AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER is made as of the 2nd day of July, 2007

AMONG:

TECH LABORATORIES, INC., a corporation formed pursuant to the laws of the State
of New Jersey and having an office for business located at 1818 North Farwell
Avenue, Milwaukee, Wisconsin 53202

(“TLBT”)

AND:

BSI ACQUISITIONS, INC., a body corporate formed pursuant to the laws of the
State of Nevada and a wholly owned subsidiary of TLBT

(the "Acquirer")

AND:

BIODIESEL SOLUTIONS, INC., a body corporate formed pursuant to the laws of the
State of Nevada and having an office for business located at 1395 Greg Street,
Suite #102, Sparks, Nevada 89431

("BSI")

AND:

RUDOLF WIEDEMANN, an individual having an address at 572 Echo Ridge Court, Reno,
NV 89511
 
(“Wiedemann”)

AND:

GREGORY SPRINGER, an individual having an address at 7026 Poco Bueno Court,
Sparks, NV 89436

(“Springer”)

AND:

KEN THOMAS AND MARYANNE HARZHEIM, TRUSTEES OF THE THOMAS- HARZHEIM TRUST, having
an address at 48867 Chenin Blanc Drive, Fremont, CA 94539
 
 
 

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(the “BSI Preferred Shareholder” and together with Springer and Wiedemann, the
“BSI Shareholders”)

WHEREAS:

A. BSI is a Nevada corporation engaged in the development and marketing of
equipment used to produce biodiesel fuels;

B. The BSI Shareholders own an aggregate of 7,773,794 BSI Common Shares (of
which Wiedemann owns 7,000,000 shares and Springer owns 773,794 shares) and the
BSI Preferred Shareholder owns 50,000 BSI Preferred Shares, being 100% of the
presently issued and outstanding equity of BSI;

C. TLBT is a reporting company whose common stock is quoted on the NASD
“Bulletin Board” and which is engaged in the business of producing
personal-scale biodiesel production equipment;

D. The respective Boards of Directors of TLBT, BSI and the Acquirer deem it
advisable and in the best interests of TLBT, BSI and the Acquirer that the
Acquirer merge with and into BSI (the "Merger") pursuant to this Agreement and
the Certificate of Merger, and the applicable provisions of the laws of the
State of Delaware and the State of Nevada; and

E. It is intended that the Merger shall qualify for United States federal income
tax purposes as a reorganization within the meaning of Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended.

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1
DEFINITIONS AND INTERPRETATION

Definitions

1.1 In this Agreement the following terms will have the following meanings:

 
(a)
“Acquisition Shares” means the 49,000,000 TLBT Common Shares and (ii) the
1,000,000 BSI New Preferred Shares, which shares are to be issued and delivered
to the BSI Shareholders at Closing pursuant to the terms of the Merger;

 
(b)
“Agreement” means this Agreement and Plan of Merger among TLBT, the Acquirer,
BSI, and the BSI Shareholders;

 
 
 
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(c)
“BSI Accounts Payable and Liabilities” means all accounts payable and
liabilities of BSI, due and owing or otherwise constituting a binding obligation
of BSI (other than a BSI Material Contract) as of May 31, 2007 as set forth in
Schedule “A” hereto;

 
(d)
“BSI Accounts Receivable” means all accounts receivable and other debts owing to
BSI, as of May 31, 2007 as set forth in Schedule “B” hereto;

 
(e)
“BSI Assets” means all the property and assets of the BSI Business of every kind
and description wheresoever situated including, without limitation, BSI
Equipment, BSI Material Contracts, BSI Accounts Receivable, BSI Cash, BSI
Intangible Assets, BSI Goodwill, BSI Unlisted Inventory, and all credit cards,
charge cards and banking cards issued to BSI;

 
(f)
“BSI Bank Accounts” means all of the bank accounts, lock boxes and safety
deposit boxes of BSI or relating to the BSI Business as set forth in Schedule
“C” hereto;

 
(g)
“BSI Business” means all aspects of the business conducted by BSI;

 
(h)
“BSI Cash” means all cash on hand or on deposit to the credit of BSI on the
Closing Date;

 
(i)
“BSI Debt to Related Parties” means the debts owed by BSI and its subsidiaries
to any of the BSI Shareholders or to any family member thereof, or to any
affiliate, director or officer of BSI or the BSI Shareholders as described in
Schedule “D”;

 
(j)
“BSI Equipment” means all machinery, equipment, furniture, and furnishings used
in the BSI Business, including, without limitation, the items more particularly
described in Schedule “E” hereto;

 
(k)
“BSI Financial Statements” means collectively, the financial statements of BSI
for the years ended December 31, 2005 and 2006, and the period ended March 31,
2007, all of which were prepared on an accrual basis in accordance with United
States generally accepted accounting principles (other than the treatment of the
BSI Unlisted Inventory), true copies of which are attached as Schedule “F”
hereto;

 
(l)
“BSI Goodwill” means the goodwill of the BSI Business together with the
exclusive right of TLBT to represent itself as carrying on the BSI Business in
succession of BSI subject to the terms hereof, and the right to use any words
indicating that the BSI Business is so carried on including the right to use the
name "BSI” or “BSI International" or any variation thereof as part of the name
of or in connection with the BSI Business or any part thereof carried on or to
be carried on by BSI, the right to all corporate, operating and trade names
associated with the BSI Business, or any variations of such names as part of or
in connection with the BSI Business, all telephone listings and telephone
advertising contracts, all lists of customers, books and records and other
information relating to the BSI Business, all necessary licenses and
authorizations and any other rights used in connection with the BSI Business;

 
 
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(m)
“BSI Insurance Policies” means the public liability insurance and insurance
against loss or damage to BSI Assets and the BSI Business as described in
Schedule “G” hereto;

 
(n)
“BSI Intangible Assets” means all of the intangible assets of BSI, including,
without limitation, BSI Goodwill, all trademarks, logos, copyrights, designs,
licenses, patents, and other intellectual and industrial property of BSI and its
subsidiaries;

 
(o)
“BSI Material Contracts” means the burden and benefit of and the right, title
and interest of BSI in, to and under all trade and non-trade contracts,
engagements or commitments, whether written or oral, to which BSI is entitled in
connection with the BSI Business whereunder BSI is obligated to pay or entitled
to receive the sum of $10,000 or more including, without limitation, any pension
plans, profit sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees, licensees,
managers, accountants, suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without liability on not more
than one month's notice, and those contracts listed in Schedule “I” hereto; and

 
(p)
“BSI Common Shares” means the common stock, $0.001 par value per share, of BSI;

 
(q)
“BSI New Preferred Shares” means the Series B Preferred Stock, $0.001 par value
per share, of BSI;

 
(r)
“BSI Preferred Shares” means the Series A Preferred Stock, $0.001 par value per
share, of BSI;

 
(s)
“BSI Shares” means collectively, all of the issued and outstanding BSI Common
Shares;

(t)
“NGCL” means the Nevada General Corporation Law;

 
(u)
“Closing” means the completion, on the Closing Date, of the transactions
contemplated hereby in accordance with Article 9 hereof;

 
(v)
“Closing Date” means the day on which all conditions precedent to the completion
of the transaction as contemplated hereby have been satisfied or waived;

(w)
“Commission” means the Securities and Exchange Commission;

 
(x)
“Effective Time” means the date of the filing of an appropriate Certificate of
Merger in the form required by the State of Delaware and the State of Nevada,
which provide that the Merger shall become effective upon such filings;

 
(y)
“Employment Agreements” means the employment agreements to be entered into on
the Closing Date between BSI and Wiedemann and Springer in the forms attached
hereto as Exhibit “A” and “B”, respectively;

 
 
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(z)
“Exchange Act” means the Securities Exchange Act of 1934, as amended;

 
(aa)
“Lock Up Agreement” means the Lock Up Agreement to be entered into on the
Closing Date between TLBT and the BSI Shareholders in respect of the Acquisition
Shares in the form attached hereto as Exhibit “F”;

