, estimated or other
tax of any kind whatsoever, including any interest, additions to tax, penalties,
fees, deficiencies, assessments, additions or other charges of any nature with
respect thereto, whether disputed or not; and (ii) any liability for the payment
of any amount of the type described in (i) above;
 
“Tax Returns” means all federal, state, local, provincial and foreign tax
returns, declarations, reports, claims, schedules and forms for refund or credit
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof;

 
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“Terminated Employees” shall have the meaning set forth in Section 5.3 of this
Agreement; and
 
“Transmittal Letter” shall have the meaning set forth in Section 2.9.
 
ARTICLE 2
THE MERGER
 
2.1 Merger. Upon the terms and conditions set forth in this Agreement, and in
accordance with the provisions of the NRS, at the Effective Time (as defined
below), Merger Sub shall be merged with and into the Company, the separate
corporate existence of Merger Sub shall cease and the Company will continue as
the surviving corporation following the Merger, succeeding to all of the
property, rights, privileges, powers and franchises of Merger Sub, and shall
become a wholly-owned Subsidiary of Parent. The Company, as the surviving
corporation after the Merger, is sometimes referred to herein as the “Surviving
Corporation.”
 
2.2 Closing. Subject to the terms and conditions of this Agreement, the closing
of the Merger (the “Closing”) will take place at the offices of Troy & Gould
located at 1801 Century Park East, 16th Floor, Los Angeles, California 90067, or
at such other place as Parent and the Company mutually agree, at 10:00 a.m.
local time on the later to occur of (a) November 15, 2007, or (b) the second
Business Day after the day on which the last of the closing conditions set forth
in Article 6 below has been satisfied or waived, or such other date as Parent
and the Company mutually agree upon in writing (the “Closing Date”).
 
2.3 Effective Time. Upon the terms of and subject to the conditions of this
Agreement, as soon as practicable on the Closing Date: (a) the parties hereto
will cause the Merger to be consummated by filing with the Secretary of State of
the State of Nevada a certificate of merger and any required related documents,
in such form or forms as are required by, and executed in accordance with,
applicable law (the date and time of such filing being the “Effective Time” and
the date upon which the Effective Time occurs, being the “Effective Date”); and
(b) Parent will deliver the Merger Consideration to the shareholders of the
Company and the holders of the Company Preferred Stock in accordance with
Section 2.7 hereof; and (c) Parent, Merger Sub and the Company will
cross-deliver the certificates and other documents and instruments to be
cross-delivered pursuant to Article 6 below.
 
2.4 Effect of the Merger. At the Effective Time, in accordance with the NRS, the
separate existence of Merger Sub will cease and the Surviving Corporation shall
succeed, without further action, to all the property, assets, rights,
privileges, powers and franchises of every kind of the nature and description of
Merger Sub and the Company. All debts, liabilities and duties of Merger Sub and
the Company will become the debts, liabilities and duties of the Surviving
Corporation. As of the Effective Time, the Surviving Corporation will be a
wholly owned subsidiary of the Parent.
 
2.5 Effect of Merger on Common Stock of the Parent. Subject to a reverse split
to be determined by the Parties after the date hereof (the “Reverse Split”) to
occur prior to Closing, each share of Common Stock of Parent issued and
outstanding immediately prior to the Effective Time, including, without
limitation, Parent Common Stock, shall remain issued and outstanding

 
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from and after the Effective Time. Notwithstanding anything herein to the
contrary, the number of shares of Parent Common Stock to be held by the
shareholders of Parent immediately prior to the Closing shall equal 4.99% of the
fully diluted capital stock of the Parent as of the Closing after giving effect
to the shares of Parent Common Stock (i) to be issued to the holders of Company
Common Stock pursuant to Section 2.7(a); (ii) issuable upon conversion of the
Parent Preferred Stock to be issued pursuant to Section 2.7(b); (iii) issuable
upon exercise of the Merger Options to be issued pursuant to Section 2.7(c) and
the Parent Warrants to be issued pursuant to Section 2.7(e); and (iv) without
duplication, the capital stock (including any shares of common stock issuable
upon conversion on exercise of any derivative securities) issuable or deemed to
be issued (if not in fact issued) in connection with an equity financing or
financings to be undertaken by Parent or the Company pursuant to which Parent or
the Company shall raise at least $6,000,000 in gross proceeds at a per share
price of not less than $0.50 per share (on a pre-Reverse Split basis).
 
2.6 Effect of Merger on Common Stock of Merger Sub. At the Effective Time, each
share of common stock, par value $.001 per share, 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 the holders thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.001 per share, of the Surviving Corporation.
 
2.7 Effect of Merger on Capital Stock of Company.
 
(a) Company Common Stock. At the Effective Time, all issued and outstanding
shares of the Company’s common stock (the “Company Common Stock”) shall, by
virtue of the Merger and without any action on the part of the holders thereof ,
be converted into the right to receive a such number of shares of Parent Common
Stock equal to 95.01% of Parent Common Stock outstanding immediately prior to
Closing (after giving effect to the Reverse Split) less the shares of Parent
Common Stock issuable upon Conversion of the Parent Preferred Stock and the
exercise of the Parent Warrants and the Merger Options.
 
(b) Company Series A Preferred Stock and Series B Preferred Stock. At the
Effective Time, (i) all of the issued and outstanding shares of the Company’s
Series A Preferred Stock, par value $0.001 per share, (the “Company Series A
Preferred Stock”) shall by virtue of the Merger and without any action on the
part of the holders thereof, be converted into the right to receive a pro rata
share of 3,800,000 shares of Parent’s Series A Preferred Stock (the “Parent
Series A Preferred Stock”); and (iii) all of the issued and outstanding shares
of the Company’s Series B Preferred Stock, par value $0.001 per share, (the
“Company Series A Preferred Stock”) shall by virtue of the Merger and without
any action on the part of the holders thereof, be converted into the right to
receive a pro rata share of 4,600,000 shares of Parent’s Series B Preferred
Stock (the “Parent Series B Preferred Stock”, together with Parent Series A
Preferred Stock, the “Parent Preferred Stock”), as set forth in Schedule 2.7
hereto, subject to the terms and conditions of this Agreement. The shares of
Parent Common Stock and Parent Preferred Stock issuable pursuant to Sections
2.7(a) and this Section 2.7(b) are collectively referred to herein as the
“Merger Consideration.”
 
(c) Outstanding Company Options. At the Effective Time, each outstanding option
to purchase Company Common Stock granted under the Company’s 2007 Stock Option

 
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and Performance Awards Plan (the “Company Option Plan”), which has not
previously expired or been exercised in full, whether or not vested or
exercisable on the Closing Date, shall be assumed by Parent. Pursuant to such
assumption, holders of such assumed Options shall be entitled to receive in
respect of each share of Company Common Stock subject to such assumed Options,
after the Effective Time, options (“Merger Options”) to purchase that number of
shares of Parent Common stock obtained by multiplying (x) the number of shares
of Company Common Stock issuable under such assumed option by (y) the Exchange
Ratio (defined below), at an exercise price equal to the exercise price of such
assumed option divided by the Exchange Ratio and otherwise on the same terms and
conditions as those contained in such assumed option. For the avoidance of
doubt, and notwithstanding anything to the contrary contained herein, under no
circumstances shall any such assumed options accelerate with respect to the
vesting thereof by virtue of, in anticipation of or otherwise in connection with
the Merger or the transactions contemplated by this Agreement. For purposes of
this Agreement, “Exchange Ratio” shall mean the ratio obtained by dividing (x)
the number of shares equal to the Merger Consideration by (y) the sum of the
number shares of the Company Common Stock and the Company Preferred Stock issued
and outstanding immediately prior to the Effective Time and the number of shares
of Company Common Stock issuable upon exercise of all such Merger Options and
Parent Warrants.
 
(d) Company Option Plan. At the Effective Time, Parent shall assume the Company
Option Plan pursuant to which 9,500,000 shares of Company Common Stock are
reserved for issuance.
 
(e) Outstanding Company Warrants. At the Effective Time, each outstanding
warrant to purchase Company Common Stock, which has not previously expired or
been exercised in full (each such option, an “Eligible Warrant”), shall be
assumed by Parent (the “Parent Warrants”).
 
(f) As a result of the Merger and without any action on the part of the holders
thereof, at the Effective Time, all shares of Company Common Stock, all shares
of Company Series A Preferred Stock, and all shares of Company Series B
Preferred Stock shall be cancelled and retired and shall cease to be
outstanding. Each holder of shares of the Company Common Stock, Company Series A
Preferred Stock, and Company Series B Preferred Stock shall thereafter cease to
have any rights with respect to such shares, except that the issued and
outstanding shares of Company Common Stock, Company Series A Preferred Stock and
Company Series B Preferred Stock immediately prior to the Effective Time, and
the respective holders thereof, shall have the right to receive the Merger
Consideration in accordance with this Section 2.7 upon the surrender of the
certificate or certificates representing such shares.
 
(g) Each share of Company Common Stock held in the Company’s treasury at the
Effective Time, if any, shall, by virtue of the Merger and without any action on
the part of the Company, cease to be outstanding and shall be cancelled and
retired without payment of any Merger Consideration or any other consideration
therefor.
 
2.8 Effect of Merger on Existing Common Stock of Parent. At the Effective Time,
holders of Parent Common Stock shall be entitled to receive in respect of each
share of Parent Common Stock, warrants (the “New Parent Warrants”) to purchase
0.333 shares of Parent

 
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Common Stock following the consummation of the Merger and other transactions
contemplated herein at an exercise price of 110% per share of the most recent
private placement of the Company from the date hereof and ending six months from
the Closing Date. At and after the Effective Time, Parent will deliver to each
holder of a Parent Common Stock a certificate, evidencing the New Parent
Warrants. Pursuant to Article 5 hereof, such New Parent Warrants and the shares
of Parent Common Stock issuable pursuant to the exercise thereof shall be
registered with the SEC under the Joint Proxy-Registration Statement to be filed
with the SEC following the execution of this Agreement in respect of the Merger,
this Agreement and the transactions contemplated hereby.
 
2.9 Delivery of Certificates and Eligible Warrant Agreements. At and after the
Effective Time, Parent will make available, and each holder of an issued and
outstanding share of Company Common Stock and Company Preferred Stock, and each
holder of an Eligible Warrant, will be entitled to receive, (i) upon surrender
to Parent or its representatives of any certificates evidencing Company Common
Stock and Company Preferred Stock (the “Certificates”) for cancellation and a
letter of transmittal or assignment separate from certificate in customary form
(which will be in such form and have such other provisions as Parent will
reasonably specify) (the “Transmittal Letter”); or (ii) upon delivery to Parent
or its representatives of agreements evidencing the Eligible Warrants (the
“Eligible Warrant Agreements”) and/or other certificates or instruments
evidencing the Eligible Warrants, if any, the pro-rata share of the Merger
Consideration, Merger Options and Merger Warrants, as applicable, into which
such Company Common Stock or Eligible Warrant have been converted into pursuant
to the Merger, and upon such surrender of each Certificate and/or the agreements
or certificates representing the Eligible Warrants, and delivery by Parent of
the aggregate Merger Consideration in exchange therefor, the Participating
Company Shares will forthwith be cancelled. Until surrendered or delivered as
contemplated by this Section 2.9, each Certificate, Eligible Warrant Agreement
or certificates representing the Eligible Warrants, as applicable, will be
deemed at any time after the Effective Time for all purposes to evidence only
the right to receive upon such surrender the corresponding pro rata portion of
the Merger Consideration and Merger Warrants, as applicable.
 
2.10 Stock Transfer Books. From and after the Effective Time, the stock transfer
books of the Company will be closed, and there will be no further registration
or transfers of Company Common Stock and Company Preferred Stock thereafter on
the records of the Company.
 
2.11 No Further Ownership Rights. The Merger Consideration and Merger Warrants
delivered upon the surrender for exchange of the Certificates, or the delivery
of the agreements or certificates representing Eligible Warrants, in accordance
with the terms hereof will be deemed to have been issued in full satisfaction of
all rights pertaining to such Participating Company Shares, and there will be no
further registration of transfers of such shares which were outstanding
immediately prior to the Effective Time on the records of the Surviving
Corporation. If, after the Effective Time, Certificates, or agreements or
certificates representing the Eligible Warrants, are presented to the Surviving
Corporation, they will be cancelled, assumed and/or adjusted, as applicable,
pursuant to Section 2.7 hereof.

