ex10_1.htm


    STOCK
PURCHASE AGREEMENT

    between

    BLUE
EARTH SOLUTIONS, INC.,

    DATAMEG
CORPORATION,

    and

    AMERICAN
MARKETING & SALES, INC.

    Dated as
of March 17, 2009

    


    


    STOCK
PURCHASE AGREEMENT

    


    STOCK
PURCHASE AGREEMENT, dated as of March 17, 2009 (the “Agreement”), between Blue
Earth Solutions, Inc., a Nevada corporation (“Buyer”), Datameg Corporation, a
Delaware corporation (“Seller”) and American Marketing & Sales, Inc., a
Massachusetts corporation (the “Company”).

    


    W I T N E
S S E T H :

    


    WHEREAS,
Seller owns Five Thousand (5,000) shares of common stock, without par value, of
the Company, constituting all issued and outstanding shares of the Company (such
shares being referred to herein as the “Stock”);

    


    WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the
Stock on the terms and subject to the conditions set forth in this
Agreement;

    


    WHEREAS,
the Board of Directors of each of Seller and Buyer has approved the sale and
purchase of the Stock (the “Purchase”); and

    


    WHEREAS,
concurrently with the execution and delivery of this Agreement and as a
condition to Buyer’s willingness to enter into this Agreement, Leonard J. Tocci,
Lynel J. Tocci, Leanne J. Whitney, and Linnea J. Clary. Leonard J. Tocci (the
“Principal Stockholders”) will enter into an note assumption agreement with the
Parties hereto, substantially in the form attached hereto as Exhibit 1 (the
“Assumption Agreement”), pursuant to which, among other things, the Principal
Stockholders consent  to Buyer’s assumption of the Seller’s Purchase
Money Note (Exhibit A to the Assumption Agreement), approving this Agreement and
the transactions contemplated hereby (including the Purchase), upon the terms
and subject to the conditions set forth in the Principal Stockholders’
Agreement.

    


    NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement, and intending
to be legally bound hereby and thereby, the parties hereto agree as
follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
I

    THE
PURCHASE; CERTAIN RELATED MATTERS

    


    1.1. The Purchase. Subject to the
satisfaction or waiver of the conditions set forth in this Agreement, at the
Closing (as defined below) and as of the Closing Date (as defined below), Seller
shall sell to Buyer and Buyer shall purchase from Seller, the
Stock.

    


    1.2. Purchase Price. The purchase
price for the Stock (the “Purchase Price”) shall be an amount equal to One
Million of Buyer’s common stock, unregistered but entitled to piggy-back
registration. The Purchase Price shall be delivered to Seller at the
Closing.

    


    1.3. Closing. Unless this
Agreement shall have been terminated and the transactions herein contemplated
shall have been abandoned pursuant to Section 9.2, and subject to the
satisfaction or waiver of the conditions set forth in Article V hereof, the
closing of the Purchase (the “Closing”) will take place at 9:00 a.m. on the
second Business Day following the satisfaction or waiver of each of the
conditions set forth in Article V (the “Closing Date”), at the offices of the
Company, unless another date, time or place is agreed to in writing by the
parties hereto. The Closing shall be deemed effective as of 12:01 a.m., Eastern
Standard Time, on the Closing Date.

    


    1.4. Closing
Deliveries.

    


    (a) At the Closing, Buyer shall deliver
to Seller:

    


    (i) One Million of Buyer’s common
stock, unregistered but entitled to piggy-back registration;

    


    (ii) the documents described in
Sections 5.3(c), (d) and (e); and

    


    (iii) such other documents and
instruments as counsel for Seller shall reasonably request to consummate the
transactions described herein.

    


    (b) At the Closing, Seller shall
deliver to Buyer:

    


    (i) stock certificate(s) evidencing the
Stock duly endorsed in blank, or accompanied by stock powers duly executed in
blank, for transfer to Buyer, together with any required deed or stock transfer
stamps;

    


    (ii) the documents described in
Sections 5.2(c), (d) and (e);

    


    (iii) an executed receipt for the
Closing Date Cash Amount less the sum of (A) the Environmental Offset Amount, if
any and (B) the Escrow Amount, if any;

    


    (iv) a good standing certificate for
the Company issued by the Secretary of State of its state of incorporation and
of such other applicable jurisdictions where the Company is qualified to do
business, dated as of a date within twenty (20) days of the Closing
Date;

     

    
      
        
        

      

      
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    (v) a bring-down good standing
certificate for the Company, dated as of the Closing Date, issued by the
Secretary of State of its state of incorporation;

    


    (vi) a certificate signed by the Seller
of its non-foreign status pursuant to Section 1.1445-2(b)(2) of the Treasury
Regulations;

    


    (vii) such other documents and
instruments as counsel for Buyer shall reasonably request to consummate the
transactions described herein.

    


    (viii) Fifty Million unregistered
Datameg common shares issued to Buyer in consideration of Buyer’s assumption of
the Note.

    


    ARTICLE
II

    REPRESENTATIONS
AND WARRANTIES OF SELLER

    


    Seller represents and warrants to Buyer
as of the date hereof and as of the Closing Date as follows:

    


    2.1. Due
Organization.

    


    (a) Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Seller has all requisite power and authority to enter into this
Agreement and to perform its obligations hereunder.

    


    (b) The Company is duly incorporated,
validly existing and in good standing under the laws of the State of
Massachusetts. The Company has all requisite power and authority to enter into
this Agreement and to perform its obligations hereunder. The Company (i) has all
requisite power and authority to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted, and (ii) is in
good standing and is duly qualified to transact business in each jurisdiction in
which its ownership or leasing of property or assets or its conduct of business
would require such qualification, except where the failure to so qualify is not
and would not be reasonably likely to, individually or in the aggregate, have a
Material Adverse Effect. Set forth on Schedule 2.1(b) are the jurisdictions in
which the Company is qualified to transact business.

    


    2.2. Authorization and Validity of
Agreement. The execution, delivery and performance by Seller of this
Agreement and the other Transactions Documents and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Seller, and no other action on the
part of Seller is necessary for the execution, delivery and performance by
Seller of this Agreement or the other Transaction Documents and the consummation
by it of the transactions contemplated hereby and thereby, subject to the
approval of this Agreement by the Required Seller Stockholders (as defined
below). This Agreement has been duly executed and delivered by Seller and this
Agreement is, and, when executed and delivered, each of the other Transaction
Documents will be, a legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except to the extent that its
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors’ rights generally
and by general equity principles.

     

    
      
        
        

      

      
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    2.3. Subsidiaries. Except as set
forth on Schedule 2.3, the Company does not own or control, directly or
indirectly, or have any direct or indirect equity participation in, any
corporation, partnership, limited liability company, trust, joint venture or
other business association.

    


    2.4. No Conflict. Except as set
forth on Schedule 2.4, except as specifically contemplated in this Agreement
(including, without limitation, with respect to the approval of the Required
Seller Stockholders), the execution, delivery and performance by Seller of this
Agreement and the other Transaction Documents and the consummation by it of the
transactions contemplated hereby and thereby: (a) do not and will not violate,
in any material respect, any Law or Order applicable to Seller or the Company;
(b) do not and will not require any (i) consent or approval of, or (ii) material
filing with or notice to, any Governmental Authority under any Law applicable to
Seller or the Company, except for any consent, approval, filing or notice
requirements which become applicable solely as a result of the specific
regulatory status of Buyer or its affiliates or which Buyer or its affiliates
are otherwise required to obtain; (c) do not and will not violate any provision
of the organizational documents of Seller or the Company; (d) do not and will
not, in any material respect, violate, breach, conflict with, or result in the
termination of, or constitute a default under, or result in the loss of material
rights of the Company under, or result in the acceleration of the performance by
the Company under, any Material Contract (as defined below); and (e) do not and
will not require the authorization or order of, registration, declaration or
filing with, or notice to, any Governmental Authority or other Person with
respect to Seller or the Company in connection with the execution and delivery
of this Agreement and the other Transaction Documents and the consummation of
the transactions contemplated hereby and thereby, except for such filings as may
be required under the HSR Act.

    


    2.5. Capitalization; Ownership of
Stock.

    


    (a) The authorized capital stock of the
Company consists of 5,000 shares of common stock, without par value, all of
which are outstanding as of the date hereof. Seller is and will be on the
Closing Date the record and beneficial owner of the Stock. Seller holds the
Stock free and clear of all Liens. All of the Stock has been duly authorized and
validly issued and is fully paid and nonassessable and was issued in compliance
with applicable laws. Upon the transfer of the Stock to Buyer on the Closing
Date in accordance with Section 1.1, Buyer will receive good and marketable
title to the Stock, free and clear of all Liens.

     

    (b) There
are no (i) outstanding options, warrants or other rights of any kind relating to
the sale, issuance or voting of any shares of capital stock of any class of, or
other ownership interests in, the Company which have been issued, granted or
entered into by the Company or any securities convertible into or evidencing the
right to purchase any shares of capital stock of any class of, or other
ownership interests in, the Company; (ii) shares of capital stock of the Company
reserved for any purpose; (iii) preemptive or similar rights with respect to the
issuance, sale or other transfer (whether present, past or future) of capital
stock of the Company; or (iv) agreements or other obligations (contingent or
otherwise) which may require the Company to repurchase or otherwise acquire any
shares of its capital stock.

     

    
      
        
        

      

      
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    2.6. Financial Statements.
Schedule 2.6 contains a copy of (a) the audited balance sheet of the Company as
of December 31, 2008, and the related statement of operations and cash flows for
the year ended December 31, 2008 (together with the notes thereto, the “Audited
Financial Statements”), and (b) the unaudited balance sheet of the Company as of
and for the quarter ended March 31, 2009, and the related statement of
operations and cash flows as of and for the same period (the “Most Recent
Financial Statements,” and together with the Audited Financial Statements, the
“Financial Statements”). The Financial Statements have been prepared in
accordance with generally accepted accounting principles as applied in the
United States on a consistent basis (“GAAP”), except as may be indicated in the
notes thereto. The Financial Statements present fairly in all material respects
the financial condition and results of operations of the Company as of the dates
and for the periods stated therein, subject in the case of the Most Recent
Financial Statements to the absence of notes and normal year-end adjustments not
inconsistent with prior practice.

    


    2.7. Absence of Material Adverse
Change. Except as expressly contemplated hereby and except as set forth
on Schedule 2.7, since the Most Recent Financial Statements, the Company has
conducted its business in the ordinary course of business consistent with past
practice, and the Company has not:

    


    (a) redeemed or purchased, directly or
indirectly, any Stock or declared, set aside or paid any dividends or
distributions with respect to any Stock or any other security issued by
it;

    


    (b) split, combined, altered any term
of or reclassified the Stock, or issued, sold or transferred any of its equity
securities, securities convertible into its equity securities or warrants,
options or other rights to acquire its equity securities, or any bonds or other
securities issued by it;

    


    (c) incurred any Indebtedness or become
liable as a guarantor for any amount in excess of $100,000 in the aggregate,
except for Current Liabilities incurred in the ordinary course of business
consistent with past practice;

    


    (d) discharged or satisfied any lien or
encumbrance in excess of $100,000, other than in the ordinary course of business
consistent with past practice;

     

    (e)
mortgaged, pledged or subjected to any Lien any of its properties or assets,
except (i) Liens securing obligations of less than $100,000 and (ii) Liens for
current property taxes or assessments not yet due and payable with respect to
which the Company maintains adequate reserves;

     

    
      
        
        

      

      
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    (f) sold, leased, assigned or
transferred any of its properties or assets or canceled without reasonable
consideration any Indebtedness owing to or held by it, in each case except in
the ordinary course of business consistent with past practice;

    


    (g) made or granted any bonus or any
wage or salary increase to any current or former employee or group of employees,
directors, leased employees, contractors or consultants (other than in the
ordinary course of business in accordance with past practice, or as required
pursuant to the terms of any existing Company Benefit Plans or any existing
Collective Bargaining Agreement) or made or granted any increase in any employee
benefit plan or arrangement, or amended or terminated any existing employee
benefit plan or arrangement or adopted any new employee benefit plan or
arrangement (other than as contemplated hereby, as required pursuant to the
terms of any existing Collective Bargaining Agreement or as required by
applicable law) or entered into, modified or supplemented any employment,
severance, Collective Bargaining Agreement or termination
agreement;

    


    (h) made capital expenditures or
commitments therefor that aggregate in excess of $100,000;

    


    (i) made any loans or advances to, or
guarantees for the benefit of, any Person, including its affiliates (other than
loans or advances made to employees in the ordinary course of business
consistent with past practice);

    


    (j) entered into or materially modified
any Material Contracts or waived any material rights or obligations thereunder,
except in the ordinary course of business consistent with past
practice;

    


    (k) entered into any other transaction
or agreement requiring the Company to make aggregate payments in excess of
$100,000, other than in the ordinary course of business consistent with past
practice;

    


    (l) amended or modified any of its
organizational documents;

    


    (m) suffered any material damage,
destruction or loss with respect to any of its properties or assets, whether or
not covered by insurance;

    


    (n) made any material changes in
accounting practices;

    


    (o) made any material Tax election,
changed its method of Tax accounting in any material respect or settled any
material claim for Taxes;

    


    (p) experienced any labor
dispute;

     

    
      
        
        

      

      
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    (q) suffered any change that has had or
would reasonably be expected to have a Material Adverse Effect; or

    


    (r) agreed or entered into any
arrangement to do any of the foregoing.

    


    2.8. Absence of Undisclosed
Liabilities. Except as set forth on Schedule 2.8, the Company has no
obligations, liabilities or commitments of any nature whatsoever, asserted or
unasserted, known or unknown, accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due and regardless of when or by whom
asserted, which would be required to be set forth on a balance sheet prepared in
accordance with GAAP, except (a) liabilities incurred in the ordinary course of
business consistent with past practice, (b) liabilities reflected on the
Financial Statements and the notes thereto (to the extent not heretofore
extinguished), (c) liabilities which in the aggregate are not material in
amount, (d) obligations and liabilities incurred at the request or with the
consent of Buyer.