 
(bb)
“Merger” means the merger, at the Effective Time, of BSI and the Acquirer
pursuant to this Agreement and Plan of Merger;

 
(cc)
“Place of Closing” means the offices of Sichenzia Ross Friedman Ference LLP, 61
Broadway, New York, New York 10006, or such other place as TLBT and BSI may
mutually agree upon;

 
(dd)
“Registration Rights Agreement” means the Registration Rights Agreement to be
entered into on the Closing Date between TLBT and the BSI Shareholders in
respect of the Acquisition Shares in the form attached hereto as Exhibit “C”;

 
(ee)
“SEC Reports” means all forms, reports and documents filed and required to be
filed by TLBT with the Commission under the Exchange Act;

 
(ff)
“Securities Act” means the Securities Act of 1933, as amended;

 
(gg)
“Surviving Company” means BSI following the Merger with the Acquirer;

 
(hh)
“TLBT Business” means all aspects of any business conducted by TLBT and its
subsidiaries;

 
(ii)
“TLBT Common Shares” means the Common Stock, $0.01 par value per share, of TLBT;
and

 
(jj)
“TLBT Financial Statements” means, collectively, the audited consolidated
financial statements of TLBT for the fiscal years ended December 31, 2005 and
2006, together with the unqualified auditors’ report thereon, and the unaudited
financial statements for the three month periods ended March 31, 2007 and 2006,
true copies of which are attached as Schedule “I” hereto.

Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.

Captions and Section Numbers

1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
 
 
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Section References and Schedules

1.3 Any reference to a particular “Article”, “section”, “paragraph”, “clause” or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule or Exhibit by
letter will mean the appropriate Schedule or Exhibit attached to this Agreement
and by such reference the appropriate Schedule or Exhibit is incorporated into
and made part of this Agreement. The Schedules and Exhibits to this Agreement
are as follows:

Information concerning BSI

BSI Disclosure Letter, including the following Schedules appurtenant thereto:

Schedule “A” BSI Accounts Payable and Liabilities
Schedule “B” BSI Accounts Receivable
Schedule “C” BSI Bank Accounts
Schedule “D” BSI Debts to Related Parties
Schedule “E” BSI Equipment
Schedule “F” BSI Financial Statements
Schedule “G” BSI Insurance Policies
Schedule “H” BSI Material Contracts
 
Information concerning TLBT

Schedule “I” TLBT Financial Statements

Ancillary Agreements

Exhibit “A” Form of Employment Agreement for Wiedemann
Exhibit “B” Form of Employment Agreement for Springer
Exhibit “C” Form of Registration Rights Agreement
Exhibit “D” BSI Milestones
Exhibit “E” Form of Option
Exhibit “F” Form of Lock-Up Agreement

Severability of Clauses

1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.

ARTICLE 2
THE MERGER

The Merger

2.1 The Acquirer shall be merged with and into BSI pursuant to this Agreement
and Plan of Merger and the separate corporate existence of the Acquirer shall
cease and BSI, as it exists from and after the Closing, shall be the Surviving
Company. At Closing, Articles of Merger shall be filed with the Secretary of
State of Nevada in accordance with Chapter 92A of the NGCL. The merger shall
become effective upon the filing of the Articles of Merger with the Secretary of
State of Nevada, which date and time is sometimes herein referred to as the
“Effective Time”.
 
 
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Effect of the Merger

2.2 The Merger shall have the effect provided therefor by the NGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time (i) all the rights, privileges, immunities, powers and franchises, of a
public as well as of a private nature, and all property, real, personal and
mixed, and all debts due on whatever account, including without limitation
subscriptions to shares, and all other choses in action, and all and every other
interest of or belonging to or due to BSI or the Acquirer, as a group, subject
to the terms hereof, shall be taken and deemed to be transferred to, and vested
in, the Surviving Company without further act or deed; and all property, rights
and privileges, immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company, as they were of BSI and the Acquirer, as a group, and (ii) all debts,
liabilities, duties and obligations of BSI and the Acquirer, as a group, subject
to the terms hereof, shall become the debts, liabilities and duties of the
Surviving Company and the Surviving Company shall thenceforth be responsible and
liable for all debts, liabilities, duties and obligations of BSI and the
Acquirer, as a group, and neither the rights of creditors nor any liens upon the
property of BSI or the Acquirer, as a group, shall be impaired by the Merger,
and may be enforced against the Surviving Company.

Articles of Incorporation; Bylaws; Directors and Officers

2.3 The Articles of Incorporation of the Surviving Company from and after the
Closing shall be the Articles of Incorporation of BSI until thereafter amended
in accordance with the provisions therein and as provided by the applicable
provisions of the NGCL. The Bylaws of the Surviving Company from and after the
Closing shall be the Bylaws of BSI as in effect immediately prior to the
Closing, continuing until thereafter amended in accordance with their terms, the
Articles of Incorporation of the Surviving Company and as provided by the NGCL.
The Directors of the Surviving Company at the Effective Time shall be John King,
David Marks and Rudi Wiedemann.

Conversion of Securities

2.4 At the Effective Time, by virtue of the Merger and without any action on the
part of the Acquirer, BSI or the BSI Shareholders, the shares of capital stock
of each of BSI and the Acquirer shall be converted as follows:

 
(a)
Capital Stock of the Acquirer. Each issued and outstanding share of the
Acquirer's capital stock shall continue to be issued and outstanding and shall
be converted into one share of validly issued, fully paid, and non-assessable
common stock of the Surviving Company. Each stock certificate of the Acquirer
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Company.

 
(b)
Conversion of BSI Shares. Each BSI Share that is issued and outstanding at the
Effective Time shall automatically be cancelled and extinguished and converted,
without any action on the part of the holder thereof, into the right to receive
at the time and in the amounts described in this Agreement an amount of
Acquisition Shares equal to (a) in the case of Wiedemann, 44,023,061 TLBT Common
Shares and all 1,000,000 of the BSI New Preferred Shares and (b) in the case of
Springer, 4,976,939 TLBT Common Shares. All such BSI Shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive the Acquisition Shares paid in consideration therefor upon the surrender
of such certificate in accordance with this Agreement.

 
 
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(c)
Cancellation of BSI Preferred Shares. Each BSI Preferred Share that is issued
and outstanding at the Effective Time shall automatically be cancelled and
extinguished, without any action on the part of the holder thereof, in exchange
for the right to receive the Liquidation Consideration (as defined below) at the
Closing. All such BSI Preferred Shares shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such shares shall cease to have any rights
with respect thereto, except the right to receive the Liquidation Consideration
paid in consideration therefor upon the surrender of such certificate in
accordance with this Agreement.

Additional Consideration

2.5 (a) In addition to the Acquisition Shares, TLBT shall pay the BSI
Shareholders additional consideration in the amount of $375,000 (“Cash
Consideration”). The Cash Consideration shall be paid to the applicable BSI
Shareholders on the Closing Date by certified check, bank check or wire
transfer. Of such amount, $275,000 shall be paid to Wiedemann and $100,000 shall
be paid to Springer.

(b) In addition, TLBT shall pay the BSI Preferred Shareholder additional
consideration in the amount of $125,000 (“Liquidation Consideration”) as a
liquidation payment in connection with the cancellation of the BSI Preferred
Shares at the Closing. The Liquidation Consideration shall be paid to the BSI
Preferred Shareholder on the Closing Date by certified check, bank check or wire
transfer

2.6 The BSI Shareholders acknowledge that foregoing allocation of merger
consideration amongst them has been specifically negotiated and agreed to, and
consent to such allocation for all intents and purposes and waive any claims
arising from any disparate allocation of the merger consideration relative to
any other document or BSI’s Articles of Incorporation or Bylaws.