 
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2.12 Lost, Stolen or Destroyed Certificates. In the event any Certificates are
lost, stolen or destroyed, Parent will issue in exchange for such lost, stolen
or destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereof and the other deliveries required above, the applicable Merger
Consideration; provided, however, that the Surviving Corporation may, in its
sole discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed Certificates to deliver an indemnity
or bond in such sum as it may reasonably direct as indemnity against any claim
that may be made against it with respect to the Certificates alleged to have
been lost, stolen or destroyed.
 
2.13 Charter Documents; Directors and Officers. Unless otherwise agreed by the
Company and Parent prior to the Closing, at and as of the Effective Time,
without any further action on the part of Parent, Merger Sub or the Company: (i)
the Articles of Incorporation and the Bylaws of the Company as in effect
immediately prior to the Effective Time will be the Articles of Incorporation
and Bylaws of the Surviving Corporation at and after the Effective Time until
thereafter amended as provided by applicable law and such Articles of
Incorporation and Bylaws, as applicable; (ii) the directors of the Company
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation from and after the Effective Time, until their successors
are elected and qualified or until their resignation or removal; (iii) the
officers of the Company immediately prior to the Effective Time shall serve in
their respective offices of the Surviving Corporation from and after the
Effective Time, until their successors are elected or appointed and qualified or
until their resignation or removal.
 
2.14 Taking of Necessary Action; Further Action. Each of Parent, Merger Sub and
the Company will take all such reasonable lawful action as may be necessary or
appropriate in order to effect the Merger in accordance with this Agreement as
promptly as practicable. If, at any time after the Effective Time, any such
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all the property, rights, privileges, power and franchises of the
Company and Merger Sub, the officers and directors of the Company and Merger Sub
immediately prior to the Effective Time are fully authorized in the name of
their respective corporations or otherwise to take, and will take, all such
lawful and necessary action
 
2.15 Company Dissenting Shares. Shares of Company Common Stock which are issued
and outstanding immediately prior to the Effective Time and which are held by
persons who are entitled to and have properly exercised, and not withdrawn or
waived, appraisal rights with respect thereto in accordance with the NRS (the
“Dissenting Shares”), will not be converted into the right to receive the Merger
Consideration, and holders of such shares of Company Common Stock will be
entitled, in lieu thereof, to receive payment of the appraised value of such
shares of Company Common Stock in accordance with the provisions of the NRS
unless and until such holders fail to perfect or effectively withdraw or lose
their rights to appraisal and payment under the NRS. If, after the Effective
Time, any such holder fails to perfect or effectively withdraws or loses such
right, such shares of Company Common Stock will thereupon be treated as if they
had been converted at the Effective Time into the right to receive the Merger
Consideration, without any interest thereon. The Company will give Parent prompt
notice of any demands received by the Company for appraisal of shares of Company
Common Stock. Prior to the Effective Time, the Company will not, except with the
prior written consent of Parent make any payment with respect to, or settle or
offer to settle, any such demands.

 
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2.16 Parent Dissenting Shares. Shares of Parent Common Stock which are issued
and outstanding immediately prior to the Effective Time and which are held by
persons who are entitled to and who have properly exercised, and not withdrawn
or waived, appraisal rights with respect thereto in accordance with the
California General Corporation Law (“CGCL”) (the “Dissenting Shares”), will be
entitled to receive payment of the appraised value of such shares of Parent
Common Stock in accordance with the provisions of the CGCL unless and until such
holders fail to perfect or effectively withdraw or lose their rights to
appraisal and payment under the CGCL. The Parent will give Company prompt notice
of any demands received by the Parent for appraisal of shares of Parent Common
Stock. Prior to the Effective Time, the Parent will not, except with the prior
written consent of Company make any payment with respect to, or settle or offer
to settle, any such demands.
 
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company hereby represents and warrants to Parent that (subject to such
exceptions as are disclosed in the corresponding Schedules with respect to
specific sections of this Article 3) the statements contained in this Article 3
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Article 3, except in the case of representations and warranties stated to be
made as of the date of this Agreement or as of another date and except for
changes contemplated or permitted by this Agreement):
 
3.1 Organization, Standing and Qualification. (a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada. The Company has all requisite corporate power and authority to
own, lease and use its assets as they are currently owned, leased and used and
to conduct its business as it is currently conducted. The Company is duly
qualified or licensed to do business in and is in good standing in each
jurisdiction in which the character of the properties owned, leased or used by
it or the nature of the activities conducted by it make such qualification
necessary, except any such jurisdiction where the failure to be so qualified or
licensed would not have a Material Adverse Effect on the Company or a Material
Adverse Effect on the validity, binding effect or enforceability of this
Agreement or the Collateral Documents or the ability of the Company to perform
its obligations under this Agreement or any of the Collateral Documents. (b) The
Company’s wholly-owned subsidiaries Information Intellect, Inc., Riptide
Software, Inc. and Bravera, Inc. are corporations duly organized, validly
existing and in good standing under the laws of the State of Georgia, State of
Florida and State of Florida respectively. Each has all requisite corporate
power and authority to own, lease and use its assets as they are currently
owned, leased and used and to conduct its business as it is currently conducted.
Each subsidiary is duly qualified or licensed to do business in and is in good
standing in each jurisdiction in which the character of its properties owned,
leased or used by it or the nature of the activities conducted by it make such
qualification necessary, except any such jurisdiction where the failure to be so
qualified or licensed would not have a Material Adverse Effect on the Company
and its subsidiaries as a whole.

 
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3.2 Due Authorization. The Company has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by all necessary
action by the Board of Directors of the Company, and no other action on the part
of the Board of Directors of the Company is required to authorize the execution,
delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws relating to the enforcement of creditors’ rights generally
and by general principles of equity.
 
3.3 Capitalization.
 
(a) The authorized common stock and other ownership interests of the Company
consist of 800,000,000 shares of Common Stock, par value $0.001 per share and
60,000,000 shares of Preferred Stock, par value $0.001 per share, of which
10,000,000 shares have been designated as Series A Preferred Stock and
20,000,000 shares have been designated as Series B Preferred Stock. There are
63,446,676 shares of Common Stock, 3,800,000 shares of Series A Preferred Stock
and 4,600,000 shares of Series B Preferred Stock issued and outstanding as of
the date hereof. All of the issued and outstanding shares of the Company Common
Stock, Company Series A Preferred Stock and Company Series B Preferred Stock
have been duly authorized and are validly issued and outstanding, fully paid and
nonassessable and have been issued in compliance with applicable securities laws
and other applicable Legal Requirements or transfer restrictions under
applicable securities laws.
 
(b) Schedule 3.3(b) hereto lists all outstanding or authorized options,
warrants, purchase rights, preemptive rights or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its common stock or other ownership interests (collectively
“Equity Equivalents”), including, without limitation, all Eligible Warrants.
Except as disclosed in Schedule 3.3(b) hereto, there are no other Equity
Equivalents, commitments or agreements of any character (whether created by
statute, the Articles of Incorporation or Bylaws of the Company, or any
agreement or otherwise) to which the Company is a party or by which it is bound,
obligating the Company to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of common
stock of the Company or obligating the Company to grant, extend, accelerate the
vesting of, change the price or otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement.
 
3.4 No Conflicts. Except as set forth on Schedule 3.4 hereto, the execution,
delivery and performance by the Company of this Agreement and the Collateral
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby in accordance with the terms and conditions
hereof and thereof, do not and will not conflict with, constitute a violation or
breach of, constitute a default or give rise to any right of termination or

 
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acceleration of any right or obligation of the Company under, or result in the
creation or imposition of any Encumbrance upon the Company, its business,
assets, properties or the Company Common Stock by reason of the terms of (i) the
Articles of Incorporation, Bylaws or other charter or organizational document of
the Company or any Subsidiary of the Company, (ii) any material contract,
agreement, lease, indenture or other instrument to which the Company is a party
or by or to which the Company, or its assets may be bound or subject and a
violation of which would result in a Material Adverse Effect on the Company,
(iii) any order, judgment, injunction, award or decree of any arbitrator or
Regulatory Authority or any statute, law, rule or regulation applicable to the
Company or (iv) any Permit of the Company, which in the case of (ii), (iii) or
(iv) above would have a Material Adverse Effect on the Company or a material
adverse effect on the validity, binding effect or enforceability of this
Agreement or the Collateral Documents or the ability of the Company to perform
its obligations under this Agreement or any of the Collateral Documents.
 
3.5 Consents and Approvals. Except as set forth on Schedule 3.5 hereto, no
consent, approval, authorization or order of, registration or filing with, or
notice to, any Regulatory Authority or any other Person is necessary to be
obtained, made or given by the Company in connection with the execution,
delivery and performance by the Company of this Agreement or any Collateral
Document or for the consummation by the Company of the transactions contemplated
hereby or thereby, except to the extent the failure to obtain any such consent,
approval, authorization or order or to make any such registration or filing
would not have a Material Adverse Effect on the Company or a material adverse
effect on the validity, binding effect or enforceability of this Agreement or
the Collateral Documents or the ability of the Company to perform its
obligations under this Agreement or any of the Collateral Documents.
 
3.6 Intellectual Property. Except as set forth on Schedule 3.6 hereto, the
Company and each of the Company’s subsidiaries own, or is licensed or otherwise
possesses legally enforceable rights to use, all Intellectual Property that is
used or currently proposed to be used in the business of the Company as
currently conducted or as presently proposed by the Company to be conducted in
the immediate future.
 
3.7 Compliance with Legal Requirements. The Company has operated its business in
compliance with all Legal Requirements applicable to the Company except to the
extent the failure to operate in compliance with all material Legal Requirements
would not have a Material Adverse Effect on the Company on the validity, binding
effect or enforceability of this Agreement or the Collateral Documents.
 
3.8 Financial Statements. The Company has provided Parent with copies of the
unaudited Consolidated Balance Sheets of the Company as of June 30, 2007 (the
“Company Financial Statement Date”), and the unaudited Consolidated Statements
of Operations for the period then ended and the audited Consolidated Balance
Sheet of the Company as of December 31, 2006 and the audited Consolidated
Statement of Operations for the period then ended (collectively, the “Company
Financial Statements”). The Company Financial Statements have been prepared in
accordance with GAAP applied on a basis consistent throughout all periods
presented, present fairly in all material respects the financial condition of
the Company and its results of operations as of the date and for the periods
indicated therein. The accounting and

 
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other financial records of the Company have been maintained in accordance with
good business practices.
 
3.9 Litigation. Except as set forth on Schedule 3.9 hereto, there are no
outstanding judgments or orders against or otherwise affecting or related to the
Company, its business, assets or properties, and there is no action,
arbitration, audit, hearing, suit, complaint, proceeding or investigation,
judicial, administrative or otherwise, that is pending or, to the Company’s
knowledge, threatened that, if adversely determined, would have a Material
Adverse Effect on the Company or a Material Adverse Effect on the validity,
binding effect or enforceability of this Agreement or the Collateral Documents.
 
3.10 Taxes. Except as set forth on Schedule 3.10 hereto, the Company has duly
and timely filed in proper form all Tax Returns for all Taxes required to be
filed with the appropriate Regulatory Authority, and has paid all taxes required
to be paid in respect thereof except where such failure would not have a
Material Adverse Effect on the Company.
 
3.11 Books and Records. The books and records of the Company accurately and
fairly represent the Company’s business and its results of operations in all
material respects.
 
3.12 Brokers or Finders. Except as set forth on Schedule 3.12 hereto, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by the Company or its Affiliates in connection with the
transactions contemplated by this Agreement, and neither the Company, or
Affiliates has incurred any obligation to pay any brokerage or finder’s fee or
other commission in connection with the transaction contemplated by this
Agreement.
 
3.13 Disclosure. No representation or warranty of the Company in this Agreement
or in the Collateral Documents and no statement in any certificate furnished or
to be furnished by the Company pursuant to this Agreement contained, contains or
will contain on the date such agreement or certificate was or is delivered, or
on the Closing Date, any untrue statement of a material fact, or omitted, omits
or will omit on such date to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading.
 
