**SHARE
      EXCHANGE AGREEMENT**




**THIS
      SHARE EXCHANGE AGREEMENT** (the
“ **Agreement** ”)
      is
      made as of January 12, 2007 (the “ **Effective
      Date** ”),
      by
      and among **O2Diesel
      Corporation** ,
      a
      corporation organized under the laws of the State of Delaware (“ **Purchaser** ”), **ProEco
      Energy Company, Inc.** ,
      a
      corporation organized under the laws of the State of South Dakota (“ **Company”** ),
      and
      each of the undersigned selling shareholders of Company (each a “ **Seller** ”
and
      collectively the “ **Sellers** ”).




***Preliminary
      Statements***




A.  Sellers
      own all of the issued and outstanding capital stock of Company, consisting
      of
      85,750,000 shares of common stock, $0.0001 par value per share (“ **Company
      Shares** ”).




B.  Purchaser
      desires to acquire 68,600,000 Company Shares from the Sellers, in the amounts
      specified on Schedule I of this
      Agreement (“ **Schedule
      I** ”),
      which
      Company Shares equal 80% of the outstanding equity interests of Company on
      a
      fully-diluted basis as of the Closing Date (as defined below), in exchange
      for
      9,174,312 shares of Purchaser’s common stock, par value US$0.0001 per share (the
“ **Purchaser
      Stock** ”),
      upon
      the terms and subject to the conditions contained in this Agreement (the
“ **Purchase** ”);




C.  The
      parties intend this transaction to qualify as a reorganization under
      Section 368(a) of the Internal Revenue Code of 1986, as amended (the
“ **Code** ”);
      and




D.  In
      separate transactions in connection with the Purchase, (i) Purchaser and Company
      intend to work together to construct a new fuel-grade ethanol plant (the
“ **Ethanol
      Plant** ”)
      with
      planned capacity of 100 million gallons per year to be built in two 50-million
      gallon trains (each, a “ **Train** ”
and
      collectively, “ **Trains** ”)
      (the
“ **Potential
      Project** ”);
      and
      (ii) Purchaser has extended credit to Company to finance the Potential Project
      (the “ **Financing
      Transaction** ”),
      including but not limited to purchase of an option (“ **Option** ”)
      to
      purchase parcels of land (collectively, the “ **Parcels** ”)
      on
      which the Ethanol Plant would be constructed.




**NOW,
      THEREFORE** ,
      for and
      in consideration of the premises, covenants, and agreements contained herein,
      and other good and valuable consideration, the receipt and sufficiency of which
      is hereby acknowledged, the parties do covenant, agree, represent, warrant,
      and
      stipulate as follows:




***Agreement***




**1.**  **EXCHANGE**




1.1  **Valuation
      and Issuance and Transfer of Purchaser Stock** **.**




(a)  Purchase
      Price .
      Subject
      to the terms and conditions set forth herein, Purchaser hereby agrees to
      transfer to the Sellers 9,174,312 shares of Purchaser Stock (the “ **Transaction
      Shares** ”).
      The
      Transaction Shares shall be distributed to the Sellers in accordance with the
      terms of Section
      1.1(b) of this
      Agreement.









(b)  Transfer
      of Transaction Shares .
      On the
      Closing Date (as defined below), Purchaser shall transfer and instruct the
      transfer agent to register in the name of the several Sellers 60% of the
      Transaction Shares (the “ **Closing
      Shares** ”)
      as set
      forth on Schedule
      I .
      Purchaser shall transfer and instruct the transfer agent to register in the
      name
      of the several Sellers the balance of the Transaction Shares (the “ **Earnout
      Shares** ”)
      as set
      forth on Schedule
      I upon the
      achievement, in the reasonable business judgment of Purchaser, of the milestones
      relating to the Potential Project as set forth on Schedule
      II of this
      Agreement (the “ **Project
      Milestones** ”).
      The
“ **Closing
      Date** ”
shall
      be the date that the Purchase closes. For avoidance of doubt, the Closing Shares
      and the Earnout Shares collectively shall constitute all of the Transaction
      Shares.





(c)  Earnout
      Shares .
      The
      Earnout Shares shall be held in escrow with an escrow agent to be mutually
      agreed upon by the parties (the “ **Escrow
      Agent** ”),
      to be
      held by the Escrow Agent pursuant to an escrow agreement in a form and on terms
      to be mutually agreed upon by the parties (the “ **Escrow
      Agreement** ”).
      The
      Escrow Agreement will authorize the Escrow Agent to release the Earnout Shares
      to the several Sellers upon the achievement of the applicable Project
      Milestones, within fifteen (15) days of such milestone, as confirmed in writing
      by Purchaser to the Escrow Agent. Purchaser agrees to instruct the Transfer
      Agent to register any Earnout Shares so released in the name of each individual
      Seller as specified on Schedule
      I .





(d)  Stockholder
      Agreement .
      In
      connection with this Agreement, each Seller agrees to enter into a stockholder
      agreement with Purchaser in a form and on terms to be mutually agreed upon
      by
      the parties (the “ **Stockholder
      Agreement** ”).
      Such
      terms shall include, but not be limited to, a holding period for the Closing
      Shares (subject to customary exceptions with respect to tender offers) to end
      on
      the later of (x) the date that the final Train is completed and demonstrated
      to
      be operational to Purchaser’s reasonable satisfaction or (y) the end of a
      twelve-month period, rights to one (1) demand registration and unlimited
      registrations on Form S-3 of the Transaction Shares (each subject to customary
      black-out periods), unlimited piggy-back registration rights of the Transaction
      Shares, representation by the Sellers as a group on the board of directors
      of
      Purchaser (“ **Purchaser’s
      Board** ”)
      based
      on the Sellers’ ownership of the Transaction Shares and in accordance with and
      subject to the listing standards of the American Stock Exchange (“ **AMEX** ”),
      including but not limited to the AMEX independence standards.




1.2   **Transfer
      of Company Shares to Purchaser** **.**




(a)  Subject
      to the terms and conditions set forth herein, the Sellers hereby agree to
      jointly and severally transfer to Purchaser the Company Shares, as set forth
      on Schedule I on the
      Closing Date.




(b)  On
      the
      Closing Date, Company shall transfer and instruct the transfer agent to register
      in the name of Purchaser the Company Shares as set forth on Schedule
      I .




2




**2.**  **REPRESENTATIONS
      AND WARRANTIES OF THE SELLERS AND COMPANY**




Except
      as
      set forth on the Company Disclosure Schedule attached to this Agreement as Schedule
      III to this
      Agreement (the “ **Company
      Disclosure Schedule** ”)
      and
      delivered to Purchaser prior to the Effective Date, the Sellers and Company,
      jointly and severally, represent and warrant to Purchaser as of the Effective
      Date as follows:




2.1  **Execution
      and Delivery; Valid and Binding Agreements** **.** Each
      Seller and the Company have duly executed and delivered this Agreement and,
      assuming that this Agreement is the legal, valid and binding agreement of
      Purchaser, this Agreement constitutes the legal, valid and binding obligations
      of such Seller and the Company, enforceable against each such party, in
      accordance with its terms.




2.2  **Authority;
      No Breach** **.** Each
      Seller and the Company have all requisite power and authority (and capacity
      in
      the case of a Seller who is an individual) to execute and deliver this Agreement
      and to perform their obligations hereunder (including all right, power, capacity
      and authority to sell, transfer, and convey the Company Shares). The execution,
      delivery and performance by each Seller and Company of this Agreement and the
      agreements provided for herein, and the consummation by Company and each Seller,
      as applicable, of the transactions contemplated hereby and thereby, including
      but not limited to the Potential Project, will not, with or without the giving
      of notice or the passage of time or both, directly or indirectly
      (A) contravene, conflict or result in a violation of (i) any provision
      of Company’s organizational or formation documents; (ii) any law, statute, rule,
      regulation, ordinance, code, directive, writ, injunction, settlement, permit,
      license, decree, judgment or order (collectively, “ **Laws** ”)
      of any
      governmental authority to which Company or any Seller or the assets of Company
      are subject, or by which the same may be bound; or (iii) any of the terms,
      conditions or provisions of any material contract to which Company or any Seller
      is a party; (B) constitute or create a default, or give rise to any right of
      termination, cancellation or acceleration under any material contract to which
      Company or any Seller is a party; (C) result in the imposition of a lien on
      the
      Company Shares or all or any portion of Company’s assets; or (D) require any
      filing with, or permit, consent or approval of, or the giving of any notice
      to,
      any governmental authority or third party, in each case except as specified
      on
      the Company Disclosure Schedule.




2.3  **Corporate
      Matters** **.** Company
      (i) is a corporation, duly registered, validly existing, and in good
      standing under the laws of its jurisdiction of organization; and (ii) has
      full power and authority to carry on the businesses in which it is engaged,
      and
      to own and use the properties owned and used by it. Company
      is duly qualified as a foreign entity in the jurisdiction set forth on the
      Company Disclosure Schedule and is in good standing as a foreign entity in
      all
      jurisdictions where the properties owned, leased or operated by it and relating
      to the business are located or where the business is conducted, except where
      failure to qualify or be in good standing is not reasonably likely to have
      a
      material adverse effect on the business, results of operations, prospects or
      financial condition of the business (a “ **Material
      Adverse Effect** ”). The
      address of Company’s principal office and all of Company’s additional places of
      business are listed on the Company Disclosure Schedule. Except as set forth
      on
      the Company Disclosure Schedule, during the past five (5) years, Company has
      not
      been known by or used any corporate, fictitious or other name in the conduct
      of
      Company’s business or in connection with the use or operation of its assets. The
      Company Disclosure Schedule lists all current directors and officers of Company.
      Company has no subsidiaries. Company has delivered to Purchaser copies of
      Company’s organizational or formation documents as currently in
      effect.