    


    2.9. Real Property.

    


    (a) The Company owns no real
property.

    


    (b) Schedule 2.9 lists all real
property leased by the Company as of the date hereof (the “Real Property”). The
Real Property includes all interests in real property used in the conduct of
business and operations of the Company as currently conducted. Seller has made
available to Buyer a true and complete copy of every lease and sublease (if
applicable) pursuant to which the Company is a party or by which it is bound, a
list of which is set forth on Schedule 2.9 (each a “Lease”). Except as disclosed
on Schedule 2.9: (i) such Lease is in full force and effect, and the Company
holds a valid and existing leasehold interest under each Lease, free and clear
of all Liens other than Permitted Liens; (ii) neither the Company nor, to the
knowledge of Seller, any other party to such Lease, is in breach or default, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a breach or default or permit termination, modification or
acceleration, under such Lease; and (iii) such Lease will continue to be binding
in accordance with its terms following the Closing, except as may result from
actions that may be taken by Buyer or its affiliates following the Closing.
Except as set forth on Schedule 2.9: (A) the other parties to the Leases are not
an affiliate of, and otherwise do not have any economic interest in, Seller or
the Company; (B) the transactions contemplated by this Agreement do not require
the consent of or notice to any other party to the Leases, will not result in a
breach or default under the Leases, will not give rise to any recapture or
similar rights, and will not otherwise cause any of the Leases not to be legal,
valid, binding, enforceable and in full force and effect on identical terms
following the Closing; (C) no security deposit or portion thereof deposited with
respect to any Lease has been applied in respect of a breach or default under
any Lease which has not been redeposited in full; (D) none of the Leases contain
any unsatisfied capital expenditure requirements or repair obligations of Seller
or the Company other than ordinary maintenance and repair obligations; (E) none
of the Leases have been leased, subleased, licensed or otherwise assigned to a
third party by Seller or the Company, and Seller or the Company have not
collaterally assigned or granted any other security interest in such Lease or
any interest therein to any other person; and (F) there are no outstanding
termination fees or contingent liabilities related to any Leases that have
expired or been terminated.

     

    
      
        
        

      

      
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    (c) The uses for which the buildings,
facilities and other improvements located on the Real Property are zoned do not
restrict, or impair, in any material respect the use of the Real Property for
purposes of the businesses of the Company.

    


    (d) There are no pending or, to
Seller’s knowledge, threatened condemnation, eminent domain, fire, health,
safety, building, zoning or other land use regulatory proceedings, lawsuits or
administrative actions relating to the future use of or requiring any change in
the present use or operations of any portion of the Real Property. Neither the
Seller, nor the Company has received notice of any pending or threatened special
assessment proceedings affecting any portion of the Real Property.

    


    (e) The Real Property and all present
uses and operations of the Real Property comply in all material respects with
all Laws, covenants, conditions, restrictions, easements, disposition agreements
and similar matters affecting the Real Property. The Real Property and its
continued use, occupancy and operation as used, occupied and operated in the
conduct of the businesses of the Company do not constitute a nonconforming use
and is not the subject of a special use permit under any Law.

    


    (f) No Person other than the Company is
in possession of any of the Real Property or any portion thereof, and there are
no leases, subleases, licenses, concessions or other agreements, written or
oral, granting to any Person other than the Company the right of use or
occupancy of the Real Property or any portion thereof. No easement, utility
transmission line or water main located on the Real Property adversely affects
in any material respect the use of the Real Property or any improvement on the
Real Property.

    


    (g) All water, sewer, gas, electric,
telephone and drainage facilities, and all other utilities required by any Law
or by the use and operation of the Real Property in the conduct of the
businesses of Company are installed to the property lines of the Real Property,
are connected pursuant to valid permits to municipal or public utility services
or proper drainage facilities and in all material respects are (i) fully
operable, (ii) adequate to service the Real Property in the operation of the
businesses of the Company and (iii) permit compliance with the requirements of
all Laws in the operation thereof. All outstanding charges with respect to such
utilities that are due and payable are paid in full. To Seller’s knowledge, no
fact or condition exists which could result in the termination or material
reduction of the current access from the Real Property to existing roads or to
sewer or other utility services presently serving the Real
Property.

     

    (h) There
are no defects in the buildings, improvements and structures or fixtures located
on or at the Real Property that would materially impair the conduct of the
Business by Buyer. The mechanical, electrical, plumbing, HVAC and other systems
servicing the Real Property are in good working order and repair, ordinary wear
and tear excepted.

     

    
      
        
        

      

      
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    2.10. Title to Personal
Properties.

    


    (a) With respect to material personal
properties and assets that are owned by the Company (“Owned Personal Property”),
including all such properties and assets reflected as owned on the Most Recent
Financial Statements (other than inventory sold in the ordinary course of
business since the date thereof), the Company has good and valid title to all of
such properties and assets, free and clear of all Liens other than Permitted
Liens.

    


    (b) With respect to material personal
properties and assets that are leased by the Company (“Leased Personal
Property”), the Company has a valid leasehold interest in such Leased Personal
Property and all such leases are in full force and effect. Neither the Company,
nor to the knowledge of Seller, any other party thereto is in breach or default
in any material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute a material breach or default or permit
termination, modification or acceleration, under any such lease.

    


    (c) Neither Seller nor any of its
affiliates (other than the Company) has any interest in any equipment or other
tangible assets or properties used in the businesses of the
Company.

    


    2.11. Condition of Properties.
Except as disclosed on Schedule 2.11, (a) the Owned Personal Property
(particularly all equipment, molds, tooling) and the Leased Personal Property
constitute all material personal property necessary for the conduct of the
Company’s business as presently conducted (except for assets and properties of
Seller and its affiliates used to provide services to the Company as set forth
on Schedule 2.11) and (b) the Owned Personal Property and the Leased Personal
Property are in good operating condition and repair (subject to normal wear and
tear given the use and age of such assets) and are usable in the continuing
operations of the Company in substantially the same manner as such operations
are presently conducted. Other than holding a security interest for payment of
the Purchase Money Note (Exhibit A to Exhibit 1), no Principal Shareholder or
other individual(s) has an ownership interest in any personal property necessary
for the conduct of the Company’s business as presently conducted.

    


    2.12. Tax Matters.

    


    (a) Certain Defined Terms. For purposes
of this Agreement, the following definitions shall apply:

    


    (i) The term “Tax” and “Taxes” shall
mean all taxes, however denominated, including any interest, penalties or other
additions to tax or additional amounts with respect thereto that may become
payable in respect thereof, imposed by any federal, territorial, state, local or
foreign government or any agency or political subdivision of any such
government, which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes (including, but not limited to, federal
income taxes and state income taxes), payroll and employee taxes, unemployment
insurance taxes, social security taxes, sales and use taxes, ad valorem taxes,
excise taxes, franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes, environmental
taxes, transfer taxes net proceeds, value added, withholding, employment, deed,
escheat, unclaimed property, alternative or add-on minimum, windfall profits,
transaction, lease, service, service use, severance, energy, workers’
compensation, capital, premium, and other taxes, assessments, customs duties,
fees, levies or governmental charges of any nature whatever, whether disputed or
not.

     

    
      
        
        

      

      
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    (ii) The term “Returns” shall mean with
respect to the Company and with respect to the Seller Group, but only to the
extent it reflects the business activity and property of the Company or a Tax
that could be or become a liability of the Company, all returns, reports,
estimates, declarations of estimated Tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes, including
any schedule or attachment thereto.

    


    (iii) The term “Seller Group” shall
mean the federal consolidated Tax return group of which Seller and the Company
are members and any similar group on which the income of Seller and the Company
is reported on a combined, consolidated or unitary basis for the purposes of any
state or local Tax; but only to the extent such return reflects the business
activity and property of the Company or a Tax that could be or become a
liability of the Company.

    


    (b) Except as set forth on Schedule
2.12(b), (i) all Returns required to be filed by or on behalf of the Company or
any Seller Group on or before the Closing Date have been or will be duly filed
on a timely basis and are accurate and complete in all material respects, (ii)
all Taxes (whether or not shown to be due and payable on the Returns or on
subsequent assessments with respect thereto) of the Company and any Seller Group
have been paid in full, (iii) the Company has timely withheld and paid over all
Taxes required to have been withheld and paid over, and complied with all
information reporting requirements, including maintenance of required records
with respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party for all periods for which
the statute of limitations has not expired and (iv) there are no liens on any of
the assets of the Company with respect to Taxes, other than liens for Taxes not
yet due and payable.

    


    (c) Except as set forth on Schedule
2.12(c), (i) there is no audit by a Governmental Authority or Taxing authority
in process or pending with respect to any Tax of the Company or any Seller
Group; (ii) no deficiencies exist or have been asserted, in writing, with
respect to any Taxes of the Company or any Seller Group, and neither the Company
nor any Seller Group has received written notice that it has not filed a Return
or paid Taxes required to be filed or paid by it; (iii) neither the Company nor
any Seller Group is a party to any action or proceeding for assessment or
collection of any Taxes, nor has such event been asserted, in writing against
the Company, any Seller Group or any of their respective assets; (iv) no waiver
or extension of any statute of limitations is in effect with respect to any
Taxes of the Company or any Seller Group; (v) the charges, accruals and reserves
for Taxes with respect to the Company reflected on the books of the Company are
adequate to cover material Tax liabilities accruing through the end of the last
period for which the Company ordinarily records items on its books, (vi) the
Company has no revenue deferred for Tax purposes; (vii) the Company has not
agreed to and is not required to make by reason of a change in accounting method
or otherwise, and could not be required to make by reason of a proposed or
threatened change in accounting method or otherwise, any adjustment under
Section 481(a) of the Code; (viii) the Company has not received (and is not
subject to) any ruling from any Taxing authority and has not entered into (and
is not subject to) any agreement with a Taxing authority; (ix) Seller and the
Company have not entered into any compensatory agreements with respect to
performance of services that could obligate it to make payments that would
result in a nondeductible expense to the Company under Sections 162(m) or 280G
of the Code or an excise Tax to the recipient of such payment pursuant to
Section 4999 of the Code; (x) the Company has not participated in an
international boycott as defined in Code Section 999; (xi) neither the Company
nor any Seller Group has been the “distributing corporation” (within the meaning
of Section 355(c)(2) of the Code) with respect to a transaction described in
Section 355 of the Code within the three (3) year period ending as of the date
of this Agreement and (xii) the Company and each member of a Seller Group have
disclosed on its Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Section
6662 of the Code.

     

    
      
        
        

      

      
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    (d) The Company is not a party to any
tax allocation agreement or tax sharing agreement and has not assumed the
liability for Taxes of any other person under contract.

    


    (e) Except as set forth on Schedule
2.12(e), the Company has no liability for the Taxes of any Person, (i) as a
transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of the
Treasury regulations (or any similar provision of state, local or foreign Law),
or (iv) otherwise. The Company will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any (i)
installment sale or open transaction disposition made on or prior to the Closing
Date or (ii) prepaid amount received on or prior to the Closing Date. The
Company has not participated in a “reportable transaction” within the meaning of
Treas. Reg. § 1.6011-4(b).

    


    (f) Except as set forth on Schedule
2.12(f), Seller has made available to Buyer complete and accurate copies of all
of the Company’s Returns as filed that have been filed or will be filed (after
giving effect to all valid extensions of time for filing) with respect to all
Tax periods for which the applicable statute of limitations has not expired.
Schedule 2.12(f) lists all jurisdictions in which the Company is required to pay
Tax or file a Return under applicable state, local or foreign Tax
Law.

    


    (g) Except as set forth on Schedule
2.12(g), Seller owns all of the interests in Company that are treated as equity
for U.S. federal income tax purposes. Seller is and will on the Closing Date be
the “common parent” (as defined in Treasury Regulations Section
1.1502-77(a)(1)(i)) of a U.S. federal consolidated return group that includes
Seller and Company. Seller has the authority to consent to making an election
under Section 338(h)(10) of the Code and similar state elections with respect to
the Purchase.

    


    2.13. Legal Proceedings. Except as set
forth on Schedule 2.13:

    


    (a) (i) there are no actions, suits,
proceedings, arbitrations, litigations, investigations (each, an “Action”) or
orders pending or (to the knowledge of Seller) threatened against or affecting
the Company at law or in equity, or before or by any federal, state, municipal,
foreign or other governmental department, commission, board, bureau, agency,
court or instrumentality, domestic or foreign, or airport authority
(“Governmental Authority”), (ii) to the knowledge of Seller no event has
occurred, nor circumstance exist, that may give rise or serve as a reasonable
basis for any such Action and (iii) there is no Action against any current or
(to the knowledge of Seller) former director or employee of the Company with
respect to which the Company has or is reasonably likely to have an
indemnification obligation; and

    


    (b) there is no (i) unsatisfied
judgment, penalty or award against the Company or any of its properties or
assets or (ii) Order to which the Company or any of its properties or assets are
subject.

     

    
      
        
        

      

      
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    2.14. Government Licenses, Permits and
Related Approvals.

    


    (a) Except as set forth on Schedule
2.14(a), the Company owns or possesses, and is in material compliance with, all
permits, licenses, franchises, certificates, approvals and other authorizations
which are required under foreign, federal, state and local laws and regulations
in the conduct of its business as it is presently conducted including, all FAA
certificates, licenses, and approvals, EASA certificates, licenses, validations,
and approvals, and any additional foreign CAA certificates, licenses,
validations, and approvals necessary to carry on its business as it is now being
conducted (collectively, the “Licenses and Permits”).

    


    (b) All Licenses and Permits are listed
on Schedule 2.14(b).