3.14 No Undisclosed Liabilities. Except as set forth in Schedule 3.14 hereto,
the Company has no obligations or liabilities of any nature (matured or
unmatured, fixed or contingent) other than (i) those set forth or reserved
against in the Company Financial Statements or if subsequent to the date of the
Company Financial Statements, as otherwise disclosed in filings made with the
SEC, (ii) those incurred in connection with this Agreement or the transactions
contemplated hereby, (iii) those incurred in the ordinary course of business
consistent with the Company’s past practice.
 
3.15 Absence of Certain Changes. Except as set forth on Schedule 3.15 hereto,
since the Financial Statement Date or otherwise disclosed in filings made with
the SEC, the Company has not: (a) suffered any material adverse change in its
financial condition, assets, liabilities or business; (b) contracted for or paid
any capital expenditures; (c) except as otherwise disclosed in SEC filings,
incurred any indebtedness or borrowed money, issued or sold any debt or equity

 
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securities, declared any dividends or discharged or incurred any liabilities or
obligations except in the ordinary course of business as heretofore conducted;
(d) except as otherwise disclosed in SEC filings mortgaged, pledged or subjected
to any lien, lease, security interest or other charge or encumbrance any of its
properties or assets; (e) except as otherwise disclosed in SEC filings paid any
material amount on any indebtedness prior to the due date, forgiven or cancelled
any material amount on any indebtedness prior to the due date, forgiven or
cancelled any material debts or claims or released or waived any material rights
or claims; (f) suffered any damage or destruction to or loss of any assets
(whether or not covered by insurance); (g) except as otherwise disclosed in SEC
filings acquired or disposed of any assets or incurred any liabilities or
obligations; (h) except as otherwise disclosed in SEC filings made any payments
to its Affiliates or associates or loaned any money to any person or entity; (i)
except as otherwise disclosed in SEC filings acquired or disposed of any
interest in any corporation, partnership, limited liability company, joint
venture or other entity; (j) except as otherwise disclosed in SEC filings
entered into any employment, compensation, consulting or collective bargaining
agreement or any other agreement of any kind or nature with any person or group,
or modified or amended in any respect the terms of any such existing agreement;
(k) except as otherwise disclosed in SEC filings entered into any other
commitment or transaction or experienced any other event that relates to or
affect in any way this Agreement or to the transactions contemplated hereby, or
that has affected, or may adversely affect the Company’s business, operations,
assets, liabilities or financial condition; or (1) except as otherwise disclosed
in SEC filings amended its Articles of Incorporation or By-laws, except as
otherwise contemplated herein.
 
3.16 Contracts. Schedule 3.16(a) hereto sets forth a true and complete list of
all contracts, agreements, leases, commitments or other understandings or
arrangements, written or oral, express or implied, to which the Company is a
party or by which it or any of its property is bound or affected requiring
payments to or from, or incurring of liabilities by, the Company in excess of
$250,000 (the “Contracts”). Except as set forth on Schedule 3.16(b) hereto, the
Company has complied with and performed, in all material respects, all of its
obligations required to be performed under and is not in default with respect to
any of the Contracts, as of the date hereof, nor has any event occurred which
has not been cured which, with or without the giving of notice, lapse of time,
or both, would constitute a default in any respect thereunder. To the best
knowledge of the Company, no other party has failed to comply with or perform,
in all material respects, any of its obligations required to be performed under
or is in material default with respect to any such Contracts, as of the date
hereof, nor has any event occurred which, with or without the giving of notice,
lapse of time or both, would constitute a material default in any respect by
such party thereunder. Except as set forth on Schedule 3.16(c) hereto, the
Company knows of and has no reason to believe that there are any facts or
circumstances which would make a material default by any party to any contract
or obligation likely to occur subsequent to the date hereof.
 
3.17 Permits and Licenses. The Company has all certificates of occupancy,
rights, permits, certificates, licenses, franchises, approvals and other
authorizations as are reasonably necessary to conduct its business and to own,
lease, use, operate and occupy its assets, at the places and in the manner now
conducted and operated, except those the absence of which would not materially
adversely affect its business. The Company has not received any written or oral
notice or claim pertaining to the failure to obtain any material permit,
certificate, license,

 
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approval or other authorization required by any federal, state or local agency
or other regulatory body, the failure of which to obtain would materially and
adversely affect its business.
 
3.18 Restrictions on Business Activities. Except as set forth in Schedule 3.18
hereto, there is no agreement or Order binding upon the Company, or any of its
assets or properties which has had or could reasonably be expected to have the
effect of prohibiting or impairing any current business practice of the Company
(or future business practice of the Surviving Corporation), any acquisition of
property by the Company or the conduct of business by the Company as currently
conducted or as proposed to be conducted by the Company other than in the
ordinary course of business or which would not reasonably be expected to give
rise to a Material Adverse Effect.
 
3.19 Title to Property. The Company has good and marketable title to all of its
properties, interests in properties and assets, real and personal, reflected in
the Company Financial Statements or acquired after the Financial Statement Date
(except as otherwise disclosed in SEC filings and except properties, interests
in properties and assets sold or otherwise disposed of since the Financial
Statement Date in the ordinary course of business), or with respect to leased
properties and assets, valid leasehold interests in, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any kind or character,
except (i) liens for current Taxes not yet due and payable or which are being
contested by the Company in good faith, (ii) such imperfections of title, liens
and easements as do not and will not materially detract from or interfere with
the use of the properties subject thereto or affected thereby, or otherwise
materially impair business operations involving such properties, (iii) liens
securing debt which is reflected on the Company Financial Statements, and (iv)
Encumbrances listed on Schedule 3.19 hereto. The property and equipment of the
Company that are used in the operations of its business are in good operating
condition subject to normal wear and tear. All material properties used in the
operations of the Company are reflected in the Company Financial Statements. The
Company owns no real property.
 
3.20 Labor Agreements and Labor Relations. Except as set forth on Schedule
3.20(a) hereto, the Company has no collective bargaining or union contracts or
agreements. Except as set forth on Schedule 3.20(b) hereto, the Company is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practices; there are no charges of discrimination or
unfair labor practice charges, or complaints against the Company pending or
threatened before any governmental or regulatory agency or authority; and, there
is no material labor strike, dispute, employee grievance, disciplinary action,
slowdown or stoppage actually pending or threatened against or affecting the
Company.
 
3.21 Employment Arrangements. Except as set forth on Schedule 3.21(a) hereto,
the Company has no employment or consulting agreements or arrangements, written
or oral, which are not terminable at the will of the Company, or any pension,
profit-sharing, option, other incentive plan, or any other type of employment
benefit plan as defined in ERISA or otherwise, or any obligation to or customary
arrangement with employees for bonuses, incentive compensation, vacations,
severance pay, insurance or other benefits. Except as set forth on Schedule
3.21(b) hereto, no employee of the Company is in violation of any employment
agreement or restrictive covenant.

 
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3.22 Conduct of Business. Prior to the Closing Date, the Company shall conduct
its business in the normal course, and shall not sell, pledge, or assign any
assets, without the prior written approval of Parent, except in the regular
course of business. Except as otherwise provided herein, the Company shall not
amend its Articles of Incorporation or By-Laws, declare dividends, redeem or
sell stock or other securities, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any material balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount or enter into any other transaction other than in the regular
course of business
 
3.23 SEC Reports. The Company has filed all required SEC Reports since March 2,
2007 the date of the merger of Shea Development Corp. and Information Intellect,
Inc. and to the best of the Company’s knowledge all SEC filings prior to March
2, 2007 have been filed with the SEC, each of which complied at the time of
filing in all material respects with all applicable requirements of the
Securities Act and the Exchange Act, as applicable, in each case as in effect on
the dates such forms reports and documents were filed. None of the Company’s SEC
Reports contained when filed an untrue statement of a material fact or omitted
to state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements therein in light of the
circumstances under which they were made not misleading, except to the extent
superseded by a SEC Report filed subsequently and prior to the date hereof.
Except as publicly disclosed by the Company since the filing of its last SEC
Report, there have been no events, changes or effects with respect to the
Company which the Company (i) was required to publicly disclose, in a filing
with the SEC or otherwise, or (ii) which would reasonably be expected to have a
material adverse effect on the Company’s future operations or financial
condition.
 
3.24 Information Supplied by Company. None of the information supplied or to be
supplied by the Company for inclusion in the Joint Proxy-Registration Statement
to be delivered to its shareholders in connection with any written consent by or
meeting of such shareholders, at the date on which such information was supplied
prior to the time the Company’s shareholders were requested to approve the
Merger, contained or will contain any untrue statement or material fact or omits
or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not materially misleading.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
 
Parent and Merger Sub hereby, jointly and severally, represent and warrant to
the Company that (subject to such exceptions as are disclosed in the
corresponding Schedules with respect to specific sections of this Article 4) the
statements contained in this Article 4 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Article 4, except in the case of representations
and warranties stated to be made as of the date of this Agreement or as of
another date and except for changes contemplated or permitted by this
Agreement):

 
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4.1 Organization, Standing and Qualification. Parent and Merger Sub are each
corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation. Parent and Merger Sub
each have the requisite corporate power and authority to own, lease and use its
assets as they are currently owned, leased and used and to conduct their
respective businesses as currently conducted. Parent and Merger Sub are each
duly qualified or licensed to do business in and is in good standing in each
jurisdiction in which the character of the properties owned, leased or used by,
or the nature of the activities conducted by, each of Parent and Merger Sub make
such qualification necessary, except any such jurisdiction where the failure to
be so qualified or licensed would not have a Material Adverse Effect on Parent
or Merger Sub, or a Material Adverse Effect on the validity, binding effect or
enforceability of this Agreement or the Collateral Documents or the ability of
each of Parent and Merger Sub to perform their respective obligations under this
Agreement or any of the Collateral Documents.
 
4.2 Due Authorization; Ownership of Stock. (a) Each of Parent and Merger Sub has
full corporate power and authority to execute and deliver this Agreement, to
perform their respective obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by each of Parent
and Merger Sub of this Agreement and the consummation by Parent and Merger Sub
of the transactions contemplated hereby, and the performance by Parent and
Merger Sub of their respective obligations hereunder, have been duly and validly
authorized by all necessary action by the Board of Directors of each of Parent
and Merger Sub, and no other action on the part of the Board of Directors of
each of Parent and Merger Sub is required to authorize the execution, delivery
and performance of this Agreement and the consummation by Parent and Merger Sub
of the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by each of Parent and Merger Sub and constitutes
a legal, valid and binding obligation of each of Parent and Merger Sub
enforceable against Parent and Merger Sub in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar Legal
Requirements relating to the enforcement of creditors’ rights generally and by
general principles of equity. (b) Except for the transactions contemplated by
this Agreement, as of the date hereof, neither Parent nor Merger Sub
beneficially owns any Company Common Stock.
 
4.3 Capitalization.
 
(a) The authorized common stock and other ownership interests of Parent consist
of 100,000,000 shares of Common Stock, of which 14,258,756 shares of Common
Stock are issued and outstanding as of the date hereof. All of the issued and
outstanding shares of Parent Common Stock have been duly authorized and are
validly issued and outstanding, fully paid and nonassessable and have been
issued in compliance with applicable securities laws and other applicable Legal
Requirements or transfer restrictions under applicable securities laws.
 
(b) The authorized common stock and other ownership interests of Merger Sub
consist of 100 shares of Common Stock, of which 100 shares of Common Stock are
issued and outstanding as of the date hereof. All of the issued and outstanding
shares of Common Stock of Merger Sub have been duly authorized and are validly
issued and outstanding, fully paid and

 
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nonassessable and have been issued in compliance with applicable securities laws
and other applicable Legal Requirements or transfer restrictions under
applicable securities laws.
 
(c) Schedule 4.3(c) hereto lists all Equity Equivalents of Parent. Except as
disclosed in Schedule 4.3(c) hereto, there are no other Equity Equivalents,
commitments or agreements of any character (whether created by statute, the
Articles of Incorporation or Bylaws of Parent, or any agreement or otherwise) to
which Parent is a party or by which it is bound, obligating Parent to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of common stock of Parent or obligating
Parent to grant, extend, accelerate the vesting of, change the price or
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement.
 
