ex10_2.htm


    
      

    

    Exhibit
10.2

     

    
      AGREEMENT
AND PLAN OF MERGER

      


      BY AND
AMONG

      


      TWL
CORPORATION,  

      A NEVADA
CORPORATION,

      


      AND

      


      TWL
KNOWLEDGE GROUP, INC.

      A
DELAWARE CORPORATION,

      


      ON THE
ONE HAND,

      


      AND

      


      DIVERGENT
ENTERTAINMENT, INC.,

      A
MINNESOTA CORPORATION

      


      AND

      


      DANIEL
HAMMETT,

      


      ON THE
OTHER HAND

      


      


      DATED AS
OF FEBRUARY 25, 2008


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      AGREEMENT
AND PLAN OF MERGER

      


      This
AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made
and entered into as of February 25, 2008, by and among TWL Corporation, a Nevada
corporation (“Parent”), and TWL
Knowledge Group, Inc., a Delaware corporation and wholly owned subsidiary of
Parent (“Merger
Sub”), and Divergent Entertainment, Inc., a Minnesota corporation (the
“Company”), and
Daniel Hammett (“Selling
Stockholder”).  Parent, Selling Stockholder, Merger Sub and the
Company are collectively referred to herein as the “Parties,” and each is
a “Party.”  Capitalized
terms used and not otherwise defined herein have the meanings set forth in
Article 1.

      


      RECITALS

      


      WHEREAS,
the Boards of Directors of Parent, Merger Sub and the Company have each
determined that it is the best interests of their respective corporations and
stockholders that Parent, Merger Sub and the Company enter into a business
combination transaction;

      


      WHEREAS,
the Boards of Directors of each of Parent, Merger Sub and the Company have
adopted and approved, as the case may be, this Agreement, the merger of the
Company with and into Merger Sub (the “Merger”) in
accordance with the provisions of the Delaware General Corporations Act (the
“DGCL”), and
the terms and conditions set forth herein;

      


      WHEREAS,
the Board of Directors of the Company has determined to recommend to the
Company’s stockholders the approval and adoption of this Agreement and the
Merger;

      


      WHEREAS,
the Selling Stockholder is the sole stockholder of the Company and will benefit
from the transactions contemplated herein;

      


      WHEREAS,
for U.S. federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), and that this
Agreement shall constitute a plan of reorganization within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the Treasury Regulations and each of
Parent, Merger Sub, and the Company will be a party to a reorganization within
the meaning of Section 368(b) of the Code; and

      


      WHEREAS,
in connection with the Merger, the Parties desire to make certain
representations, warranties, covenants and agreements and also to prescribe
various conditions to the Merger, upon the terms and subject to the conditions
contained herein.

      


      NOW,
THEREFORE, in consideration of the covenants, promises, representations and
warranties set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:

      


      ARTICLE
1


      DEFINITIONS

      


      1.1       
    Certain
Definitions.  The following terms shall, when used in this
Agreement, have the following meanings:


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      “Affiliate” means,
with respect to any Person: (i) any Person directly or indirectly owning,
controlling or holding with power to vote ten percent (10%) or more of the
outstanding voting securities of such other Person (other than passive or
institutional investors); (ii) any Person ten percent (10%) or more of whose
outstanding voting securities are directly or indirectly owned, controlled or
held with power to vote, by such other Person; (iii) any Person directly or
indirectly controlling, controlled by or under common control with such other
Person; and (iv) any officer, director or partner of such other Person.
“Control” for the foregoing purposes shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities or
voting interests, by contract or otherwise;

      


      “Agreement” shall have
the meaning set forth in the Recitals of this Agreement;

      


      “Alternative
Acquisition” shall have the meaning set forth in Section 5.9 of this
Agreement;

      


      “Ancillary Agreements”
means the Hammett Employment Agreement and the Disclosure Schedules to this
Agreement;

      


      “Bankrupt” means, with
respect to any person or entity, such person or entity (a) that (i) makes an
assignment for the benefit of creditors; (ii) files a voluntary petition in
bankruptcy; (iii) is adjudged a bankrupt or insolvent, or has entered against
him or it an order for relief, or is declared insolvent in any bankruptcy or
insolvency proceedings; (iv) files a petition or answer seeking for the person
or entity a reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation; (v) files
an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the person or entity in a proceeding of
the type described in subclauses (i) through (iv) of this clause (a); or (vi)
seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or
liquidator of the person’s or of all or any substantial part of the person’s or
entity’s properties; or (b) against whom, a proceeding seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any law has been commenced and one hundred twenty (120) days have
expired without dismissal thereof or with respect to whom, without the person’s
or entity’s consent or acquiescence, a trustee, receiver, or liquidator of the
person  or entity or of all or any substantial part of the person’s or
entity’s properties has been appointed and ninety (90) days have expired without
the appointment having been vacated or stayed, or ninety (90) days have expired
after the date of expiration of a stay, if the appointment has not previously
been vacated;

      


      “Benefit Arrangement”
means any employment, consulting, severance or other similar contract, plan,
arrangement or policy, and each plan, arrangement (written or oral), program,
agreement or commitment providing for insurance coverage (including any
self-insured arrangements), workers’ compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits,
life, health, disability or accident benefits or for deferred compensation,
profit-sharing bonuses, stock options, stock purchases or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
which (A) is not a Welfare Plan, Pension Plan or Multi-employer Plan, and (B) is
entered into, maintained, contributed to or required to be contributed to, by
the Company or an ERISA Affiliate or under which the Company or any ERISA
Affiliate may incur any liability;


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      “Business” shall mean
the development, production, publishing, marketing, distribution, license and
sale of computer products throughout the world;

      


      “Business Day” means
any day other than Saturday, Sunday or a day on which banking institutions in
Dallas, Texas, are required or authorized to be closed;

      


      “Certificate of
Merger” shall have the meaning set forth in Section 2.3 of this
Agreement;

      


       “Claim” shall have the
meaning set forth in Section 8.4 of this Agreement;

      


      “Claim Notice” shall
have the meaning set forth in Section 8.4 of this Agreement;

      


      “Closing” shall have
the meaning set forth in Section 2.2 of this Agreement;

      


      “Closing Date” shall
have the meaning set forth in Section 2.2 of this Agreement;

      


       “Company” shall have
the meaning set forth in the preamble of this Agreement;

      


      “Company
Certificate(s)” shall have the meaning set forth in Section 2.5(b) of
this Agreement;

      


      “Company Common Stock”
shall have the meaning ascribed to it in Section 2.5(a) of this
Agreement;

      


       “Company Financial
Documentation” shall mean the Company’s complete financial records
including, but not limited to, balance sheets, cash flow statements, expense
ledgers, bank statements, documentation of cash transactions and expenses, and
bookkeeping records, if and as applicable;

      


      “Company Indemnified
Parties” shall have the meaning set forth in Section 8.2 of this
Agreement;

      


      “Contract” means any
agreement, contract, note, loan, evidence of indebtedness, purchase order,
letter of credit, indenture, security or pledge agreement, covenant not to
compete, license, instrument, commitment, obligation, promise or undertaking
(whether written or oral and whether express or implied) to which the Company is
a party or is bound and which relates to the Business;

      


      “DEID” means the
separate DEI business division of Merger Sub, or whatever other entity Parent
designates to manage the assets acquired from DEI, that shall include all of the
business and assets merged into Merger Sub from DEI in the Merger.

      


      “DEID Cost of Goods
Sold” shall include manufacturing and distribution costs for DEID
products sold and DEID programs licensed, operating costs related to DEID
product support service centers and DEID product distribution centers, costs
incurred to support and maintain Internet-based DIED products and services,
warranty costs, inventory write-downs, costs associated with the delivery of
DEID consulting services, costs associated with promoting, selling and marketing
the DEID products (including fees and costs related to advertising, trade shows
and other trade events, production of collateral materials and market research,
and other costs related to the marketing and sale of the products, and an
allocation for marketing personnel costs associated with DEID-related services),
and DEID Research and Development Expenses.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      “DEID Expense
Allocation” shall mean the allocation of Merger Sub and Parent operating
expenses, including general and administrative-related, facilities-related,
indirect employee and consultant and other operating expenses, equal to 4% of
the DEID Revenue calculated in accordance with GAAP, but no less than $400,000
on an annual basis, and calculated commencing on January 9, 2008.

      


      “DEID Gross Profit”
means the DEID Gross Sales for goods and services provided by DEID less DEID
Cost of Goods Sold, DEID Expense Allocation, and direct DEID employee and
consultant costs (including base salary, quarterly payments and bonuses paid to
Selling Stockholder) calculated commencing on January 9, 2008, and calculated in
accordance with GAAP; provided, however, quarterly payments and bonuses paid to
Selling Stockholder shall only be included in the calculation of “DEID Gross
Profit” for the first six (6) months from the Closing Date, thereafter, the
amount, if any, of such quarterly payments and bonuses shall be negotiated in
good faith between Parent and Selling Stockholder to reflect Selling
Stockholder’s ongoing responsibilities with respect to Parent, Merger Sub and
DEID.

      


      “DEID Gross Profit
Margin” shall be a percentage calculated by dividing (i) DEID Gross
Profit by (ii) DEID Gross Sales.

      


      “DEID Net Sales” means
DEID Gross Sales minus returns, discounts and allowances attributable to DEID,
calculated in accordance with GAAP.

      


      “DEID Gross Sales” or
“DEID Gross Product
Sales” means the total DEID sales, after deducting for DEID customer
discounts, allowances or returns, attributable to DEID, calculated in accordance
with GAAP.

      


      “DEID Research and
Development Expenses” shall include payroll, employee benefits,
stock-based compensation expense, and other headcount-related expenses
associated with product development, as well as third-party development and
programming costs, localization costs incurred to translate software for
international markets, and the amortization of purchased software code and
services content.

      


      “DEID Revenue” shall
mean the appropriate amount from DEID Gross Sales for goods sold or services
provided by DEID, calculated annually in accordance with GAAP.

      


      “DGCL” shall have the
meaning set forth in the Recitals of this Agreement;

      


      “Effective Time” shall
have the meaning set forth in Section 2.3 of this Agreement;

      


      “Effective Date” shall
have the meaning set forth in Section 2.3 of this Agreement;


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      “Employee Plans” means
all Benefit Arrangements, Pension Plans and Welfare Plans;

      


      “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended;

      


      “Family Member” means,
with respect to any individual (i) the individual, (ii) the individual’s spouse,
(iii) any other natural Person who is related to the individual or the
individual’s spouse within the second degree (including adopted children) and
(iv) any other natural Person who resides with such individual;

      


      “GAAP” means U.S.
generally accepted accounting principles consistently applied, as in effect from
time to time;

      


      “Hammett Employment
Agreement” shall have the meaning set forth in Section 5.1 of this
Agreement;

      


      “Indemnification
Threshold” shall have the meaning set forth in Section 8.3 of this
Agreement;

      


      “Intellectual
Property” means all trademarks and trademark rights, trade names and
trade name rights, service marks and service mark rights, service names and
service name rights, patents and patent rights, utility models and utility model
rights, copyrights, mask work rights, brand names, trade dress, product designs,
product packaging, business and product names, logos, slogans, rights of
publicity, trade secrets, inventions (whether patentable or not), invention
disclosures, improvements, processes, formulae, industrial models, processes,
designs, specifications, technology, methodologies, computer software (including
all source code and object code), firmware, development tools, flow charts,
annotations, all Web addresses, sites and domain names, all data bases and data
collections and all rights therein, any other confidential and proprietary right
or information, whether or not subject to statutory registration, and all
related technical information, the information set forth in manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, utility models, trademarks, service marks and
copyrights, and the right to sue for past infringement, if any, in connection
with any of the foregoing;

      


      “Knowledge” means and
an individual shall be deemed to have “Knowledge” of a particular fact or other
matter if such individual is actually aware of such fact or other
matter.  A Person (other than an individual and other than the Selling
Stockholder) shall be deemed to have “Knowledge” of a particular fact or other
matter if any individual who is serving, or who has at any time served as a
director or officer of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.

      


      “Laws” means any
statute, ordinance, law, rule, regulation, code, injunction, judgment, order,
decree, ruling, or other requirement enacted, adopted or applied by any
Regulatory Authority, including judicial decisions applying common law or
interpreting any other Law;

      


      “Leases” means all of
the existing leases of the Company listed on Schedule 3.11(a)
hereto;


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      “Legal Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation or suit
(whether civil, criminal, administrative, investigative or informal) commenced,
brought, conducted or heard by or before, or otherwise involving, any Regulatory
Authority or arbitrator;

      


      “Liabilities” means
any direct or indirect liability, indebtedness, obligation, commitment, expense,
claim, deficiency, guaranty or endorsement of or by any Person of any type,
whether known or unknown, accrued, absolute, contingent, matured, unmatured,
liquidated or unliquidated or otherwise;

      


      “Licensed Proprietary
Rights” shall have the meaning set forth in Section 3.10(a) of this
Agreement;

      


      “Lien” means any
material mortgage, pledge, lien, encumbrance, charge, security interest,
security agreement, conditional sale or other title retention agreement,
limitation, option, assessment, restrictive agreement, restriction, adverse
interest, restriction on transfer or exception to or material defect in title or
other ownership interest (including but not limited to restrictive covenants,
leases and licenses);

      


      “Losses” means any
claim, liability, obligation, loss, damage, assessment, penalty, judgment,
settlement, cost and expense, including costs attributable to the loss of the
use of funds to the date on which a payment is made with respect to a matter of
indemnification under Article 8 hereof, and including reasonable attorneys’ and
accountants’ fees and disbursements incurred in investigating, preparing,
defending against or prosecuting any claim;

      


      “Material Adverse
Effect” or “Material Adverse
Change” means a material adverse effect on (i) the assets, liabilities,
properties or business of the Parties, (ii) the validity, binding effect or
enforceability of this Agreement or the Ancillary Agreements or (iii) the
ability of any Party to perform its obligations under this Agreement and the
Ancillary Agreements; provided, however, that none of
the following shall constitute a Material Adverse Effect on the Company: (i) the
filing, initiation and subsequent prosecution, by or on behalf of stockholders
of any Party, of litigation that challenges or otherwise seeks damages with
respect to the Merger, this Agreement and/or transactions contemplated thereby
or hereby, (ii) occurrences due to a disruption of a Party’s business as a
result of the announcement of the execution of this Agreement or changes caused
by the taking of action required by this Agreement, (iii) general economic
conditions, or (iv) any changes generally affecting the industries in which a
Party operates;

      


      “Merger” shall have
the meaning set forth in the Recitals of this Agreement;

      


      “Merger Cash
Consideration” shall have the meaning set forth in Section 2.5(e) of this
Agreement;

      


      “Merger Consideration”
shall have the meaning set forth in Section 2.5(f) of this
Agreement;

      


      “Merger Stock
Consideration” shall have the meaning set forth in Section 2.5(a) of this
Agreement;

      


      “Merger Sub” shall
have the meaning set forth in the preamble to this Agreement;


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      “Multiemployer Plan”
means any “multiemployer plan” as defined in Section 3(37) of
ERISA.