Adherence with Applicable Securities Laws

2.7
The BSI Shareholders agree that they are acquiring the Acquisition Shares for
investment purposes and will not offer, sell or otherwise transfer, pledge or
hypothecate any of the Acquisition Shares issued to them (other than pursuant to
an effective registration statement under the Securities Act) directly or
indirectly unless:

(a)
the sale is to TLBT;

 
(b)
the sale is made pursuant to the exemption from registration under the
Securities Act, provided by Rule 144 thereunder; or

 
(c)
the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act, or any applicable United States state
laws and regulations governing the offer and sale of securities, and, if
requested by TLBT, the seller has furnished to TLBT an opinion of counsel to
that effect or such other written opinion as may be reasonably required by TLBT.

 
 
 
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The BSI Shareholders acknowledge that the certificates representing the
Acquisition Shares shall bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT. THEY MAY
NOT BE MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
1933 AND OTHER APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE
HOLDER’S COST TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE
ACCEPTABLE TO THE COMPANY’S COUNSEL.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF TLBT

Representations and Warranties

3.1 TLBT represents and warrants to BSI and the BSI Shareholders, with the
intent that BSI and the BSI Shareholders will rely thereon in entering into this
Agreement and in approving and completing the transactions contemplated hereby,
that:

TLBT - Corporate Status and Capacity

 
(a)
Incorporation. TLBT and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, has the corporate power and authority to own, operate and
lease its properties and to carry on its business as now conducted or as
proposed to be conducted, and is qualified as a foreign corporation in each
jurisdiction in which a failure to be so qualified could reasonably be expected
to have a material adverse effect on its present or expected operations or
financial condition.

 
(b)
Power and Capacity. Each of TLBT and Acquirer has the right, power, legal
capacity and authority to enter into and perform its obligations under this
Agreement, and all agreements to which TLBT and/or Acquirer is or will be a
party that are required to be executed pursuant to this Agreement (the “TLBT
Ancillary Agreements”). The execution, delivery and performance of this
Agreement and the TLBT Ancillary Agreements have been duly and validly approved
and authorized by the respective Boards of Directors of TLBT and Acquirer, and
the stockholder of Acquirer, as required by applicable law and their respective
certificates of incorporation and bylaws.

 
 
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(c)
No Filings. No filing, authorization or approval, governmental or otherwise, is
necessary to enable TLBT and Acquirer to enter into, and to perform their
respective obligations under, this Agreement and the TLBT Ancillary Agreements,
except for (a) the filing of the Certificate of Merger with the Delaware and
Nevada Secretaries of State and the filing of appropriate documents with the
relevant authorities of other states in which TLBT is qualified to do business,
if any, and (b) such filings as may be required to comply with federal and state
securities laws.

 
(d)
Binding Obligation. This Agreement and the TLBT Ancillary Agreements are, or
when executed by TLBT and/or Acquirer (as applicable) will be, valid and binding
obligations of TLBT and Acquirer enforceable in accordance with their respective
terms, except as to the effect, if any, of (a) applicable bankruptcy and other
similar laws affecting the rights of creditors generally, and (b) rules of law
governing specific performance, injunctive relief and other equitable remedies

 
(e)
Reporting Status; Listing. TLBT’s common stock is registered under Section 12(b)
or 12(g) of the Exchange Act and TLBT is required to file current reports with
the Commission pursuant to section 13(a) of the Exchange Act. The TLBT Common
Shares are quoted on the NASD "Bulletin Board” under the symbol “TLBT”;

 
Acquirer - Corporate Status and Capacity

 
(f)
Carrying on Business. Other than corporate formation and organization, the
Acquirer has not carried on any business activities to date.

TLBT - Capitalization

 
(g)
Authorized Capital. The authorized capital of TLBT consists of 3,000,000,000
TLBT Common Shares, $0.01 par value and 20,000,000 shares of preferred stock.
$0.001 par value, of which 357,076,887 TLBT Common Shares and no shares of
Series A Convertible Preferred Stock, are presently issued and outstanding;

 
(h)
No Option. Except as disclosed herein or in the TLBT SEC Reports, no person,
firm or corporation has any agreement, warrant or option or any right capable of
becoming an agreement, warrant or option for the acquisition of any capital
stock or equity interest in TLBT, except for the outstanding shares of Series A
Convertible Preferred Stock;

 
(i)
Agreements Concerning TLBT Capital Stock. Except as disclosed herein or in the
TLBT SEC Reports, there are no restrictions on the transfer, sale or other
disposition of any capital stock of TLBT contained in the charter documents of
TLBT or under any other agreements. There are no stockholder agreements,
investor rights agreements, co-sale agreements, right of first refusal
agreements, voting agreements, registration rights agreements or any other
similar type of agreement to which TLBT, any subsidiary of TLBT or any officer
or director of TLBT (or any subsidiary of TLBT) is a party.

 
 
 
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Acquirer - Capitalization

 
(j)
Authorized Capital. The authorized capital of the Acquirer consists of 100
shares of common stock, $0.001 par value, of which one share of common stock is
presently issued and outstanding;

 
(k)
No Option. No person, firm or corporation has any agreement, warrant or option
or any right capable of becoming an agreement, warrant or option for the
acquisition of any capital stock or equity interest in Acquirer;

TLBT - Records and Financial Statements

 
(l)
Charter Documents. The charter documents of TLBT and the Acquirer have not been
altered since the incorporation of each, respectively, except as filed in the
record books of TLBT or the Acquirer, as the case may be, copies of which have
been provided to BSI;

 
(m)
TLBT Financial Statements. The TLBT Financial Statements present fairly, in all
material respects, the assets and liabilities (whether accrued, absolute,
contingent or otherwise) of TLBT, on a consolidated basis, as of the respective
dates thereof, and the results of operations and statement of cash flows of TLBT
during the periods covered thereby, in all material respects and have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated;

 
(n)
TLBT has previously delivered or made available to BSI true and complete copies
of (a) its Annual Report on Form 10-K for the fiscal year ended December 31,
2006, (b) its Quarterly Reports on Form 10-Q for the fiscal quarter ended March
31, 2007, and (c) its Definitive Proxy Statement on Schedule 14A as filed on May
23, 2007, with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As of their respective
dates, such reports and proxy statement (collectively, the "Public Filings")
(i) complied with all applicable provisions, rules and regulations of federal
securities laws and (ii) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances in which
such statements were made, not misleading.

 
(o)
Since the date of the balance sheet included in TLBT’s most recently filed
report on Form 10-Q, TLBT has conducted its business in the ordinary course and
there has not occurred: (a) any material adverse change in the financial
condition, liabilities, assets or business of TLBT; (b) any amendment or change
in the certificate of incorporation or bylaws of TLBT, or any proposal to so
amend; (c) any damage to, destruction of or loss of any assets of TLBT (whether
or not covered by insurance) that materially and adversely affects, or could
reasonably be expected to materially and adversely affect, the financial
condition or business of TLBT; or (d) any sale of a material amount of property
of TLBT, except in the ordinary course of business;

 
 
 
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TLBT - Applicable Laws and Legal Matters

 
(p)
Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or, to TLBT’s knowledge,
threatened against or relating to TLBT, its subsidiaries, or the TLBT Business
nor does TLBT have any knowledge of any act, fact or omission that would form
any material basis for any such action or proceeding;

 
(q)
No Bankruptcy. Neither TLBT nor its subsidiaries have made any voluntary
assignment or proposal under applicable laws relating to insolvency and
bankruptcy and no bankruptcy petition has been filed or presented against TLBT
or its subsidiaries and no order has been made or a resolution passed for the
winding-up, dissolution or liquidation of TLBT or its subsidiaries;

 
(r)
Finder's Fees. Neither TLBT nor its subsidiaries are party to any agreement
which provides for the payment of finder's fees, brokerage fees, commissions or
other fees or amounts which are or may become payable to any third party in
connection with the execution and delivery of this Agreement and the
transactions contemplated herein;

Execution and Performance of Agreement

 
(s)
No Violation or Breach. The execution and performance of this Agreement will
not:

 
(i)
violate the charter documents of TLBT or the Acquirer or result in any breach
of, or default under, any loan agreement, mortgage, deed of trust, or any other
agreement to which TLBT or its subsidiaries are party,