    


    (c) Such Licenses and Permits are valid
and in full force and effect and no loss of any of the Licenses and Permits is
pending, or, to the knowledge of Seller, threatened as a result of the
transactions contemplated by this Agreement or otherwise, except for normal
expiration in accordance with the terms thereof.

    


    (d) Except as set forth on Schedule
2.14(d), neither Seller nor the Company has received any written notice or claim
against the Company during the past five (5) years alleging a violation of any
Laws applicable to its business and to which the Company is
subject.

    


    (e) To the knowledge of Seller, no
event has occurred and no circumstances exist that (with or without the passage
of time or the giving of notice) may result in a violation of, conflict with,
failure on the part of the Company to comply with the terms of, or the
revocation, withdrawal, termination, cancellation, suspension or modification of
any of the Licenses and Permits. Neither Seller nor the Company has received
notice regarding any violation of, conflict with, failure on the part of the
Company to comply with the terms of, or any revocation, withdrawal, termination,
cancellation, suspension or modification of, any of the Licenses and
Permits.

     

    
      
        
        

      

      
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    (f) To the knowledge of Seller, there
are no pending FAA or foreign civil aviation authority (“CAA”) enforcement
actions against the Company.

    


    2.15. Environmental Matters. Except as set
forth on Schedule 2.15:

    


    (a) the Company is and has been in
compliance in all material respects with and has no material liability under all
federal, state, local and foreign laws (including common law) and regulations
relating to the protection of the environment and human and worker health and
safety and/or relating to the spilling, releasing, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing (“Release”) or threatened Release, treatment, or storage of or
exposure to pollutants, contaminants or hazardous or toxic materials, substances
or wastes (“Hazardous Substances”) into ambient air, surface water, ground
water, or lands, or otherwise relating to any legally binding regulation, code,
order, decree, or judgment issued, entered, promulgated or approved thereunder
(“Environmental Laws”);

    


    (b) the Company holds and is and has
been in compliance with all Licenses and Permits which are required under
Environmental Laws (“Environmental Permits”);

    


    (c) no loss of any Environmental
Permits is pending, or, to the knowledge of Seller, threatened as a result of
the transactions contemplated by this Agreement or otherwise, except for normal
expiration in accordance with the terms thereof;

    


    (d) neither Seller nor the Company has
received any notice or claim, or is aware of any facts or circumstances which
could reasonably be expected to form the basis for any claim, against the
Company alleging a material violation of any Environmental Laws or Environmental
Permits;

    


    (e) there have been no Releases of any
Hazardous Substances, and no person has been exposed to any Hazardous Substances
at, to, in, on, under or from any real property currently or formerly owned,
operated or leased by the Company (or any predecessors thereof) for which the
Company is or may be liable, and neither Seller nor the Company has received any
notice or claim alleging that the Company is or may be liable as a result of a
Release of any Hazardous Substances at any location;

    


    (f) (i) the Company is not subject to
any outstanding Order from or agreement with any Governmental Authority or
person relating to or arising under Environmental Laws, and (ii) the Company is
not a party to any pending judicial or administrative proceedings or, to the
knowledge of Seller, is the subject of any investigations by any Governmental
Authority, pursuant to any Environmental Laws;

    


    (g) neither Seller nor the Company has,
expressly or by operation of law, assumed responsibility or agreed to indemnify
or hold harmless any person for any liability or obligation relating to
Environmental Laws;

     

    
      
        
        

      

      
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    (h) Seller has made available to Buyer
all environmental reports, studies or audits in the possession or reasonable
control of the Seller or the Company with respect to the Company or its
properties or assets; and

    


    (i) notwithstanding the generality of
any other representations and warranties in this Agreement, the representations
and warranties in this Section 2.15 and Sections 2.6 and 2.7 shall be deemed the
only representations and warranties in this Agreement with respect to matters
relating to Environmental Laws or to Hazardous Substances.

    


    2.16. Employee Benefit
Plans.

    


    (a) Except as set forth on Schedule
2.16(a) (the plans disclosed on Schedule 2.16(a), being the “Company Benefit
Plans”), the Company is not the sponsor of any “employee benefit plan” (within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)), severance, change-in-control, employment, stock
option, stock purchase, restricted stock, supplemental retirement, bonus or
incentive plan, agreement, program or arrangement for the benefit of any current
employees of the Company (the “Business Employees”) or former employees of the
Company (the “Former Business Employees”) or its officers or directors. With
respect to each Company Benefit Plan, Seller has made available to Buyer a
written description or copy thereof.

    


    (b) Schedule 2.16(b) sets forth each
“employee benefit plan” (within the meaning of Section 3(3) of ERISA),
severance, change-in-control, employment, stock option, stock purchase,
restricted stock, supplemental retirement, bonus or incentive plan, agreement,
program or arrangement maintained or contributed to by Seller or any of its
Subsidiaries for the benefit of any Business Employees or officers or directors
of the Company (each a “Seller Benefit Plan”). With respect to each Seller
Benefit Plan, Seller has made available to Buyer a complete and accurate written
description or copy thereof.

    


    (c) With respect to each Company
Benefit Plan and with respect to each Seller Benefit Plan that is an “employee
pension benefit plan” within the meaning of Section 3(2) of ERISA, Seller has
made available to Buyer, as applicable, a true and correct copy of (i) the plan
documents and all amendments thereto, (ii) the most recent annual report on Form
5500, (iii) each trust agreement and group annuity contract, (iv) the most
recent valuation report, (v) the most recent favorable determination letter, and
(vi) the most recent summary plan description.

    


    (d) Each Company Benefit Plan and
Seller Benefit Plan intended to be qualified within the meaning of Section 401
of the Internal Revenue Code of 1986, as amended (the “Code”) has received a
favorable determination letter as to its qualification from the Internal Revenue
Service and nothing has occurred since the date of such determination that could
reasonably be expected to adversely affect such qualification.

    


    (e) Each Company Benefit Plan, and each
Seller Benefit Plan that is an “employee pension benefit plan” within the
meaning of Section 3(2) of ERISA, has been administered in all material respects
with its terms and applicable Law (including, but not limited to, ERISA and the
Code, and all rules and regulations promulgated thereunder).

     

    
      
        
        

      

      
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    (f) Except as set forth on Schedule
2.16(f), with respect to each Company Benefit Plan and Seller Benefit Plan that
is subject to Part 3 of Title I or Title IV of ERISA (a “Title IV Plan”): (i) no
reportable event under Section 4043 of ERISA for which the notice requirement
has not been waived has occurred; (ii) no accumulated funding deficiency,
whether or not waived under Code Section 412 has been incurred; (iii) no
liability to the Pension Benefit Guaranty Corporation has been incurred and all
premiums required to be paid thereto have been paid on behalf of each Title IV
Plan; and (iv) no event or condition exists which (A) would constitute grounds
for termination by the Pension Benefit Guaranty Corporation or (B) has caused or
would give rise to a partial termination of any such Title IV Plan.

    


    (g) Except as set forth on Schedule
2.16(g), none of the Company Benefit Plans or Seller Benefit Plans is a
“multiemployer plan” as defined in Section 3(37) of ERISA or has been subject to
Sections 4063 or 4064 of ERISA. The Company has no liability, contingent or
otherwise, with respect to a “multiemployer plan” contributed to by Seller or
any Person that together with the Company is or was at any time treated as a
single employer under Section 414 of the Code or Section 4001 of
ERISA.

    


    (h) Except as set forth on Schedule
2.16(h), all contributions as well as obligations of the Company or Seller under
any Company Benefit Plan or Seller Benefit Plan which are due for any period
ending on or before the Closing Date have been paid or accrued by the Seller or
the Company (as applicable) within the time required by Law.

    


    (i) Except as set forth on Schedule
2.16(i), no Company Benefit Plan provides deferred compensation to any Business
Employee or Former Business Employee that is taxable under Section 409A of the
Code or would be taxable under Section 409A of the Code as a result of the
transactions contemplated by this Agreement.

    


    (j) No disputes are pending before, or
to Seller’s knowledge, are threatened by any Governmental Authority or by any
participant or beneficiary against any Company Benefit Plan, other than routine
claims for benefits.

    


    (k) No prohibited transaction (as
defined in Section 406 of ERISA or Section 4975 of the Code) for which a
statutory or administrative exemption does not exist has occurred with respect
to any Company Benefit Plan which could result in a material liability to the
Company.

    


    (l) The Company has no liability with
respect to any “employee welfare benefit plan” within the meaning of Section
3(1) of ERISA that provides benefits to retired employees (other than as
required by Section 601 of ERISA).

    


    (m) The consummation of the
transactions contemplated by this Agreement will not (i) entitle any Business
Employee to severance pay, (ii) accelerate the time of payment or vesting of, or
increase the amount of, compensation or benefits due to any Business Employee,
(iii) result in any sale bonus, stay bonus or other transaction-based bonus
being due to any Business Employee or (iv) result in the payment to any Business
Employee of any amount that would be an “excess parachute payment” within the
meaning of Section 280G of the Code.

     

    
      
        
        

      

      
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    (n) The Company has no commitment,
intention, or understanding to create, modify, or terminate any Company Benefit
Plan that would result in additional liability to Buyer or Company, except as
set forth in Article VII below.

    


    2.17. Intellectual
Property.

    


    (a)
Schedule 2.17(a) sets forth a true and complete list (by name, owner and, where
applicable, registration number and jurisdiction of registration, application,
certification or filing) of (i) all registered, pending applications for Company
Owned Intellectual Property and (ii) all in-bound licenses, sublicenses or other
agreements pursuant to which a third party authorizes the Company to use,
practice any rights under, or grant sublicenses with respect to, any
Intellectual Property. Notwithstanding anything to the contrary herein, Schedule
2.17(a) need not include any licenses for click-wrap, shrink-wrap, open source
or off-the-shelf software.

    


    (b) Except with respect to
non-exclusive licenses under the Company Intellectual Property, which are either
expressly provided and/or implied in connection with a customer’s use of the
Company’s products or services, and which are disclosed in Schedule 2.17(b), the
Company does not license, sublicense, nor is it a party to any other agreement,
pursuant to which it authorizes a third party to use, practice any rights under
or grant sublicenses with respect to Company Intellectual Property.

    


    (c) Except as set forth in Schedule
2.17(c), (i) the Company has good title to each registration, application, and,
to the knowledge of Seller, other material items of Company Owned Intellectual
Property, free and clear of any Liens; (ii) the Company owns or has the right to
use pursuant to license, sublicense, or other written agreement, all material
items of Company Intellectual Property used in the operation of the business of
the Company, as presently conducted.

    


    (d) All registration, maintenance and
renewal fees applicable to the Company Owned Intellectual Property that are
currently due have been paid and all documents and certificates related to such
items have been filed with the relevant Governmental Authority or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such items.

    


    (e) To the knowledge of Seller, (i) no
holding, decision or judgment has been rendered in any action or proceeding
before any court or administrative authority denying the validity of, the
Company’s right to register, or the Company’s right to own or use, any Company
Intellectual Property, and (ii) there are no pending actions or proceedings
challenging the validity, enforceability, ownership, or use of any Company
Intellectual Property.

     

    
      
        
        

      

      
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    (f) To the knowledge of Seller, no
third party is infringing upon, misappropriating, or otherwise violating any
Company Owned Intellectual Property, and the Company and Seller have taken
reasonable measures to protect and enforce the Company Owned Intellectual
Property against other Persons, including the confidentiality of trade secrets
owned by the Company.

    


    (g) There are no claims pending against
the Company, nor has any officer of Seller received actual notice of any claims
made against the Company, in the past five (5) years by a third party, that the
conduct of the Company’s business in the manner currently conducted infringes
upon, misappropriates or otherwise violates the Intellectual Property rights of
any other Person.

    


    2.18.
Insurance.

    


    (a) Schedule 2.18(a) sets forth (i) an
accurate and complete list of each insurance policy and fidelity bond which
covers the Company and its business, properties, assets, directors and employees
(the “Policies”) and (ii) a list of all pending claims and the claims history
for the Company under the Policies during the current year and the preceding
three (3) years (including with respect to insurance obtained but not currently
maintained). There are no pending claims under any of such Policies as to which
coverage has been questioned, denied or disputed by the insurer or in respect of
which the insurer has reserved its rights.

    


    (b) Schedule 2.18(b) describes any
self-insurance arrangement by or affecting the Company, including any reserves
thereunder, and describes the loss experience for all claims that were
self-insured in the current year and the preceding three (3) years.

    


    (c) All Policies are in full force and
effect.

    


    (d) All premiums due under the Policies
have been paid in full or, with respect to premiums not yet due, accrued. The
Company has not received a notice of cancellation of any Policy or of any
material changes that are required in the conduct of the businesses of the
Company as a condition to the continuation of coverage under, or renewal of, any
such Policy. There is no existing default of, and Seller has no knowledge of any
threatened termination of, or material premium increase with respect to, any
Policy and none of such Policies provides for retroactive premium
adjustments.