      


      “Order” means any
writ, judgment, decree, ruling, injunction or similar order of any Regulatory
Authority (in each such case whether preliminary or final);

      


      “Ordinary Course of
Business” or “ordinary course” or
any similar phrase means the usual and ordinary course of business of the
Company, consistent with its past custom and practice;

      


      “Owned Proprietary
Rights” shall have the meaning set forth in Section 3.10(a) of this
Agreement;

      


      “Parent” shall have
the meaning set forth in the preamble to this Agreement;

      


      “Parent Common Stock”
shall have the meaning set forth in Section 2.5(a) of this
Agreement;

      


      “Parent Indemnified
Parties” shall have the meaning set forth in Section 8.2 of this
Agreement;

      


      “Party” or “Parties” shall have
the meaning set forth in the preamble to this Agreement;

      


      “Pension Plan” means
any “employee pension benefit plan” as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan) which the Company or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or has
maintained, administered, contributed to or was required to contribute to, or
under which the Company or any ERISA Affiliate may incur any
liability;

      


      “Permit” means any
license, franchise, certificate, declaration, waiver, exemption, variance,
permit, consent, approval, registration, authorization, qualification or similar
right granted by a Regulatory Authority;

      


      “Person” means any
natural person, individual, firm, corporation, including a non-profit
corporation, partnership, trust, unincorporated organization, association,
limited liability company, labor union, Regulatory Authority or other
entity;

      


      “Regulatory Authority”
means: any (i) federal, state, local, municipal or foreign government; (ii)
governmental or quasi-governmental authority of any nature (including without
limitation any governmental agency, branch, department, official,
instrumentality or entity and any court or other tribunal; (iii) multi-national
organization or body; or (iv) body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulation or taxing
authority or power of any nature;

      


      “Representatives”
shall have the meaning set forth in Section 5.9 of this Agreement;

      


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


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      “Selling Stockholder”
shall have the meaning set forth in the preamble to this Agreement;

      


      “Stock Power” shall
have the meaning set forth in Section 2.7 of this Agreement;

      


      “Subsidiary” of a
specified Person means (a) any Person if securities having ordinary voting power
(at the time in question and without regard to the happening of any contingency)
to elect a majority of the directors, trustees, managers or other governing body
of such Person are held or controlled by the specified Person or a Subsidiary of
the specified Person; (b) any Person in which the specified Person and its
subsidiaries collectively hold a fifty percent (50%) or greater equity interest;
(c) any partnership or similar organization in which the specified Person or
subsidiary of the specified Person is a general partner; or (d) any Person the
management of which is directly or indirectly controlled by the specified Person
and its Subsidiaries through the exercise of voting power, by contract or
otherwise;

      


      “Surviving
Corporation” shall have the meaning set forth in Section 2.1 of this
Agreement;

      


      “Tangible Personal
Property” means all equipment, tools, fixtures, furniture, office
equipment, computer hardware, supplies, materials and other items of tangible
personal property (other than Inventory) of every kind owned or leased by the
Company (wherever located) and whether or not carried on its books) and related
to the Business, together with any express or implied warranty by the
manufacturers or sellers or lessors of any item or component part thereof and
all maintenance records and documents related thereto;

      


      “Taxes” means any U.S.
or non U.S. federal, state, provincial, local or foreign (i) income, corporation
gross income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, intangible property,
recording, occupancy, sales, use, transfer, registration, value added minimum,
ad valorem or excise tax, estimated or other tax of any kind whatsoever,
including any interest, additions to tax, penalties, fees, deficiencies,
assessments, additions or other charges of any nature with respect thereto,
whether disputed or not; and (ii) any liability for the payment of any amount of
the type described in (i) above;

      


      “Tax Returns” means
all federal, state, local, provincial and foreign tax returns, declarations,
reports, claims, schedules and forms for refund or credit or information return
or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof;

      


      “Transactions” shall
have the meaning set forth in Section 3.2 of this Agreement;

      


      “Welfare Plan” means
any “employee welfare benefit plan” as defined in Section 3(1) of ERISA
which the Company or any ERISA Affiliate maintains, administers, contributes to
or is required to contribute to, or under which the Company or any ERISA
Affiliate may incur any Liability.


      
        
           


        

        
          9

          
            

          

        

        
           


        

      


      ARTICLE
2

      THE
MERGER

      


      2.1     
      Merger.  Upon
the terms and conditions set forth in this Agreement, and in accordance with the
provisions of the DGCL, at the Effective Time (as defined below), (i) the
Company shall be merged with and into Merger Sub, (ii) the separate corporate
existence of the Company shall cease, (iii) Merger Sub, as the surviving
corporation in the Merger, shall continue its existence under the laws of the
State of Delaware, and (iv) Merger Sub shall succeed to and assume the rights,
obligations, properties, rights, privileges, powers and franchises of the
Company.  Merger Sub, as the surviving corporation after the Merger,
is sometimes referred to herein as the “Surviving
Corporation.”

      


      2.2     
      Closing.  Unless
this Agreement has been terminated pursuant to the provisions of Article 9
hereof, and subject to the satisfaction or waiver of the conditions set forth in
Article 7of this Agreement, the closing of the Merger and other transactions
contemplated hereby (the “Closing”) shall take
place at the offices of the Parent located at 4101 International Parkway,
Carrollton, Texas 75007, or at such other place as Parent and the Company
mutually agree, at 10:00 a.m. local time on the later to occur of (a) February
25, 2008, or (b) the Business Day after the day on which the last of the closing
conditions set forth in Article 7 below has been satisfied or waived, or such
other date as Parent and the Company mutually agree upon in writing (the “Closing
Date”).

      


      2.3       
    Effective
Time.  Subject to the provisions of this Agreement, at the
Closing, the Parties shall cause the Merger to become effective by causing the
Surviving Corporation to execute and file in accordance with the relevant
provisions of the DGCL a certificate of merger with the Secretary of State of
the State of Delaware (the “Certificate of
Merger”), in the form attached hereto as Exhibit A, together
with any required related certificates, and shall make any other filings or
recordings required under the DGCL and, as applicable, the Minnesota Business
Corporations Act (“MBCA”). The Merger
shall become effective upon such filing, or at such later date and time as is
agreed to by Parent and the Company and set forth in the Certificate of Merger
(the date and time of such filing being the “Effective Time” and
the date upon which the Effective Time occurs, being the “Effective
Date”).  As soon as practicable on the Closing Date, Parent
will deliver the Merger Stock Consideration to the Selling Stockholder in
accordance with Section 2.5 hereof

      


      2.4       
    Effect of the
Merger.  At the Effective Time, in accordance with the DGCL,
the separate existence of the Company will cease and the Surviving Corporation
shall succeed, without further action, to all the property, assets, rights,
privileges, powers and franchises of every kind of the nature and description of
the Company.  All debts, liabilities and duties of Merger Sub and the
Company will become the debts, liabilities and duties of the Surviving
Corporation. As of the Effective Time, the Surviving Corporation will be a
wholly owned subsidiary of the Parent.

      


      2.5      
     Effect of Merger on Company
Common Stock; Merger Consideration.

      


      (a)      
     At the Effective Time (subject to Section
2.7 below), all 80,000 shares of common stock, $0.01 par value per share, of the
Company (the “Company
Common Stock”) issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger, automatically without any action on the
part of the holder thereof be converted , upon surrender of the certificates
representing each such share, if any, into 2,000,000 shares of the common stock,
$0.001 par value per share, of Parent (“Parent Common
Stock”)(the “Merger Stock
Consideration”).


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      (b)         
  At the Effective Time, all shares of Company Common Stock
shall automatically be cancelled and shall cease to exist, and each holder of a
certificate which previously represented any such share of Company Common Stock
(each, a “Company
Certificate” and, collectively, the “Company
Certificates”) shall cease to have any rights with respect thereto other
than the right to receive the Merger Consideration such holder is entitled to
receive pursuant to Section 2.5(a) hereof, to be issued or paid in consideration
therefor upon surrender of such certificate in accordance with Section 2.7
hereof.

      


      (c)       
    At the Effective Time, all shares of Company
Common Stock held by the Company as treasury stock, if any, immediately prior to
the Effective Time shall automatically be cancelled and shall cease to exist,
and the Company shall cease to have any rights with respect
thereto.

      


      (d)       
    The Merger Stock Consideration shall be allocated
to and distributed wholly to the Selling Stockholder as the sole stockholder of
the Company.  For the avoidance of doubt, and notwithstanding anything
herein to the contrary, the securities issuable to the Selling Stockholder under
this Agreement, including, without limitation, the Merger Stock Consideration,
shall be unregistered shares of the Parent Common Stock issued in reliance upon
the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “1933 Act”) and
bearing a restrictive legend.  The Merger Stock Consideration shall be
subject to Parent Stock Restrictions as set forth on Exhibit
B.

      


      (e)    
       Subject to Sections 2.5(e)(iv)
and (v), and Section 6.4 below, the Selling Stockholder shall also receive cash
consideration in the aggregate amount of $1,000,000.00 (the “Merger Cash
Consideration”) paid as follows:

      


      (i)           
 Following the Effective Time, but no later than fourteen (14) days
following the Closing Date, Parent shall pay to the Selling Stockholder the cash
amount of $150,000.00 (the “Initial Cash
Payment”);

      


      (ii)         
  Following payment of the Initial Cash Payment to the Selling
Stockholder, Parent shall pay to the Selling Stockholder an aggregate cash
amount of $100,000.00 in three (3) equal quarterly payments of $33,333.33, each
within fifteen (15) Business Days following each of June 30, 2008, September 30,
2008, and December 31, 2008 (each such payment, a “Balance First Year Cash
Payment”, and collectively, the “Balance First Year Cash
Payments”);

      


      (iii)           Following
payment of the Balance First Year Cash Payments to the Selling Stockholder,
parent shall pay to the Selling Stockholder $62,500.00 within fifteen (15)
Business Days following each of March 31, 2009, June 30, 2009, September 30,
2009, December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010,
December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011, and
December 31, 2011 for a total of $750,000.00 paid over twelve (12) fiscal
quarters (each, a “Quarterly Cash
Payment” and collectively, the “Quarterly Cash
Payments”);


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      (iv)           Notwithstanding
the foregoing, in the event Selling Stockholder’s employment with Parent (or a
subsidiary thereof) pursuant to the Hammett Employment Agreement is terminated
without “Cause” or Selling Stockholder voluntarily terminates his employment
with Parent (or a subsidiary thereof) for “Good Reason” (each as defined in the
Hammett Employment Agreement), Balance First Year Cash Payments or Quarterly
Cash Payments shall continued to be paid for a period of eighteen (18) months or
the remaining term of the Agreement, whichever is shorter; and

      


      Notwithstanding
the foregoing, in the event Selling Stockholder’s employment with Parent (or a
subsidiary thereof) pursuant to the Hammett Employment Agreement is terminated
for “Cause” or Selling Stockholder voluntarily terminates his employment with
Parent (or a subsidiary thereof) without “Good Reason” (each as defined in the
Hammett Employment Agreement), or Selling Stockholder’s employment terminates
due to Selling Stockholder’s death or disability, then no unpaid Balance First
Year Cash Payments or Quarterly Cash Payments shall be due or payable to Selling
Stockholder hereunder on or following the date of termination of Selling
Stockholder’s employment.

      


      (f)      
      The Merger Stock Consideration and
the Merger Cash Consideration shall collectively be referred to as the “Merger Consideration”
herein.

      


      2.6       
    Effect of Merger on Common
Stock of Merger Sub.  At the Effective Time, each share of
common stock of Merger Sub issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holders thereof, be converted into and become one share of validly
issued, fully paid and non-assessable share of common stock of the Surviving
Corporation.

      


      2.7       
    Delivery of
Certificates.  At and after the Effective Time and subject to
the Parent Stock Restrictions set forth on Exhibit B, Parent
will make available, and the Selling Stockholder shall be entitled to receive,
(i) upon surrender to Parent or its Representatives of the Company Certificates
for cancellation and an assignment separate from certificate in the form
approved by Parent (the “Stock Power”), the
allocable share of the Merger Stock Consideration, and upon such surrender of
the Company Certificates, and delivery by Parent of the aggregate Merger Stock
Consideration in exchange therefor, such shares shall forthwith be
cancelled.  Until surrendered or delivered as contemplated by this
Section 2.7, each Company Certificate will be deemed at any time after the
Effective Time for all purposes to evidence only the right to receive upon such
surrender the Merger Stock Consideration.

      


      2.8      
     Stock Transfer
Books.  From and after the Effective Time, the stock transfer
books of the Company will be closed, and there will be no further registration
or transfers of Company Common Stock thereafter on the records of the
Company.

      


      2.9     
      No Fractional
Shares.  No certificate or scrip representing fractional shares
of Parent Common Stock shall be issued upon the surrender of Company
Certificates for exchange, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of
Parent..


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      2.10          Lost, Stolen or Destroyed
Certificates.  In the event any Company Certificates are lost,
stolen or destroyed, Parent will issue in exchange for such lost, stolen or
destroyed Company Certificates, upon the making of an affidavit of that fact by
the holder thereof and the other deliveries required above, the applicable
Merger Consideration; provided, however, that the
Surviving Corporation may, in its sole discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or destroyed
Company Certificate to deliver an indemnity or bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against it
with respect to the Company Certificates alleged to have been lost, stolen or
destroyed.

      


      2.11          Charter Documents; Directors
and Officers.  Unless otherwise agreed by the Company and
Parent prior to the Closing, at and as of the Effective Time, without any
further action on the part of Parent, Merger Sub or the Company: (i) the
Certificate of Incorporation and the Bylaws of the Merger Sub as in effect
immediately prior to the Effective Time will be the Certificate of Incorporation
and Bylaws of the Surviving Corporation at and after the Effective Time until
thereafter amended as provided by applicable law and such Certificate of
Incorporation and Bylaws, as applicable; (ii) the directors of the Merger Sub
immediately prior to the Effective Time will continue to be the directors of the
Surviving Corporation from and after the Effective Time, until their successors
are elected and qualified or until their resignation or removal; (iii) the
officers of the Merger Sub immediately prior to the Effective Time shall
continue to serve in their respective offices of the Surviving Corporation from
and after the Effective Time, until their successors are elected or appointed
and qualified or until their resignation or removal.

      


      2.12          Taking of Necessary Action;
Further Action.  Each of Parent, Merger Sub and the Company
will take all such reasonable lawful action as may be necessary or appropriate
in order to effect the Merger in accordance with this Agreement as promptly as
practicable.  If, at any time after the Effective Time, any such
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all the property, rights, privileges, power and franchises of the
Company and Merger Sub, the officers and directors of the Company and Merger Sub
immediately prior to the Effective Time are fully authorized in the name of
their respective corporations or otherwise to take, and will take, all such
lawful and necessary action

      


      2.13          Reorganization
Treatment. For federal income tax purposes, the Merger is intended to
constitute a reorganization within the meaning of Section 368 of the
Code.  For the avoidance of doubt, and not withstanding anything
herein to the contrary, no Party represents, warrants or guarantees that the
Merger and the transactions contemplated by this Agreement will be treated by
any relevant Regulatory Authority as a reorganization within the meaning of
Section 368 of the Code.