4.4 No Conflicts. Except as set forth on Schedule 4.4 hereto, the execution,
delivery and performance by the Parent and Merger Sub of this Agreement and the
Collateral Documents to which each is a party and the consummation of the
transactions contemplated hereby and thereby in accordance with the terms and
conditions hereof and thereof, do not and will not conflict with, constitute a
violation or breach of, constitute a default or give rise to any right of
termination or acceleration of any right or obligation of either Parent or
Merger Sub under, or result in the creation or imposition of any Encumbrance
upon the property of either Parent or Merger Sub by reason of the terms of (i)
the articles of incorporation, by laws or other charter or organizational
document of either Parent or Merger Sub, (ii) any contract, agreement, lease,
indenture or other instrument to which either Parent or Merger Sub is a party or
by or to which either Parent or Merger Sub or its property may be bound or
subject and a violation of which would result in a Material Adverse Effect on
Parent taken as a whole, (iii) any order, judgment, injunction, award or decree
of any arbitrator or Regulatory Authority or any statute, law, rule or
regulation applicable to either Parent or Merger Sub or (iv) any Permit of
Parent or Merger Sub, which in the case of (ii), (iii) or (iv) above would have
a Material Adverse Effect on Parent or a material adverse effect on the
validity, binding effect or enforceability of this Agreement or the Collateral
Documents or the ability of either Parent or Merger Sub to perform its
obligations hereunder or thereunder.
 
4.5 Consents and Approvals. Except as set forth on Schedule 4.5 hereto, no
consent, approval, authorization or order of, registration or filing with, or
notice to, any Regulatory Authority or any other Person is necessary to be
obtained, made or given by either Parent or Merger Sub in connection with the
execution, delivery and performance by them of this Agreement or any Collateral
Documents or for the consummation by them of the transactions contemplated
hereby or thereby, except to the extent the failure to obtain such consent,
approval, authorization or order or to make such registration or filings or to
give such notice would not have a Material Adverse Effect on Parent or a
Material Adverse Effect on the validity, binding effect or enforceability of
this Agreement or the Collateral Documents or the ability of either Parent or
Merger Sub to perform its obligations under this Agreement or any of the
Collateral Documents.
 
4.6 Intellectual Property. Except as set forth on Schedule 4.6 hereto, Parent
owns, or is licensed or otherwise possesses legally enforceable rights to use,
all Intellectual Property that is used or currently proposed to be used in the
business of Parent as currently conducted or as presently proposed by Parent to
be conducted in the immediate future.

 
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4.7 Compliance with Legal Requirements. Parent has operated its business in
compliance with all Legal Requirements applicable to Parent except to the extent
the failure to operate in compliance with all material Legal Requirements would
not have a Material Adverse Effect on Parent on the validity, binding effect or
enforceability of this Agreement or the Collateral Documents.
 
4.8 Financial Statements. Parent has provided the Company with copies of the
unaudited Condensed Consolidated Balance Sheet of Parent as of June 30, 2007
(the “Parent Financial Statement Date”), and the unaudited Condensed
Consolidated Statements of Operations for the period then ended and the audited
Condensed Consolidated Balance Sheets of Parent as of September 30, 2006 and the
audited Condensed Consolidated Statements of Operations for the period then
ended (collectively, the “Parent Financial Statements”). The Parent Financial
Statements have been prepared in accordance with GAAP applied on a basis
consistent throughout all periods presented, present fairly in all material
respects the financial condition of Parent and its results of operations as of
the date and for the periods indicated therein. The accounting and other
financial records of Parent have been maintained in accordance with good
business practices.
 
4.9 Litigation. Except as set forth on Schedule 4.9 hereto, there are no
outstanding judgments or orders against or otherwise affecting or related to
Parent or its business or assets; and there is no action, arbitration, audit,
hearing, suit complaint, proceeding or investigation, judicial, administrative
or otherwise, that is pending or, to the best knowledge of Parent, threatened
that, if adversely determined, would have a Material Adverse Effect on Parent or
a Material Adverse Effect on the validity, binding effect or enforceability of
this Agreement or the Collateral Documents.
 
4.10 Taxes. Except as set forth on Schedule 4.10 hereto, Parent has duly and
timely filed in proper form all Tax Returns for all Taxes required to be filed
with the appropriate Regulatory Authority, and has paid all taxes required to be
paid in respect thereof except where such failure would not have a Material
Adverse Effect on Parent.
 
4.11 Books and Records. The books and records of Parent accurately and fairly
represent its business and its results of operations in all material respects.
 
4.12 Brokers or Finders. Except as set forth on Schedule 4.12 hereto, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by Parent in connection with the transactions contemplated
by this Agreement, and neither Parent nor Merger Sub has entered into any
contract, agreement, arrangement or understanding which may result in an
obligation to pay any brokerage or finder’s fee or other commission in
connection with the transaction contemplated by this Agreement.
 
4.13 Disclosure. No representation or warranty of Parent or Merger Sub in this
Agreement or in the Collateral Documents and no statement in any certificate
furnished or to be furnished by Parent pursuant to this Agreement contained,
contains or will contain on the date such agreement or certificate was or is
delivered, or on the Closing Date, any untrue statement of a material fact, or
omitted, omits or will omit on such date to state any material fact necessary in

 
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order to make the statements made, in light of the circumstances under which
they were made, not misleading.
 
4.14 No Undisclosed Liabilities. Except as set forth in Schedule 4.14 hereto,
neither Parent nor Merger Sub has any obligations or liabilities of any nature
(absolute, accrued, matured or unmatured, fixed or contingent) other than (i)
those set forth or reserved against in the Parent Financial Statements, (ii)
those incurred in connection with this Agreement or the transactions
contemplated hereby, (iii) those incurred in the ordinary course of business
consistent with the Parent’s past practice.
 
4.15 Absence of Certain Changes. Except as set forth on Schedule 4.15 hereto,
since the Parent Balance Sheet Date, Parent has not: (a) suffered any material
adverse change in its financial condition, assets, liabilities or business; (b)
contracted for or paid any capital expenditures; (c) incurred any indebtedness
or borrowed money, issued or sold any debt or equity securities, declared any
dividends or discharged or incurred any liabilities or obligations except in the
ordinary course of business as heretofore conducted; (d) mortgaged, pledged or
subjected to any lien, lease, security interest or other charge or encumbrance
any of its properties or assets; (e) paid any material amount on any
indebtedness prior to the due date, forgiven or cancelled any material amount on
any indebtedness prior to the due date, forgiven or cancelled any material debts
or claims or released or waived any material rights or claims; (f) suffered any
damage or destruction to or loss of any assets (whether or not covered by
insurance); (g) acquired or disposed of any assets or incurred any liabilities
or obligations; (h) made any payments to its affiliates or associates or loaned
any money to any person or entity; (i) formed or acquired or disposed of any
interest in any corporation, partnership, limited liability company, joint
venture or other entity; (j) entered into any employment, compensation,
consulting or collective bargaining agreement or any other agreement of any kind
or nature with any person or group, or modified or amended in any respect the
terms of any such existing agreement; (k) entered into any other commitment or
transaction or experience any other event that relates to or affect in any way
this Agreement or to the transactions contemplated hereby, or that has affected,
or may adversely affect the Parent’s business, operations, assets, liabilities
or financial condition; (1) amended its Articles of Incorporation or By-laws,
except as otherwise contemplated herein (m) made any change in accounting
methods or practices or internal control procedures, other than as required as a
result of changes in law or GAAP; (n) made any single expenditure or commitment
in excess of $25,000 for additions to property plant, equipment, or intangible
capital assets, or (o) agreed to take any action described in this Section 4.15.
 
4.16 Contracts. Schedule 4.16(a) hereto is a true and complete list of all
Contracts to which Parent is a party or by which it or any of its property is
bound or affected requiring payments to or from, or incurring of liabilities by,
Parent in excess of $100,000. Except as set forth on Schedule 4.16(b) hereto,
Parent has complied with and performed, in all material respects, all of its
obligations required to be performed under and is not in default with respect to
any of the Contracts, as of the date hereof, nor has any event occurred which
has not been cured which, with or without the giving of notice, lapse of time,
or both, would constitute a default in any respect there under. To the best
knowledge of Parent, no other party has failed to comply with or perform, in all
material respects, any of its obligations required to be performed under or is
in material default with respect to any such Contracts, as of the date hereof,
nor has any event occurred which, with or without the giving of notice, lapse of
time or both, would constitute a

 
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material default in any respect by such party there under. Except as set forth
on Schedule 4.16(c) hereto, Parent knows of and has no reason to believe that
there are any facts or circumstances, which would make a material default by any
party to any contract or obligation likely to occur subsequent to the date
hereof.
 
4.17 Permits and Licenses. The Parent and Merger Sub have all certificates of
occupancy, rights, permits, certificates, licenses, franchises, approvals and
other authorizations as are reasonably necessary to conduct their respective
businesses and to own, lease, use, operate and occupy their respective assets,
at the places and in the manner now conducted and operated, except those the
absence of which would not materially adversely affect their respective
businesses. The Parent and Merger Sub have not received any written or oral
notice or claim pertaining to the failure to obtain any material permit,
certificate, license, approval or other authorization required by any federal,
state or local agency or other regulatory body, the failure of which to obtain
would materially and adversely affect their respective businesses.
 
4.18 Restrictions on Business Activities. Except as set forth in Schedule 4.18
hereto, there is no agreement or Order binding upon Parent, or any of its assets
or properties which has had or could reasonably be expected to have the effect
of prohibiting or impairing any current business practice of Parent (or future
business practice of the Surviving Corporation), any acquisition of property by
Parent or the conduct of business by Parent as currently conducted or as
proposed to be conducted by Parent other than in the ordinary course of business
or which would not reasonably be expected to give rise to a Material Adverse
Effect.
 
4.19 Title to Property. Parent has good and marketable title to all of its
properties, interests in properties and assets, real and personal, reflected in
the Parent Financial Statements or acquired after the Financial Statement Date
(except properties, interests in properties and assets sold or otherwise
disposed of since the Financial Statement Date in the ordinary course of
business), or with respect to leased properties and assets, valid leasehold
interests in, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any kind or character, except (i) the lien of current Taxes not
yet due and payable or which are being contested by Parent in good faith, (ii)
such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, (iii) liens securing debt which is reflected on the
Parent Financial Statements, and (iv) liens listed on Schedule 4.18 hereto. The
property and equipment of the Company that are used in the operations of its
business are in good operating condition subject to normal wear and tear. All
material properties used in the operations of Parent are reflected in the Parent
Financial Statements. Parent owns no real property.
 
4.20 Labor Agreements and Labor Relations. Except as set forth on Schedule
4.20(a) hereto, Parent has no collective bargaining or union contracts or
agreements. Except as set forth on Schedule 4.20(b) hereto, Parent is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practices; there are no charges of discrimination or
unfair labor practice charges, or complaints against Parent pending or
threatened before any governmental or regulatory agency or authority; and, there
is no labor strike, dispute, employee

 
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grievance, disciplinary action, slowdown or stoppage actually pending or
threatened against or affecting Parent.
 
4.21 Employment Arrangements. Except as set forth on Schedule 4.21(a) hereto,
Parent has no employment or consulting agreements or arrangements, written or
oral, which are not terminable at the will of Parent, or any pension,
profit-sharing, option, other incentive plan, or any other type of employment
benefit plan as defined in ERISA or otherwise, or any obligation to or customary
arrangement with employees for bonuses, incentive compensation, vacations,
severance pay, insurance or other benefits. Except as set forth on Schedule
4.21(b) hereto, no employee of Parent is in violation of any employment
agreement or restrictive covenant.
 
4.22 Conduct of Business. Prior to the Closing Date, Parent shall conduct its
business in the normal course, and shall not sell, pledge, or assign any assets,
without the prior written approval of the Company, except in the regular course
of business. Except as otherwise provided herein, Parent shall not (i) amend its
Articles of Incorporation or By-Laws, (ii) declare, set aside, make or payout
dividends or other distributions, (iii) redeem or sell stock or other
securities, (iv) acquire or dispose of fixed assets, (v) enter into or change
employment terms, or increase the compensation payable to its officers,
employees, agents or consultants, or grant any severance or termination pay,
(vi) enter into any material or long-term contract, (vii) guarantee obligations
of any third party, (viii) settle or discharge any material balance sheet
receivable for less than its stated amount, (ix) pay more on any liability than
its stated amount, (x) enter into any other transaction other than in the
regular course of business, (xi) reclassify, combine, split, subdivide, redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital stock
or other securities, (xii) acquire, including without limitation by merger,
consolidation or acquisition of stock or assets any corporation, partnership,
other business organization or division thereof or any material amount or
assets, or incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or become responsible for the
obligations of any Person or make loans or advances, except in the ordinary
course of business, or (xiii) agree to any of the foregoing, except as may be
necessary to do the actions required herein.
 