    


    2.19.
Material
Contracts.

    


    (a) Except (i) as set forth on Schedule
2.19(a), (ii) for licenses of, and other agreements with respect to, the items
referred to in Section 2.17 and (iii) for Leases, as to which no representations
or warranties are made other than as set forth in Section 2.9, the Company is
not a party to or bound by, nor are any of its assets affected by,
any:

     

    
      
        
        

      

      
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    (i) note, debenture, bond, equipment
trust, letter of credit, indenture loan or other agreement relating to
Indebtedness, lending or investing of money or to the mortgaging or pledging of
any of its assets;

    


    (ii) Contract with a Governmental
Authority;

    


    (iii) guaranty of Indebtedness, other
than endorsements made for collection in the ordinary course of
business;

    


    (iv) indemnification or other
reimbursement obligations in excess of $100,000;

    


    (v) Contract for the purchase of
materials, supplies, goods or services that involves or would reasonably be
expected to involve (A) annual payments by the Company of $100,000 or more or
(B) aggregate payments by the Company, of $250,000 or more;

    


    (vi) Contracts which prohibit it from
freely engaging in any activity in any geographic region;

    


    (vii) Contract (A) for the sale by the
Company of materials, supplies, goods, services, equipment or other assets, and
that involves a specified annual minimum dollar sales amount by the Company of
$100,000 or more, or (B) pursuant to which the Company received payments of more
than $100,000 in the year ended December 31, 2008 or expects to receive payments
of more than $100,000 in the years ending December 31, 2009 and December 31,
2010;

    


    (viii) Contract that requires the
Company to purchase its total requirements of any product or service from a
third party or that contains “take or pay” provisions;

    


    (ix) employment, consulting,
termination or severance Contract, other than any such Contract that is
terminable at-will by the Company without liability to the Company;

     

    (x)
partnership or joint venture Contract;

    


    (xi) distribution, dealer,
representative or sales agency Contract;

    


    (xii) Contract for the lease of
personal property that provides for payments to or by the Company in any one
case of $100,000 or more annually or $500,000 or more over the term of the
lease;

    


    (xiii) Contract for any capital
expenditure or leasehold improvement in any one case in excess of $100,000 or in
the aggregate greater than $250,000;

    


    (xiv) Contract that relates to the
acquisition or disposition of any material business (whether by merger, sale of
stock, sale of assets or otherwise);

     

    
      
        
        

      

      
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    (xv) Collective Bargaining Agreement or
other Contract with any labor organization, union or association;
or

    


    (xvi) any other Contracts not described
above which involve the payment to or by the Company of $100,000 or more in any
twelve consecutive month period.

    


    (b) Except as set forth on Schedule
2.19(b), (i) each contract or commitment listed on Schedule 2.19(a) (the
“Material Contracts”) is valid, binding and enforceable against the Company;
(ii) the Company is not in material default under any Material Contract, has
performed all material obligations under the Material Contracts required to be
performed by it, and has not received any claim of default under any Material
Contract; and (iii) Seller has no knowledge of any breach or anticipated breach
by any other party to any Material Contract.

    


    (c) Seller has made available to Buyer
true and complete copies of each Material Contract.

    


    2.20.
Transactions with
Affiliates.

    


    (a) Except set forth in Schedule
2.20(a), there are no Contracts between the Company, on the one hand, and Seller
or any of its officers, directors, consultants or employees, or any affiliate of
any of the foregoing, on the other hand.

    


    (b) Except set forth in Schedule
2.20(b), the Company is not indebted, directly or indirectly, to Seller, or to
any of its directors, officers or employees, or to any affiliate of any of the
foregoing, other than in connection with expenses or advances of expenses
incurred in the ordinary course of business or employee relocation expenses and
for other customary employee benefits made generally available to all employees.
Neither Seller nor any of the Company’s directors, officers or employees nor any
affiliate of the foregoing (i) are, directly or indirectly, indebted to the
Company or (ii) have any direct or indirect ownership interest in any Person
with which the Company has a business relationship, or any Person that competes
with the Company, except that Seller or the Company’s directors, officers or
employees or any affiliate of any of the foregoing may own stock in (but not
exceeding two percent (2%) of the outstanding capital stock of) publicly traded
companies that may compete or have a business relationship with the Company.
None of Seller, the directors, officers or employees of the Company, or any
affiliate of any of the foregoing has, direct or indirect (other than through
the Company) economic, interest in any Material Contract. None of Seller, the
directors, officers or employees of the Company, or any affiliate of any of the
foregoing has any material commercial, industrial, banking, consulting, legal,
accounting, charitable or familial relationship with any of the Company’s
customers, suppliers, service providers, joint venture partners, licensees and
competitors.

    


    2.21. Vote Required. The
affirmative vote of the holders of a majority of the outstanding shares of
Seller Common Stock (the “Required Seller Stockholders”) is necessary to approve
this Agreement and the transactions contemplated thereby. The affirmative vote
of the Required Seller Stockholders is the only vote of the holders of any class
or series of capital stock of Seller necessary to approve this Agreement and to
consummate the transactions contemplated hereby.

     

    
      
        
        

      

      
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    2.22. Brokers, Finders, etc. Except
as set forth on Schedule 2.22, Seller has not employed, nor is it subject to any
valid claim of, any broker, finder, consultant or other intermediary in
connection with the transactions contemplated by this Agreement who might be or
is entitled to a fee or commission in connection with such
transactions.

    


    2.23. Employment-Related
Matters.

    


    (a) Schedule 2.23(a) sets forth a true
and complete list of (i) the names, titles, annual salaries and other
compensation of all officers of the Company and all other employees of the
Company whose annual base salary exceeds $100,000, along with an indication of
exempt or non-exempt status and (ii) the wage rates for non-salaried employees
of the Company (by classification and an indication of exempt or non-exempt
status). None of the employees listed on Schedule 2.23(a)(i) has indicated to
Seller or the Company that s/he intends to resign or retire as a result of the
transactions contemplated hereby or otherwise within one (1) year after the
Closing Date.

    


    (b) Except as set forth on Schedule
2.23(b), the Business Employees constitute all personnel (other than the
contractors and consultants set forth on Schedule 2.19) engaged in the business
of the Company.

    


    (c) Except as set forth on Schedule
2.23(c), (i) no labor strike, slowdown, work stoppage, dispute, or lockout is in
effect or, to the knowledge of Seller, threatened; (ii) no unfair labor practice
charge or complaint is pending or, to the knowledge of Seller, threatened; (iii)
there are no grievances, grievance proceedings or arbitration proceedings
pending or, to the knowledge of Seller, threatened; (iv) the Company is not a
party to or subject to any Collective Bargaining Agreements and no labor
organizations represent or purport to represent any employees, contractors
and/or consultants employed or retained by the Company; (v) there are no pending
or, to the knowledge of Seller, threatened other claims, complaints, lawsuits or
disputes involving or relating to any employees, contractors, consultants or
labor organizations or their wages, hours, benefits and/or terms or conditions
of employment; (vi) the Company is not a party to, or otherwise bound by, any
consent decree with, or citation by, any Governmental Authority relating to
employees or employment practices; and (vii) the Company is in compliance in all
material respects with all applicable laws relating to employment, employment
practices and the termination of employment.

    


    2.24. Inventory. All inventory of
the Company (including materials, supplies, parts, work-in-process and finished
goods) is of a quality, quantity and condition useable or saleable in the
ordinary course of business. No write-down of such inventory has been made or
should have been made under GAAP in the period since December 31, 2008 other
than in the ordinary course of business consistent with past practice. The
quantities of each item of inventory are reasonable and adequate in the present
circumstances of the Company.

     

    
      
        
        

      

      
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    2.25. Accounts Receivable. The
accounts receivable of the Company as set forth on the Most Recent Financial
Statements or arising since the date thereof are, to the extent not paid in full
by the account debtor prior to the date hereof, (a) valid and genuine and have
arisen solely out of bona fide sales and deliveries of goods, performance of
services and other business transactions in the ordinary course of business
consistent with past practice, (b) not subject to valid defenses, set-offs or
counterclaims, and (c) collectible within ninety (90) days after billing at the
full recorded amount thereof less, in the case of accounts receivable appearing
on the Most Recent Financial Statements, the recorded allowance for collection
losses on the Most Recent Financial Statements or, in the case of accounts
receivable arising since the Most Recent Financial Statements, the recorded
allowance for collection losses shown on the accounting records of the
Company.

    


    2.26. Compliance with Law. The
Company is in compliance with applicable Law in all material respects. The
Company has not received notice regarding any violation of, conflict with, or
failure to comply with any Law.

    


    2.27. Books and Records. The minute
books (containing the records of the meetings, or written consents in lieu of
such meetings, of the stockholders, the board of directors and any committees of
the board of directors), the stock certificate books, and the stock record books
of the Company are correct and complete in all material respects, and have been
maintained in accordance with sound business practices. The minute books of the
Company contain records of all meetings, or actions taken by written consent, of
the stockholders, the board of directors and any committees of the board of
directors, of the Company, and no meeting, or action by written consent in lieu
of such meeting, of any such stockholders, board of directors or committee of
such board of directors, has been held for which minutes have not been prepared
and not contained in the minute books. All minutes contained in the minute books
are accurate and complete in all material respects. At the Closing, all of the
books and records of the Company will be in the possession of the Company. At
the Closing, the Seller will deliver, or cause to be delivered, to the Buyer or
its designee all of the minute books of the Company.

    


    2.28. Suppliers and Customers.
Schedule 2.28 sets forth the largest ten (10) suppliers of the business of the
Company based on expenses incurred for each of the year ended December 31, 2008
and the three-month period ended March 31, 2009 and the largest ten (10)
customers of the business of the Company based on revenue generated for each of
the year ended December 31, 2008 and the three-month period ended March 31,
2009. The relationships of the Company with each such supplier and customer are
good commercial working relationships. No such supplier or customer has canceled
or otherwise terminated, or to the knowledge of Seller threatened to cancel or
otherwise terminate, its relationship with the Company. Neither the Seller nor
the Company has received notice that any such supplier or customer may cancel or
otherwise materially and adversely modify its relationship with the Company or
limit its services, supplies or materials to or from the Company, either as a
result of the transactions contemplated hereby or otherwise.

     

    
      
        
        

      

      
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    2.29. Bank Accounts. Schedule 2.29
sets forth the name of each bank, safe deposit company or other financial
institution in which the Company has an account, lock box or safe deposit box
and the names of all persons authorized to draw thereon or have access
thereto.

    


    2.30. Product and Service Warranty and
Liability.

    


    (a) All of the products and services
provided, distributed, manufactured, sold, licensed or delivered by the Company
have conformed in all material respects with all applicable contractual
commitments, all applicable Laws and Orders, and all express and implied
warranties with respect thereto and the Company does not have any material
liability (whether asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and due or to become due) for replacement
thereof or other damages in connection therewith, subject to reserves and
accruals reflected in the Most Recent Financial Statements, as adjusted for
operations and transactions through the date of the Closing in the ordinary
course consistent with past practice. Substantially all of such products and
services are subject to standard terms and conditions of sale. Seller has made
available to Buyer copies of the standard terms and conditions with respect to
the sale, license and distribution of such products and services (containing
applicable guaranty, warranty and indemnity provisions).

    


    (b) The Company does not have any
material liability (whether asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, and due or to become due)
arising out of any injury to individuals or property as a result of the
ownership, possession or use of any product or service provided, distributed,
manufactured, sold, licensed or delivered by the Company.

    


    2.31. Powers of Attorney. There are
no outstanding powers of attorney executed by or on behalf of the Company in
favor of any Person.

    2.32. Opinions of Financial
Advisors. The Seller has received the written opinion of SMH Capital
Inc., dated as of the date hereof to the effect that, as of the date of such
opinion, the Purchase Price to be received by the Seller in connection with the
Purchase is fair from a financial point of view.

    


    2.33. Solvency. The Seller is (on a
consolidated basis), and immediately after the Closing (after giving effect to
the Purchase and the other transactions contemplated hereby, including the
amount and terms of any debt and/or equity financing on behalf of Buyer in
connection with the transactions contemplated by this Agreement) will be,
Solvent. For purposes of this Agreement, “Solvent,” when used with respect to
any Person means that, as of any date of determination, (a) the amount of the
“present fair saleable value” of the assets of such Person will, as of such
date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are generally determined in
accordance with applicable federal laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be required
to pay the liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business and (d) such Person
will be able to pay its debts as they mature. For purposes of this definition,
(i) “debt” means liability on a “claim,” and (ii) “claim” means any (A) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (B) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.

     

    
      
        
        

      

      
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    2.34. Stormwater Discharge. The
location identified as the “Off-Site Location” on the site map attached hereto
as Exhibit E (the “Site Map”) is a point of current and historic stormwater
discharge from the Real Property.

    


    2.35. No Other Representations and
Warranties. Except for the express representations and warranties
contained in this Agreement and the Transaction Documents, Seller makes no
representation or warranty whatsoever, express or implied, including but not
limited to any implied warranty or representation as to condition,
merchantability or suitability as to any of the properties or assets of the
Company, and Buyer accepts the Stock and the Company “as is” and “where
is.”

    


    


    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF BUYER

    


    Buyer hereby represents and warrants to
Seller as of the date hereof and as of the Closing Date as follows:

    


    3.1. Due Organization. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and has all requisite power and
authority to enter into this Agreement and perform its obligations
hereunder.

    


    3.2. Authorization and Validity of
Agreement. The execution, delivery and performance by Buyer of this
Agreement and the other Transaction Documents and the consummation by Buyer of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Buyer, and no other action on the part of Buyer is or
will be necessary for the execution, delivery and performance by Buyer of this
Agreement and the other Transaction Documents and the consummation by Buyer of
the transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by Buyer and is, and when executed and delivered, each of
the other Transaction Document will be, a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting creditors’
rights generally and by general equity principles.

     

    
      
        
        

      

      
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    3.3. No Conflict. Except as
specifically contemplated in this Agreement, the execution, delivery and
performance by Buyer of this Agreement and the Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby: (a) do
not and will not violate any Law or Order applicable to Buyer; (b) do not and
will not require any consent or approval of, or filing with or notice to, any
Governmental Authority under any Law applicable to Buyer, except for any
consent, approval, filing or notice requirements which become applicable solely
as a result of the specific regulatory status of Seller or its affiliates or
which Seller or its affiliates are otherwise required to obtain; (c) do not and
will not violate any provision of the organizational documents of Buyer; (d) do
not and will not violate, conflict with, or result in the breach or termination
of, or constitute a default under, or result in the loss of rights of Buyer
under, or result in the acceleration of the performance by Buyer under, any
material Contract to which Buyer is a party or by which it, or any of its assets
are bound or encumbered; and (e) do not and will not require the authorization
or order of, registration, declaration or filing with, or notice to, any
Governmental Authority or other Person with respect to Buyer or any of its
affiliates in connection with the execution and delivery of this Agreement and
the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, except for such filings as may be required
under the HSR Act.