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      ARTICLE
3

      REPRESENTATIONS
AND WARRANTIES OF THE

      COMPANY
AND THE SELLING STOCKHOLDER

      


      Except as
set forth on the disclosure schedules to this Agreement (the “Disclosure
Schedules”), the Company and the Selling Stockholder, jointly and
severally, represent and warrant to Parent that the statements contained in this
Article 3 are true, complete and correct as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Article 3, except in the case of representations and warranties
stated to be made as of the date of this Agreement or as of another date and
except for changes contemplated or permitted by this Agreement).

      


      3.1        
   Organization and
Qualification; Subsidiaries.

      


      (a)       
    The Company is duly organized, validly existing
and in good standing under the Laws of the jurisdiction in which it is organized
and has the requisite power and authority to carry on its business as now being
conducted.

      


      (b)    
       The Company is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) has not had and would not reasonably be expected to have a Material
Adverse Effect.

      


      (c)      
     The Company has delivered to Parent
complete and correct copies of its articles of incorporation and by-laws, in
each case as amended to the date hereof.

      


      (d)      
     The Company does not own, directly or
indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity.

      


      (e)      
     The Company has no
Subsidiaries.

      


      3.2       
    Authorization;
Enforceability.  The Company has the requisite power and
authority, and has taken all action necessary, to execute, deliver and perform
its obligations under this Agreement and any Ancillary Agreement to which it is
a party and each other agreement, document, instrument or certificate
contemplated by this Agreement and/or any Ancillary Agreement or to be executed
by the Company in connection with the consummation of the transactions
contemplated by this Agreement (the “Transactions”), and,
subject to approval of the stockholders of the Company, to consummate the
Transactions.  The execution and delivery by the Company of this
Agreement and any applicable Ancillary Agreement, and the consummation by the
Company of the Transactions contemplated hereby, and the performance by the
Company of its obligations hereunder, have been duly and validly authorized by
all necessary corporate action on the part of the Company, subject to adoption
of this Agreement by the Company’s stockholders, and no other action on the part
of the Company is required to authorize the execution, delivery and performance
of this Agreement and the consummation by the Company of the transactions
contemplated hereby.  This Agreement has been duly and validly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors’ rights
generally and the general principles of equity, regardless of whether asserted
in a proceeding in equity or at law.


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      3.3        
   Capitalization.

      


      (a)       
    The authorized capital stock of the Company as of
the date of this Agreement consists of 1,000,000 shares of Company Common Stock,
$0.01 par value per share, and no shares of preferred stock of the
Company.  As of the date of this Agreement, (i) there are 80,000
shares of Company Common Stock issued and outstanding, all held by Selling
Stockholder; and (ii) no shares of Company Common Stock have been reserved for
future issuance pursuant to the exercise of outstanding options or warrants.
Except as described above, as of the close of business on the day prior to the
date hereof, there were no shares of voting or non-voting capital stock, equity
interests or other securities of the Company authorized, issued, reserved for
issuance or otherwise outstanding.

      


      (b)      
     All outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid and non-assessable, and
not subject to, or issued in violation of, any preemptive, subscription or any
kind of similar rights. The Company has no outstanding shares of Company Common
Stock that are subject to a right of repurchase that will survive the
Merger.

      


      (c)    
       There are no bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth on Schedule 3.3(c) of
the Disclosure Schedules, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind (contingent or otherwise) to which the Company is a party or bound
obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of the Company or obligating the Company to issue, grant, extend or enter into
any agreement to issue, grant or extend any security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. The Company is not
subject to any obligation or requirement to provide funds for or to make any
investment (in the form of a loan or capital contribution) in any
Person.

      


      (d)    
       All of the issued and
outstanding shares of Company Common Stock were issued in compliance in all
material respects with all applicable federal and state securities
Laws.

      


      (e)      
     Except as set forth on Schedule 3.3(e) of
the Disclosure Schedules, there are no outstanding contractual obligations of
the Company to repurchase, redeem or otherwise acquire any shares of capital
stock (or options or warrants to acquire any such shares) or other security or
equity interests of the Company. Except as set forth on Schedule 3.3(e) of
the Disclosure Schedules, there are no stock-appreciation rights, security-based
performance units, phantom stock or other security rights or other agreements,
arrangements or commitments of any character (contingent or otherwise) pursuant
to which any Person is or may be entitled to receive any payment or other value
based on the revenues, earnings or financial performance, stock price
performance or other attribute of the Company or any of its assets or calculated
in accordance therewith of the Company or to cause the Company to file a
registration statement under the Securities Act, or which otherwise relate to
the registration of any securities of the Company.


      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      (f)         
   Except as set forth on Schedule 3.3(f) of
the Disclosure Schedules, there are no voting trusts, proxies or other
agreements, commitments or understandings to which the Company or, to the
Knowledge of the Company or Selling Stockholder, any of the stockholders of the
Company, is a party or by which any of them is bound with respect to the
issuance, holding, acquisition, voting or disposition of any shares of capital
stock or other security or equity interest of the Company.

      


      3.4       
    Non-contravention.
Except as set forth on Schedule 3.4 of the
Disclosure Schedules, the execution, delivery and performance of this Agreement
by the Company does not and, subject to obtaining stockholder adoption of this
Agreement, the consummation of the Transactions will not (a) contravene,
conflict with, or result in any violation or breach of any provision of the
articles of incorporation or by-laws of the Company, (b) contravene, conflict
with, or result in a violation or breach of any provision of any Law, (c)
require any consent or other action by any Person under, constitute a breach of
or default under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
the Company is entitled under any provision of any agreement or other instrument
binding upon the Company or any license, franchise, permit, certificate,
approval or other similar authorization affecting, or relating in any way to,
the assets or business of the Company or (d) result in the creation or
imposition of any Lien on any asset of the Company, which in the case of clauses
(b) or (d) above would have a Material Adverse Effect on the Company or on the
validity, binding effect or enforceability of this Agreement, any Ancillary
Agreement, or the ability of the Company to perform its obligations under this
Agreement or any applicable Ancillary Agreement.

      


      3.5     
      Consents and
Approvals.  Except as set forth on Schedule 3.5 of the
Disclosure Schedules, no consent, approval, authorization or order of,
registration or filing with, or notice to, any Regulatory Authority or any other
Person is necessary to be obtained, made or given by the Company in connection
with the execution, delivery and performance by the Company of this Agreement or
any applicable Ancillary Agreement or for the consummation by the Company of the
Transactions, except to the extent the failure to obtain any such consent,
approval, authorization or order or to make any such registration or filing
would not have a Material Adverse Effect on the Company or on the validity,
binding effect or enforceability of this Agreement or any Ancillary Agreement to
which the Company is a party, or the ability of the Company to perform its
obligations under this Agreement or any Ancillary Agreement.

      


      3.6        
   Books and
Records.  The Company has delivered to Parent true, correct and
complete copies of the Articles of Incorporation of the Company, including all
amendments thereto, and the Bylaws of the Company, including all amendments
thereto, each as currently in effect.  The Company has not, in any
manner that pertains to, or could affect, the Business, engaged in any
transaction, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in the
normally maintained Books and Records of the Company.


      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      3.7       
    Financial
Statements.  The Company has not prepared financial statements
and has not delivered financial statements to Parent.    The
Company Financial Documents to be delivered to Parent pursuant to Section 6.5(a)
shall fairly, fully and accurately present the financial condition and financial
history of the Company from the date of its inception through the date of
delivery of such Company Financial Documents to Parent.

      


      3.8       
    No Undisclosed
Liabilities.  Except as set forth on Schedule 3.8 of the
Disclosure Schedules, the Company has no Liabilities relating to the Business
due or to become due except  Liabilities relating to the Business
incurred in the Ordinary Course of Business (none of which relates to any
default under any Contract or Lease, breach of warranty, tort, infringement or
violation of any Law or Order or arose out of any Legal Proceeding) and none of
which would have a Material Adverse Effect.

      


      3.9      
     Taxes.

      


      (a)            Filing of Tax
Returns.   The Company has not filed a Tax Return through
the Closing Date.  No claim has ever been made against the Company or
its assets by an authority in a jurisdiction such that the Company is or may be
subject to taxation by that jurisdiction.

      


      (b)       
    Payment of
Taxes.  Except as set forth on Schedule 3.9(b) of
the Disclosure Schedules, all Taxes owed and due by the Company  as of
the date of this Agreement (whether or not shown on any Tax Return) have been
paid.

      


      (c)       
    Audits, Investigations,
Disputes or Claims.  Except as set forth on Schedule 3.9(c) of
the Disclosure Schedules, no deficiencies for Taxes are claimed, proposed or
assessed by any taxing or other governmental authority against the Company, and
there are no pending or, to the Knowledge of the Company or Selling Stockholder,
threatened audits, investigations, disputes or claims or other actions for or
relating to any Liability for Taxes with respect to the Company, and there are
no matters under discussion by or on behalf of the Company with any Regulatory
Authority, or known to the Company, with respect to Taxes that are likely to
result in an additional Liability for Taxes with respect to the
Company.  Audits of federal, state and local Tax Returns by the
relevant taxing authorities have been completed for the periods set forth on
Schedule 3.9(c)
of the Disclosure Schedules, and, except as set forth thereon, none of the
Company or any predecessor thereof has been notified that any taxing authority
intends to audit a Tax Return for any other period.  The Company has
not waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.  No
power of attorney granted by the Company with respect to any Taxes is currently
in force.

      


      (d)     
      Lien.  There
are no Liens for Taxes (other than for current Taxes not yet due and payable) on
any assets or capital stock of the Company.

      


      (e)      
     Tax
Elections.  All material elections with respect to Taxes
affecting the Company or any of its respective assets as of the Closing Date are
set forth on Schedule
3.9(e) of the Disclosure Schedules.  The Company has not: (i)
consented at any time under Section 341(f)(1) of the Code to have the provisions
of Section 341(f)(2) of the Code apply to any disposition of any of its assets;
(ii) agreed, and is not required, to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise; (iii) made an
election, and is not required, to treat any of its assets as owned by another
Person pursuant to the provisions of Section 168(f) of the Code or as tax-exempt
bond financed property or tax-exempt use property within the meaning of Section
168 of the Code; (iv) acquired, and does not own, any assets that directly or
indirectly secure any debt the interest on which is tax exempt under Section
103(a) of the Code; (v) made a consent dividend election under Section 565 of
the Code; or (vi) made any of the foregoing elections and is not required to
apply any of the foregoing rules under any comparable state or local Tax
provision.


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      (f)        
    Prior Affiliated
Groups.  The Company is not and has never been a member of an
affiliated group of corporations within the meaning of Section 1504 of the
Code.  The Company does not have any Liability for the Taxes of any
Person (i) under Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local or foreign law), (ii) as a transferee or successor, (iii) by
Contract, or (iv) otherwise.

      


      (g)       
    Tax Sharing
Agreements.  There are no agreements for the sharing of Tax
liabilities or similar arrangements (including indemnity arrangements) with
respect to or involving the Company or any of its assets or the Business, and,
after the Closing Date, neither the Company nor any of its assets or the
Business shall be bound by any such Tax-sharing agreements or similar
arrangements or have any Liability thereunder for amounts due in respect of
periods prior to the Closing Date.

      


      (h)     
      Partnerships and Single
Member LLCs.  Except as set forth on Schedule 3.9(h) of
the Disclosure Schedules, the Company (i) is not subject to any joint venture,
partnership, or other arrangement or contract which is treated as a partnership
for Tax purposes, (ii) does not own a single member limited liability company
which is treated as a disregarded entity, (iii) is not a shareholder of a
“controlled foreign corporation” as defined in Section 957 of the Code (or any
similar provision of state, local or foreign law) and (iv) is not a “personal
holding company” as defined in Section 542 of the Code (or any similar provision
of state, local or foreign law).

      


      (i)      
      No
Withholding.  The Company has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897 of the
Code.  The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third
party.  The transactions contemplated herein are not subject to the
tax withholding provisions of Section 3406 of the Code, or of Subchapter A of
Chapter 3 of the Code or of any other provision of law.

      


      (j)       
     International
Boycott.  The Company has not participated in and is not
participating in an international boycott within the meaning of Section 999 of
the Code.

      


      (k)     
      Permanent
Establishment.  Except as set forth on Schedule 3.9(k) of
the Disclosure Schedules, the Company does not have and has never had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States and such foreign
country.


      
        
           


        

        
          18

          
            

          

        

        
           


        

      


      (l)        
    Parachute
Payments.  Except as set forth on Schedule 3.9(l) of
the Disclosure Schedules, the Company is not a party to any existing Contract,
arrangement or plan that has resulted or would result (upon the Closing or
otherwise), separately or in the aggregate, in the payment of any “excess
parachute payments” within the meaning of Section 280(G) of the
Code.

      


      (m)           Tax
Shelters.  The Company has not participated in and the Company
is not now participating in, any transaction described in Section 6111(c) or (d)
of the Code or Section 6112(b) of the Code or the Treasury Regulations
thereunder, or in any reportable transaction described in such
regulations.

      


      3.10          Intellectual Property;
Software.

      


      (a)          
 Schedule
3.10(a)(i) of the Disclosure Schedules sets forth contains a true,
correct and complete list of all Intellectual Property owned by the Company (the
“Owned Proprietary
Rights”).  Schedule 3.10(a)(ii)
of the Disclosure Schedules also lists each material license for Intellectual
Property licensed by the Company (the “Licensed Proprietary
Rights”).

      


      (b)        
   (i) The operation of the Business, including the use of
the Owned Proprietary Rights, does not infringe or misappropriate or otherwise
materially violate the Intellectual Property rights of any third party, and no
claim is pending or, to the Knowledge of the Company or Selling Stockholder,
threatened against the Company alleging any of the foregoing, (ii) the Company
owns, or with respect to the Licensed Proprietary Rights, licenses all of the
Intellectual Property necessary for the conduct of the Business, and (iii)
except for the Owned Proprietary Rights and the Licensed Proprietary Rights, no
material right, license, lease, consent, or other agreement is required with
respect to any Intellectual Property for the conduct of the
Business.

      


      (c)       
    Except as set forth on Schedule 3.10(c) of
the Disclosure Schedules, or licenses that are immaterial to the Ordinary Course
of Business of the Company, the Company is (i) the sole owner of the entire and
unencumbered right, title and interest, including the unencumbered right to
license, sublicense, assign or transfer, in and to each item of the Owned
Proprietary Rights, including all object and source code included therein, and
without any ongoing royalty, license, sublicense or other obligations to third
parties with respect thereto, and (ii) entitled to use the Owned Proprietary
Rights and Licensed Proprietary Rights in the ordinary course of its business to
the extent such rights are used in the operation of the Business. The Company
has legally secured all Licensed Proprietary Rights (including, without
limitation, any promotion, production, exhibition and similar rights currently
exploited by the Company, and any Licensed Proprietary Rights embodied in the
Contracts listed on Schedule 3.11 of the
Disclosure Schedules), and to the Company’s and Selling Stockholder’s Knowledge,
the respective licensors of such Licensed Proprietary Rights (including, without
limitation, any promotion, production, exhibition and similar rights currently
exploited by the Company) have valid title to all such rights

      


      (d)         
  The Owned Proprietary Rights and Licensed Proprietary Rights
include all of the material Intellectual Property used in the Business, and
there are no other items of Intellectual Property that are material to the
Business.