4.23 SEC Reports. Parent has filed all required SEC Reports since October 1,
2004, each of which complied at the time of filing in all material respects with
all applicable requirements of the Securities Act and the Exchange Act, as
applicable, in each case as in effect on the dates such forms reports and
documents were filed. None of Parent’s SEC Reports contained when filed an
untrue statement of a material fact or omitted to state a material fact required
to be stated or incorporated by reference therein or necessary in order to make
the statements therein in light of the circumstances under which they were made
not misleading, except to the extent superseded by a SEC Report filed
subsequently and prior to the date hereof. Except as publicly disclosed by
Parent since the filing of its last SEC Report, there have been no events,
changes or effects with respect to Parent which Parent (i) was required to
publicly disclose, in a filing with the SEC or otherwise, or (ii) which would
reasonably be expected to have a material adverse effect on Parent's future
operations or financial condition.
 
4.24 Information Supplied by Parent or Merger Sub. None of the information
supplied or to be supplied by the Parent or Merger Sub for inclusion in the
proxy statement to be delivered to its shareholders in connection with any
written consent by or meeting of such shareholders, at

 
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the date on which such information was supplied prior to the time the Parent’s
shareholders were requested to approve the Merger, contained or will contain any
untrue statement or material fact or omits or will omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not materially
misleading.
 
ARTICLE 5
COVENANTS OF THE PARTIES
 
5.1 Key Employees. As soon as practicable following the execution of this
Agreement, but in any event prior to the Closing Date, Parent shall deliver to
the Company a list of key employees of Parent (such persons, “Key Employees”),
which such Key Employees shall be required to execute and enter into employment
agreements with the Surviving Corporation, in substantially the form attached
hereto as Exhibit A (the “Key Employee Agreements”), subject to the terms and
conditions set forth in such Key Employee Agreements.
 
5.2 Continuing Employees. As soon as practicable following the execution of this
Agreement, but in any event prior to the Closing Date, Parent and the Company
shall determine and identify which employees of Parent, other than the Key
Employees, will receive employment offers from the Surviving Corporation
following the consummation of the Merger in accordance with the terms hereof
(such employees, the “Continuing Employees”), which determination of such
Continuing Employees shall be based on the Operating Expense Budget for FY2008
prepared by Parent and delivered to Company. Prior to the consummation of the
Merger in accordance with the terms hereof, the Company may request certain
Continuing Employees to amend their respective Eligible Warrant Agreement, if
any, in connection with such Continuing Employee’s waiver of certain rights
thereunder with respect to a Change of Control of Parent.
 
5.3 Terminated Employees. Immediately prior to consummation of the Merger, but
in no event later than the Closing Date, Parent shall terminate the employment
of all employees of Parent other than the Key Employees and the Continuing
Employees (the “Terminated Employees”), and such Terminated Employees shall be
entitled to receive all benefits accruing to them pursuant to any existing
employment agreements or option awards, including, without limitation, any
severance payments or options to which such Terminated Employees may be entitled
pursuant to applicable documents. In the event the Terminated Employees were not
hired by Parent pursuant to an employment agreement, then such Terminated
Employees shall receive severance benefits, if any, in accordance with Parent’s
past practices, subject to the execution by such Terminated Employee of a waiver
and release in a form reasonably satisfactory to the Company.
 
5.4 Joint Proxy-Registration Statement. As soon as practicable following the
execution of this Agreement, the Parties shall work together to prepare and file
with the SEC a joint proxy - registration statement in respect of the Merger and
the transactions contemplated hereby (the “Joint Proxy-Registration Statement”),
which such Joint Proxy Registration Statement shall be used in respect of (a)
soliciting shareholder approval in connection with the Merger and this
Agreement, (b) registering the Merger Consideration and the Merger Options, New
Parent Warrants and Parent Warrants and the shares of Parent Common Stock
issuable pursuant to the exercise thereof issued pursuant to Article 2 hereof,
(c) authorizing the Reverse

 
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Split, (d) changing the name of Parent to “Bravera, Inc.” and (d) increasing the
authorized number of shares of Parent Common Stock to 800,000,000 and increasing
the number of authorized shares of Parent Preferred Stock to not less than
15,000,000 (the “Capital Increase”).
 
5.5 Access to Information. The Parties shall provide to each other and their
respective representatives such financial, operating and other documents, data
and information relating to the Party, and their respective businesses,
properties, assets and liabilities, as each Party, or its representatives may
reasonably request. In addition, each Party hereby agrees to take all action
necessary to enable their respective representatives review, inspect and audit
each Party’s business, properties, assets and liabilities and discuss them with
such Party’s officers, employees, independent accountants and counsel.
Notwithstanding any investigation that any Party may conduct of the other
Parties, or their respective businesses, properties, assets and liabilities,
each Party may fully rely on the other Party’s warranties, covenants and
indemnities set forth in this Agreement.
 
5.6 Consents and Approvals. As soon as practicable after execution of this
Agreement, the Parties shall use commercially reasonable efforts to obtain any
necessary consent, approval, authorization or order of, make any registration or
filing with or give any notice to, any Regulatory Authority or Person as is
required to be obtained, made or given by any Party to consummate the
transactions contemplated by this Agreement and the Collateral Documents.
 
5.7 Notification of Adverse Change and Certain Matters. Each Party shall
promptly notify the other Parties of any material adverse change in the
condition (financial or otherwise) of such Party. Each Party shall promptly
notify the other Parties of any fact, event, circumstance or action known to it
that is reasonably likely to cause such Party to be unable to perform any of its
covenants contained herein or any condition precedent in Article 6 not to be
satisfied, or that, if known on the date of this Agreement, would have been
required to be disclosed to another Party pursuant to this Agreement or the
existence or occurrence of which would cause any of the such Party’s
representations or warranties under this Agreement not to be correct and/or
complete. Each Party shall give prompt written notice to the other Parties of
any adverse development causing a breach of any of the representations and
warranties in Articles 3 and 4 as of the date made.
 
5.8 Meeting of the Shareholders. Promptly after the date hereof, if required
under applicable law and subject to SEC review of the Joint Proxy Registration
Statement, each Party will take all action necessary in accordance with its
articles of incorporation and by-laws, or other charter or organizational
documents, to convene a meeting of their respective shareholders, or seek the
written consent of its shareholders to consider the adoption and approval of
this Agreement and approval of the Merger to be held as promptly as practicable.
Each Party, if required, will use its reasonable efforts to solicit from its
shareholders proxies in favor of the adoption and approval of this Agreement and
the approval of the Merger.
 
5.9 Disclosure Schedule. Each Party shall, from time to time prior to Closing,
supplement the Disclosure Schedules attached hereto with additional information
that, if existing or known to it on the date of delivery to the other Party,
would have been required to be included

 
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therein. For purposes of determining the satisfaction of any of the conditions
to the obligations of any Party in Article 6, the Disclosure Schedules of such
Party shall be deemed to include only (a) the information contained therein on
the date of this Agreement and (b) information added to the such Party’s
Disclosure Schedule by written supplements delivered prior to Closing by such
Party (i) are accepted in writing by the receiving Party, or (ii) reflect
actions taken or events occurring after the date hereof prior to Closing.
 
5.10 State Statutes. The Parties and their respective Board of Directors shall,
if any state takeover statute or similar law is or becomes applicable to the
Merger, this Agreement or any of the transactions contemplated by this
Agreement, use all reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this Agreement
and the transactions contemplated hereby.
 
5.11 Conduct of Business. The Parties mutually agree that during the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement pursuant to the provisions of Article 8 hereof or the Closing,
the Company, Parent and Merger Sub each shall (unless otherwise required by this
Agreement or Company has given its prior written consent to Parent or Merger Sub
or Parent has given its prior written consent to the Company, as the case may
be) carry on its business in the ordinary course consistent with past practice,
to pay its Taxes and other obligations consistent with its past practices, to
pay or perform other obligations when due consistent with its past practices,
subject to any good faith disputes over such Taxes and other obligations and, to
the extent consistent with such business, to use reasonable efforts and
institute all policies to preserve intact its present business organization,
keep available the services of its present officers and key employees, preserve
its relationships with customers, suppliers, distributors, licensors, licensees,
independent contractors and other Persons having business dealings with it and
to cause its Subsidiaries to do the same, all with the express purpose and
intent of preserving unimpaired its goodwill and ongoing businesses at the
Closing.
 
5.12 No Solicitation. Until the earlier of the Closing or the date of
termination of this Agreement pursuant to the provisions of Article 8 hereof,
neither Company nor Parent or Merger Sub, nor any of their respective
shareholders, officers, directors, agents, investment bankers or other
representatives of any of them (collectively, the “Representatives”) will,
directly or indirectly, (i) solicit, engage in discussions or negotiate with any
Person (regardless of who initiates such discussions or negotiations), or take
any other action intended or designed to facilitate the efforts of any Person,
other than the parties hereto, relating to the possible acquisition of the
Company, Parent or Merger Sub (whether by way of purchase of capital stock,
purchase of assets or otherwise) or any significant portion of its capital stock
or assets by any Person other than the parties hereto (an “Alternative
Acquisition”), (ii) provide information with respect to the Company, Parent or
Merger Sub to any Person relating to a possible Alternative Acquisition by any
Person, (iii) enter into an agreement with any Person providing for a possible
Alternative Acquisition, or (iv) make or authorize any statement, recommendation
or solicitation in support of any possible Alternative Acquisition by any
Person. The Company, Parent, or Merger Sub, as the case may be, shall cause its
Representatives to immediately cease and cause

 
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to be terminated all existing discussions or negotiations with any Person
heretofore conducted with respect to any possible Alternative Acquisition.
 
5.13 Confidentiality. Parent, Merger Sub and the Company acknowledge and agree
that the terms and conditions described in this Agreement, including its
existence, as well as the non-public information and data furnished to them or
their respective Representatives from the first introduction of the parties and
throughout the negotiation and drafting of this Agreement is confidential and
will not be disclosed to any third party, or used for any purpose not
specifically contemplated herein, without prior written consent of the other
party, unless otherwise required by Law or unless it ceases to be confidential
through no breach of the receiving party.
 
5.14 Closing Balance Sheet. For the purposes of the requirements of Internal
Revenue Service Revenue Ruling 59-60 and the accounting requirements pursuant to
the accounting for business combinations, the Company shall deliver within ten
(10) days of the Closing a balance sheet of the Company as of the Closing Date
(the “Closing Date Balance Sheet”) that has been reviewed and approved by its
independent accounting firm.   Within fifteen (15) days after the delivery of
the Closing Date Balance Sheet, Parent will provide to the Company a proposed
allocation of the Merger Consideration, which shall have been prepared by an
independent valuation accountant or consultant.
 
ARTICLE 6
CLOSING CONDITIONS
 
All obligations of the Parties under this Agreement shall be subject to the
fulfillment at or prior to Closing of each of the following conditions
applicable to such Party, it being understood that the Parties may, in their
sole discretion, to the extent permitted by applicable Legal Requirements, waive
any or all of such conditions in whole or in part:
 
6.1 Accuracy of Representations. All representations and warranties of each
Party contained in this Agreement, the Collateral Documents and any certificate
delivered by any of the Parties at or prior to Closing shall be, if specifically
qualified by materiality, true in all respects and, if not so qualified, shall
be true in all material respects, in each case on and as of the Closing Date
with the same effect as if made on and as of the Closing Date, except for
representations and warranties expressly stated to be made as of the date of
this Agreement or as of another date other than the Closing Date and except for
changes contemplated or permitted by this Agreement. The Company shall have
delivered to the Parent and Merger Sub, and the Parent and Merger Sub shall have
delivered to the Company, a certificate dated the Closing Date to the foregoing
effect.
 