3




2.4  **Capitalization** **.** The
      Company Disclosure Schedule sets forth the authorized and issued capital stock
      of Company as of the date hereof, together with a description of the rights
      and
      preferences of each class of Company’s capital stock. As
      of the
      date hereof, there are no outstanding options, warrants, preemptive rights,
      indebtedness having general voting rights or debt convertible into securities
      having such rights or subscriptions or other rights agreements or any other
      outstanding security or agreement entitling the holder thereof or party thereto
      to acquire any capital stock of Company. The Company Shares (i) have been duly
      and validly issued; (ii) are fully paid and nonassesable, (iii) are held
      beneficially and of record solely by the Sellers as specified on Schedule
      I ;
      and
      (iv) were not issued in violation of any preemptive rights or rights of first
      refusal or first offer.




2.5  **Title
      to Company Shares** .
      Each
      Seller owns good, valid and marketable title to the Company Shares owned by
      such
      Seller, free and clear of any and all liens, and upon delivery of the Company
      Shares to Purchaser on the Closing Date in accordance with this Agreement,
      good,
      valid and marketable title to the Company Shares, free and clear of all Liens
      (other than liens permitted in connection with the Financing Transaction
      (“ **Permitted
      Liens** ”)),
      will
      pass to Purchaser.




2.6  **Financial
      Statements** **.** The
      Company Disclosure Schedule sets forth true, correct and complete copies of
      the
      unaudited consolidated balance sheet of Company as of December 31, 2006 and
      the
      related statements of income for the period ended December 31, 2006 (the
“ **Company
      Financial Statements** ”).
      The
      Company Financial Statements present fairly the financial position of Company
      as
      of the dates thereof and its results of operations for the periods covered
      thereby and, except as set forth on the Company Disclosure Schedule, the Company
      Financial Statements have been prepared in all material respects in accordance
      with generally accepted accounting principles as adopted and in effect within
      the United States (“ **GAAP** ”)
      consistently applied. Except as set forth in the Company Financial Statements
      or
      the Company Disclosure Schedule, (i) Company has no material liabilities,
      contingent or otherwise, other than (a) liabilities incurred in the
      ordinary course of business, and (b) obligations under contracts and
      commitments incurred in the ordinary course of business and not required under
      GAAP to be reflected in the Company Financial Statements; (ii) there has
      been no adverse change in the assets, business, liabilities, properties,
      prospects, condition (financial or otherwise) or results of operations of
      Company that would be likely to have a Material Adverse Effect (a “ **Material
      Adverse Change** ”);
      (iii) neither the business, condition or operations of Company nor any of
      its properties or assets have been materially or adversely affected as a result
      of any legislative or regulatory change, any revocation or change in any
      franchise, license or right to do business, or any other event or occurrence,
      whether or not insured against; and (iv) Company has not entered into any
      material transaction outside of the ordinary course of business or made any
      distribution on its capital stock or other ownership interest.




2.7  **The
      Sellers’ Share Percentage** **.** The
      Company Shares to be acquired by Purchaser represent eighty percent (80%) of
      all
      of the issued and outstanding capital stock of Company on a fully-diluted basis.




4




2.8  **Due
      Diligence Information** **.** The **** due
      diligence information presented to Purchaser by the Sellers and Company in
      connection with Purchaser’s due diligence investigation of Company, including
      each of the representations, warranties and covenants of Company and each Seller
      in this Agreement, is complete and accurate in all material respects and does
      not contain any untrue statement of a material fact or omit to state a material
      fact required to make the statements made, in light of the circumstances under
      which they were made, not misleading.




2.9  **Litigation;
      Compliance with Law** **.** Except
      as
      specified in the Company Disclosure Schedule, there is no material litigation,
      including but not limited to any action, suit, claim, proceeding or
      investigation, arbitration proceeding relating to Company or any governmental
      inquiry pending or, to the best of the knowledge of Company or any Seller,
      threatened against or affecting Company, at law or in equity, or before or
      by
      any municipal or other governmental department, commission, board, bureau,
      agency or instrumentality, domestic or foreign, and, to the best of the
      knowledge of Company or any Seller, there is no reasonable basis for any of
      the
      foregoing. Company is not in default with respect to any governmental order,
      writ, judgment, injunction or decree known to or served upon Company of any
      court or of any governmental department, commission, board, bureau, agency
      or
      instrumentality, domestic or foreign. There is no action or suit by Company
      pending or threatened against others. Company has complied in all respects
      with
      all laws, rules, regulations and orders applicable to its businesses,
      operations, properties, assets, products and services, and Company has all
      necessary permits, licenses and other authorizations required to conduct its
      business as conducted and as proposed to be conducted, except to the extent
      failure to comply or obtain any such permits, licenses or authorizations will
      not have a Material Adverse Effect. There is no existing law, rule, regulation
      or order, and Company is not aware of any proposed law, rule, regulation or
      order, which would prohibit or materially restrict Company from, or otherwise
      materially and adversely affect Company in, conducting its business in any
      jurisdiction in which it is now conducting business or in which it proposes
      to
      conduct business.




2.10  **Proprietary
      Information of Third Parties** **.** No
      third
      party has claimed or has reason to claim that any person employed by or
      affiliated with Company has (a) violated or may be violating to any
      material extent any of the terms or conditions of his or her employment,
      non-competition, non-disclosure or similar type of agreement with such third
      party, (b) disclosed or may be disclosing or utilized or may be utilizing
      any trade secret or proprietary information or documentation of such third
      party, or (c) interfered or may be interfering in the employment
      relationship between such third party and any of its present or former
      employees, or has requested information from Company that suggests that such
      a
      claim might be contemplated. To the best of the knowledge of Company or any
      Seller, no person employed by or affiliated with Company has improperly utilized
      or proposes to improperly utilize any trade secret or any information or
      documentation proprietary to any former employer, and to the best of the
      knowledge of Company or any Seller, no person employed by or affiliated with
      Company has violated any confidential relationship which such person may have
      had with any third party, in connection with the development, manufacture or
      sale of any product or proposed product or the development or sale of any
      service or proposed service of Company, and Company has no reason to believe
      there will be any such employment or violation. To the best of the knowledge
      of
      Company or any Seller, none of the execution or delivery of this Agreement
      and
      the other related agreements and documents executed in connection herewith,
      or
      the carrying on of the business of Company as officers, employees or agents
      by
      any officer, director or employee of Company identified by Company and Purchaser
      and listed on the Company Disclosure Schedule (each, a “ **Company
      Key Employee** ”),
      or
      the conduct or proposed conduct of the business of Company, will materially
      conflict with or result in a material breach of the terms, conditions or
      provisions of or constitute a material default under any contract, covenant
      or
      instrument under which any such person is obligated.




5




2.11  **Title
      to and Sufficiency of Assets; Insurance** **.** Company
      has valid and marketable title to all of its assets now carried on its books
      including those reflected in the most recent balance sheet of Company which
      forms a part of the Company Financial Statements, or acquired since the date
      of
      such balance sheet (except personal property disposed of since said date in
      the
      ordinary course of business) free of any liens, charges or encumbrances of
      any
      kind whatsoever, except such encumbrances and liens that arise in the ordinary
      course of business and do not materially impair Company’s ownership or use of
      such property or assets or Permitted Liens. Company does not own any real
      property. Company is in compliance in all material respects under all leases
      for
      property and assets under which it is operating, and all said leases are valid
      and subsisting and are in full force and effect. The assets of Company
      constitute all of the assets, rights and properties that are used in the
      operation of Company’s business as it is now conducted or that are used or held
      by Company for use in the operation of Company’s business. The assets of Company
      are sufficient for the continued conduct of Company’s business after the Closing
      Date in substantially the same manner as conducted prior to the Closing Date.
      The Company Disclosure Schedule lists all insurance policies (by policy number,
      insurer, expiration date, type (i.e., “claims made” or an “occurrence” policy),
      amount and scope of coverage held by Company relating to Company, its assets
      or
      the business, properties or employees of Company. Such insurance policies (a)
      are sufficient in all material respects for compliance with all requirements
      of
      Law and for all agreements to which Company is a party and (b) provide
      commercially reasonable insurance coverage for the assets and operations of
      Company in light of present insurance market conditions.




2.12  **Intellectual
      Property Assets** **.** Company
      has, or has rights to use, all patents, patent rights, patent applications,
      trademarks, trademark applications, service marks, service mark applications,
      trade names or copyrights, any applications for such which are in the process
      of
      being prepared and other intellectual property rights and similar rights
      necessary or material for use in connection with its business (collectively,
      “ **Company
      Intellectual Property** ”).
      The
      Company Intellectual Property is sufficient to permit Company to conduct its
      business as presently conducted, without any conflict with or infringement
      of
      the rights of others, and as proposed to be conducted, and, except as disclosed
      in the Company Disclosure Schedule, no claim is pending or, to the best of
      the
      knowledge of Company or any Seller, threatened to the effect that the operations
      of Company infringe upon or conflict with the asserted rights of any other
      person under any Company Intellectual Property, and, to the best of the
      knowledge of Company or any Seller, there is no basis for any such claim
      (whether or not pending or threatened). Except as disclosed in the Company
      Disclosure Schedule, no claim is pending or, to the best of the knowledge of
      Company or any Seller, threatened to the effect that any such Company
      Intellectual Property owned or licensed by Company, or which Company otherwise
      has the right to use, is invalid or unenforceable by Company, and, to the best
      the knowledge of Company or any Seller, there is no basis for any such claim
      (whether or not pending or threatened). To the best of the knowledge of Company
      or any Seller, all material technical information developed by and belonging
      to
      Company that has not been patented has been kept confidential. Company has
      not
      granted or assigned to any other person or entity any right to manufacture,
      have
      manufactured or assemble the products or proposed products or to provide the
      services or proposed services of Company. Company has no material obligation
      to
      compensate any person for the use of any Company Intellectual Property nor
      has
      Company granted to any person any license or other rights to use in any manner
      any Company Intellectual Property.