    


    3.4. Vote Required. No vote of the
holders of any class or series of capital stock of Buyer is necessary to approve
this Agreement or to consummate the transactions contemplated
hereby.

    


    3.5. Brokers, Finders, etc. Buyer
has not employed, nor is subject to the valid claim of, any broker, finder,
consultant or other intermediary in connection with the transactions
contemplated by this Agreement who might be entitled to a fee or commission from
Seller in connection with such transactions.

    


    3.6. Available Funds. Buyer has
cash on hand or existing lines of credit to provide, in the aggregate, monies
sufficient to fund the consummation of the transactions contemplated by this
Agreement and to satisfy all other costs and expenses required to be paid by
Buyer arising in connection therewith. There is no breach or default existing,
or with notice or the passage of time may exist, under the credit or other
agreements with respect to any such lines of credit. Buyer has no reason to
believe that any of the conditions precedent to the draw-down of any such lines
of credit will not be satisfied.

    


    3.7. Purchase for Investment.
Buyer is aware that no shares of capital stock or other securities being
acquired pursuant to the transactions contemplated hereby are registered under
the Securities Act of 1933, as amended (the “Securities Act”), or under any
state or foreign securities laws. Buyer is an “accredited investor” within the
meaning of Rule 501(a) of Regulation D of the Securities Act. Buyer is not an
underwriter, as such term is defined under the Securities Act, and is purchasing
such shares solely for investment, with no present intention to distribute any
such shares to any person, and Buyer will not sell or otherwise dispose of
shares except in compliance with the registration requirements or exemption
provisions under the Securities Act and the rules and regulations promulgated
thereunder, or any other applicable securities laws.

     

    
      
        
        

      

      
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    3.8. Legal Proceedings. There are
no actions, suits, proceedings or orders pending or (to the knowledge of Buyer)
threatened against or affecting Buyer or any of its affiliates at law or in
equity, or before or by any Governmental Authority, and neither Buyer nor any of
its affiliates is subject to any Order which would or seeks to enjoin, rescind,
or delay the transactions contemplated by this Agreement or otherwise hinder
Buyer from timely complying with the terms and provisions of this
Agreement.

    


    3.9. Investigation. Buyer
acknowledges that, except for the matters that are expressly covered by the
provisions of this Agreement, Buyer is relying on its own investigation and
analysis in entering into the transactions contemplated hereby. Buyer is
knowledgeable about the industries in which the Company operates and is capable
of evaluating the merits and risks of its purchase of the Stock as contemplated
by this Agreement and is able to bear the substantial economic risk of such
investment for an indefinite period of time.

    


    3.10. Disclaimer Regarding
Projections. In connection with Buyer’s investigation of the Company,
Buyer has received from Seller and its affiliates and agents certain financial
information, memoranda or offering materials or presentations containing, among
other things, projections and other forecasts, including, without limitation,
projected financial statements, cash flow items, cost estimates, certain
business plan information and other data related to the Company. Buyer
acknowledges that (a) any such documents are not and shall not be deemed to
include representations or warranties of Seller or the Company, (b) there are
uncertainties inherent in attempting to make such projections, forecasts and
plans and, accordingly, is not relying on them, (c) Buyer is familiar with such
uncertainties and is taking full responsibility for making its own evaluation of
the adequacy and accuracy of all projections, forecasts and plans so furnished
to it and (d) Buyer shall have no claim against anyone with respect to any of
the foregoing.

    


    3.11. No Other Representations and
Warranties. Except for the express representations and warranties
contained in this Agreement and the other Transaction Documents, Buyer makes no
representation or warranty whatsoever, express or implied.

    


    ARTICLE
IV

    COVENANTS

    


    4.1. Access; Information and Records; and
Confidentiality.

    


    (a) During the period commencing on the
date hereof and ending on the Closing Date, Seller shall and shall cause the
Company to afford to Buyer, its counsel, accountants and other authorized
representatives, upon reasonable written request and notice, full access to and
the right to inspect, during normal business, the plants, properties, officers,
employees, accountants, counsel and agents, Contracts, books and records of the
Company, in order that Buyer may have the opportunity to make such
investigations, including for the purpose of conducting the Phase II Work, as it
shall desire to make of the affairs of the Company; provided that Buyer shall
conduct such investigations in such a manner as to minimize disruptions to the
continuing operations of the Company to the extent reasonably practicable.
Seller will use its commercially reasonable efforts to cause its officers,
employees, accountants and other agents to furnish to Buyer such additional
financial and operating data and information with respect to the Company as
Buyer may from time to time reasonably request.

     

    
      
        
        

      

      
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    (b) Without the prior written consent
of Seller, which consent may not be unreasonably withheld, Buyer shall not
contact any suppliers to, employees (except pursuant to Section 4.1(a)) or
customers of Seller or the Company in connection with or pertaining to any
subject matter of this Agreement.

    


    (c) Buyer will (i) hold, and will cause
its respective partners, directors, officers, employees and representatives of
its legal, accounting and financial advisors and other representatives and
affiliates (the “Representatives”) to hold, any information in confidence to the
extent required by, and in accordance with, the provisions of the
confidentiality agreement in the Term Sheet dated March 5, 2009, between the
Parties (the “Confidentiality Agreement”) and (ii) comply, and will cause its
Representatives to comply, in all respects with the Confidentiality
Agreement.

    


    (d) From and after the Closing until
the fifth anniversary thereof, Seller will, and will cause its affiliates to,
hold, and will use commercially reasonable efforts to cause its and their
respective Representatives to hold, in confidence any and all information,
whether written or oral, concerning the Company, except to the extent that such
information is (i) in the public domain through no breach of this Agreement by
Seller or any of its affiliates or (ii) lawfully acquired by Seller or any of
its affiliates after the Closing from sources which are not prohibited from
disclosing such information by a legal, contractual or fiduciary obligation. If
Seller or any of its affiliates or Representatives is compelled to disclose any
such information by judicial or administrative process or by other requirements
of Law, Seller shall promptly notify Buyer in writing and shall disclose only
that portion of such information which Seller is advised by its counsel is
legally required to be disclosed; provided that Seller shall cooperate with
Buyer in all reasonable respects, at Buyer’s expense, to obtain an appropriate
protective order or other reasonable assurance that confidential treatment will
be accorded such information.

    


    4.2. Conduct of the Business of the
Company Prior to the Closing Date. Except (a) as permitted, required or
specifically contemplated by this Agreement, including, without limitation,
those actions contemplated on Schedule 2.7, Schedule 4.2 or in this Article IV,
(b) as required by a Governmental Authority of competent jurisdiction or by
applicable Law or (c) as otherwise consented to or approved in writing by Buyer,
which consent shall not be unreasonably withheld, during the period commencing
on the date hereof and ending on the Closing Date, Seller covenants that it
shall and shall cause the Company to take or refrain from taking such action
such that:

    


    (i) the business of the Company shall
be conducted in the ordinary course of business consistent with past
practice;

     

    
      
        
        

      

      
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    (ii) the Company will not amend its
organizational documents;

    


    (iii) the Company will use its
commercially reasonable efforts to preserve intact its business organization, to
keep available the services of its present officers and key employees, and to
preserve the goodwill of those having business relationships with
it;

    


    (iv) the Company will not acquire any
new interest in or enter into any new lease of real property, or modify, amend,
assign, sublease or terminate any existing lease;

    


    (v) the Company will not enter into,
modify or supplement any Collective Bargaining Agreement with or in relation to
any labor organizations; and

    


    (vi) the Company will not take any
other action which would result in the representation and warranty contained in
Section 2.7 being untrue at and as of the Closing Date.

    


    4.3. Antitrust Laws.

    


    (a) If applicable, each party hereto
shall (i) make the filings required of it or any of its affiliates under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), in connection with this Agreement and the transactions contemplated
hereby as promptly as practicable following the date hereof, (ii) comply at the
earliest practicable date and after consultation with the other party hereto
with any request for additional information or documentary material received by
it or any of its affiliates from the Federal Trade Commission (the “FTC”), the
Antitrust Division of the Department of Justice (the “Antitrust Division”) or
any other Governmental Authority, (iii) cooperate with one another in connection
with any filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement initiated by the FTC, the Antitrust Division or any other Governmental
Authority and (iv) cause the waiting periods under the HSR Act or any other
foreign antitrust merger control authority to terminate or expire at the
earliest possible date.

    


    (b) Each party hereto shall promptly
inform the other parties of any communication made to, or received by such party
from, the FTC, the Antitrust Division or any other Governmental Authority
regarding any of the transactions contemplated hereby.

    


    (c) The filing fees under the HSR Act
or any other foreign antitrust merger control laws shall be borne by
Buyer.

    


    4.4. Non-Solicitation.

    


    (a) Buyer and its affiliates will not,
from and after the date hereof and for a period of one (1) year following any
termination of this Agreement pursuant to Section 9.2, without the prior written
approval of Seller, directly or indirectly, solicit, encourage, entice or induce
any person who is an employee of Seller or the Company, at the date hereof or at
any time hereafter until the termination of this Agreement, to terminate his or
her employment with Seller or the Company. Buyer agrees that any remedy at law
for any breach by it of this Section 4.4(a) would be inadequate, and Seller
would be entitled to injunctive relief in such a case. If it is ever held that
the restriction placed on Buyer by this Section 4.4(a) is too broad to permit
enforcement of such restriction to its fullest extent, Buyer agrees that a court
of competent jurisdiction may enforce such restriction to the maximum extent
permitted by law, and Buyer hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.

     

    
      
        
        

      

      
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    (b) Seller will not, for a period of
one (1) year following the Closing Date, without the prior written approval of
Buyer, directly or indirectly, solicit, encourage, entice or induce any person
who is an employee of the Company at the Closing Date to terminate his or her
employment with Buyer or any of its subsidiaries known to Seller. Seller agrees
that any remedy at law for any breach by it of this Section 4.4(b) would be
inadequate, and Buyer would be entitled to injunctive relief in such a case. If
it is ever held that the restriction placed on Seller by this Section 4.4(b) is
too broad to permit enforcement of such restriction to its fullest extent,
Seller agrees that a court of competent jurisdiction may enforce such
restriction to the maximum extent permitted by law, and Seller hereby consents
and agrees that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.

    


    4.5. Omitted.

    


    4.6. Termination of Affiliate
Relations. Except as contemplated by this Agreement and Exhibit 1, on or
prior to the Closing Date, (a) the Company shall have repaid or otherwise
settled all of its outstanding indebtedness (including interest thereon) and
satisfied all of its other liabilities as of the Closing Date owed to Seller or
its affiliates, and (b) Seller and its affiliates shall have repaid or otherwise
settled all of their outstanding indebtedness (including interest thereon) and
satisfied all of their other liabilities owed to the Company. All agreements
between the Company and Seller and its affiliates (other than agreements
contemplated by this Agreement) shall be terminated as of the Closing Date, and
all obligations and liabilities thereunder shall have been
satisfied.

    


    4.7. Further Actions. Subject to
the terms and conditions of this Agreement, each of the parties hereto agrees to
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including using its commercially reasonable efforts: (a) to obtain,
in addition to approvals referred to in Section 4.3, any licenses, permits,
consents, approvals, authorizations, qualifications and orders of federal,
state, local and foreign Governmental Authorities and parties to contracts with
the Company as are required in connection with the consummation of the
transactions contemplated hereby; (b) to effect, in addition to filings referred
to in Section 4.3, all necessary registrations and filings required in
connection with the consummation of the transactions contemplated hereby; (c) to
defend any lawsuits or other legal proceedings, whether judicial or
administrative, whether brought derivatively or on behalf of third parties
(including, without limitation, Governmental Authorities or officials),
challenging this Agreement or the consummation of the transactions contemplated
hereby; and (d) to furnish to each other such information and assistance and to
consult with respect to the terms of any registration, filing, application or
undertaking as reasonably may be requested in connection with the
foregoing.

     

    
      
        
        

      

      
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    4.8. Access to Records and
Personnel.

    


    (a) Buyer shall, and shall cause its
affiliates to, retain the books, records, documents, instruments, accounts,
correspondence, writings, evidences of title and other papers relating to the
Company in their possession (the “Books and Records”) for a period of six (6)
years from the Closing Date or for such longer period as may be required by law
or any applicable court order. Notwithstanding the foregoing, Buyer shall retain
for such longer periods any and all Books and Records that relate to any ongoing
litigation, investigation or proceeding until such time as Buyer is notified of
the conclusion of such matter.

    


    (b) Buyer shall, and shall cause its
affiliates to, provide Seller and its representatives with reasonable access
during normal business hours to such Books and Records for the preparation of
financial statements, Returns or the defense of litigation or tax audits. Seller
will hold in confidence all confidential information identified as such by, and
obtained from, Buyer, any of its officers, agents, representatives or employees;
provided, however, that information which (i) was in the public domain; (ii) was
in fact known to Seller prior to disclosure by Buyer, its officers, agents,
representatives or employees; or (iii) becomes known to Seller from or through a
third party not under an obligation of non-disclosure to the disclosing party,
shall not be deemed to be confidential information.

    


    4.9. Use of Names. At the Closing,
each trademark, service mark, trade name, brand name, domain name, trade dress,
logo or other source indicator of the Company shall remain with the
Company.