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      (e)     
      The Company has made available to
Parent all material correspondence and all written opinions in its possession
relating to potential infringement or misappropriation (i) by the Company of any
Intellectual Property rights of any third party or (ii) by any third party of
any of the Owned Proprietary Rights or Licensed Proprietary Rights.

      


      (f)        
    To the Knowledge of the Company or Selling
Stockholder, (i) no third party is engaging in any activity that infringes or
misappropriates the Owned Proprietary Rights or Licensed Proprietary Rights and
(ii) the Company has not granted any material license or other right to any
third party with respect to the Owned Proprietary Rights or Licensed Proprietary
Rights.

      


      (g)       
    The Company has a license to use all software
development tools, library functions, compilers and other third-party software
that are used in the operation of the Business and are material to the Business,
taken as a whole.

      


      3.11          Contracts; No
Defaults.

      


      (a)      
     Schedule 3.11(a) of
the Disclosure Schedules sets forth a complete and accurate list, and the
Company has made available to Parent true and complete copies, of all executory
Contracts of the Company in the following categories:

      


      (i)          
  Contracts that involve performance of services or delivery of
goods by the Company during any twelve (12) month period of an amount or value,
individually or, for a series of related Contracts, in the aggregate, in excess
of Five Thousand Dollars ($5,000);

      


      (ii)      
     Contracts that were not entered into in the
Ordinary Course of Business;

      


      (iii)           Leases
(including Leases of Tangible Personal Property) of the Company and other
Contracts, in each case, affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal property (except
personal property leases and installment and conditional sales agreements having
a value per item or aggregate payments, in each case, of less than Five Thousand
Dollars ($5,000) and with terms of less than one year);

      


      (iv)           Licensing
agreements of the Company, if any, and other Contracts, in each case, with
respect to patents, trademarks, copyrights or other Intellectual Property as
well as the forms of all agreements with current or former employees,
consultants or contractors regarding the appropriation of, or the non-disclosure
of, any of the Intellectual Property set forth on Schedule 3.10(a) of
the Disclosure Schedules;

      


      (v)           collective
bargaining agreements of the Company and other Contracts, in each case, to or
with any labor union or other employee representative of a group of employees
and each other written employment or consulting agreement with any employees or
consultants;


      
        
           


        

        
          20

          
            

          

        

        
           


        

      


      (vi)           joint
ventures or partnerships (however named) of the Company and other Contracts, in
each case, involving a sharing of profits, losses, costs or liabilities by the
Company with any other Person;

      


      (vii)          Contracts
containing covenants that in any way purport to restrict the business activity
of the Company or limit the freedom of the Company to engage in any line of
business or to compete with any Person or that subject the Company to
confidentiality or non-disclosure obligations;

      


      (viii)         Contracts
providing for payments to or by any Person based on sales, purchases or profits,
other than direct payments for goods;

      


      (ix)      
     powers of attorney granted by or to the
Company that are currently effective and outstanding;

      


      (x)        
    Contracts entered into other than in the Ordinary
Course of Business that contain or provide for an express undertaking by the
Company to be responsible for consequential damages;

      


      (xi)        
   Contracts for capital expenditures relating to the
Business in excess of Five Thousand Dollars ($5,000) individually or Ten
Thousand Dollars ($10,000) in the aggregate;

      


      (xii)           Contracts
which, to the Knowledge of the Company or Selling Stockholder, will result in a
material loss to the Company;

      


      (xiii)          Contracts
between the Company and any of its former or current stockholders or
shareholders, directors, officers and employees (other than standard employment
agreements previously furnished to or approved by Parent and other than option
and warrant agreements with the Company’s officers, directors and
employees);

      


      (xiv)         written
warranties, guaranties, and/or other similar undertakings with respect to
contractual performance extended by the Company, other than in the Ordinary
Course of Business; and

      


      (xv)          each
amendment, supplement, and modification (whether oral or written) in respect of
any of the foregoing.

      


      (b)       
    To the Knowledge of the Company or Selling
Stockholder, no officer, director, agent, employee, consultant or contractor of
the Company is bound by any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant or contractor to (i) engage in or
continue any conduct, activity or practice relating to the Business or (ii)
assign to the Company or to any other Person any rights to any invention,
improvement or discovery.

      


      (c)         
  To the Knowledge of the Company or Selling Stockholder, each
Contract set forth on Schedule 3.11(a) of
the Disclosure Schedules is in full force and effect and is valid and
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors’ rights generally and the general principles of equity,
regardless of whether asserted in a proceeding in equity or at
law.


      
        
           


        

        
          21

          
            

          

        

        
           


        

      


      (d)        
   To the Knowledge of the Company or Selling
Stockholder:

      


      (i)         
   the Company is, and at all times has been, in
compliance with all material terms and requirements of each Contract set forth
on Schedule
3.11(a) of the Disclosure Schedules under which the Company has or had
any obligation or Liability or by which the Company or any of the assets owned
or used by the Company is or was bound;

      


      (ii)      
     each other Person that has or had any
obligation or Liability under any Contract set forth on Schedule 3.11(a) of
the Disclosure Schedules under which the Company has or had any rights is, and
has been, in compliance with all material terms and requirements of such
Contract;

      


      (iii)           no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with, or result in a violation or breach of,
or give the Company or any other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate or modify, any Contract set forth on Schedule 3.11(a) of
the Disclosure Schedules; and

      


      (iv)           the
Company has not given to or received from any other Person, any written or, to
the Knowledge of the Company or Selling Stockholder, other notice or other
communication regarding any actual, alleged, possible or potential violation or
breach of, or default under, any Contract set forth on Schedule 3.11(a) of
the Disclosure Schedules.

      


      (e)        
   There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any material amounts paid or
payable to the Company under current or completed Contracts, as applicable, with
any Person and no such Person has made written demand for such
renegotiation.

      


      (f)        
    Contracts relating to the provision of products
or services by the Company have been entered into in the Ordinary Course of
Business and have been entered into without the commission of any act alone or
in concert with any other Person, or any consideration having been paid or
promised, that is or would be in violation of any Laws.

      


      (g)      
     The Company has no reason to believe that
the products and services called for by any unfinished Contract cannot be
supplied in accordance with the terms of such Contract, including time
specifications, and has no reason to believe that any unfinished Contract will
upon performance by the Company result in a loss to the Company.

      


      (h)       
    All of the Contracts set forth on Schedule 3.11(a) of
the Disclosure Schedules are assignable to the Surviving Corporation without the
consent of any other Person, except as specifically noted on Schedule 3.5 of the
Disclosure Schedules.


      
        
           


        

        
          22

          
            

          

        

        
           


        

      


      3.12          Employee
Benefits.

      


      (a)      
     Schedule 3.12(a) of
the Disclosure Schedules sets forth a complete list of all Employee Plans (i)
covering employees, directors or consultants or former employees, directors or
consultants in, or related to, the Business and/or (ii) with respect to which
Surviving Corporation may incur any Liability.  The Company has
delivered or made available to Parent true and complete copies of all Employee
Plans, including written interpretations thereof and written descriptions
thereof which have been distributed to the Company’s employees and for which the
Company has copies, all annuity contracts or other funding instruments relating
thereto, and a complete description of all Employee Plans which are not in
writing.

      


      (b)         
  Neither the Company nor any ERISA Affiliate sponsors,
maintains, contributes to or has an obligation to contribute to, or has
sponsored, maintained, contributed to or had an obligation to contribute to, any
Pension Plan subject to Title IV of ERISA, or any Multiemployer
Plan.

      


      (c)       
    Each Welfare Plan which covers or has covered
employees or former employees of the Company or of its Affiliates in the
Business and which is a “group health plan,” as defined in Section 607(1) of
ERISA, has been operated in compliance with provisions of Part 6 of Title I,
Subtitle B of ERISA and Section 4980B of the Code at all times.

      


      (d)       
    There is no Legal Proceeding or Order
outstanding, relating to or seeking benefits under any Employee Plan set forth
on Schedule
3.12(a) of the Disclosure Schedules, which is pending, threatened or
anticipated against the Company, any ERISA Affiliate or any Employee
Plan.

      


      (e)     
      Neither the Company nor any ERISA
Affiliate has any liability for unpaid contributions under Section 515 of ERISA
with respect to any Welfare Plan (i) covering employees, directors or
consultants or former employees, directors or consultants in, or related to, the
Business and (ii) with respect to which Surviving Corporation may incur any
Liability.

      


      (f)        
    There are no Liens arising under the Code or ERISA
with respect to the operation, termination, restoration or funding of any
Employee Plan set forth on Schedule 3.12(a) of
the Disclosure Schedules, or arising in connection with any excise tax or
penalty tax with respect to such Employee Plan.

      


      (g)        
   Each Employee Plan set forth on Schedule 3.12(a) of
the Disclosure Schedules has at all times been maintained in all material
respects, by its terms and in operation, in accordance with all applicable laws,
including, without limitation, ERISA and the Code.

      


      (h)        
   The Company and its ERISA Affiliates have made full and
timely payment of all amounts required to be contributed under the terms of each
Employee Plan and applicable Law or required to be paid as expenses or as Taxes
under applicable Laws, under such Employee Plan, and the Company and its ERISA
Affiliates shall continue to do so through the Closing Date.

      


      (i)         
   The Company has no Employee Plan intended to qualify
under Section 401 of the Code.


      
        
           


        

        
          23

          
            

          

        

        
           


        

      


      (j)          
  Neither the execution and delivery of this Agreement or other
related agreements by the Company nor the consummation of the Transactions will
result in the acceleration or creation of any rights of any person to benefits
under any Employee Plan (including, without limitation, the acceleration of the
vesting or exercisability of any stock options, the acceleration of the vesting
of any restricted stock, the acceleration of the accrual or vesting of any
benefits under any Pension Plan or the acceleration or creation of any rights
under any severance, parachute or change in control agreement).

      


      (k)      
     Neither the Company nor any ERISA Affiliate
has incurred any liability with respect to any Employee Plan, which may create,
or result in any liability to Surviving Corporation.

      


      3.13          Labor Matters;
Employees.  Except as set forth on Schedule 3.13 of the
Disclosure Schedules, the Company is not a party to any collective bargaining or
other labor Contract.  There has not been, there is not presently
pending or existing, and, to the Knowledge of the Company or Selling
Stockholder, there is not threatened (i) any strike, slowdown, picketing, work
stoppage or employee grievance process against the Company or the Business; (ii)
any Legal Proceeding against or affecting the Company or the Business relating
to the alleged violation of any Law or Order pertaining to labor relations or
employment matters; or (iii) union organizing campaign or any application for
certification of a collective bargaining agent.  No event has occurred
or circumstance exists that could provide the basis for any work stoppage or
other labor dispute.  There is no lockout of any employees by the
Company, and no such action is contemplated by the Company.  The
Company has complied with all material Laws relating to employment, equal
employment opportunity, nondiscrimination, harassment, retaliation, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar Taxes, occupational health and safety, and plant
closing.  The Company is not liable for the payment of any
compensation, damages, Taxes, fines, penalties or other amounts (including,
without limitation, amounts related to workplace safety and insurance), however
designated, for failure to comply with any of the foregoing Laws.

      


      3.14          Legal
Proceedings.  There is no Legal Proceeding or Order (a) pending
or, to the Knowledge of the Company or Selling Stockholder, threatened or
anticipated against or affecting the Company, its assets or the Business (or to
the Knowledge of the Company or Selling Stockholder, pending or threatened,
against any of the officers, directors or employees of the Company with respect
to their business activities related to or affecting the Business); (b) that
challenges or that may have the effect of preventing, making illegal, delaying
or otherwise interfering with any of the Transactions; or (c) related to the
Business or the Company’s assets to which the Company is otherwise a
party.  To the Knowledge of the Company or Selling Stockholder, there
is no reasonable basis for any such Legal Proceeding or Order.  Except
as set forth on Schedule 3.14 of the
Disclosure Schedules, to the Knowledge of the Company or Selling Stockholder, no
officer, director, agent or employee of the Company is subject to any Order that
prohibits such officer, director, agent or employee from engaging in or
continuing any conduct, activity, or practice relating to the
Business.  Except as set forth on Schedule 3.14,
neither the Company, its assets or the Business is subject to any Order of any
Regulatory Authority and the Company is not engaged in any Legal Proceeding to
recover monies due it or for damages sustained by it.  The Company is
not and has not been in default with respect to any Order, and there are no
unsatisfied judgments against the Company, its assets or the
Business.  There is not a reasonable likelihood of an adverse
determination of any pending Legal Proceedings.  There are no Orders
or agreements with, or Liens by, any Regulatory Authority or quasi-governmental
entity relating to any environmental Law, which regulate, obligate, bind or in
any way affect the Company or any property on which the Company operates the
Business.


      
        
           


        

        
          24

          
            

          

        

        
           


        

      


      3.15          Compliance with
Law.

      


      (a)         
  The Company or Selling Stockholder, to their Knowledge, and
the conduct of the Business are and at all times have been in compliance with
all Laws or Orders applicable to them or to the conduct and operations of the
Business.  The Company has not received any notice to the effect that,
or otherwise been advised of (i) any actual, alleged, possible or potential
violation of, or failure to comply with, any such Laws or Orders or (ii) any
actual, alleged, possible or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature.  No event has occurred or circumstance exists that (with
or without notice or lapse of time) (i) may constitute or result in a violation
by the Company of, or a failure on the part of the Company, any such Laws or
Orders or (ii) may give rise to any obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature, except, in either case separately or the cases together, where such
violation or failure to comply could not reasonably be expected to have a
Material Adverse Effect.

      


      (b)       
    None of the Company, or any of its directors,
officers or Representatives or to the Knowledge of the Company or Selling
Stockholder, any employee or other Person affiliated with or acting for or on
behalf of the Company, has, directly or indirectly, (i) made any contribution,
bribe, rebate, payoff, influence payment, kickback or other payment to any
Person, private or public, regardless of form, whether in money, property or
services (A) to obtain favorable treatment in securing business, (B) to pay for
favorable treatment for business secured, (C) to obtain special concessions or
for special concessions already obtained, for or in respect of the Company or
any of its Affiliates or (D) in violation of any Laws of the United States
(including, without limitation, the Foreign Corrupt Practices Act of 1977, as
amended (15 U.S.C. Sections 78dd-1 et seq.)) or any laws of any other country
having jurisdiction; or (ii) established or maintained any fund or asset that
has not been recorded in the Books and Records of the Company.