6




2.13  **Assumptions,
      Guaranties, etc., of Indebtedness of Other Persons** **.** Company
      has not assumed, guaranteed, endorsed or otherwise become directly or
      contingently liable for any material amount of indebtedness of any other person
      (including, without limitation, any liability by way of agreement, contingent
      or
      otherwise, to purchase, to provide funds for payment, to supply funds to or
      otherwise invest in the debtor, or otherwise to assure the creditor against
      loss).




2.14  **No
      Brokers or Finders** **.** No
      person
      has or will have, as a result of the transactions contemplated by this
      Agreement, any right, interest or valid claim against or upon Company for any
      commission, fee or other compensation as a finder or broker arising out of
      the
      transactions contemplated by this Agreement.




2.15  **No
      Material Adverse Change** **.** Since
      November 30, 2006 except as set forth on the Company Disclosure Schedule:
      (i) there has been no Material Adverse Change in the financial condition,
      or in the results of operations, affairs or prospects of Company, whether or
      not
      arising in the ordinary course of business; and (ii) there have been no
      transactions entered into by Company, other than those in the ordinary course
      of
      business, which are material to Company.




2.16  **Investment** **.** Each
      Seller is acquiring his or her portion of the Transaction Shares for his or
      her
      own account and beneficial interest for investment and not for sale or with
      a
      view to, or for resale in connection with, the distribution thereof, has no
      present intention of selling (in connection with a distribution or otherwise),
      granting any participation in, or otherwise distributing the Transaction Shares,
      and does not presently have any reason to anticipate a change in such intention.




2.17  **Accredited
      Investors** **.** Each
      Seller is, or together with such Seller’s Purchaser Representative, as such term
      is defined in Rule 501(h) of Regulation D under the Securities Act of 1933,
      as
      amended (“ **Securities
      Act** ”),
      is, an “ **accredited
      investor** ”
      within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation D under
      the
      Securities Act.




2.18  **Information** **.** Each
      Seller has received all information it has requested from Company that it
      considers necessary or appropriate for deciding whether to acquire the Purchaser
      Stock, including, but not limited to, information meeting the requirements
      of
      Rule 502(b) of Regulation D under the Securities Act. Each Seller has
      had an opportunity to ask questions and receive answers from Purchaser regarding
      the terms of the Transaction Shares and to obtain any additional information
      necessary to verify the accuracy of the information given to it.




7




2.19  **Experience** **.** Each
      Seller has such knowledge and experience in financial and business matters
      that
      he is capable of evaluating the merits and risk of an investment in Transaction
      Shares and is able to bear the economic risk of such investment.




2.20  **Restricted
      Securities** **.** Each
      Seller understands that the Transaction Shares are characterized as
“ **restricted
      securities** ”
under
      the  Securities
      Act,  inasmuch
      as they are being acquired from Purchaser in a transaction not involving a
      public offering and that under the  Securities
      Act  and
      applicable regulations thereunder such securities may be resold without
      registration under the  Securities
      Act  only
      in
      certain limited circumstances. In this connection, each Seller represents that
      he or she is familiar with  Rule 144  under
      the
      Securities Act, as presently in effect, and understands the resale limitations
      imposed thereby and by the  Securities
      Act. Each Seller also understands that the certificates evidencing the
      Transaction Shares will bear the legend set forth below:




THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE HOLDER
      FOR
      ITS OWN ACCOUNT, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE DISTRIBUTION
      OF SUCH SECURITIES. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ **ACT** ”),
      OR
      ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
      TRANSFERRED EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
      THE
      ACT AND IN COMPLIANCE WITH SUCH STATE SECURITIES LAWS, (II) IN COMPLIANCE WITH
      RULE 144 UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR (III) UPON
      THE DELIVERY TO O2DIESEL CORPORATION  (THE
      “ **COMPANY** ”)
      OF AN
      OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH
      REGISTRATION AND/OR COMPLIANCE IS NOT REQUIRED.




2.21  **Material
      Contract Defaults** **.** Company
      is not in default in any material respect under the terms of any outstanding
      contract, agreement, lease, or other commitment which is material to the
      business, operations, properties, assets, or financial condition of either
      of
      them, and there is no event of default or other event which, with notice or
      lapse of time or both, would constitute a default in any material respect under
      any such contract, agreement, lease, or other commitment in respect of which
      Company has not taken adequate steps to prevent such a default from occurring.




2.22  **Government
      Authorizations** **.** Except
      as set forth on the Company Disclosure Schedule, the Company has all licenses,
      franchises, permits, and other governmental authorizations that are legally
      required to enable them to conduct their business on the Effective Date, except
      where any failure to do so shall have a Material Adverse Effect on Company.
      No
      authorization, approval, consent, or order of, or registration, declaration,
      or
      filing with, any court or other governmental body is required in connection
      with
      the execution and delivery by Company or any Seller of this Agreement and the
      consummation by Company or any Seller of the transactions contemplated
      hereby.




2.23  **Foreign
      Investors** **.** If such
      Seller is not a United States person (as defined by Section 7701(a)(30) of
      the
      Internal Revenue Code of 1986, as amended), such Seller hereby represents that
      it has satisfied itself as to the full observance of the laws of its
      jurisdiction in connection with any invitation to subscribe for or purchase
      his
      or her portion of the Transaction Shares or any use of this Agreement, including
      (a) the legal requirements within its jurisdiction for the purchase of his
      or
      her portion of the Transaction Shares, (b) any foreign exchange restrictions
      applicable to such purchase or acquisition, (c) any government or other consents
      that may need to be obtained, and (d) the income tax and other tax consequences,
      if any, that may be relevant to the purchase, holding, redemption, sale or
      transfer of
      his or her portion of the Transaction Shares. Such Seller’s beneficial ownership
      of his or her portion of the Transaction Shares  will
      not violate any applicable securities or other laws of Seller’s
      jurisdiction.




8




2.24  **Tax
      Matters**




(a)  All
      tax
      returns (whether for income taxes or any other type of tax) required to have
      been filed by or with respect to Company have been timely filed. All such filed
      tax returns are true, correct and complete in all material respects. Company
      has
      timely paid (or caused to be paid) all taxes due and owing, whether or not
      shown
      on any tax return.  No claim has ever been made by a taxing authority in a
      jurisdiction where Company does not file tax returns that Company is subject
      to
      taxation by that jurisdiction. Company has properly and timely withheld and
      paid
      (or is holding for payment) all taxes required to have been withheld and paid
      in
      connection with amounts paid or owing to any employee, independent contractor,
      creditor, stockholder or other third party.




(b)  Company
      has given to Purchaser true, correct and complete copies of (i) all income
      tax
      returns filed by the Company since its incorporation, (ii) the most recently
      filed tax return[s] filed by Company for all non-income tax returns, and (iii)
      examination reports and statements of deficiencies issued by any taxing
      authority with respect to Company.




(c)  Company has made
      all required estimated tax payments sufficient to avoid any underpayment penalties
      with respect to taxes required to be paid by it.




(d)  No
      Seller is a “foreign person” within the meaning of Section 1445 of the
      Code.




(e)  Company
      (i) is not now and has not at any time been a member of any affiliated group
      required to join in the filing of consolidated federal income tax returns,
      and
      (ii) has n ot
      otherwise joined in the filing of tax returns on a consolidated, combined or
      unitary group basis.




(f)  Company is not a
      party to any agreement relating to the sharing, allocation or indemnification
      of
      taxes, or any similar agreement, contract or arrangement, and does not have,
      by
      contract or otherwise, an y
      liability for taxes of any individual, partnership, joint venture, corporation,
      trust, unincorporated organization, limited liability company, group,
      governmental authority, and any other person or entity (a “ **Person** ”)
      as a transferee or successor.




(g)  There
      are no outstanding agreements, waivers or arrangements extending the statutory
      period of limitations applicable to any claim for, or the period fo r
      the collection or
      assessment of, taxes due from or payable by Company for any taxable period
      and
      no written, or to the knowledge of Company or any Seller oral, request from
      a
      taxing authority for any such waiver or extension is currently
      pending.




9




(h)  No
      closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) or any similar provision of any state, local or foreign Law has
      been
      entered into by or on behalf of Company which would have binding effect on
      Company for any taxable year ending after the Closing Date. Company has not
      requested or received a ruling from any taxing authority or signed any agreement
      with a taxing authority that might impact any tax attribute of, or the amount
      of
      tax due from, Company on or after the Closing Date. Company will not be required
      to include any item of income in, or exclude any item of deduction from, taxable
      income as a result of any change in Company’s method of accounting.




(i)  (i)
      No
      audit or other proceeding by any taxing authority is pending or threatened
      in
      writing with respect to any taxes due from Company, (ii) Company has not
      received any written notification that such an audit or proceeding may be
      commenced, with respect to any taxes due from Company, (iii) to the knowledge of
      Company or any Seller, there is no proceeding referred to in (i) or (ii) above
      based upon personal contact with any agent of a taxing authority with any
      employee or representative of Company, and (iv) all deficiencies for taxes
      asserted or assessed against Company have been fully and timely paid, or
      otherwise settled with the relevant taxing authority, or are properly reflected
      in the Company Financial Statements.




(j)  Other than as
      set forth on the Company Disclosure Schedule, there are no liens for taxes
      upon
      the assets or properties of Company, except for statutory liens for current
      taxes not yet due, and neither Company nor any Seller has knowledge of any
      audit
      or other proceeding relating to taxes that, if adversely determined, would
      result in any lien on any of the assets or properties of Company.