    


    4.10. Litigation Support. In the
event and for so long as any party actively is contesting or defending any
action in connection with (a) any transaction contemplated under this Agreement
or (b) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act or transaction on or
prior to the Closing Date involving the Company, the other party will cooperate
with it and its counsel in all reasonable respects in the contest or defense,
make available their personnel and provide such testimony and access to their
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
pursuant to Article VIII); provided, that each party shall use it reasonable
best efforts to minimize disruptions to the other party; provided further, that
unless Seller reimburses the Company for such personnel’s wages and expenses,
the cooperation shall not exceed thirty (30) hours in the aggregate for all
personnel.

     

    
      
        
        

      

      
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    4.11. Guarantees. Buyer shall use
reasonable efforts (which shall not include agreeing to any modifications of the
terms of the underlying obligations) to cause itself or one or more of its
affiliates to be substituted in all respects for Seller and any of its
affiliates, effective as of the Closing Date, in respect of all obligations of
Seller and any such affiliates under each of the guarantees, indemnities, surety
bonds, letters of credit and letters of comfort obtained by Seller or any such
affiliates for the benefit of the Company and set forth on Schedule 4.11 (the
“Guarantees”). If Buyer is unable to effect such a substitution with respect to
any such Guarantee after using its reasonable efforts to do so, then Buyer shall
indemnify Seller, with respect to the obligations covered by each of the
Guarantees for which Buyer does not effect such substitution.

    


    4.12. Consents; Licenses; and
Permits. Seller shall, and shall cause the Company to, use reasonable
best efforts to obtain all consents set forth on Schedule 1.4(b)(vii); provided
that no Contract shall be amended nor any right thereunder be waived to obtain
any such consent. To the extent that any License and Permit set forth on
Schedule 2.14(a) has not been assigned or transferred to the Company prior to
the Closing, Seller shall (a) cooperate with Buyer in any reasonable arrangement
designed to maintain each such License and Permit in full force and effect and
shall provide Buyer after the Closing with all of the benefits intended to be
provided to Buyer under the applicable License or Permit, including enforcement
at the cost and for the account of Buyer of any and all rights of Seller against
any other party arising out of the cancellation thereof or otherwise and (b)
cooperate with Buyer, upon the request of the Buyer, in any commercially
reasonable manner to obtain each such License and Permit as promptly as
practicable after the Closing.

     

    4.13.
Notification of Certain
Matters. Between the date of this Agreement and the Closing Date, each of
Buyer and Seller will promptly notify the other in writing if it becomes aware
of any fact or condition that causes or constitutes a breach of any of its
respective representations and warranties contained in Articles II or III as of
the date of this Agreement, or if such parties become aware of the occurrence
after the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in any Schedule if such Schedule were
dated the date of the occurrence or discovery of any such fact or condition,
Buyer or Seller, as applicable, will promptly deliver to the other party a
supplement to such Schedule specifying such change. During the same period, each
of Buyer and Seller will promptly notify the other party of the occurrence of
any breach of any covenant of Buyer or Seller, as applicable, in this Article IV
or of the occurrence of any event that may make the satisfaction of the
conditions in Article V impossible or unlikely. The parties hereto agree that
the delivery of any supplements or notifications pursuant to this Section 4.13
shall have no effect with respect to the conditions to Buyer’s and Seller’s
respective obligations to close pursuant to Article V, Buyer’s or Seller’s
respective right to indemnification pursuant to Article VIII, or otherwise under
this Agreement.

    


    4.14. Non-Competition. Seller
covenants that, commencing on the Closing Date and ending on the earlier of (i)
the third anniversary of the Closing Date or (ii) a Change of Control (the
“Seller Noncompetition Period”), the Seller shall not, and shall cause its
affiliates not to, engage in, directly or indirectly, in any capacity, or have
any direct or indirect ownership interest in, the same business as the Company
as of the date hereof or as of the Closing Date.

     

    
      
        
        

      

      
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    (a) Seller acknowledges that this
Section 4.14 has been negotiated by the parties hereto and that the geographical
scope and time limitations, as well as the limitation on activities, are
reasonable in light of the circumstances pertaining to the business of the
Company.

    


    (b) If any Governmental Authority
determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable Law, including with respect to time or
geographical scope, such Governmental Authority is hereby requested and
authorized by the parties hereto to revise the foregoing restriction to include
the maximum restrictions allowable under applicable Law.

    


    (c) In the event of any breach or
threatened breach by Seller of any provision of this Section 4.14, Buyer shall
be entitled to injunctive or other equitable relief (without being required to
post any bond or security of any type), restraining Seller from engaging in
conduct that would constitute a breach of the obligations under this Section
4.14. Notwithstanding anything in this Agreement to the contrary, such relief
shall be in addition to and not in lieu of any other remedies that may be
available, including an action for the recovery of damages.

    


    (d) Seller hereby acknowledges and
agrees that the covenants contained in this Section 4.14 are a material and
substantial part of this Agreement and are entered into in connection with, and
as an inducement to, the parties to enter into this Agreement.

    


    4.15. Exclusivity. Without the
prior written consent of Buyer, Seller and the Company will not, and will not
authorize or permit any of their respective Representatives to, directly or
indirectly, solicit, initiate, or encourage (including by way of furnishing
information) or take any other action to facilitate any inquiries or the making
of any proposal that constitutes or may reasonably be expected to lead to a
proposal or offer (other than pursuant to this Agreement) for a merger,
consolidation, or other business combination involving any proposal to acquire,
in any manner, an equity interest in the Company, or any substantial portion of
its assets (any such proposal or offer hereinafter referred to as an
“Acquisition Proposal”) from any Person, or engage in any discussion or
negotiation relating thereto or accept any Acquisition Proposal. If Seller or
the Company receives any such inquiries, offers, or proposals, it shall (a)
notify Buyer orally and in writing of any such inquiries, offers, or proposals
(including the terms and conditions of any such inquiry, offer, or proposal and
the identity of the Person making it) within 24 hours of the receipt thereof and
(b) immediately notify the Person making such proposal that Seller and the
Company is precluded from engaging in any discussions or negotiations or
accepting any Acquisition Proposal.

    


    4.16. Mutual Release. Effective as
of the Closing, Seller and the Company, on behalf of itself and its affiliates
(each, a “Releasing Party”), hereby knowingly and voluntarily releases and
forever discharges the other and each of its affiliates (each, a “Released
Party”) of and from any and all Actions or causes of Action, demands,
liabilities, losses, obligations, debts, costs, damages, expenses, dues,
charges, complaints, contracts (whether oral or written, express or implied from
any source) and promises whatsoever, whether known or unknown, absolute or
contingent, at law or in equity, which any Releasing Party may now have or
hereinafter can, shall, or may have against any Released Party, other than any
pursuant to this Agreement or the other Transaction Documents or any of the
transactions contemplated hereby or thereby or which arise out of facts first
occurring after the Closing.

     

    
      
        
        

      

      
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    4.17. Proxy Statement.

    


    (a) As promptly as practicable after
the execution of this Agreement, and in any event within forty (40) days
following the date hereof, Seller shall prepare and file with the Securities and
Exchange Commission (the “SEC”) a proxy statement, together with a form of
proxy, relating to the Seller Stockholders’ Meeting (as defined below) (together
with any amendments or supplements thereto, the “Proxy Statement”) and shall use
its commercially reasonable efforts to have the Proxy Statement cleared by the
SEC. Each of Seller and Buyer shall use its commercially reasonable efforts to
respond to any comments made by the SEC and, if required, to amend or supplement
the Proxy Statement. Each of Seller and Buyer shall furnish all information
concerning it and the holders of its capital stock as the other party may
reasonably request in connection with such actions and the preparation of the
Proxy Statement. As promptly as practicable after the execution of this
Agreement, Seller shall mail the Proxy Statement to its stockholders.
Notwithstanding the foregoing, Seller shall not mail the Proxy Statement, or any
amendment or supplement thereto, without (i) providing Buyer with a reasonable
opportunity to review and comment thereon and (ii) including therein any
comments reasonably proposed by Buyer. Seller’s Board of Directors shall
recommend approval of this Agreement and the transactions contemplated herein by
Seller’s stockholders, and the Proxy Statement shall contain such
recommendation. Seller will provide Buyer with copies of all correspondence
between Seller (or its Representatives) and the SEC relating to the Proxy
Statement.

    


    (b) Each of Buyer and Seller shall
promptly inform the other party if, at any time prior to the Seller
Stockholders’ Meeting, any information, event or circumstance should be set
forth in an amendment or supplement to the Proxy Statement.

    


    4.18. Seller Stockholders’ Meeting.
Seller shall call and hold a meeting of its stockholders (the “Seller
Stockholders’ Meeting”) as promptly as practicable for the purpose of voting
upon the approval of this Agreement and the transactions contemplated herein,
and Seller shall use its commercially reasonable efforts to hold the Seller
Stockholders’ Meeting as soon as practicable after the date hereof.
Notwithstanding the foregoing, Seller shall not be required to hold the Seller
Stockholders’ Meeting if this Agreement is terminated before that meeting is
held.

    


    ARTICLE
V

    CONDITIONS
PRECEDENT

    


    5.1. Conditions Precedent to Obligations
of Parties. The respective obligations of each of the parties hereto
hereunder are subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions:

     

    
      
        
        

      

      
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    (a) No Injunction. On the Closing Date,
there shall be no injunction, restraining order or decree of any nature of any
court or Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Purchase; provided, however, that
the parties invoking this condition shall use their best efforts to have such
injunction, order or decree vacated or denied.

    


    (b) Regulatory Authorizations. The
applicable waiting periods specified under the HSR Act with respect to the
transactions contemplated by this Agreement, if any, shall have lapsed or been
terminated and all clearances, approvals or confirmations required pursuant to
the applicable requirements of foreign merger or investment control statutes or
regulations shall have been obtained, other than those the failure of which to
obtain would not, individually or in the aggregate, have a Material Adverse
Effect.

    


    (c) Stockholder Approval. This
Agreement shall have been approved by the Required Seller
Stockholders.

    


    5.2. Conditions Precedent to Obligations
of Buyer. The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction or waiver by Buyer
on or prior to the Closing Date of each of the following additional
conditions:

    


    (a) Accuracy of Representations and
Warranties. The representations and warranties of Seller contained in
this Agreement which are not qualified as to materiality shall be true and
accurate in all material respects as of the Closing Date as if made at and as of
such date and the representations and warranties of Seller contained in this
Agreement which are qualified as to materiality shall be true and accurate as of
the Closing Date as if made at and as of such date (except those representations
and warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and accurate (or
true and accurate in all material respects, as applicable) as of such date or
with respect to such period).

    


    (b) Performance of Agreement.
Seller shall have performed in all material respects all obligations and
agreements, and complied in all material respects with all covenants and
conditions, contained in this Agreement to be performed or complied with by it
prior to or on the Closing Date.

    


    (c) Certificate. Buyer shall have
received a certificate of Seller, dated the Closing Date, duly executed on
behalf of Seller by an authorized signatory, to the effect that the conditions
specified in paragraphs (a) and (b) above have been satisfied.

    


    (d)  Closing Deliveries. All
deliveries required to be made by Seller at Closing pursuant to Section 1.4
shall have been made.

     

    
      
        
        

      

      
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    The
rights of Buyer pursuant to this Section 5.2 will not be affected by any
investigation conducted or knowledge acquired (or capable of being acquired) by
Buyer at any time, whether before or after the execution and delivery of this
Agreement, with respect to the accuracy of any representation or warranty of
Seller.

    


    5.3. Conditions Precedent to the
Obligation of Seller. The obligation of Seller to consummate the
transactions contemplated by this Agreement is subject to the satisfaction on or
prior to the Closing Date of each of the following additional
conditions:

    


    (a) Accuracy of Representations and
Warranties. The representations and warranties of Buyer contained in this
Agreement which are not qualified as to materiality shall be true and accurate
in all material respects as of the Closing Date as if made at and as of such
date and the representations and warranties of Buyer contained in this Agreement
which are qualified as to materiality shall be true and accurate as of the
Closing Date as if made at and as of such date (except those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and accurate (or
true and accurate in all material respects, as applicable) as of such date or
with respect to such period).

    


    (b) Performance of Agreement.
Buyer shall have performed in all material respects all obligations and
agreements, and complied in all material respects with all covenants and
conditions, contained in this Agreement to be performed or complied with by it
prior to or on the Closing Date.

    


    (c) Certificate. Seller shall
have received a certificate of Buyer, dated the Closing Date, duly executed on
behalf of Buyer by its President or any Vice President, to the effect that the
conditions specified in paragraphs (a) and (b) above have been
satisfied.

    


    (d) Closing Deliveries. All
deliveries required to be made by Buyer at Closing pursuant to Section 1.4 shall
have been made.

    


    ARTICLE
VI

    PROVISIONS
AS TO TAXES

    


    6.1. Access to Records Following
Closing. Buyer and Seller agree that so long as any books, records and
files retained by Seller relating to the business of the Company, or the books,
records and files delivered to the control of Buyer pursuant to this Agreement
to the extent they relate to the operations of the Company prior to the Closing
Date, remain in existence and available, each party (at its expense) shall have
the right upon prior notice to inspect and to make copies of the same at any
time during business hours for any proper purpose. Buyer and Seller shall use
commercially reasonable efforts not to destroy or allow the destruction of any
such books, records and files without first offering in writing to deliver them
to the other.

    


    6.2. Post-Closing Cooperation.
Buyer and Seller shall reasonably cooperate, and shall cause their respective
affiliates, officers, employees, agents, auditors and other representatives
reasonably to cooperate, in preparing and filing all Returns, including
maintaining and making available to each other all records necessary in
connection with Taxes and in resolving all disputes and audits with respect to
all taxable periods relating to Taxes.

     

    
      
        
        

      

      
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    6.3. Other Tax
Matters.

    


    (a) All Transfer Taxes incurred in
connection with this Agreement and the transactions contemplated hereby shall be
shared equally between Seller and Buyer. Seller and Buyer shall cooperate in
timely making all filings, Returns, reports and forms as may be required to
comply with the provisions of such tax laws. For purposes of this Agreement,
“Transfer Taxes” shall mean transfer, documentary, sales, use, registration and
other such taxes (excluding all applicable real estate transfer taxes, which
shall be borne by the party obligated to pay such Taxes under applicable
Law).