6.2 Covenants. The Parties shall, in all material respects, have performed and
complied with each of the covenants, obligations and agreements contained in
this Agreement and the Collateral Documents that are to be performed or complied
with by them at or prior to Closing. The Company shall have delivered to the
Parent and Merger Sub, and the Parent and Merger Sub shall have delivered to the
Company, a certificate dated the Closing Date to the foregoing effect.

 
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6.3 Consents and Approvals. All consents, approvals, permits, authorizations and
orders required to be obtained from, and all registrations, filings and notices
required to be made with or given to, any Regulatory Authority or Person as
provided herein, shall have been so obtained or filed with such Regulatory
Authority or Person.
 
6.4 Shareholder Approval. All shareholder approval, as required under any
applicable Legal Requirements, shall have been obtained to approve the
transactions contemplated hereunder including the approval of the Merger, this
Agreement or the transactions contemplated hereby.
 
6.5 Joint Proxy Statement. The Joint Proxy Statement shall have been filed and
declared effective by the SEC pursuant to Article 5 hereof.
 
6.6 Key Employee Agreements. The Key Employee Agreements shall have been
executed and delivered to Parent and the Company pursuant to Article 5 hereof.
 
6.7 No Litigation. No injunction, action, suit or proceeding shall be pending or
threatened by or before any Regulatory Authority and no Legal Requirement shall
have been enacted, promulgated or issued or deemed applicable to any of the
transactions contemplated by this Agreement and the Collateral Documents that
would: (i) prevent consummation of any of the transactions contemplated by this
Agreement and the Collateral Documents; (ii) cause any of the transactions
contemplated by this Agreement and the Collateral Documents to be rescinded
following consummation; or (iii) have a Material Adverse Effect on a Party, the
Merger, this Agreement or the transactions contemplated hereby.
 
6.8 Renaissance Capital Indebtedness. All of the debt owed by Parent, including
but not limited to its debt owed to Renaissance Capital and affiliated funds,
shall have been converted into equity.
 
6.9 Fairness Opinion. Parent shall have received a fairness opinion issued by
the Mentor Group in that the transactions contemplated herein are fair to the
shareholders of Parent from a financial perspective.
 
6.10 Centrecourt Lien. Centrecourt shall have received a security interest in
all of the assets of Parent.
 
6.11 Parent Assumption of Company Option Plan. Parent shall have adopted and
assumed the Company Option Plan.
 
6.12 No Material Adverse Change. There shall have been no material adverse
change in the business, financial condition or operations of any of the Parties.
 
ARTICLE 7
INDEMNIFICATION
 
7.1 Indemnification by the Company. The Company shall indemnify, defend and hold
harmless Parent, Merger Sub, and each of their respective shareholders, members,
partners, directors, officers, managers, employees, agents, attorneys and
representatives, from and against

 
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any and all Losses which may be incurred or suffered by any such party and which
may arise out of or result from any breach of any material representation,
warranty, covenant or agreement of the Company contained in this Agreement.
 
7.2 Indemnification by the Parent and Merger Sub. The Parent and Merger Sub
shall indemnify, defend and hold harmless the Company, and its shareholders,
members, partners, directors, officers, managers, employees, agents, attorneys
and representatives from and against any and all Losses which may be incurred or
suffered by any such party hereto and which may arise out of or result from any
breach of any material representation, warranty, covenant or agreement of the
Parent and Merger Sub contained in this Agreement. .
 
7.3 Notice to Indemnifying Party. If any party (the “Indemnified Party”)
receives notice of any claim or other commencement of any action or proceeding
with respect to which any other party (or parties) (the “Indemnifying Party”) is
obligated to provide indemnification pursuant to Sections 7.1 or 7.2, the
Indemnified Party shall promptly give the Indemnifying Party written notice
thereof, which notice shall specify in reasonable detail, if known, the amount
or an estimate of the amount of the liability arising here from and the basis of
the claim. Such notice shall be a condition precedent to any liability of the
Indemnifying Party for indemnification hereunder, but the failure of the
Indemnified Party to give prompt notice of a claim shall not adversely affect
the Indemnified Party’s right to indemnification hereunder unless the defense of
that claim is materially prejudiced by such failure. The Indemnified Party shall
not settle or compromise any claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent of the Indemnifying
Party (which shall not be unreasonably withheld or delayed) unless suit shall
have been instituted against it and the Indemnifying Party shall not have taken
control of such suit after notification thereof as provided in Section 7.4.
 
7.4 Defense by Indemnifying Party. In connection with any claim giving rise to
indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a Person who is not a party to this Agreement, the Indemnifying
Party at its sole cost and expense may, upon written notice to the Indemnified
Party, assume the defense of any such claim or legal proceeding (i) if it
acknowledges to the Indemnified Party in writing its obligations to indemnify
the Indemnified Party with respect to all elements of such claim (subject to any
limitations on such liability contained in this Agreement) and (ii) if it
provides assurances, reasonably satisfactory to the Indemnified Party, that it
will be financially able to satisfy such claims in full if the same are decided
adversely. If the Indemnifying Party assumes the defense of any such claim or
legal proceeding, it may use counsel of its choice to prosecute such defense,
subject to the approval of such counsel by the Indemnified Party, which approval
shall not be unreasonably withheld or delayed. The Indemnified Party shall be
entitled to participate in (but not control) the defense of any such action,
with its counsel and at its own expense; provided, however, that if the
Indemnified Party, in its sole discretion, determines that there exists a
conflict of interest between the Indemnifying Party (or any constituent party
thereof) and the Indemnified Party, the Indemnified Party (or any constituent
party thereof) shall have the right to engage separate counsel, the reasonable
costs and expenses of which shall be paid by the Indemnified Party. If the
Indemnifying Party assumes the defense of any such claim or legal proceeding,
the Indemnifying Party shall take all steps necessary to pursue the resolution
thereof in a prompt and diligent manner. The Indemnifying Party shall be
entitled to consent to a settlement of, or the stipulation of any judgment
arising from, any such claim or legal proceeding, with the consent of

 
-30-

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the Indemnified Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that no such consent shall be required from the
Indemnified Party if (i) the Indemnifying Party pays or causes to be paid all
Losses arising out of such settlement or judgment concurrently with the
effectiveness thereof (as well as all other Losses theretofore incurred by the
Indemnified Party which then remain unpaid or unreimbursed), (ii) in the case of
a settlement, the settlement is conditioned upon a complete release by the
claimant of the Indemnified Party and (iii) such settlement or judgment does not
require the encumbrance of any asset of the Indemnified Party or impose any
restriction upon its conduct of business.
 
ARTICLE 8
TERMINATION
 
8.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time.
 
(a) By mutual written agreement of the Parties;
 
(b) By either of Parent or the Company if the Closing does not occur on or
before December 31, 2007 or to be extended by mutual consent of the parties;
 
(c) By either of Parent or the Company if the shareholders of such Party fail to
approve the Merger, this Agreement and the transactions contemplated hereby;
 
(d) By either of Parent or the Company if any court of competent jurisdiction or
other competent Regulatory Authority shall have issued an order making illegal
or otherwise permanently restricting, preventing or otherwise prohibiting the
Merger and such order shall have become final;
 
(e) By either of the Company or Parent upon written notice to the other Party in
the event of a breach of any provision or covenant of this Agreement, or any
representation or warranty made by such Party hereunder becomes inaccurate;
provided, however, that such breach or inaccuracy would cause the related
closing condition, if any, not be satisfied in accordance with Article 6 hereof;
provided, further, that prior to any termination by the non-breaching party,
such Party shall provide written notice to the breaching Party specifically
identifying the breach or inaccurate representation, and the breaching Party
does not cure or correct such breach or inaccuracy within 30 days following
receipt of the written notice.
 
8.2 Effect of Termination. If this Agreement is validly terminated by either the
Company or Parent pursuant to Section 8.1, this Agreement will forthwith become
null and void and there will be no liability or obligation on the part of the
parties hereto, except that nothing contained herein shall relieve any party
hereto from liability for willful breach of its representations, warranties,
covenants or agreements contained in this Agreement.
 
ARTICLE 9
MISCELLANEOUS PROVISIONS
 
9.1 Notices. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
against written

 
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receipt or mailed by prepaid first class registered or certified mail, return
receipt requested, or sent by overnight courier prepaid, to the parties at the
following addresses or facsimile numbers:
 
If to Parent or Merger Sub to:
 
CaminoSoft Corp.
600 Hampshire Road, Suite 105
Westlake Village, CA 91361-2565
Attn: Michael Skelton, Chief Executive Officer
Tel: (805) 370-3100
Fax: (805) 370-3200
     
with a copy, which shall not constitute notice to:
 
David Ficksman
Troy & Gould, PC
1801 Century Park East, 16th Floor
Los Angeles, California 90067
Tel: (310) 553-4441
Fax:(310) 201-4746
     
If to the Company:
 
Shea Development Corp.
3452 Lake Lynda Dr, Suite 350
Orlando, FL 32817
Attn: Francis E. Wilde, Chairman and CEO
Tel: (407) 282-3545
Fax: (408) 516-8239
     
with a copy, which shall not constitute notice, to:
 
Dunnington, Bartholow & Miller, LLP
477 Madison Avenue, 12th Floor
New York, NY 10022
Attn: Robert T. Lincoln
Tel: (212) 682-8811
Fax: (212) 661-7769
 

 
9.2 Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
thereof and contains the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and thereof. Except for the
representations and warranties contained in this Agreement or in any instrument
delivered pursuant to this Agreement, each of the Parties to this Agreement
acknowledges that no other representations or warranties have been relied upon
by that Party or

 
-32-

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made by any other party or its officers, directors, employees, agents, financial
and legal advisors or other representatives.
 
9.3 Further Assurances; Post-Closing Cooperation. At any time or from time to
time after the Closing, the Parties will execute and deliver to the other party
such other documents and instruments, provide such materials and information and
take such other actions as the other party may reasonably request to consummate
the transactions contemplated by this Agreement and otherwise to cause the other
Party to fulfill its obligations under this Agreement and the transactions
contemplated hereby. Each Party agrees to use commercially reasonable efforts to
cause the conditions to its obligations to consummate the transactions
contemplated hereby to be satisfied.
 
9.4 Amendment. This Agreement may be amended by the Parties hereto at any time
before the Closing by execution of an instrument in writing signed on behalf of
each of the Parties hereto and after the Closing by execution of an instrument
in writing signed on behalf of Parent and the Surviving Corporation.
 
9.5 Extension. At any time prior to the Closing, Parent, Merger Sub and the
Company may, to the extent legally allowed, may agree in writing to extend the
time for the performance of any of the obligations of the other party hereto.
 
9.6 Waiver. Any term or condition of this Agreement may be waived at any time by
the party that is entitled to the benefit thereof, but no such waiver will be
effective unless set forth in a written instrument duly executed by or on behalf
of the party waiving such term or condition. No waiver by any party of any term
or condition of this Agreement, in any one or more instances, will be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement or
by Law or otherwise afforded, will be cumulative and not alternative.
 
9.7 Third Party Beneficiaries. The terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective
successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights, upon any other Person other than any Person entitled to indemnity
as described in Article 7.
 
9.8 No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned (by operation of law or
otherwise) by any Party without the prior written consent of the other Parties
and any attempt to do so will be void. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
Parties hereto and their respective successors and assigns.
 
9.9 Captions. The headings and table of contents used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
 
9.10 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such

 
-33-

--------------------------------------------------------------------------------

 

illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
 
9.11 Governing Law. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Nevada, without giving effect
to any choice of law or conflict of law provision.
 
9.12 Construction. The Parties hereto agree that this Agreement is the product
of negotiation between sophisticated parties and individuals, all of whom were
represented by counsel, and each of whom had an opportunity to participate in
and did participate in, the drafting of each provision hereof. Accordingly,
ambiguities in this Agreement, if any, will not be construed strictly or in
favor of or against any Party hereto but rather will be given a fair and
reasonable construction without regard to the rule of contra proferentum.
 
9.13 Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
 
9.14 Specific Performance. The Parties hereto agree that irreparable damage
would occur in the event that Section 5.13 of this Agreement is not performed in
accordance with its specific terms or were otherwise breached. It is agreed that
the Parties will be entitled to an injunction or injunctions to prevent breaches
of Section 5.13 of this Agreement and to enforce specifically the terms and
provisions thereof in any court having jurisdiction, this being in addition to
any other remedy to which they are entitled at law or in equity.