 
(ii)
give any person any right to terminate or cancel any agreement or any right or
rights enjoyed by TLBT or its subsidiaries,

 
(iii)
result in any alteration of TLBT’ or its subsidiaries’ obligations under any
agreement to which TLBT or its subsidiaries are party,

 
(iv)
result in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the assets of
TLBT,

 
(v)
result in the imposition of any tax liability to TLBT or its subsidiaries
relating to the assets of TLBT, or

 
(vi)
violate any court order or decree to which either TLBT or its subsidiaries are
subject;

 
 
 
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TLBT - Acquisition Shares

 
(t)
Acquisition Shares. The Acquisition Shares when delivered to the holders of BSI
Shares or as directed thereby pursuant to the Merger shall be validly issued and
outstanding as fully paid and non-assessable shares and the Acquisition Shares
shall be transferable upon the books of TLBT, in all cases subject to the
provisions and restrictions of all applicable securities laws; and

 
(u)
Securities Law Compliance. Except as set forth in the SEC Reports, TLBT has not
issued any shares of its common stock (or securities convertible into or
exercisable for shares of common stock) since March 31, 2007. The issuance of
the Acquisition Shares (including any shares of TLBT common stock issuable upon
conversion of the BSI New Preferred Shares) will be exempt from registration
under applicable federal and state securities laws.

Non-Merger and Survival

3.2 The representations and warranties of TLBT contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by the BSI Shareholders, the representations
and warranties of TLBT shall survive the Closing for a period of eighteen (18)
months. 

Indemnity

3.3 TLBT agrees to indemnify and save harmless BSI and the BSI Shareholders from
and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
TLBT to defend any such claim) and reaonsable attorneys fees and expenses
(collectively, “Losses and Expenses”), resulting from the breach by it of any
representation, warranty or covenant made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by TLBT to BSI or the BSI Shareholders hereunder
provided that there shall be no indemnification obligation until aggregate
Losses and Expenses exceed $10,000 and, in such event, the indemnifying party
shall be required to pay the entire amount of such Losses and Expenses in excess
of $10,000. In addition, TLBT agrees to indemnify the BSI Shareholders from and
against any and all Losses and Expenses arising from the business operations of
the Surviving Company after the Closing of the Merger or on account of personal
guarantees or personal indemnity agreements entered into by the BSI Shareholders
in connection with the obligations of BSI (which Losses and Expenses shall be
recoverable without reference to the $10,000 threshold set forth in the
preceding sentence).
 
 
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ARTICLE 4
COVENANTS OF TLBT

Covenants

4.1 TLBT covenants and agrees with BSI and the BSI Shareholders that it will:

 
(a)
Conduct of Business. Until the Closing, conduct its business diligently and in
the ordinary course consistent with the manner in which it generally has been
operated up to the date of execution of this Agreement;

 
(b)
Access. Until the Closing, give the BSI Shareholders and their representatives
full access to all of the properties, books, contracts, commitments and records
of TLBT, and furnish to the BSI Shareholders and their representatives all such
information as they may reasonably request, and following the Closing, give the
BSI Shareholders and their representatives full access to all of the properties,
books, contracts, commitments and records of BSI and TLBT, and furnish to the
BSI Shareholders and their representatives all such information as they may
reasonably request in connection with their indemnification obligations under
Section 5.3 below;

 
(c)
Procure Consents. Take all reasonable steps required to obtain, prior to
Closing, any and all third party consents required to permit the Merger;

 
(d)
Tech Labs Development Corp. Upon achievement of the milestones set forth on
Exhibit “D,” TLBT shall incorporate “Tech Labs Development Corp.,” or a
variation thereof, and appoint Weidemann as its chief executive officer. TLBT
will fund such entity at an appropriate level necessary to achieve its goals and
shall provide Weidemann with appropriate compensation for the services to be
provided.

 
(e)
Renewal Fuels. At a reasonable time subsequent to the Closing Date, TLBT shall
retain a general manager for its subsidiary, Renewal Fuels, Inc., with oversight
by BSI; provided, however, that notwithstanding any oversight, management or
legal affiliation between the entities, Renewal Fuels, Inc. and BSI shall
maintain separate accounting records, with each entity reporting results and
financial information to TLBT.

 
(f)
Additional Financing. TLBT further agrees to provide BSI with an aggregate of
$1,500,000 for working capital purposes in accordance with the following
schedule:

(1)
Upon the Closing, TLBT shall automatically forgive that certain loan made to BSI
in the principal amount of $200,000 on May 24, 2007;

 

(2)
On the Closing Date TLBT shall provide BSI with $500,000;

 

(3)
Within seventy-five days of the Closing Date, shall provide BSI with $400,000;
and

 

(4)
Shall provide BSI with the remaining $400,000 within 10 business days of the
unconditional booking (and receipt of 50% deposit) for the sale of the first
BiodieselMaster unit by BSI.

 
(g)
Employee Securities. TLBT shall grant an aggregate of 1,000,000 TLBT Common
Shares and an aggregate of 2,000,000 options to purchase TLBT Common Shares to
the individuals, other than officers of BSI, employed by BSI prior to the
Closing Date. Such options shall be in the form attached hereto as Exhibit “E”
and shall be granted, along with the TLBT Common Shares, on the Closing Date in
the amounts to be mutually agreed upon by TLBT and BSI.

 
 
 
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(h)
Delivery of Registration Rights Agreement. On the Closing Date, TLBT will
deliver the executed Registration Rights Agreement to the BSI Shareholders.

 
(i)
Employment Agreements. On the Closing Date, TLBT shall cause the Surviving
Company to execute and deliver the Employment Agreements to Wiedemann and
Springer.

 
(j)
Conversion Shares. Upon conversion of any of the BSI New Preferred Shares in
accordance with the Certificate of Designation to be filed by BSI on or about
the Closing, TLBT will promptly issue and deliver to the converting holder
thereof a stock certificate representing the appropriate number of shares of
TLBT Common Stock into which BSI New Preferred Shares have been converted.

Authorization

4.2   TLBT hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting TLBT and its subsidiaries to release any and all
information in their possession respecting TLBT and its subsidiaries to BSI.
TLBT shall promptly execute and deliver to BSI any and all consents to the
release of information and specific authorizations which BSI reasonably requires
to gain access to any and all such information.

Survival

4.3 The covenants set forth in this Article shall survive the Closing for the
benefit of the BSI Shareholders.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
BSI AND THE PRINCIPAL STOCKHOLDERS

Representations and Warranties

5.1 BSI, Wiedemann and Springer, jointly and severally, represent and warrant to
TLBT and the Acquirer, with the intent that they will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated hereby, that, except as disclosed in the BSI Disclosure Letter:

BSI - Corporate Status and Capacity
.

 
(a)
Incorporation. BSI is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, has the corporate
power and authority to own, operate and lease its properties and to carry on its
business as now conducted or as proposed to be conducted, and is qualified as a
foreign corporation in each jurisdiction in which a failure to be so qualified
could reasonably be expected to have a material adverse effect on its present or
expected operations or financial condition.

 
 
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(b)
Power and Capacity. BSI has the right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, and all agreements
to which BSI is or will be a party that are required to be executed pursuant to
this Agreement (the “BSI Ancillary Agreements”). The execution, delivery and
performance of this Agreement and the BSI Ancillary Agreements has been duly and
validly approved and authorized by the Board of Directors and stockholders of
BSI, as required by applicable law and its articles of incorporation and bylaws.
Each of the BSI Shareholders has the right, power, legal capacity and authority
to enter into and perform their obligations under this Agreement, and all
agreements to which they will be a party that are required to be executed
pursuant to this Agreement

 
(c)
No Filings. No filing, authorization or approval, governmental or otherwise, is
necessary to enable BSI to enter into, and to perform its obligations under,
this Agreement and the BSI Ancillary Agreements, except for (a) the filing of
the Agreement of Merger with the Delaware and Nevada Secretaries of State, the
recording of the Agreement of Merger in the office of the Recorder of the
Delaware county in which TLBT’s registered office is located, and the filing of
appropriate documents with the relevant authorities of other states in which BSI
is qualified to do business, if any, (b) such filings as may be required to
comply with federal and state securities laws, and (c) certain third-party
consents, which have been disclosed in BSI’s Disclosure Letter.