      


      3.16          Permits.  Schedule 3.16(a) of
the Disclosure Schedules sets forth a complete list of all Permits held by the
Company or used in the conduct of the Business, and such Permits collectively
constitute all of the Permits necessary for the Company to lawfully conduct and
operate the Business, as it is presently conducted and to permit the Company to
own and use its assets in the manner in which they are presently owned and
used.  Except as set forth on Schedule 3.16(b) of
the Disclosure Schedules, the Company is and at all times has been in compliance
with all material Permits applicable to it or to the conduct and operations of
the Business.  The Company has not received any notice to the effect
that, or otherwise been advised of (i) any actual, alleged, possible or
potential violation of, or failure to comply with, any such Permits or (ii) any
actual, alleged, possible or potential revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Permit set forth on
or required to be set forth on Schedule 3.16(a) of
the Disclosure Schedules.  No event has occurred, and to the Company’s
and Selling Stockholder’s Knowledge no circumstance exists, that (with or
without notice or lapse of time) (i) may constitute or result directly or
indirectly in a violation by the Company of, or a failure on the part of the
Company to comply with, any such Permits or (ii) result directly or indirectly
in the revocation, withdrawal, suspension, cancellation or termination of, or
any modification to, any Permit set forth on or required to be set forth on
Schedule
3.16(a) of the Disclosure Schedules.  All applications for or
renewals of all Permits have been timely filed and made and no Permit will
expire or be terminated as a result of the consummation of the transactions
contemplated by this Agreement.  No present or former shareholder,
director, officer or employee of the Company or any Affiliate thereof, or any
other Person, owns or has any proprietary, financial or other interest (direct
or indirect) in any Permit that the Company owns, possesses or
uses.


      
        
           


        

        
          25

          
            

          

        

        
           


        

      


      3.17          Absence of Certain
Changes. Except as set forth on Schedule 3.17 of the
Disclosure Schedules, since January 1, 2008, there has not been any: (a)
Material Adverse Effect and no event has occurred and no circumstance exists
that may result in a Material Adverse Effect other than Material Adverse Effects
resulting from historical seasonality of the Business; (b) purchase, redemption,
retirement or other acquisition by the Company of any capital stock or other
equity interest of the Company; (c) amendments to the Articles of Incorporation
and Bylaws of the Company; (d) payment or increase by the Company of any
bonuses, salaries or other compensation (including management or other similar
fees) or entry into any employment, severance or similar Contract with any
employee engaged in the Business and which the Surviving Corporation is required
to hire after Closing, other than increases in salary to employees made in the
Ordinary Course of Business; (e) adverse change in employee relations which has
or is reasonably likely to have a Material Adverse Effect; (f) damage to or
destruction or loss of any of the assets or property of the Company relating to
the Business, whether or not covered by insurance, that could reasonably be
expected to constitute a Material Adverse Effect on the Business; (g) entry
into, termination or acceleration of, or receipt of notice of termination by the
Company of (1) any material license, distributorship, dealer, sales
representative, joint venture, credit or similar agreement relating to the
Business, or (2) any Contract or transaction involving a Liability by or to the
Company for which the Surviving Corporation may be liable after the Closing
(other than the Liabilities set forth on Schedule 3.8,
Liabilities reflected on in the interim balance sheet which have not been paid
or discharged since the interim balance sheet date, and Liabilities relating to
the Business incurred in the Ordinary Course of Business since the interim
balance sheet date); (h) sale (other than sales of inventory in the Ordinary
Course of Business, if any), lease or other disposition of any of the assets or
property of the Company relating to the Business; (i) mortgage, pledge or
imposition of any Lien on any assets or property of the Company relating to the
Business, including the sale, lease or other disposition of any of its
Intellectual Property relating to the Business; (j) (1) delay or failure to
repay when due any obligation of the Company, which delay or failure could have
a Material Adverse Effect on the Company, other than such items as have been
specifically documented to Parent in writing or (2) delay or failure to repay
when due any obligation of the Company which delay or failure could have a
Material Adverse Effect on the Company, the Business or on any assets or
property of the Company relating to the Business; (k) cancellation or waiver by
the Company of any claims or rights with a value to the Company relating to the
Business in excess of Five Thousand Dollars ($5,000) individually or in the
aggregate; (l) failure by the Company to use reasonable efforts to preserve
intact the current business organization of the Company relating to the
Business, and maintain the relations and goodwill with its suppliers, customers,
landlords, creditors, employees, licensors, resellers, distributors, agents and
others having business relationships with them relating to the Business where
such failure could reasonably be expected to have a Material Adverse Effect on
the Company; (m) licensing out on an exclusive basis or other than in the
Ordinary Course of Business, disposition or lapsing of any Intellectual Property
or any disclosure to any Person of any trade secret or other confidential
information without appropriate protections in place; (n) change in the
accounting methods, principles or practices used by the Company; (o) capital
expenditures by the Company relating to the Business in excess of $5,000
individually or $10,000 in the aggregate; or (p) agreement, whether oral or
written, by the Company with respect to or to do any of the foregoing other than
as expressly provided for herein.


      
        
           


        

        
          26

          
            

          

        

        
           


        

      


      3.18          Insurance.  There
are no insurance policies or binders of insurance of any kind or nature covering
the Company, the Business, or any employees, properties or assets of the Company
relating to the Business, including, without limitation, policies of life,
disability, fire, theft, workers compensation, employee fidelity and other
casualty and liability insurance.

      


      3.19          Restrictions on Business
Activities. There is no agreement, judgment, injunction, order or decree
binding upon the Company which has the effect of prohibiting or materially
impairing (a) any current or future business practice of the Company or (b) any
acquisition of any Person or property by the Company, except in each of clauses
(a) and (b) for any such prohibitions or impairments that would not reasonably
be expected to have a Material Adverse Effect.

      


      3.20          Related Party
Transactions.  Except as set forth on Schedule 3.20 of the
Disclosure Schedules, none of the Company, any Affiliate thereof, holders of the
capital stock or other ownership interest of the Company or any Affiliate or
Family Member thereof is presently or has, since the inception date of the
Company, borrowed any moneys from or has any outstanding debt or other
obligations to the Company or is presently a party to any transaction with the
Company relating to the Business.  Except as set forth on Schedule 3.20 of the
Disclosure Schedules, none of the Company, any Affiliate thereof, or any
director, officer or key employee of any such Persons (a) owns any direct or
indirect interest of any kind in (except for ownership of less than 1% of any
public company, provided, that such owner’s role is that solely of a passive
investor), or controls or is a director, officer, employee or partner of,
consultant to, lender to or borrower from, or has the right to participate in
the profits of, any Person which is (i) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of the Company, (ii) engaged in a business
related to the Business or (iii) a participant in any transaction to which the
Company is a party, or (b) is a party to any Contract with the
Company.  Except as set forth on Schedule 3.20 of the
Disclosure Schedules, the Company has no Contract or understanding with any
officer, director or key employee of the Company or any of the Company’s
shareholders or any Affiliate or Family Member thereof with respect to the
subject matter of this Agreement, the consideration payable hereunder or any
other matter.

      


      3.21          Brokers or
Finders.  Except as set forth on Schedule 3.21 of the
Disclosure Schedules, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Company or its
Affiliates in connection with the transactions contemplated by this Agreement,
and neither the Company, or Affiliates has incurred any obligation to pay any
brokerage or finder’s fee or other commission in connection with the transaction
contemplated by this Agreement.


      
        
           


        

        
          27

          
            

          

        

        
           


        

      


      3.22          No Other
Agreements.  Except as set forth on Schedule 3.22 of the
Disclosure Schedules, and other than this Agreement or any agreement
contemplated hereby, neither the Company, nor any of its stockholders, officers,
directors or Affiliates has any legal obligation, absolute or contingent, to any
other Person to sell, assign or transfer any capital stock of or other equity
interest (other than warrants or options in favor of the Company’s officers,
directors or employees, if any) in the Company or to effect any merger,
consolidation or other reorganization of the Company or to enter into any
agreement with respect thereto.

      


      3.23          Disclosure.  No
representation or warranty of the Company in this Agreement or in any Ancillary
Agreement and no statement in any certificate furnished or to be furnished by
the Company pursuant to this Agreement contained, contains or will contain on
the date such agreement or certificate was or is delivered, or on the Closing
Date, any untrue statement of a material fact, or omitted, omits or will omit on
such date to state any material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.

      


      3.24          Real Property; Title to
Property.

      


      (a)       
    The Company does not own any real property or any
interest, other than a leasehold interest, in any real
property.  Schedule 3.24(a) of
the Disclosure Schedules lists and describes all real property leased by the
Company and all subleases thereto.  Except for Leases and subleases
listed on Schedule
3.24(a) of the Disclosure Schedules, there are no leases, subleases,
licenses, occupancy agreements, options, rights, concessions or other agreements
or arrangements, written or oral, granting to any Person the right to purchase,
use or occupy any real property used in connection with the Business or any
portion thereof or interest in any such real property.

      


      (b)     
      The Company has good and marketable
title to all of its properties, interests in properties and assets, real and
personal, or with respect to leased properties and assets, valid leasehold
interests in, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any kind or character, except (i) Liens for current Taxes not
yet due and payable or which are being contested by the Company in good faith,
(ii) such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, (iii) Liens securing debt, and (iv) any Liens set
forth on Schedule
3.24  of the Disclosure Schedules.  The properties
and equipment of the Company that are used in the operation of the Business are
in good operating condition subject to normal wear and tear.  All
material properties used in the Business will be reflected in the Company
Financial Documents.

      


      3.25          Conduct of
Business.  Prior to the Closing Date, the Company shall conduct
its business in the normal course, and shall not sell, pledge, or assign any
assets, without the prior written approval of Parent, except in the regular
course of business. Except as otherwise provided herein, the Company shall not
amend its Articles of Incorporation or By-Laws, declare dividends, redeem or
sell stock or other securities, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any material balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount or enter into any other transaction other than in the regular
course of business.


      
        
           


        

        
          28

          
            

          

        

        
           


        

      


      3.26          Restricted
Securities.  The Selling Stockholder hereby acknowledges and
understands that the shares of Parent Common Stock issuable to the Selling
Stockholder, as the Merger Stock Consideration, pursuant to the Merger shall be
restricted securities and agrees that such restricted securities may not be
sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed
of except in compliance with the Securities Act, and all other applicable
securities laws and regulations, and as set forth in the Parent Stock
Restrictions as set forth on Exhibit
B.

      


      3.27          Accredited
Investor.  The Selling Stockholder represents and warrants as
follows:

      


      (a)        
   The Selling Stockholder is an “accredited investor” as
defined in Rule 501(a) of Regulation D, promulgated under the Securities
Act;

      


      (b)      
     The Selling Stockholder has sufficient
knowledge and experience in investing in companies similar to Parent so as to be
able to evaluate the risks and merits of its investment in Parent and it is able
financially to bear the risks thereof;

      


      (c)      
     The Selling Stockholder has sufficient
knowledge and experience in investing in companies similar to Parent so as to be
able to evaluate the risks and merits of its investment in Parent and it is able
financially to bear the risks thereof, has adequate means of providing for its
current financial needs and possible contingencies that may face it and has no
need for liquidity in its investment in Parent;

      


      (d)      
     It is the present intention that the shares
of Parent Common Stock being acquired by the Selling Stockholder pursuant to the
transactions contemplated by this Agreement are being acquired for investment
and not with a present view to or for sale in connection with any distribution
thereof; and

      


      (e)     
      The Selling Stockholder further
represents that he does not presently have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or any third person with respect to the shares of Parent Common Stock
being acquired under this Agreements.

      


      ARTICLE
4

      REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB

      


      Except as
set forth on the Disclosure Schedules, Parent and Merger Sub hereby, jointly and
severally, represent and warrant to the Company that the statements contained in
this Article 4 are true, complete and correct as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this Article 4, except in the case of representations and warranties
stated to be made as of the date of this Agreement or as of another date and
except for changes contemplated or permitted by this
Agreement).


      
        
           


        

        
          29

          
            

          

        

        
           


        

      


      4.1       
    Organization and
Qualification.  Each of Parent and Merger Sub is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is organized and has the requisite power and authority
to carry on its business as now being conducted. Each of Parent and Merger Sub
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) has not had and would not reasonably be
expected to have a Material Adverse Effect.  Each of Parent and Merger
Sub has delivered to the Company complete and correct copies of their respective
articles of incorporation and by-laws, in each case as amended to the date
hereof.

      


      4.2      
     Authorization;
Enforceability.  Each of Parent and Merger Sub have the
requisite power and authority, and have taken all action necessary, to execute,
deliver and perform their obligations under this Agreement and any Ancillary
Agreement to which either is a party and each other agreement, document,
instrument or certificate contemplated by this Agreement and/or any Ancillary
Agreement or to be executed by Parent and Merger Sub in connection with the
consummation of the Transactions, and to consummate the
Transactions.  The execution and delivery by Parent and Merger Sub of
this Agreement and any applicable Ancillary Agreement, and the consummation by
Parent and Merger Sub of the Transactions contemplated hereby, and the
performance by Parent and Merger Sub of its obligations hereunder, have been
duly and validly authorized by all necessary corporate action on the part of
Parent and Merger Sub, and no other action on the part of each of Parent and
Merger Sub is required to authorize the execution, delivery and performance of
this Agreement and the consummation by each of Parent and Merger Sub of the
transactions contemplated hereby.  This Agreement has been duly and
validly executed and delivered by each of Parent and Merger Sub and constitutes
a legal, valid and binding obligation of Parent and Merger Sub enforceable
against each in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws affecting creditors’ rights generally and the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.

      


      4.3      
     Non-contravention.
Except as set forth on Schedule 4.3 hereto,
the execution, delivery and performance of this Agreement by each of Parent and
Merger Sub does not, and the consummation of the Transactions will not (a)
contravene, conflict with, or result in any violation or breach of any provision
of the articles of incorporation or by-laws of each of Parent and Merger Sub,
(b) contravene, conflict with, or result in a violation or breach of any
provision of any Law, (c) require any consent or other action by any Person
under, constitute a breach of or default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which either of Parent or Merger Sub is
entitled under any provision of any agreement or other instrument binding upon
Parent or Merger Sub or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets,
property or business of either of Parent or Merger Sub, or (d) result in the
creation or imposition of any Lien on any of the assets or properties of either
of Parent or Merger Sub, which in the case of clauses (b) or (d) above would
have a Material Adverse Effect on either of Parent or Merger Sub or on the
validity, binding effect or enforceability of this Agreement, any Ancillary
Agreement, or the ability of either of Parent or Merger Sub to perform their
obligations under this Agreement or any applicable Ancillary
Agreement.


      
        
           


        

        
          30

          
            

          

        

        
           


        

      


      4.4        
   Consents and
Approvals.  Except as set forth on Schedule 4.4 of the
Disclosure Schedules, no consent, approval, authorization or order of,
registration or filing with, or notice to, any Regulatory Authority or any other
Person is necessary to be obtained, made or given by either of Parent or Merger
Sub in connection with their execution, delivery and performance of this
Agreement or any applicable Ancillary Agreement or for the consummation by each
of Parent or Merger Sub of the Transactions, except to the extent the failure to
obtain any such consent, approval, authorization or order or to make any such
registration or filing would not have a Material Adverse Effect on either of
Parent or Merger Sub or on the validity, binding effect or enforceability of
this Agreement or any Ancillary Agreement to which Parent or Merger Sub is a
party, or the ability of either of Parent or Merger Sub to perform their
obligations under this Agreement or any Ancillary Agreement.

      


      4.5       
    Legal
Proceedings.  There are no Legal Proceedings pending, or to the
Knowledge of each of Parent or Merger Sub, threatened that are reasonably likely
to prohibit or restrain the ability of either of Parent or Merger Sub to enter
into this Agreement, any applicable Ancillary Agreement or consummate the
Transactions.