    


    (b) Seller shall cause all tax
allocation agreements or tax sharing agreements with respect to the Company to
be terminated as of the Closing Date, and shall ensure that such agreements are
of no further force or effect as to the Company on and after the Closing Date
and that there shall be no further liabilities or obligations imposed on the
Company under any such agreements.

    6.4. Straddle Period. In the case
of any Tax period that includes (but does not end on) the Closing Date (a
“Straddle Period”), the amount of any income Taxes apportioned to the period
ending on the Closing Date and to the period beginning on the day after the
Closing Date shall be determined based on an interim closing of the books as of
the end of the day on the Closing Date, and to the extent not susceptible to
such allocation, by apportionment on the basis of elapsed days unless such Tax
is transaction based (such as sales, transfer and other similar Taxes) in which
case such Tax shall be apportioned to the period in which the related
transaction occurred.

    


    6.5. Section 338(h)(10) Election.
At Buyer’s request, Seller and Buyer shall jointly make the election provided
for by Section 338(h)(10) of the Code and any comparable election under state,
local or foreign tax law (the “Section 338(h)(10) Election”) with respect to the
Purchase. With respect to the Section 338(h)(10) Election:

    


    (a) On the Closing Date, Seller and
Buyer shall mutually prepare Internal Revenue Service Form 8023 (with all
attachments) and cooperate with each other to take all actions necessary and
appropriate (including filing such additional forms, returns, elections,
schedules and other documents as may be required) to effect and preserve the
Section 338(h)(10) Election (or any comparable provisions of state, local and
foreign tax law).

    


    (b) Following the Closing, Buyer shall
prepare a proposed allocation of the Purchase Price (and any liabilities of the
Company that are liabilities for Tax purposes) among the various classes of the
Company’s assets (as such classes are defined for purposes of Section 1060 of
the Code and the Treasury Regulations thereunder) (as modified pursuant to any
reasonable comments from Seller, the “Section 338(h)(10) Allocations”) Each of
Seller and Buyer agrees to (i) be bound by the Section 338(h)(10) Allocations
(as modified pursuant to

    any
reasonable comments from Seller), (ii) act in accordance with such Section
338(h)(10) Allocations in the filing of all Returns (including Form 8883) and in
the course of any Tax audit, Tax review or Tax litigation related thereto, and
(iii) take no position and cause or permit their respective affiliates to take
no position inconsistent with such Section 338(h)(10) Allocations for income Tax
purposes, including United States federal and state income Tax, unless otherwise
required pursuant to a “determination” within the meaning of Section 1313(a) of
the Code or similar provision of applicable foreign law.

     

    
      
        
        

      

      
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    6.6. Preparation and Filing of
Pre-Closing and Post-Closing Period Tax Returns.

    


    (a) Seller shall prepare, or cause to
be prepared, and file, or cause to be filed, all Returns of the Company for all
periods ending on or prior to the Closing Date which are filed after the Closing
Date. Seller shall permit the Buyer to review and comment on each such Return
prior to filing. The Seller shall pay all Taxes required to be shown as due on
such Returns, including any Taxes resulting from the Section 338(h)(10)
Election.

    


    (b) Buyer shall prepare, or cause to be
prepared, and file, or cause to be filed, all Returns of the Company for Tax
periods which begin before the Closing Date and end after the Closing Date.
Buyer shall permit Seller to review and comment on each such Tax Return prior to
filing. The Seller shall pay to the Buyer, within five (5) days following any
demand by the Buyer, with respect to such Return, an amount equal to the portion
of such Taxes which relates to the portion of such taxable period ending on the
Closing Date (as determined pursuant to Section 6.4 hereof).

    


    (c) Buyer and Seller agree that they
intend that, as a result of the Purchase, the taxable year for federal and state
(in those states that conform to federal treatment or otherwise provide for the
termination of the taxable year at such time) income tax purposes of the Company
will terminate at the close of the Closing Date.

    


    ARTICLE
VII

    LABOR
MATTERS, EMPLOYEE

    RELATIONS
AND BENEFITS

    


    7.1. Defined Benefit Plan. The
Seller represents that it maintains no Defined Benefit Plans applicable to the
Company or its employees.

    


    7.2. 401(k) Plan. The Seller
represents that it maintains no 401(k) Plans applicable to the Company or its
employees.

    


    7.3. Collective Bargaining
Agreements. Buyer shall honor all collective bargaining agreements listed
on Schedule 7.3 to the extent that such agreements are in effect as of the
Closing.

    


    
      
        
        

      

      
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    ARTICLE
VIII

    INDEMNIFICATION

    


    8.1. Indemnification by Seller.
Subject to the limits set forth in this Section 8.1, from and after the Closing,
Seller shall defend, indemnify and hold Buyer and its affiliates harmless from
and against and in respect of any and all actual losses, liabilities, damages,
judgments, settlements and expenses, including reasonable attorneys’ fees, but
excluding lost profits, consequential, punitive, special or indirect damages
(hereinafter “Buyer Losses”) arising out of (a) fraud of Seller or the Company
in respect of any representation or warranty contained in this Agreement, (b)
any and all Taxes with respect to any taxable period of the Company ending on or
before the Closing Date or any income or franchise Tax arising as a result of a
Section 338(h)(10) Election, and with respect to any Straddle Period, or any
portion thereof ending on the Closing Date, (c) any Tax imposed upon Seller, a
Seller Group or any affiliate of Seller for any period, (d) any Tax for which
the Company may be liable prior to its acquisition by Buyer (i) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), (ii) as a transferee or successor or (iii) by contract. Buyer
shall give Seller prompt written notice of any third party claim which may give
rise to any indemnity obligation under this Article VIII, together with the
estimated amount of such claim, and Seller shall have the right to assume the
defense of any such claim through counsel of its own choosing by so notifying
Buyer within sixty (60) days of receipt of Buyer’s written notice; provided,
however, that Seller’s counsel shall be reasonably satisfactory to Buyer.
Failure to give prompt notice shall not affect the indemnification obligations
hereunder in the absence of actual prejudice. If Buyer desires to participate in
any such defense assumed by Seller, it may do so at its sole cost and expense.
If Seller declines to assume any such defense, it shall be liable for all
reasonable costs and expenses of defending such claim incurred by Buyer,
including reasonable fees and disbursements of counsel. Neither party shall,
without the prior written consent of the other party, which consent shall not be
unreasonably withheld, settle, compromise or offer to settle or compromise any
such claim or demand on a basis which would result in the imposition of an Order
which would restrict the future activity or conduct of the other party or any
subsidiary or affiliate thereof or if such settlement or compromise does not
include an unconditional release of the other party for any liability arising
out of such claim or demand or any related claim or demand.

    


    8.2. Indemnification by Buyer.
Subject to the limits set forth in this Section 8.2, from and after the Closing,
Buyer shall defend, indemnify and hold Seller and its affiliates harmless from
and against and in respect of any and all actual losses, liabilities, damages,
judgments, settlements and expenses, including reasonable attorneys’ fees, but
excluding lost profits, consequential, punitive, special or indirect damages
(hereinafter “Seller Losses”) arising out of (a) fraud of Buyer in respect of
any representation or warranty contained in this Agreement or (b) any and all
Taxes with respect to any taxable period of the Company commencing on or after
the Closing Date and with respect to any Straddle Period, or portion thereof,
ending after the Closing Date, in each case that are not an income or franchise
Tax arising as a result of a Section 338(h)(10) Election. Seller shall give
Buyer prompt written notice of any third party claim which may give rise to any
indemnity obligation under this Article VIII, together with the estimated amount
of such claim, and Buyer shall have the right to assume the defense of any such
claim through counsel of its own choosing by so notifying Seller within sixty
(60) days of receipt of Seller’s written notice; provided, however, that Buyer’s
counsel shall be reasonably satisfactory to Seller. Failure to give prompt
notice shall not affect the indemnification obligations hereunder in the absence
of actual prejudice. If Seller desires to participate in any such defense
assumed by Buyer, it may do so at its sole cost and expense. If Buyer declines
to assume any such defense, it shall be liable for all reasonable costs and
expenses of defending such claim incurred by Seller, including reasonable fees
and disbursements of counsel. Neither party shall, without the prior written
consent of the other party, which consent shall not be unreasonably withheld,
settle, compromise or offer to settle or compromise any such claim or demand on
a basis which would result in the imposition of an Order which would restrict
the future activity or conduct of the other party or any subsidiary or affiliate
thereof or if such settlement or compromise does not include an unconditional
release of the other party for any liability arising out of such claim or demand
or any related claim or demand.

     

    
      
        
        

      

      
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    8.3. Indemnification Calculations.
The parties agree that any indemnification payments made pursuant to this
Agreement shall be treated for Tax purposes as an adjustment to the Purchase
Price, unless otherwise required by applicable law.

    


    8.4. Survival. The parties hereto
acknowledge and agree that no representation or warranty contained herein shall
survive the Closing, and (a) neither Buyer nor any of its affiliates shall have
any right to recover for any Buyer Losses in respect of any representation or
warranty contained in this Agreement unless the Loss results from fraud of
Seller or the Company (in which case such representation or warranty shall
nonetheless survive solely for purposes of such Buyer (or its affiliates’, as
applicable) claim and recovery for such Buyer Losses and (b) neither Seller nor
any of its affiliates shall have any right to recover for any Seller Losses in
respect of any representation or warranty contained in this Agreement unless the
Loss results from fraud of Buyer (in which case such representation or warranty
shall nonetheless survive solely for purposes of such Seller (or its
affiliates’, as applicable) claim and recovery for such Seller Losses. The
covenants and agreements to be performed exclusively and in their entirety prior
to the Closing pursuant to this Agreement shall terminate at the Closing, and
all other covenants and agreements shall survive the Closing and remain in
effect indefinitely or in accordance with their terms.

    


    8.5. Other Rights and Remedies Not
Affected. The indemnification rights of the parties hereunder are
independent of and in addition to such rights and remedies as the parties may
have at Law or in equity or otherwise for (a) fraud or willful misrepresentation
on the part of Seller, the Company or their respective Representatives, or Buyer
or its Representatives, as applicable, or (b) failure to fulfill any agreement
or covenant hereunder including the right to seek specific performance,
rescission or restitution, none of which rights or remedies shall be affected or
diminished hereby.

     

    
      
        
        

      

      
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    ARTICLE
IX

    MISCELLANEOUS

    


    9.1.
Certain Definitions. For purposes of this Agreement, the following defined terms
shall have the meanings indicated below:

    


    “Business Day” shall mean a
day other than a Saturday, Sunday or other day on which banks located in Florida
are authorized or required by Law to close.

    


    “Change of Control” shall mean
(a) a merger or consolidation of the Seller with or into any other corporation
or other entity or person or (b) a sale, lease, exchange or other transfer in
one transaction or a series of related transactions of all or substantially all
the Seller’s outstanding securities or all or substantially all the Seller’s
assets; provided that the following events shall not constitute a “Change of
Control”: (i) a merger or consolidation of the Seller in which the holders of
the voting securities of the Seller immediately prior to the merger or
consolidation hold at least a majority of the voting securities in the successor
corporation immediately after the merger or consolidation; (ii) a sale, lease,
exchange or other transaction in one transaction or a series of related
transactions of all or substantially all of the Seller’s assets to a wholly
owned subsidiary corporation or; (iii) a mere reincorporation of the
Seller’s.

    


    “Collective Bargaining
Agreement” shall mean any and all agreements, understandings, contracts,
letters, side letters, grievance or arbitration settlements, and contractual
obligations of any kind, nature and description, oral or written, involving or
entered into between any employer and any labor organization, union,
association, agency or employee committee or plan, including but not limited to
the agreements identified in Schedule 7.3.

    


    “Contract” shall mean any
agreement, contract, license, lease, commitment, arrangement or understanding,
whether written or oral, including any sales order or purchase
order.

    


    “Current Assets” shall mean
any and all current assets of the Company that are categorized as such on the
Draft Closing Balance Sheet or Closing Balance Sheet, as applicable, prepared in
conformity with GAAP.

    


    “Current Liabilities” shall
mean any and all liabilities of the Company that are categorized as such on the
Draft Closing Balance Sheet or Closing Balance Sheet, as applicable, prepared in
conformity with GAAP.

    


    “Indebtedness” shall mean any
of the following: (a) any indebtedness for borrowed money, (b) any obligations
evidenced by bonds, debentures, notes or other similar instruments, (c) any
obligations to pay the deferred purchase price of property or services, except
trade accounts payable and other Current Liabilities arising in the ordinary
course of business, (d) any obligations as lessee under capitalized leases, (e)
any indebtedness created or arising under any conditional sale or other title
retention agreement with respect to acquired property, (f) any obligations,
contingent or otherwise, under acceptance credit, letters of credit or similar
facilities, and (g) any guaranty of any of the foregoing.

     

    
      
        
        

      

      
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    “Intellectual Property” shall
mean all foreign and domestic (a) copyright rights (whether registered,
unregistered, or applications therefor), (b) trademarks or service marks
(whether registered, unregistered, or applications therefor), trade names, trade
dress, and domain names, together with the goodwill associated with any of the
foregoing, (c) trade secrets, inventions (whether or not patentable), know-how,
formulae and processes, patents (including all applications, reissues,
divisions, continuations and extensions thereof), proprietary models, software,
databases, websites, customer information, client lists and information
technology. Intellectual Property owned or licensed for use by the Company in
connection with the business of the Company shall be referred to as “Company
Intellectual Property” and Intellectual Property owned by the Company in
connection with the business of the Company shall be referred to as “Company
Owned Intellectual Property”.