 
(d)
Binding Obligation. This Agreement and the BSI Ancillary Agreements are, or when
executed by BSI will be, valid and binding obligations of BSI enforceable in
accordance with their respective terms, except as to the effect, if any, of (a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally, and (b) rules of law governing specific performance, injunctive
relief and other equitable remedies. This Agreement and the BSI Ancillary
Agreements are, or when executed by each BSI Shareholders will be, valid and
binding obligations of such person, enforceable in accordance with their
respective terms, except as to the effect, if any, of (a) applicable bankruptcy
and other similar laws affecting the rights of creditors generally, and (b)
rules of law governing specific performance, injunctive relief and other
equitable remedies.

BSI - Capitalization

 
(e)
Authorized Capital. The authorized capital of BSI consists of 40,000,000 shares
of common stock, $0.001 par value per share and 10,000,000 shares of preferred
stock, $0.001 par value per share;

 
(f)
Ownership of BSI Shares. The issued and outstanding share capital of BSI will on
Closing consist of 7,773,794 shares of common stock (being the BSI Shares) and
50,000 BSI Preferred Shares, which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The BSI Shareholders will
be at Closing the registered and beneficial owner of the BSI Shares. The BSI
Shares owned by the BSI Shareholders will on Closing be free and clear of any
and all liens, charges, pledges, encumbrances, restrictions on transfer and
adverse claims whatsoever;

 
 
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(g)
No Option. No person, firm or corporation has any agreement, warrant or option
or any right capable of becoming an agreement, warrant or option for the
acquisition of any capital stock or equity interest in BSI;

 
(h)
No Restrictions. There are no restrictions on the transfer, sale or other
disposition of BSI Shares contained in the charter documents of BSI or under any
agreement that would prohibit the consummation of the transactions contemplated
herein;

BSI - Records and Financial Statements

 
(i)
Charter Documents. The charter documents of BSI have not been altered since its
incorporation date, except as filed in the record books of BSI;

 
(j)
Corporate Minute Books. The corporate minute books of BSI are complete and each
of the minutes contained therein accurately reflect the actions that were taken
at a duly called and held meeting or by consent without a meeting. All actions
by BSI which required director or shareholder approval are reflected on the
corporate minute books of BSI. BSI is not in violation or breach of, or in
default with respect to, any term of its Articles of Incorporation (or other
charter documents) or by-laws, except where such breach or default would not
have a material adverse effect upon BSI;

 
(k)
BSI Financial Statements. The BSI Financial Statements present fairly, in all
material respects, the assets and liabilities (whether accrued, absolute,
contingent or otherwise) of BSI as of the respective dates thereof, and the
results of operations and statement of cash flows of BSI during the periods
covered thereby, in all material respects, and were prepared on an accrual basis
in accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, except for (i) the treatment of the BSI
Unlisted Inventory and (ii) footnote disclosure;

 
(l)
BSI Accounts Payable and Liabilities. There are no material liabilities,
contingent or otherwise, of BSI which are not disclosed in Schedule “A” hereto
or the BSI Disclosure Letter or reflected in the BSI Financial Statements except
those incurred in the ordinary course of business since the date of the said
schedule and the BSI Financial Statements, and BSI has not guaranteed or agreed
to guarantee any debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing, all accounts
payable and liabilities of BSI as of May 31, 2007 are described in Schedule “A”
hereto;

 
(m)
BSI Accounts Receivable. All BSI Accounts Receivable result from bona fide
business transactions and services actually rendered without, to the knowledge
and belief of BSI, any claim by the obligor for set-off or counterclaim;

 
 
 
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(n)
BSI Bank Accounts. All of the BSI Bank Accounts, their location, numbers and the
authorized signatories thereto are as set forth in Schedule “C” hereto;

 
(o)
No Debt to Related Parties. BSI is not, or on Closing will not be, materially
indebted to the BSI Shareholders nor to any family member thereof, nor to any
affiliate, director or officer of BSI or the BSI Shareholders except accounts
payable on account of bona fide business transactions of BSI incurred in normal
course of BSI Business, including employment agreements with the BSI
Shareholders and attached to Schedule “D” hereto is an accounts payable aging
ledger;

 
(p)
No Related Party Debt to BSI. Neither the BSI Shareholders nor any director,
officer or affiliate of BSI are now indebted to or under any financial
obligation to BSI on any account whatsoever, except for advances on account of
travel and other expenses not exceeding $5,000 in total;

 
(q)
No Dividends. No dividends or other distributions on any shares in the capital
of BSI have been made, declared or authorized since the date of the BSI
Financial Statements (which for all purposes under this Agreement shall mean
March 31, 2007);

 
(r)
No Payments. No payments of any kind have been made or authorized since the date
of the BSI Financial Statements to or on behalf of the BSI Shareholders or to or
on behalf of officers, directors, shareholders or employees of BSI, except
payments made in the ordinary course of business and at the regular rates of
salary or other remuneration payable to them;

 
(s)
No Pension Plans. There are no pension, profit sharing, group insurance or
similar plans or other deferred compensation plans affecting BSI;

 
(t)
No Adverse Events. Since the date of the BSI Financial Statements:

(i)
there has not been any material adverse change in the properties, results of
operations, financial position or condition of BSI, its liabilities or the BSI
Assets or any damage, loss or other change in circumstances materially affecting
BSI, the BSI Business or the BSI Assets or BSI’s right to carry on the BSI
Business, other than changes in the ordinary course of business,

(ii)
there has not been any damage, destruction, loss or other event (whether or not
covered by insurance) materially and adversely affecting BSI, the BSI Business
or the BSI Assets,

(iii)
there has not been any material increase in the compensation payable or to
become payable by BSI to the BSI Shareholders or to any of BSI's officers,
employees or agents or any bonus, payment or arrangement made to or with any of
them,

(iv)
the BSI Business has been and continues to be carried on in the ordinary course,

 
 
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(v)
BSI has not waived or surrendered any right of material value,

(vi)
BSI has not discharged or satisfied or paid any lien or encumbrance or
obligation or liability other than current liabilities in the ordinary course of
business, and

(vii)
no capital expenditures in excess of $10,000 individually or $30,000 in total
have been authorized or made;

BSI - Income Tax Matters

 
(u)
Tax Returns. All tax returns and reports of BSI required by law to be filed have
been filed based on a cash basis, and are true, complete and correct, and any
taxes payable in accordance with any return filed by BSI or in accordance with
any notice of assessment or reassessment issued by any taxing authority have
been so paid;

 
(v)
Current Taxes. Adequate provisions have been made for taxes payable for the
current period for which tax returns are not yet required to be filed and there
are no agreements, waivers, or other arrangements providing for an extension of
time with respect to the filing of any tax return by, or payment of, any tax,
governmental charge or deficiency by BSI. BSI is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment;

BSI - Applicable Laws and Legal Matters

 
(w)
Licenses. BSI holds all licenses and permits as may be requisite for carrying on
the BSI Business in the manner in which it has heretofore been carried on, which
licenses and permits have been maintained and continue to be in good standing
except where the failure to obtain or maintain such licenses or permits would
not have a material adverse effect on the BSI Business;

 
(x)
Applicable Laws. BSI has not been charged with or received notice of breach of
any laws, ordinances, statutes, regulations, by-laws, orders or decrees to which
it is subject or which applies to it the violation of which would have a
material adverse effect on the BSI Business, and, to BSI’s knowledge, BSI is not
in breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees the contravention of which would result in a material adverse impact on
the BSI Business;

 
(y)
Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or, to BSI’s knowledge,
threatened against or relating to BSI, the BSI Business, or any of the BSI
Assets, nor does BSI have any knowledge of any act, fact or omission that would
form any material basis for any such action or proceeding;