 
-34-

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
 

 
CaminoSoft Corp.
 
By:

--------------------------------------------------------------------------------

Name: Michael Skelton
Title: Chief Executive Officer
 
CC Merger Corp.
 
By:

--------------------------------------------------------------------------------

Name: Michael Skelton
Title: Chief Executive Officer
     
Shea Development Corp.
 
By:

--------------------------------------------------------------------------------

Name: Francis E. Wilde
Title: Chairman and CEO

 

 
-35-

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DISCLOSURE SCHEDULES
 
Table of Contents

Schedule Number
Schedule Name
Page Number
Parent or Company
Status
3.3(b)
List of all outstanding warrants, options and stock and rights
12
Company
   
3.4
List of potential conflicts as it pertains to the agreement
13
Company
   
3.5
List of consents and approvals needed
13
Company
   
3.6
Intellectual Property
13
Company
   
3.9
List of current pending litigation
14
Company
   
3.10
List of unfiled taxes
14
Company
   
3.12
List of fees for brokers
14
Company
   
3.14
List of obligations and liabilities
15
Company
  
3.15
List of material changes to the business post the last filed financial statement
15
Company
   
3.16
List of all contracts, leases, etc.
15
Company
   
3.18
List of restrictions on the Company to do business
16
Company
   
3.19
List of liens and encumbrances on the property
16
Company
  
3.20(a)
List of union contracts
16
Company
  
3.20(b)
List of employment laws the Company is not in compliance with
16
Company
  
3.21(a)
List of employee agreements that are not terminable at will
17
Company
   
3.21 (b)
List of employees in violation of their agreements
18
Company
                        
4.3 (c)
List of equity equivalents
19
Parent
  
4.4
List of conflicts as it relates to the Camino parties
19
Parent
   
4.5
List of consents and approvals needed
19
Parent
   
4.6
List of Intellectual Property
19
Parent
  
4.9
List of litigation pending
20
Parent
   
4.10
List of unfiled taxes
20
Parent
  
4.12
List of third party fees
20
Parent
   
4.14
List of undisclosed liabilities and obligations
21
Parent
    
4.15
List of material changes
21
Parent
   
4.16 (a)
List of contracts
21
Parent
 
4.16 (b)
List of contract where the parent is in default
21
Parent
  
4.16 (c)
List of potential default or changes
21
Parent
    
4.18
List of restrictions as it relates to ordinary business
22
Parent
  

 
 
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4.20 (a)
List of union agreements
22
Parent
   
4.20(b)
List of employee related issues
22
Parent
  
4.21(a)
List of employee agreements that are not terminable at-will
22
Parent
  
4.21(b)
List of Parent violations regarding employee agreements
22
Parent
            
Exhibit A
Employee Agreement
23
Parent
                                                                               

 
-37-

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Schedule 3.3(b)
Capitalization Table

 [graph1.jpg]

 
-38-

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Schedule 3.4
Potential Conflicts
 
To the Company’s best knowledge, the execution, delivery and performance by the
Company of this Agreement and the Collateral Documents to which it is a party,
and the consummation of the transactions contemplated hereby and thereby in
accordance with the terms and conditions hereof and thereof, do not and will not
conflict with, constitute a violation or breach of, constitute a default or give
rise to any right of termination or acceleration of any right or obligation of
the Company.

 
-39-

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Schedule 3.5
Consents Needed

To the Company’s knowledge, the following represents the consents, approvals and
authorizations which may be required to be obtained, made or given by the
Company in connection with the execution, delivery and performance by the
Company of this Agreement:

Holders of the Senior Secured Notes
Bridgepointe
Holders of Series A and Series B Preferred Stock
Holders of Debt

 
-40-

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Schedule 3.6
Intellectual Property

 [graph2.jpg] 

 
-41-

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Schedule 3.9
List of Pending Litigation
 
To the Company’s knowledge, there are no outstanding judgments or orders against
or otherwise affecting or related to the Company, its business, assets or
properties, and there is no action, suit, complaint, proceeding or
investigation, judicial, administrative or otherwise would have a Material
Adverse Effect on the Company or a material adverse effect on the validity,
binding effect or enforceability of this Agreement or the Collateral Documents.
 

 
-42-

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Schedule 3.10
List of Unfiled Taxes
 
To the Company’s knowledge and to the knowledge of each of its Subsidiaries the
following represents the status of all federal, state and foreign income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject.

Tax Filing Status
           
Company
 
Tax Year
 
Jurisdiction
 
Status
             
Shea Development Corp.
 
2006
 
Federal
 
Extended
   
2005
 
Federal
 
Filed
             
Information Intellect, Inc.
 
2006
 
Federal
 
Extended
   
2006
 
Georgia
 
Extended
   
2005
 
Federal
 
Filed
   
2005
 
Georgia
 
Filed
             
ETG, Inc.
 
2006
 
Federal
 
Extended
   
2006
 
Texas
 
Extended
   
2005
 
Federal
 
Filed
   
2005
 
Texas
 
Filed
             
PSD Software
 
2005
 
Federal
 
Filed
(sold in 2005)
 
2005
 
Georgia
 
Filed
             
Riptide Software, Inc.
 
2006
 
Federal
 
Filed
   
2006
 
Florida
 
Filed
   
2005
 
Federal
 
Filed
   
2005
 
Florida
 
Filed
             
Bravera, Inc.
 
2006
 
Federal
 
Extended
   
2006
 
Florida
 
Extended
   
2006
 
South Carolina
 
Extended
   
2006
 
Virginia
 
Extended
   
2006
 
Maryland
 
Extended
   
2005
 
Federal
 
Filed
   
2005
 
Florida
 
Filed
   
2005
 
South Carolina
 
Filed
   
2005
 
Virginia
 
Filed
   
2005
 
Maryland
 
Filed

 
As it relates to the shell company Shea Development Corp, the Company has not
filed any returns as a shell company due to the fact that it was not profitable.

 
-43-

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Schedule 3.12
List of Company Broker and Third Party Fees

 
To the Company’s best knowledge there is no plan to pay brokers fees or other
third party fees outside of the auditors and lawyers.

 
-44-

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Schedule 3.14
List of Obligations and Liabilities

To the Company’s knowledge, the Company has no obligations or liabilities of any
nature (matured or unmatured, fixed or contingent) other than (i) those set
forth or reserved against in the Company Financial Statements or if subsequent
to the date of the Company Financial Statements, as otherwise disclosed in
filings made with the SEC, (ii) those incurred in connection with this Agreement
or the transactions contemplated hereby, (iii) those incurred in the ordinary
course of business consistent with the Company’s past practice.
 

 
-45-

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Schedule 3.15
Absence of Changes
 
The following list represents all Material Changes in and by the Company since
the May 15, 2007 Form10-QSB:

 
1.
Asset sale of Acufile 2 and Intelliplant software

 
-46-

--------------------------------------------------------------------------------

 
 
Schedule 3.16 (a)
List of Contracts

To the Company’s knowledge there are no agreements, contracts, etc. that are not
over $1,000,000 and not reported in our SEC filings or Material to the Company.

 

 
-47-

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Schedule 3.16 (b)
Contracts
 
The best of the Company’s knowledge, the Company has complied with and
performed, in all material respects, all of its obligations required to be
performed under and is not in default with respect to any of the Contracts, as
of the date hereof, nor has any event occurred which has not been cured which,
with or without the giving of notice, lapse of time, or both, would constitute a
default in any respect there under.

 
-48-

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Schedule 3.16(c)
Contracts

To the Company’s best knowledge, the Company knows of and has no reason to
believe that there are any facts or circumstances which would make a material
default by any party to any contract or obligation likely to occur subsequent to
the date hereof.
 

 
-49-

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Schedule 3.18
Restrictions on Business Activities
 
To the Company’s knowledge, there is no agreement or Order binding upon the
Company, or any of its assets or properties which has had or could reasonably be
expected to have the effect of prohibiting or impairing any current business
practice of the Company (or future business practice of the Surviving
Corporation), any acquisition of property by the Company or the conduct of
business by the Company as currently conducted or as proposed to be conducted by
the Company other than in the ordinary course of business or which would not
reasonably be expected to give rise to a Material Adverse Effect.

 
-50-

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Schedule 3.19
Title to Property
 
The Company has good and marketable title to all of its properties, interests in
properties and assets, real and personal, reflected in the Company Financial
Statements or acquired after the Financial Statement Date (except properties,
interests in properties and assets sold or otherwise disposed of since the
Financial Statement Date in the ordinary course of business), or with respect to
leased properties and assets, valid leasehold interests in, free and clear of
all mortgages, liens, pledges, charges or encumbrances of any kind or character.

 
-51-

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Schedule 3.20(a)
Labor Relations

To the best of the Company’s knowledge, the Company has no collective bargaining
or union contracts or agreements.

 
-52-

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Schedule 3.20 (b)
Violation of Employment Laws

To the Company’s knowledge, the Company is in compliance with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor
practices; there are no charges of discrimination or unfair labor practice
charges, or complaints against the Company pending or threatened before any
governmental or regulatory agency or authority; and, there is no labor strike,
dispute, slowdown or stoppage actually pending or threatened against or
affecting the Company.
 

 
-53-

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Schedule 3.21(a)
Employee Agreements Not Terminable At-Will

To the best of the Company’s knowledge, the Company has no employment or
consulting agreements or arrangements, written or oral, which are not terminable
at the will of the Company

 
-54-

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Schedule 3.21(b)
Employment Agreement Violations

To the best of the Company’s knowledge, no employee of the Company is in
violation of any employment agreement or restrictive covenant.
 

 

 
-55-

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Schedule 4.3 (c)

Capitalization

Common Stock 100,000,000 shares authorized and 14,258,756 issued and
outstanding.

Preferred Stock 2,000,000 shares authorized no shares currently issued.

The following table sets forth certain information regarding the beneficial
ownership of the Company’s Common Stock as of September 30, 2006 by (I) each
person who is known by the Company to own beneficially more than 5% of the
Company’s outstanding Common Stock; (ii) each of the Company’s directors; (iii)
the named Executive Officers; and (iv) executive officers and directors of the
Company as a group:

   
COMMON STOCK (1)
     
NUMBER OF
 
PERCENTAGE OF
 
NAME AND ADDRESS (2)
 
SHARES
 
OUTSTANDING (3)
 
Robert Pearson (4)
   
----
   
----
                 
Robert Degan
   
268,000 (5
)
 
1.85
                 
Russell Cleveland (4)
   
----
   
----
                 
Lee Pryor
   
----
   
----
                 
Stephen Crosson
   
1,205,770 (6
)
 
7.91
                 
Michael Skelton
   
741,785 (7
)
 
4.96
                 
Renaissance Capital Growth & Income Fund III, Inc.
   
5,321,226 (8
)
 
33.17
 
8080 N. Central Expressway
             
Suite 210
             
Dallas, Texas 75206
                             
Renaissance US Growth & Income Trust PLC
   
4,667,698 (9
)
 
29.32
 
8080 N. Central Expressway
             
Suite 210
             
Dallas, Texas 75206
                             
BFSUS Special Opportunities Trust PLC
   
7,062,282 (10
)
 
37.15
 
8080 N. Central Expressway
             
Suite 210
             
Dallas, Texas 75206
                             
All executive officers and directors as a group (5 persons)
   
2,215,555
   
13.68
 

 
-56-

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--------------------------------------------------------------------------------

(1)
As used herein, the term beneficial ownership is defined by Rule 13d-3 under the
Securities Exchange Act of 1934 as consisting of sole or shared voting power
and/or sole or shared investment power subject to community property laws where
applicable.

(2)
Except as indicated, the address of each person is c/o the Company at 600
Hampshire Road, #105, Westlake Village, California 91361.

(3)
Based on 14,258,756 shares of Common Stock outstanding, as of September 30,
2006.

(4)
Does not include any shares owned by the Renaissance Funds described in the
table. Mr. Pearson is an executive officer of Renaissance Capital Group, Inc.
(“RCG”) which is the investment advisor to the Renaissance Funds and BFS US and
the investment manager of Renaissance U.S.

(5)
Includes four year non-qualified options from the Company to purchase 50,000
shares at $.95 per share, 35,000 shares from the Company at $.61 per share,
85,000 shares from the Company at $.44 per share and options to purchase 85,000
shares from the Company at $0.41 per share, does not include 35,000 options not
currently exercisable.