(k)  No
      property owned by Company (i) is property required to be treated as being
      owned by another Person pursuant to the provisions of Section 168(f)(8) of
      the Internal Revenue Code of 1954, as amended and in effect immediately prior
      to
      the enactment of the Code, (ii) constitutes “tax-exempt use property”
within the meaning of Section 168(h)(1) of the Code or (iii) is
“tax-exempt bond financed property” within the meaning of Section 168(g)(5)
      of the Code.




(l)  Company
      has made all necessary disclosures required by Treasury Regulations Section
      1.6011-4. Company has not been a participant in a reportable transaction within
      the meaning of Treasury Regulations Section 1.6011-4(b). Company has disclosed
      on its federal income tax returns all positions taken therein that could give
      rise to a substantial understatement of federal income tax under Section 6662(d)
      of the Code.




(m)  Company
      has not made any payment nor is obligated to make any payment, and is not a
      party to any agreement that under any circumstances could obligate it to make
      any payment, that would be nondeductible under Section 280E of the Code.




(n)  The
      representations and warranties of Company set forth in Section
      2.6 are
      correct and complet e
      with respect to any unpaid taxes, tax liabilities or tax assets of
      Company.




10




2.25  **Environmental
      Matters** **.** Except
      as set forth on the Company Disclosure Schedule, Company has not received any
      written, or to the knowledge of Company or any Seller oral, claim or notice
      alleging that Company is not in compliance with or is in violation of any
      Environmental Law (as defined below), or has liability or responsibility under
      any Environmental Law. There are no pending or, to the knowledge of Company
      or
      any Seller threatened, investigations, inquiries, administrative proceedings,
      actions, suits, claims, charges, complaints, demands, notices or legal
      proceedings against Company, Company’s business or assets, under Environmental
      Laws, including those that involve or relate to Environmental Conditions (as
      defined below), Environmental Noncompliance (as defined below) or the release,
      use, disposal or arranging for disposal of any Hazardous Materials (as defined
      below) on or from any real property used, leased or owned by Company. Except
      as
      set forth on the Company Disclosure Schedule, Company has not released any
      Hazardous Materials on, under or about any real property used, leased or owned
      by Company in quantities that are required to be reported under or that requires
      investigation or remediation pursuant to Environmental Law or that otherwise
      is
      in violation of any requirement of any Environmental Law. Company is in
      compliance with Environmental Laws. Company has not generated, stored, treated,
      handled, disposed of, or arranged to dispose of, Hazardous Materials in a manner
      or to a location that could reasonably be expected to result in liability to
      Company under Environmental Laws. Company has not exposed any employee or other
      individual to any Hazardous Materials or conditions that could reasonably be
      expected to form the basis for any present or future action, suit, proceeding,
      hearing, investigation, charge, complaint, claim, or demand for damage to,
      or
      investigation and remediation of, any site, location or body of water (surface
      or subsurface), or any illness of or personal injury to any employee or
      individual. “ **Environmental
      Condition** ”
means
      any contamination or damage to the environment caused by or relating to the
      use,
      handling, storage, treatment, recycling, generation, transportation, release,
      spilling, leaching, pumping, pouring, emptying, discharging, injection,
      escaping, disposal, dumping or threatened release of Hazardous Materials by
      Company or any other Person. With respect to claims by employees or any other
      third parties, Environmental Condition shall also include the exposure of
      Persons to amounts of Hazardous Materials in amounts that have been determined
      to be deleterious to human health. “ **Environmental
      Law** ”
means
      all currently applicable federal, state and local laws, ordinances, rules and
      regulations and standards, policies and other governmental requirements,
      administrative rulings and court judgments and decrees, including all
      amendments, and requirements applicable under common law that relate to (1)
      pollution; (2) the protection of human health and safety; (3) the protection
      or
      regulation of the environment, including without limitation, air, soils,
      wetlands, surface and underground water; (4) aboveground or underground storage
      tank regulation or removal; (5) wildlife; (6) protection or regulation of
      natural resources; (7) radioactive materials, including without limitation
      radon; (8) indoor air quality; and (9) chemicals, pesticides, mold or fungus
      or
      similar substances. “Environmental Laws” include, without limitation, the
      Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
      Section 9601, *et
      seq* .,
      the
      Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, *et
      seq* .,
      the
      Toxic Substance Control Act, 15 U.S.C. 2601, *et
      seq* .,
      the
      Federal Water Pollution Control Act, 33 U.S.C. Section 1251, *et
      seq* .,
      the
      Hazardous Materials Transportation Act, 49 U.S.C. 5101, *et
      seq* .,
      the
      Clean Air Act, 42 U.S.C. Section 651, *et
      seq* .,
      the
      Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. 11001, *et
      seq* .,
      the
      Atomic Energy Act, 42 U.S.C. Section 2014, *et
      seq* .,
      the
      National Environmental Policy Act, 42 U.S.C. Section 4321, *et
      seq* .,
      the
      Endangered Species Act, 16 U.S.C. Section 1531, *et
      seq* .,
      the
      Federal Insecticide, Fungicide & Rodenticide Act, 7 U.S.C. 136, *et
      seq* .,
      and
      their state analogs, all applicable state superlien or environmental clean-up
      or
      disclosure statutes in the state in which Company operates or conducts business
      or owns, leases or uses any property, and all similar local laws, and all
      implementing regulations. “ **Environmental
      Noncompliance** ”
means
      any violation of any Environmental Law. “ **Hazardous
      Materials** ”
means
      any materials regulated as hazardous or toxic under applicable Environmental
      Laws, or any other material regulated, or that could result in the imposition
      of
      liability, under Environmental Laws, including, without limitation, petroleum,
      petroleum products, fuel oil, crude oil or any fraction thereof, derivatives
      or
      byproducts of petroleum products or fuel oil, natural gas, mold, hazardous
      substances, toxic substances, polychlorinated biphenyls, any materials
      containing more than one percent (1%) asbestos by weight and any other substance
      determined to present a deleterious effect on human health or the
      environment.




11




2.26  **ERISA
      and Employee Benefits** **.** Except
      as specified on the Company Disclosure Schedule, Company is not now maintaining
      or contributing to, nor has within the prior six (6) years ever maintained
      or
      contributed to, or been obligated to contribute to, any Benefit Plan (as defined
      below) or Multiemployer Plan (as defined below), has no ERISA Affiliates (as
      defined below) and is not otherwise subject to any provision of ERISA (as
      defined below). All benefit plans to which Company is a party are specified
      on
      the Company Disclosure Schedule. “ **ERISA** ”
means
      the Employee Retirement Income Security Act of 1974, as amended. “ **Benefit
      Plan** ”
means
      an employee pension benefit plan, excluding any Multiemployer Plan, which is
      subject to Title IV of ERISA. “ **ERISA
      Affiliate** ”
means
      with respect to any Person, any trade or business (whether or not incorporated)
      which is a member of a group of which such Person is a member and which would
      be
      deemed to be a “controlled group” within the meaning of Sections 414(b),
      (c), (m) and (o) of the Code. “ **Multiemployer
      Plan** ”
means
      a
“multiemployer plan” as defined in Section 3(37) of ERISA to which Company or
      any ERISA Affiliate of Company has been obligated to contribute at any time
      during the past six years, or has liability.




2.27  **No
      Other Agreement to Sell** **.** Neither
      Company nor any Seller has any legal obligation, absolute or contingent, to
      any
      other Person to sell, encumber or otherwise transfer Company, Company Shares,
      the assets or Company’s business (in whole or in part), or effect any merger,
      consolidation, combination, share exchange, recapitalization, liquidation,
      dissolution or other reorganization involving Company, or to enter into any
      agreement with respect thereto.




2.28  **Transactions
      with Certain Persons** **.** Except
      as specified on the Company Disclosure Schedule, no officer, director or Seller
      or any member of such individual’s immediate family, or any affiliate of such
      individual or member of such individual’s immediate family is presently a party
      to any transaction or contract with Company.




12




3.  **REPRESENTATIONS
      AND WARRANTIES OF PURCHASER** **.**




Except
      as
      set forth on the Purchaser Disclosure Schedule attached to this Agreement as Schedule
      IV to this
      Agreement (the “ **Purchaser
      Disclosure Schedule** ”)
      and
      delivered to Company prior to the Effective Date, Purchaser represents and
      warrants to Company and each Seller as of the Effective Date as
      follows:




3.1  **Organization,
      Execution and Delivery; Valid and Binding Agreements** **.** Purchaser has duly executed and delivered this Agreement and, assuming that
      this
      Agreement is the legal, valid and binding agreement of the Sellers and Company,
      this Agreement constitutes the valid and binding obligation of Purchaser,
      enforceable against it in accordance its terms. Purchaser is a corporation,
      duly
      registered, validly existing and in good standing under the laws of the State
      of
      Delaware. Purchaser is duly qualified as a foreign entity in the jurisdiction
      set forth on the Purchaser Disclosure Schedule and is in good standing as a
      foreign entity in all jurisdictions where the properties owned, leased or
      operated by it and relating to the business are located or where the business
      is
      conducted, except where failure to qualify or be in good standing is not
      reasonably likely to have a Material Adverse Effect. The address of Purchaser’s
      principal office and all of Purchaser’s additional places of business are listed
      on the Disclosure Schedule. Except as set forth on the Purchaser Disclosure
      Schedule, during the past five (5) years, Purchaser has not been known by or
      used any corporate, fictitious or other name in the conduct of Purchaser’s
      business or in connection with the use or operation of its assets. The Purchaser
      Disclosure Schedule lists all current directors and officers of Purchaser.
      Purchaser has no subsidiaries, except as set forth on the Purchaser Disclosure
      Schedule. Purchaser has delivered to Company copies of Purchaser’s
      organizational or formation documents as currently in effect.