 
(z)
No Bankruptcy. BSI has not made any voluntary assignment or proposal under
applicable laws relating to insolvency and bankruptcy and no bankruptcy petition
has been filed or presented against BSI and no order has been made or a
resolution passed for the winding-up, dissolution or liquidation of BSI;

 
 
 
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(aa)
Labor Matters. BSI is not a party to any collective agreement relating to the
BSI Business with any labor union or other association of employees and no part
of the BSI Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of BSI, has made any attempt in that regard and
BSI has no reason to believe that any current employees will leave BSI's employ
as a result of this Merger;

 
(bb)
Finder's Fees. BSI is not a party to any agreement which provides for the
payment of finder's fees, brokerage fees, commissions or other fees or amounts
which are or may become payable to any third party in connection with the
execution and delivery of this Agreement and the transactions contemplated
herein;

Execution and Performance of Agreement

 
(cc)
No Violation or Breach. The execution and performance of this Agreement will not

 
(i)
violate the charter documents of BSI or result in any breach of, or default
under, any loan agreement, mortgage, deed of trust, or any other agreement to
which BSI is a party,

 
(ii)
give any person any right to terminate or cancel any agreement including,
without limitation, BSI Material Contracts, or any right or rights enjoyed by
BSI,

 
(iii)
result in any material alteration of BSI's obligations under any agreement to
which BSI is a party including, without limitation, the BSI Material Contracts,

 
(iv)
result in the creation or imposition of any material lien, encumbrance or
restriction of any nature whatsoever in favor of a third party upon or against
the BSI Assets,

 
(v)
result in the imposition of any tax liability to BSI relating to BSI Assets or
the BSI Shares, or

 
(vi)
violate any court order or decree to which either BSI is subject;

BSI Assets - Ownership and Condition

 
(dd)
Business Assets. The BSI Assets comprise all of the property and assets of the
BSI Business, and neither the BSI Shareholders nor any other person, firm or
corporation owns any assets used by BSI in operating the BSI Business, whether
under a lease, rental agreement or other arrangement;

 
(ee)
Title. Other than to the extent of any leased assets, BSI is the legal and
beneficial owner of the BSI Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims whatsoever;

 
 
 
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(ff)
No Option. No person, firm or corporation has any agreement or option or a right
capable of becoming an agreement for the purchase of any of the BSI Assets;

 
(gg)
BSI Insurance Policies. BSI maintains the public liability insurance and
insurance against loss or damage to the BSI Assets and the BSI Business as
described in Schedule “G” hereto;

 
(hh)
BSI Material Contracts. The BSI Material Contracts listed in Schedule “H”
constitute all of the material contracts of BSI;

 
(ii)
No Default. There has not been any default in any material obligation of BSI or
to the knowledge of BSI any other party to be performed under any of BSI
Material Contracts, each of which to the knowledge of BSI is in good standing
and in full force and effect and unamended, and BSI is not aware of any default
in the obligations of any other party to any of the BSI Material Contracts;

 
(jj)
No Compensation on Termination. There are no agreements, commitments or
understandings relating to severance pay or separation allowances on termination
of employment of any employee of BSI. BSI is not obliged to pay benefits or
share profits with any employee after termination of employment except as
required by law;

BSI Assets - BSI Equipment

 
(kk)
BSI Equipment. The BSI Equipment has been maintained in a manner consistent with
that of a reasonably prudent owner and to the knowledge of BSI such equipment is
in good working condition;

BSI Assets - BSI Goodwill and Other Assets

 
(ll)
BSI Goodwill. BSI carries on the BSI Business only under the name "Biodiesel
Solutions, Inc." and variations thereof and under no other business or trade
names. BSI does not have any knowledge of any infringement by BSI of any patent,
trademark, copyright or trade secret;

The Business of BSI

 
(mm)
Maintenance of Business. Since the date of the BSI Financial Statements, the BSI
Business has been carried on in the ordinary course and BSI has not entered into
any material agreement or commitment except in the ordinary course; and

 
(nn)
Subsidiaries. BSI does not own any subsidiaries and does not otherwise own,
directly or indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm and BSI does not own any subsidiary and does
not otherwise own, directly or indirectly, any shares or interest in any other
corporation, partnership, joint venture or firm.

Non-Merger and Survival

5.2 The representations and warranties of BSI contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by TLBT, the representations and warranties
of BSI shall survive the Closing for a period of eighteen (18) months.
 
 
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Indemnity

5.3 Wiedemann and Springer jointly and severally agree to indemnify and save
harmless TLBT from and against any and all Losses and Expenses resulting from
the breach by BSI of any representation, warranty or covenant of BSI made under
this Agreement or from any misrepresentation in or omission from any certificate
or other instrument furnished or to be furnished by BSI or the BSI Shareholders
to TLBT hereunder provided that (i) there shall be no indemnification obligation
until aggregate Losses and Expenses exceed $10,000 and, in such event, the
indemnifying party shall be required to pay the entire amount of such Losses and
Expenses in excess of $10,000, (ii) neither Wiedemann nor Springer will be
liable to the extent that any such claims exceed the amount of merger
consideration actually received by such BSI Shareholder hereunder, other than to
the extent of claims based on fraud by such BSI Shareholder, for which there
shall be no dollar limit, and (iii) the obligations of Wiedemann and/or Springer
may be satisfied in cash or surrender of Acquisition Shares (valued consistent
with the method used to calculate the number of shares of such security issued
at Closing - which in the case of TLBT Common Shares shall be equal to. the
greater of (a) the average closing price of TLBT Common Shares for the 10
trading days immediately preceding the Closing Date, or (b) $0.05 per share, and
in the case of the BSI New Preferred Shares shall be their State Value as set
forth in the applicable Certificate of Designation for such shares), or any
combination thereof, at the election of the applicable BSI shareholder.

ARTICLE 6
COVENANTS OF BSI AND
THE BSI SHAREHOLDERS
 
Covenants

6.1 BSI, Wiedemann and Springer covenant and agree with TLBT that they will:

 
(a)
Conduct of Business. Until the Closing, conduct the BSI Business diligently and
in the ordinary course consistent with the manner in which the BSI Business
generally has been operated up to the date of execution of this Agreement and
will not enter into any material obligations or compensatory arrangements
without the prior consent of TLBT;

 
(b)
Preservation of Business. Until the Closing, use their best efforts to preserve
the BSI Business and the BSI Assets and, without limitation, preserve for TLBT
BSI’s relationships with their suppliers, customers and others having business
relations with them;

 
(c)
Access. Until the Closing, give TLBT and its representatives full access to all
of the properties, books, contracts, commitments and records of BSI relating to
BSI, the BSI Business and the BSI Assets, and furnish to TLBT and its
representatives all such information as they may reasonably request;

 
 
 
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(d)
Procure Consents. Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to permit
the Merger and to preserve and maintain the BSI Assets, including the BSI
Material Contracts, notwithstanding the change in control of BSI arising from
the Merger;

 
(e)
Delivery of Registration Rights Agreement. On the Closing Date, the BSI
Shareholders will deliver the executed Registration Rights Agreement to TLBT;

 
(f)
Employment Agreements. On the Closing Date, Wiedemann and Springer will deliver
the executed Employment Agreements to TLBT; and

 
(g)
Delivery of Lock Up Agreement. On the Closing Date, the BSI Shareholders will
deliver the executed Lock Up Agreement to TLBT.

Authorization

6.2 BSI hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting BSI to release any and all information in their
possession respecting BSI to TLBT. BSI shall promptly execute and deliver to
TLBT any and all consents to the release of information and specific
authorizations which TLBT reasonably require to gain access to any and all such
information.

Survival

6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of TLBT.