      


      4.6       
    Brokers or
Finders.  Except as set forth on Schedule 4.6 of the
Disclosure Schedules, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Parent and Merger Sub
or their Affiliates in connection with the transactions contemplated by this
Agreement, and neither Parent nor Merger Sub, or their Affiliates, has incurred
any obligation to pay any brokerage or finder’s fee or other commission in
connection with the transaction contemplated by this Agreement.

      


      4.7       
    Restrictions on Business
Activities. There is no agreement, judgment, injunction, order or decree
binding upon the Parent and Merger Sub or their Affiliates which has the effect
of prohibiting or materially impairing (a) any current or future business
practice of the Company or (b) any acquisition of any Person or property by
Parent and Merger Sub or their Affiliates, except in each of clauses (a) and (b)
for any such prohibitions or impairments that would not reasonably be expected
to have a Material Adverse Effect.

      


      ARTICLE
5

      PRE-CLOSING
COVENANTS OF THE PARTIES

      


      5.1     
      Hammett Employment
Agreement.  As soon as practicable following the execution of
this Agreement, but in any event prior to the Closing Date, the Selling
Stockholder shall execute and enter into an employment agreement with the
Surviving Corporation, in substantially the form attached hereto as Exhibit C (the “Hammett Employment
Agreement”).

      


      5.2        
   Otting Offer
Letter.  As soon as practicable following the execution of this
Agreement, but in any event prior to the Closing Date, Zachary Otting shall
enter into an offer letter with the Surviving Corporation setting forth the
terms and conditions of his employment in substantially the form attached hereto
as Exhibit D
(the “Otting Offer
Letter”).

      


      5.3       
    Access to
Information.  The Parties shall provide to each other and their
respective representatives such financial, operating and other documents, data
and information relating to the Party, and their respective businesses,
properties, assets and liabilities, as each Party, or its representatives may
reasonably request.  In addition, each Party hereby agrees to take all
action necessary to enable their respective representatives review, inspect and
audit each Party’s business, properties, assets and liabilities and discuss them
with such Party’s officers, employees, independent accountants and
counsel.  Notwithstanding any investigation that any Party may conduct
of the other Parties, or their respective businesses, properties, assets and
liabilities, each Party may fully rely on the other Party’s warranties,
covenants and indemnities set forth in this Agreement.


      
        
           


        

        
          31

          
            

          

        

        
           


        

      


      5.4       
    Consents and
Approvals.  As soon as practicable after execution of this
Agreement, the Parties shall use commercially reasonable efforts to obtain any
necessary consent, approval, authorization or order of, make any registration or
filing with or give any notice to, any Regulatory Authority or Person as is
required to be obtained, made or given by any Party to consummate the
transactions contemplated by this Agreement and the Ancillary
Agreements.

      


      5.5      
     Notification of Adverse
Change and Certain Matters.  Each Party shall promptly notify
the other Party of any material adverse change in the condition (financial or
otherwise) of such Party.  Each Party shall promptly notify the other
Party of any fact, event, circumstance or action known to it that is reasonably
likely to cause such Party to be unable to perform any of its covenants
contained herein or any condition precedent in Article 7 not to be satisfied, or
that, if known on the date of this Agreement, would have been required to be
disclosed to another Party pursuant to this Agreement or the existence or
occurrence of which would cause any of the such Party’s representations or
warranties under this Agreement not to be correct and/or
complete.  Each Party shall give prompt written notice to the other
Party of any adverse development causing a breach of any of the representations
and warranties in Articles 3 and 4 as of the date made.

      


      5.6     
      Disclosure
Schedule.  Each Party shall, from time to time prior to
Closing, supplement the Disclosure Schedules attached hereto with additional
information that, if existing or known to it on the date of delivery to the
other Party, would have been required to be included therein.  For
purposes of determining the satisfaction of any of the conditions to the
obligations of any Party in Article 7, the Disclosure Schedules of such Party
shall be deemed to include only (a) the information contained therein on the
date of this Agreement and (b) information added to the such Party’s Disclosure
Schedule by written supplements delivered prior to Closing by such Party (i) are
accepted in writing by the receiving Party, or (ii) reflect actions taken or
events occurring after the date hereof prior to Closing.

      


      5.7     
      State
Statutes.  The Parties and their respective Board of Directors
shall, if any state takeover statute or similar law is or becomes applicable to
the Merger, this Agreement or any of the transactions contemplated by this
Agreement, use all reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this Agreement
and the transactions contemplated hereby.


      
        
           


        

        
          32

          
            

          

        

        
           


        

      


      5.8     
      Conduct of
Business.  During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement pursuant
to the provisions of Article 9 hereof or the Closing, Parent shall direct the
day-to-day operations of the Company and approve all non-recurring transactions
and significant recurring transactions undertaken by the
Company.  Further, during such period, the Company shall (unless
otherwise required by this Agreement or Parent has given its prior written
consent to the Company) carry on its business in the ordinary course consistent
with past practice, pay its Taxes and other obligations consistent with its past
practices, pay or perform other obligations when due consistent with its past
practices, subject to any good faith disputes over such Taxes and other
obligations and, to the extent consistent with the Business, use reasonable
efforts and institute all policies to preserve intact its present business
organization, keep available the services of its present officers and key
employees, preserve its relationships with customers, suppliers, distributors,
licensors, licensees, independent contractors and other Persons having business
dealings with it to do the same, all with the express purpose and intent of
preserving unimpaired its goodwill and ongoing businesses at the
Closing.  Parent shall assume the risk of losses incurred, and the
benefit of profits earned, during such period, unless this Agreement is
otherwise terminated pursuant to Article 9 hereof.

      


      5.9      
     No
Solicitation.  Until the earlier of the Closing or the date of
termination of this Agreement pursuant to the provisions of Article 9 hereof,
neither the Company, the Selling Stockholder, the Parent and Merger Sub or their
Affiliates, nor any of their respective stockholders, officers, directors,
agents, investment bankers or other representatives of any of them
(collectively, the “Representatives”)
will, directly or indirectly, (i) solicit, engage in discussions or negotiate
with any Person (regardless of who initiates such discussions or negotiations),
or take any other action intended or designed to facilitate the efforts of any
Person, other than the parties hereto, relating to the possible acquisition of
the Company (whether by way of purchase of capital stock, purchase of assets or
otherwise) or any significant portion of its capital stock or assets by any
Person other than the parties hereto (an “Alternative
Acquisition”), (ii) provide information with respect to the Company to
any Person relating to a possible Alternative Acquisition by any Person, (iii)
enter into an agreement with any Person providing for a possible Alternative
Acquisition, or (iv) make or authorize any statement, recommendation or
solicitation in support of any possible Alternative Acquisition by any
Person.  The Company Parent and Merger Sub or their Affiliates shall
cause their Representatives to immediately cease and cause to be terminated all
existing discussions or negotiations with any Person heretofore conducted with
respect to any possible Alternative Acquisition.

      


      5.10          Confidentiality.  The
Parties hereto acknowledge and agree that the terms and conditions described in
this Agreement, including its existence, as well as the non-public information
and data furnished to them or their respective Representatives from the first
introduction of the parties and throughout the negotiation and drafting of this
Agreement is confidential and will not be disclosed to any third party, or used
for any purpose not specifically contemplated herein, without prior written
consent of all Parties, unless otherwise required by Law or unless it ceases to
be confidential through no breach of the receiving
party.  Notwithstanding the foregoing, Parent and Merger Sub shall be
entitled to make a public announcement of the terms and conditions described in
this Agreement and make such public disclosures and filings as they deem
reasonable or prudent without the prior written consent of the Company or the
Selling Stockholder.


      
        
           


        

        
          33

          
            

          

        

        
           


        

      


      5.11          Meeting of the
Stockholders.  Promptly after the date hereof, if required
under applicable law, each Party will take all action necessary in accordance
with its articles of incorporation and by-laws, or other charter or
organizational documents, to convene a meeting of their respective stockholders,
or seek the written consent of its stockholders to consider the adoption and
approval of this Agreement and approval of the Merger to be held as promptly as
practicable, but in any event prior to the Closing Date.

      


      5.12          Pre-Closing
Cooperation.  Between the date of this Agreement and the
Closing Date, the Company shall, and Selling Stockholders shall cause the
Company to, (i) afford Parent and its Representatives full and free access to
the Company’s personnel, properties, Contracts, books and records, and other
documents and data, and (ii) cooperate with Parent and its Representatives,
including providing any relevant documents, in connection with an accounting
review and audit of the Company.   Between the date of this
Agreement and the Closing Date, the Parent and Merger Sub shall cooperate with
Company and Selling Stockholders and thier Representatives, including providing
any relevant documents, in connection with this transaction.

      


      ARTICLE
6

      POST-CLOSING
COVENANTS OF THE PARTIES

      


      6.1      
     Post-Closing
Cooperation.  Following the Closing Date, the Company shall,
and the Selling Stockholder shall cause the Company to cooperate with Parent and
its Representatives, including providing any relevant documents, in connection
with any post-Closing accounting review and audit of the Company.

      


      6.2       
    Expense
Reimbursements.  Following the Closing Date, on the date that
is the later of (A) sixty (60) days following the Closing Date, or (B) the date
that all of the post-closing covenants set forth in Section 6.5 have been
satisfied or waived by Parent in writing, Parent shall reimburse the Selling
Stockholder for all reasonable and documented out-of-pocket expenses paid by the
Selling Stockholder on behalf of Company in connection with the development of
(i) engine code base, art, graphics, sound, user interface, and associated
content with product entitled “Fire Dept 2 & 3, Raging Inferno,” by Monte
Cristo, a French corporation (“Monte Cristo”),
pursuant to that certain Software Publishing Agreement (“Monte Cristo
Agreement”), provided to Parent and as described in Schedule A attached
thereto, and (ii) engine code base, art, graphics, sound, user interface, and
associated content with product entitled “FireFighter:  Everybody Goes
Homeä”, by Digital
Content LLC, a Minnesota corporation d/b/a “Big John Games” (“Big John Games”),
pursuant to that certain draft Software Publishing Agreement provided to Parent
and as described in Schedule A attached thereto ((i) and (ii) collectively,
“Expense
Reimbursements”).  Full documentation of all such reimbursable
expenses shall be provided by Selling Stockholder to Parent for reimbursement
thereof.

      


      6.3        
   DEID Capital Development
Plan and Monte Cristo Payment.  Following the Closing Date, the
Selling Stockholder and Parent agree to use commercially reasonable, good faith
efforts to create and implement a DEID capital development plan pursuant to
which Parent and/or Merger Sub shall agree to invest approximately $250,000 into
DEID’s development in Q1 2008, and an aggregate of $500,000 in 2008 (including
the $250,000 invested in Q1 2008 and all Expense Reimbursements paid in
accordance with Section 6.3 above).  Parent and Merger Sub further
agree to use commercially reasonable, good faith efforts to provide sales and
marketing support required to sell DEID product and services.  As soon
as commercially practicable following the Closing Date, but no later than one
(1) Business Day following the Closing Date, Parent shall pay to Monte Cristo
the amount of $100,000 in development fees pursuant to the Monte Cristo
Agreement, which amount shall applied against Parent’s $250,000 development
commitment in Q1 2008.


      
        
           


        

        
          34

          
            

          

        

        
           


        

      


      6.4    
       Merger
Unwind.

      


      (a)        
   Parent Unwind
Rights.  In the event that (i) the DEID Gross Product Sales do
not equal or exceed $2,000,000 within the first one (1) year from the date of
first shipment of a production version of the earlier to ship of (i) FireFighter:  Everybody
Goes Home, or (ii) the ACLS/EMS software product, and with DEID
maintaining at least an average of 50% DEID Gross Profit Margin measured from
the Effective Date through the end of such one (1) year period; or Production
versions of (i) FireFighter:  Everybody
Goes Home, and (ii) the ACLS/EMS
product are not first shipped by September 30, 2008; Parent may deliver a
written notice (“Unwind Notice”) to
Selling Stockholder indicating their election to transfer, assign, license,
sublicense and otherwise return, as applicable, all Owned Proprietary Rights and
Licensed Proprietary Rights assumed by Merger Sub from the Company as a result
of the Merger, and all developments and improvements directly related to FireFighter:  Everybody
Goes Home and the ACLS/EMS product which were conceived by Parent, Merger
Sub and/or Selling Stockholder following the Effective Date and through the date
of the Unwind Notice, to Selling Stockholder (collectively, the “Unwind Transfer”), in
exchange for the option for Parent to repurchase some or all of the unvested
Merger Stock Consideration issued to Selling Stockholder hereunder in accordance
with the repurchase provisions set forth in Exhibit B attached
hereto (the “Unwind
Repurchase”), and the discontinuation of any and all Merger Cash
Consideration payments to Selling Stockholder hereunder.  The Unwind
Transfer and Unwind Repurchase shall occur within 30 days of the date of the
Unwind Notice as determined by Parent.  No Merger Cash Consideration
or Expense Reimbursements previously paid to Selling Stockholder prior to the
date of the Unwind Notice shall be refundable to Parent upon consummation of the
Unwind Transfer and Unwind Repurchase, and the Parties shall have no further
obligations under this Agreement.

      


      (b)     
      Selling Stockholder Unwind
Rights.  In the event that (i) Parent fails to meet the capital
requirements of the DEID Capital Development Plan referred to in paragraph 6.3,
above, (ii) fails to use commercially reasonable, good faith efforts to provide
sales and marketing support required to sell DEID product and services, and/or
(iii) Parent and/or Merger Sub become Bankrupt, Selling Stockholder may deliver
a written notice (“Unwind Notice”) to
Parent indicating his election that Parent transfer, assign, license, sublicense
and otherwise return, as applicable, all Owned Proprietary Rights and Licensed
Proprietary Rights assumed by Merger Sub from the Company as a result of the
Merger, and all developments and improvements directly related to FireFighter:  Everybody
Goes Home and the ACLS/EMS product which were conceived by Parent, Merger
Sub and/or Selling Stockholder following the Effective Date and through the date
of the Unwind Notice, to Selling Stockholder (collectively, the “Unwind Transfer”), in
exchange for Selling Stockholder transferring the Merger Stock Consideration
issued to Selling Stockholder hereunder in accordance back to the Parent/Merger
Sub.  Should Selling  Stockholder deliver such Unwind
Notice, the Parent may discontinue all future Merger Cash Consideration payments
to Selling Stockholder hereunder.  The Unwind Transfer shall occur
within 30 days of the date of the Unwind Notice.  No Merger Cash
Consideration or Expense Reimbursements previously paid to Selling Stockholder
prior to the date of the Unwind Notice shall be refundable to Parent upon
consummation of the Unwind Transfer and Unwind Repurchase, and the Parties shall
have no further obligations under this Agreement.


      
        
           


        

        
          35

          
            

          

        

        
           


        

      


      6.5       
    Selling Stockholder
Post-Closing Covenants.

      


      (a)       
    Delivery of Company
Financial Documents.  Within thirty (30) days following the
Closing Date, Selling Stockholder shall deliver all Company Financial Documents
to Parent.

      


      (b)       
    Delivery of Sponsor
Information.  Within thirty (30) days following the Closing
Date, Selling Stockholder shall deliver to Parent the names and contact
information for all potential sponsors Selling Stockholder has identified for
the FireFighter:  Everybody
Goes Home product.