3.2  **Authority;
      No Breach or Conflicts** **.** Purchaser has all requisite corporate power and authority to execute and deliver
      this Agreement and to perform its obligations hereunder (including all right,
      power, capacity and authority to issue, sell, transfer and convey the
      Transaction Shares, subject to applicable federal and state securities law
      restrictions). The execution, delivery and performance by Purchaser of this
      Agreement and the agreements provided for herein, and the consummation by
      Purchaser of the transactions contemplated hereby and thereby, including but
      not
      limited to the Potential Project, will not, with or without the giving of notice
      or the passage of time or both, directly or indirectly (A) contravene, conflict
      or result in a violation of (i) any provision of Purchaser’s organizational or
      formation documents; (ii) any Laws of any governmental authority to which
      Purchaser or Purchaser’s assets are subject, or by which the same may be bound;
      (iii) or any of the terms, conditions or provisions of any material contract
      to
      which Purchaser is a party; (B) constitute or create a default, or give rise
      to
      any right of termination, cancellation or acceleration under any material
      contract to which Purchaser is a party; (C) result in the imposition of a lien
      on the Transaction Shares or all or any portion of Purchaser’s assets; or (D)
      require any filing with, or permit, consent or approval of, or the giving of
      any
      notice to, any governmental authority or third party, in each case except as
      specified on the Purchaser Disclosure Schedule.




3.3  **Investment** **.**  Purchaser
      is acquiring the Company Shares for its own account and beneficial interest
      for
      investment and not for sale or with a view to, or for resale in connection
      with,
      the distribution thereof, has no present intention of selling (in connection
      with a distribution or otherwise), granting any participation in, or otherwise
      distributing the Company Shares, and does not presently have any reason to
      anticipate a change in such intention.




13




3.4  **Capitalization** **.** The
      Purchaser Disclosure Schedule sets forth the authorized and issued capital stock
      of Purchaser as of the date hereof, together with a description of the rights
      and preferences of each class of Purchaser’s capital stock, including any
      conversion rights attached to any outstanding shares of preferred stock or
      convertible securities, any outstanding options, warrants, preemptive rights,
      indebtedness having general voting rights or subscriptions or other rights
      agreements or any other outstanding security or agreement entitling the holder
      thereof or party thereto to acquire any capital stock of Company. The
      Transaction Shares, when issued in compliance with the provisions of this
      Agreement, will be duly and validly issued, fully paid and non-assessable;
      provided, however, that the Transaction Shares are subject to restrictions
      on
      transfer under US federal or state securities laws. The issuance of the
      Transaction Shares is not subject to any preemptive rights or rights of first
      refusal.




3.5  **Purchaser
      Reports; Financial Statements** **.**




(a)  Purchaser
      has made available to Company each registration statement, report, proxy
      statement or information statement prepared by it since December 31, 2005
      (the “ **Audit
      Date** ”)
      and
      filed with the US Securities and Exchange Commission (“ **SEC** ”),
      including the Purchaser’s Annual Report on Form 10-K-SB for the year ended
      December 31, 2005, each in the form (including exhibits, annexes and any
      amendments thereto) as filed with the SEC. Purchaser has filed or furnished
      all
      forms, statements, reports and documents required to be filed or furnished
      by it
      with the SEC pursuant to applicable securities statutes, regulations, policies
      and rules since the Audit Date (the forms, statements, reports and documents
      filed or furnished with the SEC since the Audit Date and those filed or
      furnished with the SEC subsequent to the date of this Agreement, if any,
      including any amendments thereto, the “ **Reports** ”).
      Except as set forth in the Purchaser Disclosure Schedule, each of the Reports,
      at the time of its filing (including any amendments), complied or will comply
      in
      all material respects with the applicable requirements of the Securities and
      Exchange Act of 1934, as amended (“ **Exchange
      Act** ”)
      and
      the rules and regulations thereunder and complied in all material respects
      with
      then applicable accounting standards. As of its respective dates (or, if
      amended, as of the date of such amendment), the Reports did not contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements made therein, in light
      of
      the circumstances in which they were made, not misleading.




(b)  Each
      of
      the consolidated balance sheets included in or incorporated by reference into
      the Reports (including the related notes and schedules) fairly presents the
      consolidated financial position of Purchaser as of its date and each of the
      consolidated statements of income, shareholders’ equity and cash flows included
      in or incorporated by reference into the Reports (including any related notes
      and schedules) fairly presents, or in the case of Reports filed after the date
      hereof, will fairly present, the net income, total shareholders’ equity and net
      increase in cash and cash equivalents, as the case may be, of Purchaser for
      the
      periods set forth therein (subject, in the case of unaudited statements, to
      notes and normal year-end audit adjustments that will not be material in amount
      or effect), in each case in accordance with GAAP consistently applied during
      the
      periods involved, except as may be noted therein. Except as set forth in the
      Purchaser Financial Statements or the Purchaser Disclosure Schedule,
      (i) Purchaser has no material liabilities, contingent or otherwise, other
      than (a) liabilities incurred in the ordinary course of business, and
      (b) obligations under contracts and commitments incurred in the ordinary
      course of business and not required under GAAP to be reflected in the Purchaser
      Financial Statements; (ii) there has been no adverse change in the assets,
      business, liabilities, properties, prospects, condition (financial or otherwise)
      or results of operations of Purchaser that would be likely to have a Material
      Adverse Change; (iii) neither the business, condition or operations of
      Purchaser nor any of its properties or assets have been materially or adversely
      affected as a result of any legislative or regulatory change, any revocation
      or
      change in any franchise, license or right to do business, or any other event
      or
      occurrence, whether or not insured against; and (iv) Purchaser has not
      entered into any material transaction outside of the ordinary course of business
      or made any distribution on its capital stock or other ownership
      interest.




14




3.6  **Due
      Diligence Information** **.** The due
      diligence information presented to the Sellers and Company by Purchaser in
      connection with their due diligence investigation of Purchaser, including each
      of the representations, warranties and covenants of Purchaser in this Agreement,
      is complete and accurate in all material respects and does not contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      make the statements made, in light of the circumstances under which they were
      made, not misleading.




3.7  **Litigation;
      Compliance with Law** **.** Except
      as
      disclosed on the Purchaser Disclosure Schedule, there is no material litigation,
      including but not limited to any action, suit, claim, proceeding or
      investigation, arbitration proceeding relating to Purchaser or any governmental
      inquiry pending or, to the best of Purchaser’s knowledge, threatened against or
      affecting Purchaser, at law or in equity, or before or by any municipal or
      other
      governmental department, commission, board, bureau, agency or instrumentality,
      domestic or foreign, and, to the best of Purchaser’s knowledge, there is no
      reasonable basis for any of the foregoing. Purchaser is not in default with
      respect to any governmental order, writ, judgment, injunction or decree known
      to
      or served upon Purchaser of any court or of any governmental department,
      commission, board, bureau, agency or instrumentality, domestic or foreign.
      There
      is no action or suit by Purchaser pending or threatened against others.
      Purchaser has complied in all respects with all laws, rules, regulations and
      orders applicable to its businesses, operations, properties, assets, products
      and services, and Purchaser has all necessary permits, licenses and other
      authorizations required to conduct its business as conducted and as proposed
      to
      be conducted, except to the extent failure to comply or obtain any such permits,
      licenses or authorizations will not have a Material Adverse Effect. There is
      no
      existing law, rule, regulation or order, and Purchaser is not aware of any
      proposed law, rule, regulation or order, which would prohibit or materially
      restrict Purchaser from, or otherwise materially and adversely affect Purchaser
      in, conducting its business in any jurisdiction in which it is now conducting
      business or in which it proposes to conduct business.




3.8  **Proprietary
      Information of Third Parties** .
      No
      third party has claimed or has reason to claim that any person employed by
      or
      affiliated with Purchaser has (a) violated or may be violating to any
      material extent any of the terms or conditions of his employment,
      non-competition, non-disclosure or similar type of agreement with such third
      party, (b) disclosed or may be disclosing or utilized or may be utilizing
      any trade secret or proprietary information or documentation of such third
      party, or (c) interfered or may be interfering in the employment
      relationship between such third party and any of its present or former
      employees, or has requested information from Purchaser that suggests that such
      a
      claim might be contemplated. To the best of Purchaser’s knowledge, no person
      employed by or affiliated with Purchaser has improperly utilized or proposes
      to
      improperly utilize any trade secret or any information or documentation
      proprietary to any former employer, and to the best of Purchaser’s knowledge, no
      person employed by or affiliated with Purchaser has violated any confidential
      relationship which such person may have had with any third party, in connection
      with the development, manufacture or sale of any product or proposed product
      or
      the development or sale of any service or proposed service of Purchaser, and
      Purchaser has no reason to believe there will be any such employment or
      violation. To the best of Purchaser’s knowledge, none of the execution or
      delivery of this Agreement and the other related agreements and documents
      executed in connection herewith, or the carrying on of the business of Purchaser
      as officers, employees or agents by any officer, director or key employee of
      Purchaser identified by Company and Purchaser and listed on the Purchaser
      Disclosure Schedule (each, a “ **Purchaser
      Key Employee** ”),
      or
      the conduct or proposed conduct of the business of Purchaser, will materially
      conflict with or result in a material breach of the terms, conditions or
      provisions of or constitute a material default under any contract, covenant
      or
      instrument under which any such person is obligated.