ARTICLE 7
CONDITIONS PRECEDENT

Conditions Precedent in favor of TLBT

7.1 TLBT’s obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:

 
(a)
all documents or copies of documents required to be executed and delivered to
TLBT by BSI or the BSI Shareholders under Section 9.2 will have been so executed
and delivered;

 
(b)
all of the terms, covenants and conditions of this Agreement to be complied with
or performed by BSI or the BSI Shareholders at or prior to the Closing will have
been complied with or performed;

 
(c)
TLBT shall have completed its review and inspection of the books and records of
BSI and shall be satisfied with same in all material respects;

 
(d)
title to the BSI Shares held by the BSI Shareholders and to the BSI Assets will
be free and clear of all mortgages, liens, charges, pledges, security interests,
encumbrances or other claims whatsoever;

 
 
 
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(e)
the Articles of Merger shall be executed by BSI in form acceptable for filing
with the Nevada Secretary of State;

 
(f)
subject to Article 8 hereof, there will not have occurred

 
(i)
any material adverse change in the financial position or condition of BSI, its
liabilities or the BSI Assets or any damage, loss or other change in
circumstances materially and adversely affecting the BSI Business or the BSI
Assets or BSI's right to carry on the BSI Business, other than (i) changes
described in the Schedule “A” hereto and (ii) changes in the ordinary course of
business, none of which has been materially adverse, or

 
(ii)
any damage, destruction, loss or other event, including changes to any laws or
statutes applicable to BSI or the BSI Business (whether or not covered by
insurance) materially and adversely affecting BSI, the BSI Business or the BSI
Assets;

 
(i)
BSI debt obligations shall consist of no more than $100,000 of unsecured bank
debt and $72,000 in unsecured vendor debt, such amounts to be reduced by any
payments made using the $200,000 previously loaned to BSI by TLBT;

 
(j)
BSI cash assets shall consist of no less than $200,000, such amount to be
reduced by any payments made to debt referenced in 7.1(i);

 
(g)
TLBT shall have received satisfactory confirmation that the customer
relationships of BSI shall not be negatively impacted by the Merger; and

 
(h)
the transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof, if
any.

 
Waiver by TLBT

7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of TLBT and any such condition may be waived in whole or
in part by TLBT at or prior to Closing by delivering to BSI and the BSI
Shareholders a written waiver to that effect signed by TLBT. In the event that
the conditions precedent set out in the preceding section are not satisfied on
or before the Closing, TLBT shall be released from all obligations under this
Agreement.

Conditions Precedent in Favor of BSI and the BSI Shareholders

7.3 The obligations of BSI and the BSI Shareholders to carry out the
transactions contemplated hereby is subject to the fulfillment of each of the
following conditions precedent on or before the Closing:

 
(a)
all documents or copies of documents required to be executed and delivered to
BSI or the BSI Shareholder by TLBT or Acquirer under Section 9.3 will have been
so executed and delivered;

 
 
 
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(b)
all of the terms, covenants and conditions of this Agreement to be complied with
or performed by TLBT at or prior to the Closing will have been complied with or
performed;

 
(c)
BSI shall have completed its review and inspection of the books and records of
TLBT and its subsidiaries and shall be satisfied with same in all material
respects;

 
(d)
TLBT will have delivered the Acquisition Shares to be issued pursuant to the
terms of the Merger to the BSI Shareholders at the Closing and the Acquisition
Shares will be registered on the books of TLBT in the name of the BSI
Shareholders at the Effective Time;

 
(e)
title to the Acquisition Shares will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims whatsoever;

 
(f)
payment of the Cash Consideration required to be paid as of the Closing Date
shall have been made;

 
(g)
the Articles of Merger shall be executed by the Acquirer in form acceptable for
filing with the Nevada Secretary of State;

 
(h)
subject to Article 8 hereof, there will not have occurred

 
(i)
any material adverse change in the financial position or condition of TLBT, its
subsidiaries, their assets of liabilities or any damage, loss or other change in
circumstances materially and adversely affecting TLBT or the TLBT Business or
TLBT’ right to carry on the TLBT Business, other than changes in the ordinary
course of business, none of which has been materially adverse, or

 
(ii)
any damage, destruction, loss or other event, including changes to any laws or
statutes applicable to TLBT or the TLBT Business (whether or not covered by
insurance) materially and adversely affecting TLBT, its subsidiaries or its
assets; and

 
(i)
the transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof, if
any.

 
Waiver by BSI and the BSI Shareholders

7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of BSI and the BSI Shareholders and any such condition may
be waived in whole or in part by BSI or the BSI Shareholders at or prior to the
Closing by delivering to TLBT a written waiver to that effect signed by BSI and
the BSI Shareholders. In the event that the conditions precedent set out in the
preceding section are not satisfied on or before the Closing BSI and the BSI
Shareholders shall be released from all obligations under this Agreement.
 
 
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Termination

7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before June 30, 2007, this Agreement will be at an end and will
have no further force or effect, unless otherwise agreed upon by the parties in
writing.

Confidentiality

7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from BSI and TLBT and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that TLBT may be required to issue news releases regarding
the execution and consummation of this Agreement and file a Current Report on
Form 8-K with the Securities and Exchange Commission respecting the proposed
Merger contemplated hereby together with such other documents as are required to
maintain the currency of TLBT’ filings with the Securities and Exchange
Commission.

No-Shop Provision

7.8 From the date hereof until the close of business on June 30, 2007, the
parties hereto agree that they shall not, nor will they cause their directors,
officers, employees, agents and representatives to, directly or indirectly,
solicit or entertain offers from, hold meetings or discussions with, or in any
manner encourage, accept or consider any proposal of, any other person relating
to the acquisition of BSI, shares of BSI’s capital stock, securities convertible
into or exchangeable for shares of BSI’s capital stock, or BSI’s assets or
business, in whole or in part, whether directly or indirectly, through purchase,
merger, consolidation, original issuance, or otherwise. BSI and the BSI
Shareholders will immediately notify TLBT in writing regarding any such contact
from the date hereof until the close of business on June 30, 2007.

ARTICLE 8
RISK

Material Change in the Business of BSI

8.1 If any material loss or damage to the BSI Business occurs prior to Closing
and such loss or damage, in TLBT' reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, TLBT shall, within two (2) days
following any such loss or damage, by notice in writing to BSI, at its option,
either:

 
(a)
terminate this Agreement, in which case no party will be under any further
obligation to any other party; or

 
(b)
elect to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all insurance
covering such loss or damage will, as a condition precedent to TLBT' obligations
to carry out the transactions contemplated hereby, be vested in BSI or otherwise
adequately secured to the satisfaction of TLBT on or before the Closing Date.

 
 
 
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Material Change in the TLBT Business

8.2 If any material loss or damage to the TLBT Business occurs prior to Closing
and such loss or damage, in BSI's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, BSI shall, within two (2) days
following any such loss or damage, by notice in writing to TLBT, at its option,
either:

 
(a)
terminate this Agreement, in which case no party will be under any further
obligation to any other party; or

 
(b)
elect to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all insurance
covering such loss or damage will, as a condition precedent to BSI's obligations
to carry out the transactions contemplated hereby, be vested in TLBT or
otherwise adequately secured to the satisfaction of BSI on or before the Closing
Date.

ARTICLE 9
CLOSING

Closing

9.1 The Merger and the other transactions contemplated by this Agreement will be
closed at the Place of Closing in accordance with the closing procedure set out
in this Article.

Documents to be Delivered by BSI

9.2 On or before the Closing, BSI, Wiedemann and Springer will deliver or cause
to be delivered to TLBT:

 
(a)
the original or certified copies of the charter documents of BSI and all
corporate records documents and instruments of BSI, the corporate seal of BSI
and all books and accounts of BSI;

 
(b)
all reasonable consents or approvals required to be obtained by BSI for the
purposes of completing the Merger and preserving and maintaining the interests
of BSI under any and all BSI Material Contracts and in relation to BSI Assets;

 
(c)
certified copies of such resolutions of the shareholders and directors of BSI as
are required to be passed to authorize the execution, delivery and
implementation of this Agreement;

 
(d)
an acknowledgement from BSI and the BSI Shareholders of the satisfaction of the
conditions precedent set forth in section 7.3 hereof;

 
(e)
the Employment Agreements, duly executed by BSI, Wiedemann and Springer;

 
(f)
the Articles of Merger, duly executed by BSI;

 
(g)
the Registration Rights Agreement, duly executed by the BSI Shareholders;

 
 
 
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(h)
the Lock Up Agreement, duly executed by the BSI Shareholders; and

 
(i)
such other documents as TLBT may reasonably require to give effect to the terms
and intention of this Agreement.