(6)
Includes currently exercisable options to purchase 48,000 shares from the
Company at $.56 per share, 120,000 shares from the Company at $3.87 per share,
60,000 shares from the Company at $5.00 per share, 120,000 shares from the
Company at $1.55 per share, 50,000 shares from the Company at $.95 per share,
100,000 shares from the Company at $.61 per share, 100,000 shares from the
Company at $.44 per share, options to purchase 300,000 shares at $0.55 per
share, options to purchase 85,000 shares at $0.41 per share and does not include
100,000 options not currently exercisable.

(7)
Includes currently exercisable options from the Company to purchase 700,000
shares at $0.63 per share. Does not include 700,000 options not currently
exercisable.

(8)
RCG is the investment advisor of the Renaissance Funds. The Common Shares deemed
to be beneficially owned by the Renaissance Capital Growth and Income Fund III,
are comprised of 3,539,414 shares of our Common Stock, options to purchase
26,500 shares at $0.95 per share, options to purchase 18,550 shares at $0.61 per
share, options to purchase 38,250 shares at $0.44 per share, options to purchase
37,400 shares at $0.41 per share, warrants to purchase 540,541 shares at $0.74
per share, warrants to purchase 540,540 shares at $1.11 per share, warrants to
purchase 471,698 shares at $0.53 per share, warrants to purchase 58,333 shares
at $1.14 per share and warrants to purchase 50,000 shares at $0.86 per share.
All of such securities are owned by the Renaissance Funds as described herein.

(9)
RCG is the Investment Manager of Renaissance US. The Common Shares deemed to be
beneficially owned by the Renaissance US Fund are comprised of 3,006,585 shares
of our Common Stock and warrants to purchase 540,541 shares at $0.74 per share,
warrants to purchase 540,540 shares at $1.11 per share, warrants to purchase
471,698 shares at $0.53 per share, warrants to purchase 58,334 shares at $1.14
per share and warrants to purchase 50,000 shares at $0.86 per share.

(10)
RCG is the Investment Advisor for BFS US. The Common Shares deemed to be
beneficially owned by BFS US are comprised of 2,312,818 shares of Common Stock
and 3,088,352 shares of Common Stock issuable upon conversion of an aggregate of
$1,750,000 of 6% Convertible Debenture at a weighted average conversion price of
$0.63 per share. Also includes warrants to purchase 540,541 shares at $0.74 per
share, warrants to purchase 540,540 shares at $1.11 per share, warrants to
purchase 471,698 shares at $0.53 per share, warrants to purchase 58,333 shares
at $1.14 per share and warrants to purchase 50,000 shares at $0.86 per share.

The following table summarizes information about employee’s stock options
outstanding at June 30, 2007.
 
Outstanding
 
Exercisable
       
Weighted Average
     
Weighted Average
 
Exercise
   
Life
 
Exercise
     
Exercise
 
Price
 
Options
 
(Months)
 
Price
 
Options
 
Price
 
$0.41
   
438,000
   
30
 
$
0.41
   
413,500
 
$
0.41
 
0.44
   
388,000
   
30
   
0.44
   
371,000
   
0.44
 
0.52
   
85,000
   
30
   
0.52
   
85,000
   
0.52
 
0.55
   
302,000
   
30
   
0.55
   
301,000
   
0.55
 
0.56
   
146,000
   
30
   
0.56
   
146,000
   
0.56
 
0.61
   
305,000
   
30
   
0.61
   
305,000
   
0.61
 
0.62
   
70,000
   
34
   
0.62
   
70,000
   
0.62
 

 
 
-57-

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0.63
   
1,400,000
   
30
   
0.63
   
1,050,000
   
0.63
 
0.87
   
2,000
   
42
   
0.87
   
500
   
0.87
 
0.90
   
70,000
   
30
   
0.90
   
70,000
   
0.90
 
0.95
   
259,000
   
30
   
0.95
   
259,000
   
0.95
 
1.01
   
5,000
   
42
   
1.01
   
1,250
   
1.01
 
1.14
   
365,000
   
30
   
1.14
   
91,250
   
1.14
 
1.25
   
25,000
   
30
   
1.25
   
25,000
   
1.25
 
1.30
   
15,000
   
30
   
1.30
   
15,000
   
1.30
 
1.55
   
300,000
   
30
   
1.55
   
300,000
   
1.55
 
3.38
   
2,000
   
30
   
3.38
   
2,000
   
3.38
 
3.56
 
 
52,000
   
30
   
3.56
   
52,000
   
3.56
 
3.87
   
314,500
   
30
   
3.87
   
314,500
   
3.87
 
5.00
   
150,000
   
30
   
5.00
   
150,000
   
5.00
 
$0.41-$5.00
   
4,693,500
      $
1.10
   
4,022,000
  $
1.14
 

 
The following table summarizes information about warrants outstanding at June
30, 2007.
 

 Outstanding  
Exercisable
       
Weighted Average
     
Weighted Average
 
Exercise
     
Life
 
Exercise
     
Exercise
 
Price
 
Warrants
 
(Months)
 
Price
 
Warrants
 
Price
 
$ 0.53
   
1,415,094
   
25
   
0.53
   
1,415,094
 
$
0.53
 
0.74
   
1,621,623
   
18
   
0.74
   
1,621,623
   
0.74
 
0.86
   
150,000
   
44
   
0.86
   
150,000
   
0.86
 
1.11
   
1,621,620
   
18
   
1.11
   
1,621,620
   
1.11
 
1.14
   
175,000
   
40
   
1.14
   
175,000
   
1.14
 
$0.53-$1.14
   
4,983,337
       
$
0.82
   
4,983,337
  $ 0.82  

 
-58-

--------------------------------------------------------------------------------

 

Schedule 4.4

$1,000,000 Convertible Debenture Agreement, originated November 27, 2002
Matures on November 27, 2007

$750,000 Convertible Debenture Agreement, originated July 2003, Matures on
November 27, 2007

$750,000 Secured Loan, Matures on January 19, 2008.

$100,000 Secured Convertible Note, Matures on November 7, 2007
$100,000 Secured Convertible Note, Matures on November 7, 2007

The above agreements and associated rights documents have conflicts relating to
any change of ownership.

 
-59-

--------------------------------------------------------------------------------

 

Schedule 4.5

Consent of the CaminoSoft Corp. Shareholders.

Consent of the CaminoSoft Corp. Board of Directors.

Consent of the debt holders of $2.7 million in total CaminoSoft Corp. debt as
listed below.

$1,000,000 Convertible Debenture Agreement, originated November 27, 2002
Matures on November 27, 2007

$750,000 Convertible Debenture Agreement, originated July 2003, Matures on
November 27, 2007

$750,000 Secured Loan, Matures on January 19, 2008.

$100,000 Secured Convertible Note, Matures on November 7, 2007
$100,000 Secured Convertible Note, Matures on November 7, 2007

 
-60-

--------------------------------------------------------------------------------

 

Schedule 4.6

CaminoSoft Corp. Intellectual Property used as collateral to secure debt
financing listed below.

$1,000,000 Convertible Debenture Agreement, originated November 27, 2002
Matures on November 27, 2007

$750,000 Convertible Debenture Agreement, originated July 2003, Matures on
November 27, 2007

$750,000 Secured Loan, Matures on January 19, 2008.

$100,000 Secured Convertible Note, Matures on November 7, 2007
$100,000 Secured Convertible Note, Matures on November 7, 2007

 
-61-

--------------------------------------------------------------------------------

 

Schedule 4.9

None

 
-62-

--------------------------------------------------------------------------------

 

Schedule 4.10

None

 
-63-

--------------------------------------------------------------------------------

 

Schedule 4.12

None

 
-64-

--------------------------------------------------------------------------------

 

Schedule 4.14

Undisclosed Liabilities:

Non Book vacation accrual named executives. Payment of Vacation pay is normal
based on historical practice the listed liabilities although tracked by the
company for hours and number of vacation days used the liability balance of the
accrued vacation amounts were not carried as liabilities on the Company’s
financial statements.

Mike Skelton  balance due as of July 31, 2007 = $11,209.49

Steve Crosson balance due as of July 31, 2007 = $63,668.80

VACATION ACCRUAL SCHEDULE
                           
NAME:
MIKE SKELTON
 
               
DOH:
04/02/04
                   
DOT:
 
                               
MONTH/
 
HOURS
HOURS
ACCRUED
LIABILITY
YEAR
 
ACCRUED
TAKEN
BALANCE
AMOUNT
**BAL. FRWRD FROM DEC. 31, 2006**
92.11
 
01/31/07
X
6.67
0.00
98.78
7,977.47
02/28/07
X
6.67
0.00
105.45
8,516.14
03/31/07
X
6.67
0.00
112.12
9,054.81
04/30/07
X
6.67
0.00
118.79
9,593.48
05/31/07
X
6.67
0.00
125.46
10,132.15
06/30/07
X
6.67
0.00
132.13
10,670.82
07/31/07
X
6.67
0.00
138.80
11,209.49
08/31/07
 
6.67
 
 
0.00
09/30/07
 
6.67
 
 
0.00
10/31/07
 
6.67
 
 
0.00
11/30/07
 
6.67
 
 
0.00
12/31/07
 
6.67
 
 
0.00
Balance
     
0.00
0.00
           
Vacation taken:
Current Year
0.00
   

 
-65-

--------------------------------------------------------------------------------

 
 
VACATION ACCRUAL SCHEDULE
                           
NAME:
STEVE CROSSON
 
               
DOH:
03/01/92
                   
DOT:
 
                               
MONTH/
 
HOURS
HOURS
ACCRUED
LIABILITY
YEAR
 
ACCRUED
TAKEN
BALANCE
AMOUNT
**BAL. FRWRD FROM DEC. 31, 2006**
805.63
 
01/31/07
X
13.33
8.00
810.96
58,478.33
02/28/07
X
13.33
0.00
824.29
59,439.55
03/31/07
X
13.33
0.00
837.62
60,400.78
04/30/07
X
13.33
0.00
850.95
61,362.00
05/31/07
X
13.33
0.00
864.28
62,323.23
06/30/07
X
13.33
8.00
869.61
62,707.58
07/31/07
X
13.33
0.00
882.94
63,668.80
08/31/07
 
13.33
 
 
0.00
09/30/07
 
13.33
 
 
0.00
10/31/07
 
13.33
 
 
0.00
11/30/07
 
13.33
 
 
0.00
12/31/07
 
13.33
 
 
0.00
Balance
     
0.00
0.00
           
Vacation taken:
Current Year
16.00
   

 
-66-

--------------------------------------------------------------------------------

 

Schedule 4.15

None

 
-67-

--------------------------------------------------------------------------------

 

Schedule 4.16 (a)

$1,000,000 Convertible Debenture Agreement, originated November 27, 2002
Matures on November 27, 2007

$750,000 Convertible Debenture Agreement, originated July 2003, Matures on
November 27, 2007

$750,000 Secured Loan, Matures on January 19, 2008.

$100,000 Secured Convertible Note, Matures on November 7, 2007
$100,000 Secured Convertible Note, Matures on November 7, 2007

 
-68-

--------------------------------------------------------------------------------

 

Schedule 4.16 (b)

None

 
-69-

--------------------------------------------------------------------------------

 

Schedule 4.16 (c)

None

 
-70-

--------------------------------------------------------------------------------

 

Schedule 4.18

CaminoSoft Corp. Intellectual Property used as collateral to secure debt
financing listed below.

$1,000,000 Convertible Debenture Agreement, originated November 27, 2002
Matures on November 27, 2007

$750,000 Convertible Debenture Agreement, originated July 2003, Matures on
November 27, 2007

$750,000 Secured Loan, Matures on January 19, 2008.

$100,000 Secured Convertible Note, Matures on November 7, 2007
$100,000 Secured Convertible Note, Matures on November 7, 2007

 

 
-71-

--------------------------------------------------------------------------------

 

Schedule 4.20(a)

None

 
-72-

--------------------------------------------------------------------------------

 

Schedule 4.20(b)

None

 
-73-

--------------------------------------------------------------------------------

 

Schedule 4.21(a)

None

 
-74-

--------------------------------------------------------------------------------

 

Schedule 4.21(b)

None
 
 
-75-

--------------------------------------------------------------------------------