15




3.9  **Title
      to and Sufficiency of Assets; Insurance** .
      Purchaser has valid and marketable title to all of its assets now carried on
      its
      books including those reflected in the most recent balance sheet of Purchaser
      which forms a part of the Reports, or acquired since the date of such balance
      sheet (except personal property disposed of since said date in the ordinary
      course of business) free of any liens charges or encumbrances of any kind
      whatsoever, except such encumbrances and liens that arise in the ordinary course
      of business and do not materially impair Purchaser’s ownership or use of such
      property or assets. Purchaser does not own any real property. Purchaser is
      in
      compliance in all material respects under all leases for property and assets
      under which it is operating, and all said leases are valid and subsisting and
      are in full force and effect. Purchaser’s assets constitute all of the assets,
      rights and properties that are used in the operation of Purchaser’s business as
      it is now conducted or that are used or held by Purchaser for use in the
      operation of Purchaser’s business. The Purchaser Disclosure Schedule lists all
      insurance policies (by policy number, insurer, expiration date, type (i.e.,
      “claims made” or an “occurrence” policy), amount and scope of coverage held by
      Purchaser relating to Purchaser, its assets or the business, properties or
      employees of Purchaser. Such insurance policies (a) are sufficient in all
      material respects for compliance with all requirements of Law and for all
      agreements to which Purchaser is a party and (b) provide commercially reasonable
      insurance coverage for the assets and operations of Purchaser in light of
      present insurance market conditions.




3.10  **Intellectual
      Property Assets** **.** Purchaser has, or has right to use all patents, patent rights, patent
      applications, trademarks, trademark applications, service marks, service mark
      applications, trade names or copyrights, any applications for such which are
      in
      the process of being prepared and other intellectual property rights and similar
      rights necessary or material for use in connection with its business
      (collectively, “ **Purchaser
      Intellectual Property** ”).
      The
      Purchaser Intellectual Property is sufficient to permit Purchaser to conduct
      its
      business as presently conducted, and, except as disclosed in the Purchaser
      Disclosure Schedule, no claim is pending or, to the best of Purchaser’s
      knowledge, threatened to the effect that the operations of Purchaser infringe
      upon or conflict with the asserted rights of any other person under any
      Purchaser Intellectual Property, and, to the best of Purchaser’s knowledge,
      there is no basis for any such claim (whether or not pending or threatened).
      Except as disclosed in the Purchaser Disclosure Schedule, no claim is pending
      or, to the best of Purchaser’s knowledge, threatened to the effect that any such
      Purchaser Intellectual Property owned or licensed by Purchaser, or which
      Purchaser otherwise has the right to use, is invalid or unenforceable by
      Purchaser, and, to the best of Purchaser’s knowledge, there is no basis for any
      such claim (whether or not pending or threatened). To the best of Purchaser’s
      knowledge, all material technical information developed by and belonging to
      Purchaser that has not been patented has been kept confidential. Purchaser
      has
      not granted or assigned to any other person or entity any right to manufacture,
      have manufactured or assemble the products or proposed products or to provide
      the services or proposed services of Purchaser. Purchaser has no material
      obligation to compensate any person for the use of any Purchaser Intellectual
      Property nor has Purchaser granted to any person any license or other rights
      to
      use in any manner any Purchaser Intellectual Property, except as set forth
      on
      the Purchaser Disclosure Schedule.




16




3.11  **Assumptions,
      Guaranties, etc. of Indebtedness of Other Persons** **.** Purchaser
      has not assumed, guaranteed, endorsed or otherwise become directly or
      contingently liable for any material amount of indebtedness of any other person
      (including, without limitation, any liability by way of agreement, contingent
      or
      otherwise, to purchase, to provide funds for payment, to supply funds to or
      otherwise invest in the debtor, or otherwise to assure the creditor against
      loss).




3.12  **No
      Brokers or Finders** **.** Except
      as set forth on the Purchaser Disclosure Schedule, no person has or will have,
      as a result of the transactions contemplated by this Agreement, any right,
      interest or valid claim against or upon Purchaser for any commission, fee or
      other compensation as a finder or broker arising out of the transactions
      contemplated by this Agreement.




3.13  **No
      Material Adverse Change** **.** Since
      the date of Purchaser’s last report Form 10-Q-SB as filed with the SEC
      (including any amendments) and as specified in the Purchaser Disclosure
      Schedule: (i) there has been no Material Adverse Change affecting
      Purchaser, whether or not arising in the ordinary course of business; and
      (ii) there have been no transactions entered into by Purchaser, other than
      those in the ordinary course of business, which are material to Purchaser.




3.14  **Investment** **.** The
      Purchaser is acquiring the Company Shares for investment and not for sale or
      with a view to, or for resale in connection with, the distribution thereof,
      has
      no present intention of selling (in connection with a distribution or
      otherwise), granting any participation in, or otherwise distributing the Company
      Shares, and does not presently have any reason to anticipate a change in such
      intention.




3.15  **Information** **.** Purchaser has received all information requested from Company, including the
      Company’s business plan and feasibility study, and the Sellers that it considers
      necessary or appropriate for deciding whether to acquire the Company Shares.
      Purchaser has had an opportunity to ask questions and receive answers from
      Company and the Sellers regarding the terms of the Company Shares and to obtain
      any additional information necessary to verify the accuracy of the information
      given to it.




17




3.16  **Material
      Contract Defaults** **.** Purchaser is not in default in any material respect under the terms of any
      outstanding contract, agreement, lease, or other commitment which is material
      to
      the business, operations, properties, assets, or financial condition of either
      of them, and there is no event of default or other event which, with notice
      or
      lapse of time or both, would constitute a default in any material respect under
      any such contract, agreement, lease, or other commitment in respect of which
      the
      Purchaser has not taken adequate steps to prevent such a default from occurring.




3.17  **Government
      Authorizations** **.** Purchaser has all licenses, franchises, permits, and other governmental
      authorizations that are legally required to enable them to conduct their
      business in all material respects as conducted on the Effective Date, except
      where any failure to do so shall have a Material Adverse Effect on Purchaser.
      No
      authorization, approval, consent, or order of, or registration, declaration,
      or
      filing with, any court or other governmental body is required in connection
      with
      the execution and delivery by Purchaser of this Agreement and the consummation
      by Purchaser of the transactions contemplated hereby.




3.18  **Accuracy
      of Information** **.** Neither
      this Agreement nor any document furnished to the Company or the Sellers in
      connection with the negotiation, execution and delivery of this Agreement or
      the
      transaction contemplated hereby, contains any untrue statement of a material
      fact or omits to state any material fact necessary in order to make the
      statements contained herein not materially misleading.




**4.**  **CONTINUING
      COVENANTS**




From
      and
      after the execution and delivery of this Agreement, the parties agree as
      follows:




4.1  **Stockholder
      and AMEX Approval** .
      Purchaser agrees to use reasonable efforts to obtain approval of the issuance
      of
      the Transaction Shares and the Potential Project from Purchaser stockholders
      and
      any necessary approvals from AMEX. Company and each Seller agree to cooperate
      fully with Purchaser and provide such information as Purchaser may reasonably
      request in order to obtain such approvals.




4.2  **Notice
      of Developments** **.** Each
      party will give prompt written notice to the other party of any material adverse
      development causing a breach or likely breach of any of its covenants in this
      Agreement.




4.3  **Access** **.** Each
      party will provide to the other party and such party’s employees, agents,
      representative and advisors (including counsel and accountants (collectively,
      “ **Representatives** ”),
      complete access to all information necessary to complete its due diligence
      review and to cooperate fully with such party in connection with its due
      diligence review, in each case as specified in this Agreement and in the letter
      of intent, dated November 30, 2006, between Purchaser and Company (the
“ **LOI** ”).




18




4.4  **No
      Negotiations** .
      Company
      and each Seller agree to immediately cease any existing discussion or
      negotiation with any Person (other than Purchaser) conducted prior to the date
      of this Agreement with respect to (a) any proposed, potential or contemplated
      acquisition of Company Shares, any assets of Company or (b) participation in
      the
      Potential Project, except as needed to negotiate any agreements or transactions
      in connection with the Potential Project as contemplated in this Agreement.
      Company and each Seller will refrain, and will cause each of their respective
      Representatives to refrain, from taking, directly or indirectly, any action
      (x)
      to solicit or initiate the submission of any proposal or indication of interest
      from any Person (other than Purchaser) relating to an acquisition of Company
      Shares, assets of Company or any merger, consolidation, combination, share
      exchange, recapitalization, liquidation or dissolution involving Company, or
      participation in the Potential Project (except as needed to negotiate any
      agreements or transactions in connection with the Potential Project as
      contemplated in this Agreement), (y) to participate in any discussion or
      negotiations regarding, or furnish to any Person any information with respect
      to, or that may reasonably be expected to lead to, an acquisition of Company
      Shares, assets of Company or any merger, consolidation, combination, share
      exchange, recapitalization, liquidation or dissolution involving Company, or
      participation in the Potential Project (except as needed to negotiate any
      agreements or transactions in connection with the Potential Project contemplated
      in this Agreement) or any proposal or indication of interest relating to any
      of
      the foregoing) with any Person (other than Purchaser or (z) to authorize, engage
      in, or enter into any agreement or understanding (other than with Purchaser)
      with respect to an acquisition of Company Shares, assets of Company or any
      merger, consolidation, combination, share exchange, recapitalization,
      liquidation or dissolution involving Company, or participation in the Potential
      Project (except as needed to negotiate any agreements or transactions in
      connection with the Potential Project as contemplated in this Agreement) or
      any
      proposal or indication of interest relating to any of the foregoing. If any
      proposal described in this Section
      4.4 is
      received by Company or any Seller, such party(ies) agrees to promptly notify
      Purchaser in writing and disclose the material terms of any such proposal
      (including the identify of the prospective purchaser) to Purchaser, and such
      party(ies) will notify any prospective purchaser of their obligations hereunder
      and assure that any disclosure does not violate any agreement binding on
      Company.




4.5  **Operational
      Restrictions during the Build-Out Period** .
      During
      the period specified as the build-out period in the EPC Contracts (as defined
      below), Company shall take such steps as are required to insure that the Ethanol
      Plant shall be a nameplated facility nameplated to produce ethanol at a level
      of
      at least 100 million gallons of production a year. ****




4.6  **Tax
      Treatment** .
      The
      parties acknowledge and agree that each party intends that the exchange of
      the
      Company Shares for the Transaction Shares as contemplated by this Agreement
      is
      intended to be a reorganization under Section 368(a) of the Code. The parties
      shall cooperate to implement the transactions contemplated by this Agreement
      in
      a manner consistent with this Section
      4.6 and
      shall report such transactions for federal income tax purposes in a manner
      that
      is consistent with this Section
      4.6 .