Documents to be Delivered by TLBT

9.3 On or before the Closing, TLBT shall deliver or cause to be delivered to BSI
and the BSI Shareholders:

 
(a)
share certificates representing the Acquisition Shares duly registered in the
names of the BSI Shareholders;

 
(b)
the Cash Consideration due to be paid on the Closing Date;

 
(c)
certified copies of such resolutions of the directors of TLBT as are required to
be passed to authorize the execution, delivery and implementation of this
Agreement;

 
(d)
a certified copy of a resolution of the directors of BSI dated as of the Closing
Date, approving the Employment Agreements;

 
(e)
an acknowledgement from TLBT of the satisfaction of the conditions precedent set
forth in section 7.1 hereof;

 
(f)
the Employment Agreements, duly executed by TLBT:

 
(g)
the Registration Rights Agreement, duly executed by TLBT;

 
(h)
the Articles of Merger, duly executed by the Acquirer;

 
(i)
such other documents as BSI may reasonably require to give effect to the terms
and intention of this Agreement.

 
ARTICLE 10
POST-CLOSING MATTERS

Forthwith after the Closing, TLBT, BSI and the BSI Shareholders agree to use all
their best efforts to:

 
(a)
file the Articles of Merger with Secretary of State of Nevada;

 
(b)
cause the directors of BSI to be John King, David Marks and Rudi Wiedemann and
to cause the appointment of an additional director to be chosen by John King and
David Marks;

 
(c)
issue a news release reporting the Closing;

 

 
(d)
file reports on Form 3 (and Form 13D, where applicable) with the Securities and
Exchange Commission disclosing the acquisition of the Acquisition Shares by the
BSI Shareholders.

 
 
 
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ARTICLE 11
GENERAL PROVISIONS

Submission to Jurisdiction; Consent to Service of Process.

11.1 The parties hereto hereby irrevocably submit to the exclusive jurisdiction
of any federal or state court located within the State of Nevada over any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be
heard and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable Law, any objection which they may now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

11.2 Each of the parties hereto hereby consents to process being served by any
party to this Agreement in any suit, action or proceeding by the mailing of a
copy thereof in accordance with the provisions of Section 11.6.

Procedure for Indemnity Claims

11.3 In the event that any legal proceedings shall be instituted or that any
claim or demand (“Claim”) shall be asserted by any person in respect of which
payment may be sought under this Agreement, the indemnified party shall
reasonably and promptly cause written notice of the assertion of any Claim of
which it has knowledge which is covered by this indemnity to be forwarded to the
indemnifying party. The indemnifying party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the indemnified party, and to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
and Expenses with respect to which indemnification is provided hereunder. If the
indemnifying party elects to defend against, negotiate, settle or otherwise deal
with any Claim which relates to any Losses and Expenses indemnified against
hereunder, it shall within five (5) days (or sooner, if the nature of the Claim
so requires) notify the indemnified party of its intent to do so. If the
indemnifying party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses and Expenses indemnified against
hereunder, fails to notify the indemnified party of its election as herein
provided or contests its obligation to indemnify the indemnified party for such
Losses and Expenses under this Agreement, the indemnified party may defend
against, negotiate, settle or otherwise deal with such Claim. If the indemnified
party defends any Claim, then the indemnifying party shall reimburse the
indemnified party for the Losses and Expenses of defending such Claim upon
submission of periodic bills. If the indemnifying party shall assume the defense
of any Claim, the indemnified party may participate, at his or its own expense,
in the defense of such Claim; provided, however, that such indemnified party
shall be entitled to participate in any such defense with separate counsel at
the expense of the indemnifying party if, (i) so requested by the indemnifying
party to participate or (ii) in the reasonable opinion of counsel to the
indemnifying party, a conflict or potential conflict exists between the
indemnified party and the indemnifying party that would make such separate
representation advisable; and provided, further, that the indemnifying party
shall not be required to pay for more than one such counsel for all indemnified
parties in connection with any Claim. The parties hereto agree to cooperate
fully with each other in connection with the defense, negotiation or settlement
of any such Claim. Any settlement of any Claim by the indemnifying party shall
provide for a full release of Claims against the indemnified party and any
settlement of any Claim by the indemnified party is subject to the reasonable
consent of the indemnified party.
 
 
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11.4 After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay all of the sums
so due and owing to the indemnified party by wire transfer of immediately
available funds within 10 business days after the date of such notice.

11.5 The failure of the indemnified party to give reasonably prompt notice of
any Claim shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such failure.

Notice

11.6 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
Facsimile. Any notice delivered by mail shall be deemed to have been received on
the fourth business day after and excluding the date of mailing, except in the
event of a disruption in regular postal service in which event such notice shall
be deemed to be delivered on the actual date of receipt. Any notice delivered
personally or by Facsimile shall be deemed to have been received on the actual
date of delivery.

Addresses for Service

11.5 The address for service of notice of each of the parties hereto is as
follows:

(a) TLBT or the Acquirer:

Tech Laboratories, Inc.
1818 North Farwell Avenue
Milwaukee, Wisconsin 53202
Attention: John King, Chief Executive Officer
Telephone: (414) 283-2616
Facsimile: (312) 873-3739
 
 
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Copy to:

Thomas A. Rose, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
Phone: (212) 930-9700
Facsimile: (212) 930-9725

(b) BSI or the BSI Shareholders

Biodiesel Solutions, Inc.
1395 Greg Street, Suite #102
Sparks, Nevada 89431
Attention: Rudi Wiedemann, President and Chief Executive Officer
Telephone: (775) 358-6400
Facsimile: (775) 358-6499

Copy to:

Hale Lane
5441 Kietzke Lane, Second Floor 
Reno, Nevada 89511
Attention: David A. Garcia, Esq.
Telephone: (775) 327-3000
Facsimile: (775) 786-6179

Change of Address

11.6 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.

Further Assurances

11.7 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.

Time of the Essence

11.8 Time is expressly declared to be the essence of this Agreement.

Entire Agreement

11.9 The provisions contained herein constitute the entire agreement among BSI,
the BSI Shareholders, the Acquirer and TLBT respecting the subject matter hereof
and supersede all previous communications, representations and agreements,
whether verbal or written, among BSI, the BSI Shareholders, the Acquirer and
TLBT with respect to the subject matter hereof.
 
 
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Successors and Assigns

11.10 This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.

Assignment

11.11 This Agreement is not assignable without the prior written consent of the
parties hereto.

Counterparts

11.12 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by Facsimile will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.

Applicable Law

11.13 This Agreement is subject to the laws of the State of Nevada.

[Remainder of page intentionally left blank.]

 
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
 

        TECH LABORATORIES, INC.  
   
   
  By:   /s/ John King   

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

John King, CEO

 

        BSI ACQUISITIONS, INC.  
   
   
  By:   /s/ John King   

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

John King, CEO

 

        BIODIESEL SOLUTIONS, INC.  
   
   
  By:   /s/ Rudolf Wiedemann   

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

Rudolf Wiedemann, President

 

      /s/ Rudolf Wiedemann  

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

Rudolf Wiedemann

 

      /s/ Gregory Springer  

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

Gregory Springer

 

       
KEN THOMAS AND
MARYANNE HARZHEIM,
TRUSTEES OF THE THOMAS-
HARZHEIM TRUST
 
   
   
  By:   /s/ Ken Thomas    

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

        By:  /s/ Maryanne Harzheim   

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Name:   Title:Trustee

 
  
 
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