    


    “Knowledge” of a party shall
mean (a) with respect to Seller, with respect to any matter in question, the
actual knowledge of James Murphy and (b) with respect to Buyer, with respect to
any matter in question, the actual knowledge of Paul Sluarczyk.

    


    “Law” shall mean any statute,
law (including common law), constitution, treaty, ordinance, directive, code,
order, decree, judgment, rule, regulation and any other binding requirement or
determination of any Governmental Authority.

    


    “Lien” shall mean any lien,
claim, charge, security interest, option, pledge, right of first refusal, other
legal or equitable encumbrances, agreements, voting trusts, proxies or other
agreements or restrictions (other than restrictions imposed by applicable
securities laws).

    


    “Material Adverse Effect”
shall mean, when used in connection with the Company, any fact, event, change,
circumstance or effect that is, or is reasonably likely to be, materially
adverse to the business, assets, revenues, liabilities, financial condition or
results of operations of the Company, taken as a whole, other than any fact,
event, change, circumstance or effect relating to, arising out of, or resulting
from (a) events affecting the United States or global economy or capital or
financial markets generally, unless such events affect the Company
disproportionately, (b) changes in conditions in the industries in which the
Company or its customers operate, unless such changes affect the Company
disproportionately, (c) changes in Laws, unless such changes affect the Company
disproportionately, (d) earthquakes, hurricanes, tornadoes or similar
catastrophes, or acts of war, sabotage, terrorism, military action or any
escalation or worsening thereof whether commenced before or after the date
hereof, and whether or not pursuant to the declaration of national emergency or
war or (e) this Agreement, the announcement thereof, the transactions
contemplated hereby and the identity or involvement by Buyer or its
affiliates.

    


    “Net Working Capital” shall
mean Current Assets minus Current Liabilities minus any Indebtedness of the
Company (excluding Taxes for which Seller is obligated to provide
indemnification pursuant to Article VIII).

     

    
      
        
        

      

      
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    “Order” shall mean any award,
injunction, judgment, decree, order, ruling, subpoena or verdict or other
decision issued, promulgated or entered by or with any Governmental
Authority.

    


    “Permitted Liens” means (a)
mechanic’s, materialmen’s and similar liens, (b) liens for Taxes not yet due and
payable or being contested in good faith by appropriate proceeding; (c) zoning,
building and other land use laws imposed by any Governmental Authority and (d)
easements, covenants, conditions, restrictions and other similar matters of
record affecting real property title and such other real property title defects
which would not be reasonably expected to have a Material Adverse
Effect.

    


    “Person” shall mean an
individual, a corporation, a partnership, a limited liability company, a trust,
an unincorporated association, a Governmental Authority or any agency,
instrumentality or political subdivision of a Governmental Authority, or any
other entity or body.

    


    “Transaction Documents” shall
mean this Agreement and the Services Agreement.

    


    9.2. Termination and
Abandonment.

    


    (a) General. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any
time, but not later than the Closing Date:

    


    (i) by mutual written consent of Buyer
and Seller; or

    


    (ii) by either Buyer or Seller if an
Order is issued that prohibits the consummation of the Purchase and such Order
is final and non-appealable; provided, however, that the party seeking to
terminate this Agreement pursuant to this clause (ii) shall have used its best
efforts to have such Order vacated or denied; or

    


    (iii) by either Buyer or Seller if the
Closing shall not have been consummated on or before June 1, 2009; provided that
if the Closing shall not occur on or before such date due to the act or omission
of, or breach of representation, warranty, covenant or agreement hereunder by,
Seller or Buyer, then that party may not terminate this Agreement pursuant to
this clause (iii); or

    


    (iv) by either Buyer or Seller if the
approval of this Agreement by the Required Seller Stockholders shall not have
been obtained; provided that the right to terminate this Agreement under this
Section 9.2(a)(iv) shall not be available to Seller if Seller is in breach of
its obligations under Sections 4.15 and the first sentence of Section 4.17;
or

    


    (v) by Buyer if there has been a
violation or breach by Seller of any covenant, representation or warranty
contained in this Agreement which has prevented the satisfaction of any
condition to the obligations of Buyer set forth in Sections 5.2(a) or 5.2(b) and
such violation or breach has not been waived by Buyer; provided, however, Buyer
has notified Seller of the respective breach and such breach has continued
without cure for a period of twenty (20) days after delivery of such notice of
breach, and there is a reasonable likelihood that such breach will result in an
inability of Seller to satisfy the conditions set forth in Sections 5.2(a) or
5.2(b); or

     

    
      
        
        

      

      
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    (vi) by Seller if there has been a
violation or breach by Buyer of any covenant, representation or warranty
contained in the Agreement which has prevented the satisfaction of any condition
to the obligations of Seller set forth in Section 5.3(a) or 5.3(b) and such
violation or breach has not been waived by Seller; provided, however, Seller has
notified Buyer of the respective breach and such breach has continued without
cure for a period of twenty (20) days after delivery of such notice of breach,
and there is a reasonable likelihood that such breach will result in an
inability of Buyer to satisfy the conditions set forth in Sections 5.3(a) or
5.3(b);

    


    (b) Procedure Upon Termination.
In the event of the termination and abandonment of this Agreement, written
notice thereof shall promptly be given to the other party hereto and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned without further action by any of the parties hereto; provided,
however, that nothing herein shall relieve any party from liability for any
breach hereof and, provided, further, that Buyer shall promptly deliver to
Seller all documents, work paper and other materials of Seller and the Company
related to the transactions contemplated hereby, whether or not obtained before
or after the execution hereof.

    


    (c) Survival of Certain
Provisions. Only the respective obligations of the parties hereto
pursuant to Sections 4.1(c), 4.4 and this Article IX shall survive any
termination of this Agreement.

    


    9.3. Fees and Expenses. Whether or
not the transactions contemplated hereby are consummated, except as expressly
provided herein, each of the parties hereto shall pay its own fees and expenses
incident to the negotiation, preparation and execution of this Agreement,
including attorneys’, accountants’ and other advisors’ fees and the fees and
expenses of any broker, finder or agent retained by such party in connection
with the transactions contemplated by this Agreement; provided, however, that
Seller shall pay all of the expenses related to printing, filing and mailing the
Proxy Statement; provided, further, that if the transactions contemplated hereby
are consummated, (a) the Seller shall pay all pre-Closing fees and expenses of
the Company, if any and (b) the Company shall pay all fees and expenses of
Buyer. Notwithstanding the foregoing, if this Agreement is terminated pursuant
to Section 9.2(a)(iv), then Seller shall pay to Buyer, in cash by wire transfer
of immediately available funds to an account designated by Buyer, within five
(5) Business Days following such termination, all of Buyer’s reasonable
out-of-pocket expenses (including all fees and expenses of counsel, accountants,
investment bankers, financing sources, experts and consultants) incurred by or
on behalf of Buyer in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation of the Proxy Statements, the solicitation of the vote of the
Required Seller Stockholders, financing and all other matters relating to the
closing of the Purchase; provided that such payment shall in no event exceed
Twenty Thousand Dollars ($20,000) in the aggregate.

     

    
      
        
        

      

      
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    9.4. Notices. All notices,
requests, demands, waivers and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed, certified or registered mail with
postage prepaid, or sent by telegram or facsimile, as follows:

    


               (a)           if
to Seller, to it at:

    


    Datameg
Corporation

    2150
South 1300 East, Suite 500

    Salt Lake
City, Utah 84106

    


    Facsimile:
(866) 739-3945

    Attention:
James Murphy

    


    with a
copy (which shall not constitute notice) to:

    


    Paul
Michael Vuksich, Esq.

    582
Market Street, Suite 2001

    San
Francisco, California 94104

    


    Facsimile:
(415) 788-9949

    


               (b)           if
to Buyer, to it at:

    


    Blue
Earth Solutions, Inc.

    13511
Granville Ave.

    Clermont,
Fl 34711

    


    Attention:
Paul Sluarczyk

    Facsimile:
(352) 729-0149

    


    with a
copy (which shall not constitute notice) to:

    


    *

    


    or to
such other person or address as a party shall specify by notice in writing to
the other parties. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of personal
delivery or on the third Business Day after the mailing thereof or, in the case
of notice by telecopier, when receipt thereof is confirmed by
telephone.

    


    9.5. Entire Agreement. This
Agreement (including the Schedules and Exhibits hereto), the Confidentiality
Agreement and the other Transaction Documents constitute the entire agreement
between the parties hereto and supersede all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof.

     

    
      
        
        

      

      
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    9.6. No Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. Other than Section 8.1 and
Section 8.2, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

    


    9.7. Assignability. This Agreement
shall not be assigned by any of the parties hereto without the prior written
consent of the other parties; provided that Buyer may, without the prior written
consent of Seller, assign all of its rights hereunder to any Person who acquires
all or substantially all of the business and assets of the Buyer or any of its
subsidiaries, any its affiliates and to any financial institution, lender or
investor providing to Buyer debt or equity financing in connection with the
Purchase; provided that, notwithstanding any such assignment, Buyer shall remain
liable to perform all of its obligations hereunder, including without limitation
the obligations to fund the full amount of the Purchase Price.

    


    9.8. Amendment and Modification;
Waiver. Subject to applicable law, this Agreement may be amended,
modified and supplemented only by a written instrument authorized and executed
on behalf of each of the parties hereto at any time prior to the Closing Date
with respect to any of the terms contained herein. No waiver by any party of any
of the provisions hereof shall be effective unless explicitly set forth in
writing and executed by the party so waiving. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any representations, warranties, covenants, or agreements contained herein, and
in any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.

    


    9.9.  Public Announcements. Unless
otherwise required by law and absent each Party’s consent, prior to the Closing
Date, no news release or other public announcement pertaining to the
transactions contemplated by this Agreement will be made by or on behalf of any
party or their affiliate, and each party shall cause its affiliates not to make
such release or announcement. Prior to issuing a press release or other public
announcement required by law with respect to the execution and delivery of or
the transactions contemplated by this Agreement, Buyer and Seller shall consult
with each other and each party shall have reasonable opportunity to comment on
such press release, and prior to issuing a press release or other public
announcement with respect to the Closing, Buyer and Seller shall agree on the
form of such press release or other public announcement.

    


    9.10. Section Headings; Table of
Contents. The section headings contained in this Agreement and the Table
of Contents to this Agreement are inserted for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.

     

    
      
        
        

      

      
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    9.11. Severability. If any
provision of this Agreement shall be declared by any court of competent
jurisdiction to be illegal, void or unenforceable, all other provisions of this
Agreement shall not be affected and shall remain in full force and
effect.

    


    9.12. Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, and all of which together shall be deemed to be one and the same
instrument.

    


    9.13. Enforcement. The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State of Delaware,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any state or federal court sitting in the State
of Delaware in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction or venue by motion or other request
for leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than such courts sitting in the State of
Delaware.

    


    9.14. Waiver of Jury Trial. THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY
AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY
AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

    


    9.15. Governing Law. This Agreement
(including any claim or controversy arising out of or relating to this
Agreement) shall be governed by, and construed in accordance with, the laws of
the State of Delaware without regard to conflict of law principles that would
result in the application of any law other than the law of the State of
Delaware.

    


    9.16. Sophistication of the Parties;
Representation by Counsel. Each party hereto hereby acknowledges and
agrees that it has consulted legal counsel in connection with the negotiation of
this Agreement and that it has bargaining power equal to that of the other
parties in connection with the negotiation and execution of this Agreement.
Accordingly, the parties agree the rule of contract construction to the effect
that an agreement shall be construed against the draftsman shall have no
application in the construction or interpretation of this Agreement. Buyer
further acknowledges that (a) Seller and/or its affiliates have been, and may
be, represented by the law firm of Paul Michael Vuksich, Esq. in connection with
this Agreement and the transactions contemplated hereby, and (b) Buyer (on its
own behalf and as duly authorized representative of its affiliates) (i) consents
without qualification to the continued representation of Seller and/or its
affiliates by such firm in connection with all such matters, notwithstanding any
past, current or future representation by such firm of any of Buyer or its
affiliates, and (ii) agrees that any such representation by such firm of Seller
and/or its affiliates shall not constitute a breach of any duty (if any) owed by
such firm to Buyer or its affiliates.

    


    
      
        
        

      

      
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    9.17. Interpretation.

    


    (a) The meaning assigned to each term
defined herein shall be equally applicable to both the singular and the plural
forms of such term and vice versa, and words denoting either gender shall
include both genders as the context requires. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding
meaning.

    


    (b) The terms “hereof”, “herein” and
“herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement.

    


    (c) When a reference is made in this
Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference
is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement
unless otherwise specified.

    


    (d) The word “include”, “includes”, and
“including” when used in this Agreement shall be deemed to be followed by the
words “without limitation”, unless otherwise specified.

    


    (e) Reference to any Law means such Law
as amended, modified, codified, replaced or reenacted, and all rules and
regulations promulgated thereunder.

    


    (f) Reference to “days” other than
Business Days shall be construed to refer to calendar days.

    


    IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.

    


    ***
SIGNATURE PAGE IS THE NEXT PAGE ***

     

    
      
        
        

      

      
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    ***
SIGNATURE PAGE ***

    


    


    
      
        	
                Datameg
      Corporation

                 

                 

                 

                By:
      /s/ James
      Murphy

                       James
      Murphy, President and CEO

              	
                Blue
      Earth Solutions, Inc.

                 

                 

                 

                By:
      /s/ Paul
      Slusarczyk

                       Paul
      Sluarczyk, President

              
	 
      	 
      
	
                American
      Marketing & Sales, Inc.

                 

                 

                By:
      /s/ Leonard J.
      Tocci

                       Leonard
      J. Tocci, President

              	
                Principal
      Shareholders

                 

                 

                By:
      /s/ Leonard J.
      Tocci

                       Leonard
      J. Tocci, as their
Representative