      


      (c)      
     Introduction to
Developers.  Within thirty (30) days following the Closing
Date, Selling Stockholder shall use his best efforts to schedule, and
participate in, introductory telephone calls or meetings between Dennis Cagan,
the CEO of Parent, and each of Monte Cristo and Big John Games.

      


      6.6        
   Parent Post-Closing
Covenants.

      


      (a)       
    Payment of Bonus to Selling
Stockholder.  On the date that is the later of (A) sixty (60)
days following the Closing Date, or (B) the date that all of the post-closing
covenants set forth in Section 6.5 have been satisfied or waived by Parent in
writing, Parent shall (i) pay to Selling Stockholder a cash bonus equal to the
amount of salary, less applicable withholding, Selling Stockholder would have
accrued as an employee of Parent or Merger Sub from January 9, 2008 through the
date that Selling Stockholder’s formal employment with the Parent or Merger Sub
commences on or after the Closing Date pursuant to the Hammett Employment
Agreement, and (ii) reimburse all reasonable and documented out-of-pocket
expenses incurred on behalf of Parent and Merger Sub during the period from
January 9, 2008 through  the date that Selling Stockholder’s formal
employment with the Parent or Merger Sub commences on or after the Closing Date
pursuant to the Hammett Employment Agreement.

      


      (b)       
    Payment of Bonus to Zachary
Otting.  On the date that is the later of (A) sixty (60) days
following the Closing Date, or (B) the date that all of the post-closing
covenants set forth in Section 6.5 have been satisfied or waived by Parent in
writing, Parent shall pay to Zachary Otting a cash bonus equal to the amount of
salary, less applicable withholding, Zachary Otting would have accrued as an
employee of Parent or Merger Sub from January 9, 2008 through the date that
Zachary Otting’s formal employment with the Parent or Merger Sub commences on or
after the Closing Date pursuant to the Otting Offer Letter.


      
        
           


        

        
          36

          
            

          

        

        
           


        

      


      ARTICLE
7

      CLOSING
CONDITIONS

      


      7.1     
      Conditions to Company and
the Selling Stockholder’s Obligations to Close.  The
obligations of the Company and the Selling Stockholder to consummate the
transactions provided for hereby are subject to the satisfaction, before or on
the Closing Date, of each of the conditions set forth below in this Section 7.1,
any of which may be waived by either of the Company and the Selling
Stockholder:

      


      (a)     
      Accuracy of
Representations.  All representations and warranties of each of
each of Parent and Merger Sub contained in this Agreement, the Ancillary
Agreements and any certificate delivered by any of them at or prior to Closing
shall be, if specifically qualified by materiality, true in all respects and, if
not so qualified, shall be true in all material respects, in each case on and as
of the Closing Date with the same effect as if made on and as of the Closing
Date, except for representations and warranties expressly stated to be made as
of the date of this Agreement or as of another date other than the Closing Date
and except for changes contemplated or permitted by this
Agreement.  Parent shall have delivered to the Company a certificate
dated the Closing Date to the foregoing effect.

      


      (b)      
     Covenants.  Parent
and Merger Sub shall, in all material respects, have performed and complied with
each of the covenants, obligations and agreements contained in this Agreement
and the Ancillary Agreements that are to be performed or complied with by them
at or prior to Closing.  Parent shall have delivered to the Company a
certificate dated the Closing Date to the foregoing effect.

      


      (c)      
     Consents and
Approvals.  All consents, approvals, permits, authorizations
and orders required to be obtained from, and all registrations, filings and
notices required to be made with or given to any Regulatory Authority or Person
as provided herein, if any, shall have been so obtained or filed with such
Regulatory Authority or Person.

      


      (d)    
       Hammett Employment
Agreement.  The Hammett Employment Agreement shall have been
executed and delivered to the Company pursuant to Article 5 hereof.

      


      (e)      
     Otting Offer
Letter.  The Otting Offer Letter shall have entered into by and
between Zachary Otting pursuant to Article 5 hereof.

      


      (f)    
        No Legal
Proceedings.  No injunction, action, suit or proceeding shall
be pending or threatened by or before any Regulatory Authority and no Law shall
have been enacted, promulgated or issued or deemed applicable to any of the
transactions contemplated by this Agreement and the Ancillary Agreements, which
would: (i) prevent consummation of any of the transactions contemplated by this
Agreement and the Ancillary Agreements; (ii) cause any of the transactions
contemplated by this Agreement and the Ancillary Agreements to be rescinded
following consummation; or (iii) have a Material Adverse Effect on a Party, the
Merger, this Agreement or the transactions contemplated hereby.

      


      (g)    
       Closing
Deliverables.  Parent and Merger Sub shall have delivered, or
caused to be delivered, to the Company those certificates set forth in Section
7.1(a) and (b) hereof.


      
        
           


        

        
          37

          
            

          

        

        
           


        

      


      (h)        
   Covenants.  The
Parties shall, in all material respects, have performed and complied with each
of the covenants, obligations and agreements contained in this Agreement and the
Collateral Documents that are to be performed or complied with by them at or
prior to Closing.  The Company shall have delivered to the Parent and
Merger Sub, and the Parent and Merger Sub shall have delivered to the Company, a
certificate dated the Closing Date to the foregoing effect.

      


      7.2      
     Conditions to Parent and
Merger Sub’s Obligations to Close.  The obligations of Parent
and Merger Sub to consummate the transactions provided for hereby are subject to
the satisfaction, before or on the Closing Date, of each of the conditions set
forth below in this Section 7.2, any of which may be waived by
Parent:

      


      (a)         
  Accuracy of
Representations.  All representations and warranties of the
Company and of the Selling Stockholder contained in this Agreement, the
Ancillary Agreements and any certificate delivered by any of the Company and the
Selling Stockholder at or prior to Closing shall be, if specifically qualified
by materiality, true in all respects and, if not so qualified, shall be true in
all material respects, in each case on and as of the Closing Date with the same
effect as if made on and as of the Closing Date, except for representations and
warranties expressly stated to be made as of the date of this Agreement or as of
another date other than the Closing Date and except for changes contemplated or
permitted by this Agreement.  The Company and the Selling Stockholder
shall have delivered to Parent a certificate dated the Closing Date to the
foregoing effect.

      


      (b)      
     Covenants.  The
Company and the Selling Stockholder shall, in all material respects, have
performed and complied with each of the covenants, obligations and agreements
contained in this Agreement and the Ancillary Agreements that are to be
performed or complied with by them at or prior to Closing.  The
Company shall have delivered to Parent a certificate dated the Closing Date to
the foregoing effect.

      


      (c)     
      Consents and
Approvals.  All consents, approvals, permits, authorizations
and orders required to be obtained from, and all registrations, filings and
notices required to be made with or given to, any Regulatory Authority or Person
as provided herein, shall have been so obtained or filed with such Regulatory
Authority or Person.

      


      (d)    
       Stockholder
Approval.  All stockholder approval, if any, as required under
any applicable Law, shall have been obtained to approve the transactions
contemplated hereunder including the approval of the Merger, this Agreement or
the transactions contemplated hereby.

      


      (e)    
       Hammett Employment
Agreement.  The Hammett Employment Agreement shall have been
executed and delivered to Parent pursuant to Article 5 hereof.

      


      (f)        
    Otting Offer
Letter.  The Otting Offer Letter shall have entered into by and
between Zachary Otting pursuant to Article 5 hereof.

      


      (g)     
      No Legal
Proceedings.  No injunction, action, suit or proceeding shall
be pending or threatened by or before any Regulatory Authority and no Law shall
have been enacted, promulgated or issued or deemed applicable to any of the
transactions contemplated by this Agreement and the Ancillary Agreements, which
would: (i) prevent consummation of any of the transactions contemplated by this
Agreement and the Ancillary Agreements; (ii) cause any of the transactions
contemplated by this Agreement and the Ancillary Agreements to be rescinded
following consummation; or (iii) have a Material Adverse Effect on a Party, the
Merger, this Agreement or the transactions contemplated hereby.


      
        
           


        

        
          38

          
            

          

        

        
           


        

      


      (h)        
   No Material Adverse
Change.  There shall have been no Material Adverse Change in
the business, financial condition or operations of the Company.

      


      (i)         
   Resignation of Selling
Stockholder.  Selling Stockholder shall deliver to Parent his
resignation from all positions as officer and director of Company held prior to
the Closing.

      


      (j)        
    Closing
Deliverables.  The Company and the Selling Stockholder shall
have delivered, or caused to be delivered, to Parent those certificates set
forth in Section 7.2(a) and (b) hereof.

      


      (k)    
       Delivery of Monte Cristo
Agreement.  The Company and the Selling Stockholder shall have
delivered, or caused to be delivered, to Parent a fully-executed copy of the
Monte Cristo Agreement.

      


      ARTICLE
8

      INDEMNIFICATION

      


      8.1         
  Survival of Representations,
Etc.  All of the representations and warranties contained in
this Agreement shall survive the Closing hereunder (even if the damaged party
knew or had reason to know of any misrepresentation or breach of warranty or
covenant at the time of Closing) and continue in full force and effect for a
period of four (4) years after the Closing Date (subject to any applicable
statutes of limitations).  The right to indemnification, payment of
Losses or other remedy based on such representations, warranties, covenants and
obligations will not be affected by any investigation conducted with respect to,
or any knowledge of the party entitled to such right to indemnification acquired
(or capable of being acquired) at any time, whether before or after the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation.  The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Losses, or other remedies based on such
representations, warranties, covenants and obligations.

      


      8.2      
     Indemnification.

      


      (a)      
     By Company and the Selling
Stockholder.  Subject to Section 8.3, the Company and the
Selling Stockholder, jointly and severally, hereby agree (without duplication)
to indemnify, protect, defend (at Parent’s request), release and hold Parent and
its directors, officers, managers, members, employees, agents, successors,
Affiliates and assigns (collectively, the “Parent Indemnified
Parties”) harmless from and against any and all Losses incurred in
connection with, arising out of, resulting from or incident to:


      
        
           


        

        
          39

          
            

          

        

        
           


        

      


      (i)         
   any breach or inaccuracy of any representation or
warranty of the Company and the Selling Stockholder set forth in this Agreement
or contained in any certificate delivered by or on behalf of Company pursuant to
this Agreement;

      


      (ii)       
    any breach of any covenant or other agreement
made by the Company and the Selling Stockholder in or pursuant to this
Agreement;

      


      (iii)           any
Liability arising under or with respect to any and all Employee Plans, and any
Liability with respect to any of the Company’s employees, former employees or
service providers relating to acts or omissions which occurred on or prior to
the Closing Date;

      


      (iv)           any
claim by any Person for brokerage or finder’s fees or commissions or similar
payments based on any agreement or understanding alleged to have been made by
such Person with the Company or the Selling Stockholder (or any Person acting
(or purportedly acting) on behalf of any such Person) in connection with the
transactions contemplated by this Agreement; or

      


      (v)     
      any Loss, including Taxes, arising in
connection with any distributions made to Company Stockholders at any time prior
to and including the date of the Merger.

      


      (b)     
      Indemnification by
Parent.  Subject to Section 8.3, Parent hereby agrees (without
duplication) to indemnify, protect, defend (at the Company’s request), release
and hold the Selling Stockholder, Company and its directors, officers,
stockholders, employees, agents, successors and assigns (collectively, the
“Company Indemnified
Parties”) harmless from and against any and all Losses incurred in
connection with, arising out of, resulting from or incident to:

      


      (i)       
     any breach or inaccuracy of any
representation or warranty of Parent and Merger Sub set forth in this Agreement
or contained in any certificate delivered by or on behalf of Parent and Merger
Sub pursuant to this Agreement; or

      


      (ii)    
       any breach of any covenant or
other agreement made by Parent and Merger Sub in or pursuant to this
Agreement.

      


      (c)     
      The term “Losses” as used in this
Section 8.2 is not limited to matters asserted by third parties against any
indemnified party, but includes Losses incurred or sustained by an indemnified
party in the absence of third party claims.  Payments by an
indemnified party of amounts for which such indemnified party is indemnified
under this Article 8 shall not be a condition precedent to
recovery.

      


      8.3      
     Limitations on
Indemnification for Certain Breaches.  An indemnifying party
shall not have any Liability under Section 8.2(a) or 8.2(b) for any Claims
unless the aggregate amount of Losses to the indemnified parties finally
determined to arise thereunder exceeds Fifty Thousand Dollars ($50,000) (the
“Indemnification
Threshold”), in which event the indemnifying party shall be required to
pay the full amount of such Losses in relating back to the first dollar; provided, however, that the
maximum liability of any Party hereunder shall be limited to the consideration
received and to be received by such Party under this Agreement, in the case of
the Company or the Selling Stockholder, or paid or to be paid by Parent
hereunder to the Company and the Selling Stockholder, in the case of Parent or
Merger Sub.


      
        
           


        

        
          40

          
            

          

        

        
           


        

      


      8.4       
    Indemnification
Procedures.

      


      (a)      
     In the event that any Legal Proceeding
shall be instituted or any claim or demand shall be asserted (individually and
collectively, a “Claim”) by any Person
in respect of which payment may be sought under this Article 8 (regardless of
the provisions of Section 8.3), the indemnified party shall reasonably and
promptly cause written notice (a “Claim Notice”) of the
assertion of any Claim of which it has knowledge which is covered by this
indemnity to be delivered to the indemnifying party; provided, however, that the
failure of the indemnified party to give the Claim Notice shall not release,
waive or otherwise affect the indemnifying party’s obligations with respect
thereto, except to the extent that the indemnifying party can demonstrate actual
loss and material prejudice as a result of such failure.  If the
indemnifying party shall notify the indemnified party in writing within five (5)
Business Days (or sooner, if the nature of the Claim so requires) that the
indemnifying party shall be obligated under the terms of its indemnity hereunder
in connection with such lawsuit or action, then the indemnifying party shall be
entitled, if it so elects at its own cost, risk and expense, (i) to take control
of the defense and investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice, but, in any event, reasonably acceptable to
the indemnified party, to handle and defend the same unless the named parties to
such action or proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and the indemnified party has been
advised in writing by counsel that there may be one or more material legal
defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, in which event the
indemnified party shall be entitled, at the indemnifying party’s cost, risk and
expense, to a single firm of separate counsel (plus any necessary local
counsel), all at reasonable cost, of its own choosing, reasonably acceptable to
the indemnifying party and (iii) to compromise or settle such lawsuit or action,
which compromise or settlement shall be made only with the prior written consent
of the indemnified party, such consent not to be unreasonably withheld or
delayed.