4.7  **Permits** **.** The
      Company will use its reasonable efforts to obtain the DENR/EPA Air Quality
      Permits.




19




**5.**  **CLOSING
      CONDITIONS**




5.1  **Conditions
      to the Obligations of Purchaser** .
      The
      obligations of Purchaser to consummate this Agreement and close the transactions
      contemplated hereunder are subject to the satisfaction or waiver of each of
      the
      following conditions on or prior to the Closing Date:




(a)  Representations
      and Warranties .
      The
      representations and warranties of Company and each of the Sellers contained
      in
      this Agreement (and in any certificates delivered by Company or any Seller
      pursuant to this Agreement) will be true and correct in all respects as of
      the
      Closing Date.




(b)  Compliance
      with Covenants .
      All of
      the covenants and obligations to be complied with and performed by Company
      and/or any Seller on or before the Closing Date shall have been duly complied
      with and performed in all material respects.




(c)  Closing
      Documents .
      On the
      Closing Date, Company and/or the Sellers shall have delivered or caused to
      be
      delivered to Purchaser the duly executed closing documents specified
      below:




(i)  certificates
      representing the Company Shares, duly endorsed or accompanied by stock powers
      duly executed in blank and otherwise in a form acceptable for transfer on the
      books of Company;




(ii)  copies
      of
      resolutions of Company’s board of directors and stockholders authorizing the
      execution, delivery and performance of this Agreement and the transactions
      contemplated hereby, including but not limited to the Potential Project, and
      of
      Company’s Certificate of Incorporation and Bylaws, as amended, all as certified
      by Company’s corporate secretary;




(iii)  an
      incumbency certificate executed by Company’s corporate secretary;




(iv)  a
      certificate executed by Company and each Seller attesting that each of Company
      and each Seller has complied with all of the obligations and covenants of
      Company or any Seller set forth in Section
      4 of this
      Agreement;




(v)  a
      cross-receipt executed by each Seller, in a form reasonably satisfactory to
      Purchaser and each Seller;




(vi)  certificates
      from the State of South Dakota and from each jurisdiction where Company is
      qualified to do business, dated no earlier than ten (10) days prior to the
      Closing Date, as to the good standing of Company in such
      jurisdictions;




(vii)  a
      legal
      opinion of Buckmaster Law Offices, PC in a form satisfactory to
      Purchaser;




(viii)  the
      Stockholder Agreement;




20




(ix)  the
      Escrow Agreement;




(x)  employment
      agreements, retention agreements, consulting agreements or other similar type
      of
      agreement with Key Company Employees or consultants identified by Purchaser
      and
      Company and specified in the Company Disclosure Schedule, in each case in a
      form
      and on terms mutually acceptable to the parties and as approved by Purchaser’s
      Board (the “ **Company
      Employment Contracts** ”);




(xi)  executed
      offtake or marketing agreement(s) for purchase of the Ethanol Plant production
      (the “ **Production
      Agreement** ”)
      in a
      form and on terms mutually acceptable to the parties;




(xii)  evidence
      reasonably acceptable to Purchaser that Company has purchased or made payments
      toward the purchase of the Option; and




(xiii)  documentation
      reasonably satisfactory to Purchaser of out-of-pocket fees and expenses
      associated with the acquisition and permitting of the Parcels and the planning,
      engineering and design of the Ethanol Plant (the “ **Plant
      Expenses** ”).




(d)  Company
      Required Consents .
      Company
      and/or the Sellers shall have delivered or caused to be delivered to Purchaser
      the consents, permits, waivers or other approvals and copies of the notices
      set
      forth in the Company Disclosure Schedule, including, but not limited to
      government consents and third party consent, and all such consents must be
      in
      full force and effect.




(e)  Approval
      of Issuance of the Transaction Shares .
      (i)
      Purchaser’s stockholders shall have approved the issuance of the Transaction
      Shares and (ii) Purchaser shall have received approval from AMEX, to the extent
      such approval is required, for the issuance of the Transaction Shares.




(f)  Approval
      of Potential Project .
      Purchaser’s Board and a majority of Purchaser’s stockholders shall have approved
      the Potential Project.




(g)  Absence
      of Litigation .
      As of
      the Closing Date, no Law shall have been adopted, promulgated, entered, enforced
      or issued by any governmental authority, or action, claim, suit or proceeding
      shall be pending or threatened before any court, other governmental authority
      or
      arbitrator which is reasonably likely to (i) enjoin, restrain or prohibit the
      consummation of the transactions contemplated by this Agreement, including
      the
      Potential Project, or any Transaction Document (as defined below), (ii) have
      the
      effect of making illegal or otherwise prohibiting the transactions contemplated
      hereby or by any Transaction Document or (iii) materially adversely affect,
      including through the imposition of any requirement to divest or hold separate
      any assets or segments of the business of Company, the right of Purchaser
      following the Closing Date to own the Company Shares.




(h)  Material
      Adverse Change .
      There
      shall have been no Material Adverse Change affecting Company or any Seller
      during the period from the Effective Date to the Closing Date.




21




(i)  Satisfactory
      Completion of Purchaser’s Due Diligence .
      Purchaser shall have completed its due diligence review of (i) the business,
      assets, contracts, prospects and financial condition of Company, (ii) the
      Potential Project, including but not limited to financial and business models,
      contracts, assets, permits, prospects and operations and (iii) the Parcels,
      including but not limited to reviews of title, environmental matters and
      suitability of the Parcels for construction of the Ethanol Plant, and Purchaser
      shall be satisfied in all respects with the results of such due diligence in
      each case.




(j)  Financing
      Commitment for Potential Project .
      Purchaser shall have obtained a firm commitment to raise capital, either through
      debt or equity financing, or both, on terms mutually acceptable to the parties
      for construction of the first Train.




(k)  Capital
      for Purchase of Parcels .
      Purchaser shall have raised sufficient capital, or have a commitment for such
      capital, to make the final payment on the Parcels.




(l)  Engineering,
      Procurement and Construction Contracts .
      Company
      shall have in place definitive forms of engineering, procurement and
      construction contracts (“ **EPC
      Contracts** ”)
      in a
      form and on terms mutually acceptable to the parties. For avoidance of doubt,
      the EPC Contracts do not need to be executed, but each contract must be subject
      only to execution by the relevant parties.




(m)  Permits .
      Company
      shall have obtained all necessary permits required for the construction and
      operation of the Ethanol Plant.




(n)  Performance
      Bond .
      Company
      shall have in place a performance bond, if required, reasonably satisfactory
      to
      Purchaser for the work to be performed by the contractors pursuant to the EPC
      Contracts.




(o)  Insurance .
      Company
      shall insure all facilities and equipment comprising and related to the
      Potential Project, including but not limited to the Ethanol Plant, with an
      insurer and on terms that in each case are reasonably satisfactory to Purchaser.




5.2  **Conditions
      to the Obligations of Company and the Sellers** .
      The
      obligations of Company and each of the Sellers to consummate this Agreement
      and
      close the transactions contemplated hereunder are subject to the satisfaction
      or
      waiver of each of the following conditions on or prior to the Closing
      Date:




(a)  Representations
      and Warranties .
      The
      representations and warranties of Purchaser contained in this Agreement (and
      in
      any certificates delivered by Purchaser pursuant to this Agreement) will be
      true
      and correct in all respects as of the Closing Date.




(b)  Compliance
      with Covenants .
      All of
      the covenants and obligations to be complied with and performed by Purchaser
      on
      or before the Closing Date shall have been duly complied with and performed
      in
      all material respects.




22




(c)  Closing
      Documents .
      On the
      Closing Date, Purchaser shall have delivered or caused to be delivered to
      Company the duly executed closing documents set forth below:




(i)  certificates
      representing the Closing Shares, duly endorsed or accompanied by stock powers
      duly executed in blank and otherwise in a form acceptable for transfer on the
      books of Purchaser;




(ii)  copies
      of
      resolutions of Purchaser’s Board and stockholders authorizing the execution,
      delivery and performance of this Agreement and the transactions contemplated
      hereby, including but not limited to the Potential Project and issuance of
      the
      Transaction Shares, and of Purchaser’s Certificate of Incorporation and Bylaws,
      as amended, all as certified by Purchaser’s corporate secretary;




(iii)  an
      incumbency certificate executed by Purchaser’s corporate secretary;




(iv)  a
      certificate executed by Purchaser attesting that Purchaser has complied with
      all
      obligations and covenants of Purchaser set forth in Section
      4 of this
      Agreement;




(v)  a
      cross-receipt executed by Purchaser, in a form reasonably satisfactory to
      Purchaser and each Seller;




(vi)  a
      certificate from the State of Delaware, dated no earlier than ten (10) days
      prior to the Closing Date, as to the good standing of Purchaser in the State
      of
      Delaware;




(vii)  a
      legal
      opinion of Arnold & Porter llp as to
      the valid issuance and non-assessability of the Transaction Shares;




(viii)  the
      Stockholder Agreement;




(ix)  the
      Escrow Agreement;




(x)  employment
      agreements, retention agreements, consulting agreements or other similar type
      of
      agreement with those certain key Purchaser employees identified by Purchaser
      and
      Company and specified in the Purchaser Disclosure Schedule, in each case in
      a
      form and on terms mutually acceptable to the parties (the “ **Purchaser
      Employment Contracts** ”,
      and
      together with this Agreement, the LOI, the Stockholder Agreement, the Escrow
      Agreement, the Company Employment Contracts, the EPC Contracts, the Production
      Agreement and the Mutual Disclosure Agreement, dated December 8, 2006, by and
      between Purchaser and Company, the “ **Transaction
      Documents** ”);




(xi)  evidence
      of transfer of funds as directed by Purchaser to reimburse Company of the
      documented, out-of-pocket fees and expenses associated with the acquisition
      and
      permitting of the Parcels and the planning, engineering and design of the
      Ethanol Plant up to, but not including the Closing Date; and




23




(xii)  a
      commitment letter for financing of the first Train.