      


      8.5       
    If the indemnifying party elects not to defend
against, negotiate, settle or otherwise deal with any Claim which relates to any
Losses indemnified against hereunder, fails to notify the indemnified party of
its election as provided in this Section 8.4 or contests its obligation to
indemnify the indemnified party for such Losses under this Agreement, the
indemnified party may defend against, negotiate, settle or otherwise deal with
such Claim.  If the indemnified party defends any Claim, then the
indemnifying party shall reimburse the indemnified party for the Losses incurred
in defending such Claim upon submission of periodic bills.  If the
indemnifying party shall assume the defense of any Claim, the indemnified party
may participate, at its own expense, in the defense of such Claim; provided, however, that such
indemnified party shall be entitled to participate in any such defense with
separate counsel at the expense of the indemnifying party if (i) so requested by
the indemnifying party to participate or (ii) in the reasonable opinion of
counsel to the indemnified party, a material conflict or potential material
conflict exists between the indemnified party and the indemnifying party that
would make such separate representation required; and provided, further, that the
indemnifying party shall not be required to pay for more than one such counsel
for all indemnified parties in connection with any Claim.  If the
indemnifying party shall assume the defense of any Claim, the indemnifying party
shall obtain the prior written consent of the indemnified party before entering
into any settlement of such Claim or ceasing to defend such Claim if, pursuant
to or as a result of such settlement or cessation, injunctive or other equitable
relief shall be imposed against the indemnified party or if such settlement or
cessation does not expressly and unconditionally release the indemnified party
from all Liabilities or obligations with respect to such Claim, with
prejudice.  The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement of any
Claim.


      
        
           


        

        
          41

          
            

          

        

        
           


        

      


      8.6        
   Recoupment From Merger Cash
Consideration.   Any
indemnification to which a Company Indemnified Party is entitled under this
Agreement as a result of any Losses it may suffer shall first be made as a
payment to such Company Indemnified Party from the next Merger Cash
Consideration payments to be made to the Selling Stockholder hereunder, which
shall reduce such Merger Cash Consideration payments accordingly until such
Losses are indemnified in full.  To the extent that the aggregate
amount of such indemnification exceeds the future Merger Cash Consideration
payments to be received by the Selling Stockholder, the Company Indemnified
Party(ies) may recoup such unpaid Losses from the Selling Stockholder
directly.

      


      ARTICLE
9

      TERMINATION

      


      9.1         
  Termination.  This
Agreement may be terminated, and the transactions contemplated hereby may be
abandoned, at any time prior to the Effective Time.

      


      (a)        
   By mutual written agreement of the
Parties;

      


      (b)       
    By either of Parent or the Company if the Closing
does not occur on or before February 29, 2008, or to be extended by mutual
consent of the parties;

      


      (c)         
  By the Company if the stockholders of the Company fail to
approve the Merger, this Agreement and the transactions contemplated
hereby;

      


      (d)      
     By either of Parent or the Company if any
court of competent jurisdiction or other competent Regulatory Authority shall
have issued an order making illegal or otherwise permanently restricting,
preventing or otherwise prohibiting the Merger and such order shall have become
final;

      


      (e)        
   By either of Parent or the Company upon written notice
to the other Party in the event of a breach of any provision or covenant of this
Agreement, or any representation or warranty made by such Party hereunder
becomes inaccurate; provided, however, that such
breach or inaccuracy would cause the related closing condition, if any, not be
satisfied in accordance with Article 7 hereof; provided, further, that prior
to any termination by the non-breaching party, such Party shall provide written
notice to the breaching Party specifically identifying the breach or inaccurate
representation, and the breaching Party does not cure or correct such breach or
inaccuracy within 30 days following receipt of the written notice.

      


      9.2        
   Effect of
Termination.  If this Agreement is validly terminated by either
the Company or Parent pursuant to Section 9.1, this Agreement will forthwith
become null and void and there will be no liability or obligation on the part of
the parties hereto, except that nothing contained herein shall relieve any party
hereto from liability for willful breach of its representations, warranties,
covenants or agreements contained in this Agreement.


      
        
           


        

        
          42

          
            

          

        

        
           


        

      


      ARTICLE
10

      MISCELLANEOUS
PROVISIONS

      


      10.1          Notices.  All
notices, requests and other communications hereunder must be in writing and will
be deemed to have been duly given only if delivered personally against written
receipt or mailed by prepaid first class registered or certified mail, return
receipt requested, or sent by overnight courier prepaid, to the parties at the
following addresses or facsimile numbers:

      


      
        	
                If
      to Parent and Merger Sub to:

              
	 
      
	
                TWL
      Corporation

              
	
                4101
      International Parkway

              
	
                Carrollton,
      Texas 75007

              
	Facsimile:	
                 

              
	
                Attention:  Chief
      Executive Officer

              
	 
      
	 
      
	
                with
      a copy, which shall not constitute notice to:

              
	 
      
	
                Clark
      R. Moore, Esq.

              
	
                105
      Carrick Circle

              
	
                Hayward,
      California 94542

              
	
                Facsimile:  510.743.4262

              
	 
      
	
                If
      to the Company or the Selling Stockholder:

              
	 
      
	
                Divergent
      Entertainment, Inc.

              
	
                700
      Hammett Lane

              
	
                New
      Smyrna Beach, FL 32169

              
	Facsimile:	
                 

              
	
                Attention:  Daniel
      Hammett

              
	 
      
	
                with
      a copy, which shall not constitute notice, to:

              
	 
      
	
                Leonard,
      O'Brien, Spencer, Gale & Sayre

              
	
                100
      South Fifth Street, Suite 2500

              
	
                Minneapolis,
      MN 55402

              
	
                Facsimile:  612.332.2740

              
	
                Attention:  Scott
      S. Payzant, Esq.

              


      

      


      


      10.2          Entire
Agreement.  This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
thereof and contains the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and thereof.  Except for the
representations and warranties contained in this Agreement or in any instrument
delivered pursuant to this Agreement, each of the Parties to this Agreement
acknowledges that no other representations or warranties have been relied upon
by that Party or made by any other party or its officers, directors, employees,
agents, financial and legal advisors or other representatives.


      
        
           


        

        
          43

          
            

          

        

        
           


        

      


      10.3          Further Assurances;
Post-Closing Cooperation.  At any time or from time to time
after the Closing, the Parties will execute and deliver to the other party such
other documents and instruments, provide such materials and information and take
such other actions as the other party may reasonably request to consummate the
transactions contemplated by this Agreement and otherwise to cause the other
Party to fulfill its obligations under this Agreement and the transactions
contemplated hereby.  Each Party agrees to use commercially reasonable
efforts to cause the conditions to its obligations to consummate the
transactions contemplated hereby to be satisfied.

      


      10.4          Amendment.  This
Agreement may be amended by the Parties hereto at any time before the Closing by
execution of an instrument in writing signed on behalf of each of the Parties
hereto and after the Closing by execution of an instrument in writing signed on
behalf of the Surviving Corporation.

      


      10.5          Extension.  At
any time prior to the Closing, Parent, Merger Sub and the Company may, to the
extent legally allowed, may agree in writing to extend the time for the
performance of any of the obligations of the other party hereto.

      


      10.6          Waiver.  Any
term or condition of this Agreement may be waived at any time by the party that
is entitled to the benefit thereof, but no such waiver will be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition.  No waiver by any party of any term or
condition of this Agreement, in any one or more instances, will be deemed to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.  All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.

      


      10.7          Third Party
Beneficiaries.  The terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective
successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights, upon any other Person other than any Person entitled to indemnity
as described in Article 8.

      


      10.8          No Assignment; Binding
Effect.  Neither this Agreement nor any right, interest or
obligation hereunder may be assigned (by operation of law or otherwise) by any
Party without the prior written consent of the other Parties and any attempt to
do so will be void.  Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of and is enforceable by the Parties
hereto and their respective successors and assigns.

      


      10.9          Captions.  The
headings and table of contents used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions
hereof.


      
        
           


        

        
          44

          
            

          

        

        
           


        

      


      10.10        Invalid
Provisions.  If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.

      


      10.11        Governing
Law.  This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Texas, without giving effect
to any choice of law or conflict of law provision.

      


      10.12        Construction.  The
Parties hereto agree that this Agreement is the product of negotiation between
sophisticated parties and individuals, all of whom were represented by counsel,
and each of whom had an opportunity to participate in and did participate in,
the drafting of each provision hereof.  Accordingly, ambiguities in
this Agreement, if any, will not be construed strictly or in favor of or against
any Party hereto but rather will be given a fair and reasonable construction
without regard to the rule of contra proferentum.

      


      10.13        Counterparts.  This
Agreement may be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.

      


      10.14        Expenses.  The
Company and the Selling Stockholder, on one hand, and Parent and Merger Sub, on
the other hand, shall each bear its own expenses, including attorneys’,
accountants’ and other professionals’ fees, incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.

      


      10.15        Attorneys’ Fees and
Costs.  In the event of any action at law or in equity between
the parties hereto to enforce any of the provisions hereof, the unsuccessful
party to such litigation shall pay to the successful party all costs and
expenses, including reasonable attorneys’ fees, incurred therein by such
successful party; and if such successful party shall recover judgment in any
such action or proceeding, such costs, expenses and reasonable attorneys’ fees
may be included in and as part of such judgment.

      


      10.16        Waiver of Jury
Trial.  Each party hereto hereby expressly waives any right to
trial by jury of any claim, demand, action or cause of action arising under or
in connection with this Agreement or the transactions contemplated
hereby.

      


      10.17        Legends.  Each
Selling Stockholders understands that the stock certificates representing the
Parent Common Stock shall bear any legend as required by the "blue sky" laws of
any state and a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock
certificates):


      
        
           


        

        
          45

          
            

          

        

        
           


        

      


      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT 7OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.

      


      10.18        Representation by
Counsel.  Each party hereto represents and agrees with each
other that it has been represented by or had the opportunity to be represented
by independent counsel of its own choosing, and that it has had the full right
and opportunity to consult with its respective attorney(s) to the extent, if
any, that it desired, it availed itself of this right and opportunity, that it
or its authorized officers (as the case may be) have carefully read and fully
understand this Agreement in its entirety and have had it fully explained to
them by such party’s respective counsel, that each is fully aware of the
contents thereof and its meaning, intent and legal effect, and that it or its
authorized officer (as the case may be) is competent to execute this Agreement
and has executed this Agreement free from coercion, duress or undue
influence.

      


      10.19        Schedules.  In
the event of any inconsistency between the statements in the body of this
Agreement and those in the Disclosure Schedule (other than an exception
expressly set forth as such in the Disclosure Schedule with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.

      


      10.20  
     Specific
Performance.  The Parties hereto agree that irreparable damage
would occur in the event that Sections 5.9, 6.1, 6.2 and 6.4 of this Agreement
is not performed in accordance with its specific terms or were otherwise
breached.  It is agreed that the Parties will be entitled to an
injunction or injunctions to prevent breaches of Sections 5.9, 6.1, 6.2 and 6.4
of this Agreement and to enforce specifically the terms and provisions thereof
in any court having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.


      
        
           


        

        
          46

          
            

          

        

        
           


        

      


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

      


      


      
        	 
      	
                “PARENT”

              	 
      
	 
      	 
      	 
      
	 
      	
                TWL
      Corporation,

              	 
      
	 
      	
                a
      Nevada corporation

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	
                Dennis
      Cagan

              	 
      
	 
      	 
      	
                Title:

              	
                Chief
      Executive Officer

              	 
      
	 
      	 
      	 
      
	 
      	
                “MERGER
      SUB”

              	 
      
	 
      	 
      	 
      
	 
      	
                TWL
      Knowledge Group, Inc.,

              	 
      
	 
      	
                a
      Delaware corporation

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	
                Dennis
      Cagan

              	 
      
	 
      	 
      	
                Title:

              	
                Chief
      Executive Officer

              	 
      
	 
      	 
      	 
      
	 
      	
                “COMPANY”

              	 
      
	 
      	 
      	 
      
	 
      	
                Divergent
      Entertainment, Inc.,

              	 
      
	 
      	
                a
      Minnesota corporation

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	
                Daniel
      Hammett

              	 
      
	 
      	 
      	
                Title:

              	
                President

              	 
      
	 
      	 
      	 
      
	 
      	
                “SELLING
      STOCKHOLDER”

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	
                Daniel
      Hammett

              	 
      


      


      
        
           


        

        
          47

          
            

          

        

        
           


        

      


      DISCLOSURE
SCHEDULES

      


      


      


      Schedule
3.3(c)

      


      No
disclosures.

      


      Schedule
3.3(e)

      


      No
disclosures.

      


      Schedule
3.3(f)

      


      No
disclosures.

      


      Schedule
3.4

      


      No
disclosures.

      


      Schedule
3.5

      


      No
disclosures.

      


      Schedule
3.8

      


      No
disclosures

      


      Schedule
3.9(b)

      


      No
disclosures

      


      Schedule
3.9(c)

      


      No
disclosures

      


      Schedule
3.9(e)

      


      No tax
elections have been made.

      


      Schedule
3.9(h)

      


      No
disclosures

      


      Schedule
3.9(k)

      


      No
disclosures.


      
        
           


        

        
          48

          
            

          

        

        
           


        

      


      Schedule
3.9(l)

      


      No
disclosures

      


      Schedule
3.10(a)(i)

      


      Complete
list of all Intellectual Property owned by the Company (the “Owned Proprietary
Rights”).

      


      Technology
prototype for Firefighter training tool

      Trademark:  Everybody
Goes HomeTM

      


      


      Schedule
3.10(a)(ii)

      


      List of
each material license for Intellectual Property licensed by the Company (the
“Licensed Proprietary
Rights”)

      


      
        	
                 
      

              	
                ·

              	
                Divergent
      Entertainment Software Licensing Agreement with Monte
    Cristo

              


      

      


      
        	
                 
      

              	
                ·

              	
                Divergent
      Entertainment Software Licensing Agreement with Big John
    Games

              


      

      


      


      Schedule
3.10(c)

      


      Disclosures
related to ownership of IP

      


      


      Schedule
3.11(a)

      


      List of
all executory Contracts of the Company:

      


      
        	
                 
      

              	
                ·

              	
                Divergent
      Entertainment Software Licensing Agreement with Monte
    Cristo

              


      

      


      
        	
                 
      

              	
                ·

              	
                Divergent
      Entertainment Software Licensing Agreement with Big John
    Games

              


      

      


      Schedule
3.12(a)

      


      No
Disclosures.

      


      Schedule
3.13

      


      No
Disclosures.


      
        
           


        

        
          49

          
            

          

        

        
           


        

      


      Schedule
3.14

      


      No
Disclosures.

      


      Schedule 3.16(a) &
(b)

      


      No
Permits.

      


      Schedule
3.17

      


      Divergent
Entertainment Software Licensing Agreement with Monte Cristo

      


      Divergent
Entertainment Software Licensing Agreement with Big John Games

      


      Schedule
3.20

      


      No
disclosures.

      


      Schedule
3.21

      


      No
disclosures.

      


      Schedule
3.22

      


      No
disclosures.

      


      Schedule
3.24(a)

      


      The
Company does not own any real property and is not a party to any
leases.


      
        
           


        

        
          50

          
            

          

        

        
           


        

      


      EXHIBIT
A

      


      DELAWARE
CERTIFICATE OF MERGER


      
        
           


        

        
          51

          
            

          

        

        
           


        

      


      EXHIBIT
B

      


      PARENT
STOCK RESTRICTIONS


      
        
           


        

        
          52

          
            

          

        

        
           


        

      


      EXHIBIT
C

      


      HAMMETT
EMPLOYMENT AGREEMENT


      
        
           


        

        
          53

          
            

          

        

        
           


        

      


      EXHIBIT
D

      


      OTTING
OFFER LETTER

       

       
54