(d)  Required
      Consents .
      Purchaser shall have delivered or caused to be delivered to Company the
      consents, permits, waivers or other approvals and copies of the notices set
      forth in the Purchaser Disclosure Schedule, including but not limited to
      government consents, third party consents and any approval that may be required
      from AMEX.




(e)  Absence
      of Litigation .
      As of
      the Closing Date, no Law shall have been adopted, promulgated, entered, enforced
      or issued by any governmental authority, or action, claim, suit or proceeding
      shall be pending or threatened before any court, other governmental authority
      or
      arbitrator which is reasonably likely to (i) enjoin, restrain or prohibit the
      consummation of the transactions, including the Potential Project, contemplated
      by this Agreement or any Transaction Document, (ii) have the effect of making
      illegal or otherwise prohibiting the transactions contemplated hereby or by
      any
      Transaction Document or (iii) materially adversely affect, including through
      the
      imposition of any requirement to divest or hold separate any assets or segments
      of the business of Purchaser, the right of any Seller following the Closing
      Date
      to own the Transaction Shares.




(f)  Financing
      Commitment for Potential Project .
      Purchaser shall have obtained a firm commitment to raise capital, either through
      debt or equity financing, or both, on terms mutually acceptable to the parties
      for construction of the first Train.




(g)  Material
      Adverse Change .
      There
      shall have been no Material Adverse Change affecting Purchaser during the period
      from the Effective Date to the Closing Date.




(h)  Satisfactory
      Completion of Company’s Due Diligence .
      Company
      shall have completed its due diligence review of the business, assets, contracts
      and financial condition of Purchaser and shall be satisfied in all respects
      with
      the results of such due diligence.




(i)  Purchaser’s
      Capital Structure .
      Company
      shall have completed a review of Purchaser’s capital structure as set forth in
      the Purchaser Disclosure Schedule and shall be satisfied in all respects with
      such capital structure.




**6.**  **TERMINATION**




6.1  **Termination** . **** This
      Agreement may be terminated at any time prior to the Closing Date:




(a)  by
      mutual
      written agreement of the parties;




(b)  by
      Purchaser, if Company or any Seller has committed a material breach of any
      provision of this Agreement that has not been cured within thirty (30) days
      of
      written notice of such material breach;




24




(c)  by
      Company or any Seller, if Purchaser has committed a material breach of any
      provision of this Agreement that has not been cured within thirty (30) days
      of
      written notice of such material breach;




(d)  by
      any
      party hereto, if an order, decree, ruling, judgment or injunction has been
      entered by any governmental authority of competent jurisdiction permanently
      restraining, enjoining or otherwise limiting or prohibiting the consummation
      of
      the transaction, including but not limited to the Potential Project,
      contemplated by this Agreement and such order, decree, ruling, judgment or
      injunction has become final and non-appealable;




(e)  by
      any
      party, if the parties are unable to consummate a financing transaction on
      mutually acceptable terms from mutually acceptable financial institutions or
      other mutually acceptable entities for construction of the Ethanol Plant;
      or




(f)  automatically,
      without any action by any party, if the Closing has not occurred before 5 p.m.,
      Newark, Delaware time, on the Maturity Date (as defined in the Loan Agreement,
      dated as of December 22, 2006, by and among Company as Borrower, the Sellers
      as
      Pledgors and Purchaser as Lender, of the term loans made available by Purchaser
      to Company in the Financing Transaction).




6.2  **Effect
      of Termination** .
      If this
      Agreement is terminated as provided in Section
      7.1 ,
      then
      all further obligations under this Agreement shall terminate and no party hereto
      shall have any liability in respect of the termination of this Agreement;
      provided, however, that the confidentiality obligations of each party described
      in Section
      4.5 will
      survive any such termination; provided further that no such termination will
      relieve any party from liability for any breach of any representation, warranty,
      covenant or agreement set forth in this Agreement prior to such termination
      and
      in the event of such breach, the parties to this Agreement shall be entitled
      to
      exercise any and all remedies available under law or equity in accordance with
      this Agreement and, if such termination resulted from a breach of any covenant
      in this Agreement by the breaching party(ies), the non-breach party(ies) shall
      be entitled to be reimbursed by the breaching party(ies) for any and all
      reasonable out-of-pocket expenses incurred by such non-breaching part(ies)
      in
      connection with this Agreement, the transactions contemplated hereby and/or
      such
      breach of covenant.




**7.**  **MISCELLANEOUS**




7.1  **Remedies
      Cumulative; Remedies Not Waived** **.** Except
      as provided in Section 6.7no remedy herein conferred upon the parties is
      intended to be exclusive of any other remedy and each and every such remedy
      shall be cumulative and shall be in addition to every other remedy given
      hereunder or now or hereafter existing at law or in equity or by statute or
      otherwise. No course of dealing between the parties, nor any delay on the part
      of the parties in exercising any rights hereunder, shall operate as a waiver
      of
      any of the rights of any of the parties, either individually or in the
      aggregate.




7.2  **Waiver
      and Amendment** **.** This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and to their respective heirs, legal representatives, successors and assigns.
      This Agreement sets forth the entire agreement and understanding between the
      parties as to the subject matter hereof and merges and supersedes all prior
      discussions, agreements and understandings of any and every nature among them.
      This Agreement shall not be changed, modified or amended except by a writing
      signed by the parties hereto.




25




7.3  **Assignability** **.** Neither
      party may assign or transfer this Agreement or its rights hereunder without
      the
      prior written consent of the other party, which consent shall not be
      unreasonably withheld.




7.4  **Disclosure
      Schedules** .
      With
      respect to information contained in either the Company Disclosure Schedule
      or
      the Purchaser Disclosure Schedule, each party shall use reasonable best efforts
      to provide specific cross-references to each representation and warranty that
      is
      modified or otherwise affected by such information; provided, that absent any
      such cross-reference, information disclosed on the Company Disclosure Schedule
      or the Purchaser Disclosure Schedule, as applicable, for any individual
      representation or warranty shall be deemed to be disclosed under and
      incorporated into any other representation or warranty for the respective party
      if the relevance of such information to such other representation or warranty
      is
      reasonably apparent.




7.5  **Notices** **.** All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be sent by registered or certified mail (return receipt
      requested and postage prepaid), transmitted by telecopy, or delivered by hand,
      by messenger or by a recognized overnight delivery service, addressed as
      follows, or to such other address as such party may have from time to time
      furnished to the other party in writing:




If
                  to the Purchaser:
                O2Diesel
                    Corporation


Suite
      301


100
      Commerce Drive


Newark,
      DE 19713


Facsimile:
      (302) 266-7076





If
              to the Company:
            Pro
                Eco Energy Company, Inc.


P.O.
      Box
      261


Belle
      Fourche, South Dakota 57717


Facsimile:
      (605) 892-6337




Each
      such
      notice or other communication shall for all purposes of this Agreement be
      treated as effective or having been given (i) if sent by registered or certified
      mail, the earlier of receipt and five (5) Business Days after dispatch, (ii)
      if
      transmitted by telecopy, on the Business Day of confirmed receipt by the
      addressee thereof, and (iii) if delivered in person or by overnight courier,
      on
      the Business Day delivered.




7.6  **Expenses** **.** Each
      party shall pay its expenses, including attorneys fees, in connection with
      this
      Agreement and the transactions contemplated hereby.




7.7  **Counterparts** .
      This
      Agreement may be executed in several counterparts, and each executed copy shall
      constitute an original instrument, but all such counterparts shall together
      constitute but one and the same instrument. Facsimiles of signatures shall
      be
      deemed to be originals.




26




7.8  **Headings;
      Construction** .
      The
      headings of the several sections, divisions or subsections of this Agreement
      shall not be construed to constitute any part or to affect the meaning of any
      such sections, divisions or subsections. The parties
      hereto have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      hereto and no presumption of burden of proof shall arise favoring or not
      favoring any party by virtue of the authorship of any of the provisions of
      this
      Agreement.




7.9  **Severability** .
      If any
      provision of this Agreement or portion of any provision, or the application
      thereof to any person or circumstance, shall, to any extent, be held invalid
      or
      unenforceable, the remainder of this Agreement or the remainder of such
      provision and the application thereof to other persons or circumstances, other
      than those as to which it is held invalid or unenforceable, shall not be
      affected thereby, and each term and provision of this Agreement shall be valid
      and be enforced to the fullest extent permitted by law.




7.10  **Governing
      Law** .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of Delaware, without regard to the
      principles of conflicts of law thereof. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof via registered or certified
      mail or overnight delivery (with evidence of delivery) to such party at the
      address in effect for notices to it under this Agreement and agrees that such
      service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any other manner permitted by law. The parties hereby waive
      all rights to a trial by jury. If either party shall commence an action or
      proceeding to enforce any provisions of this Agreement, then the prevailing
      party in such action or proceeding shall be reimbursed by the other party for
      its reasonable attorneys’ fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such action or proceeding.




7.11  **Compliance
      Required** **.** The
      obligations of each of the parties arising pursuant to this Agreement shall
      be
      expressly conditioned upon the full compliance by the other party hereto with
      the terms set forth this Agreement and in the other Transaction Documents.




*[Signature
      Page Follows]*




27


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




**COMPANY:****ProEco Energy Company,
              Inc.**By:
            /s/
              Dale S. BarkerName: Dale S.
              BarkerTitle:
              President




**SELLERS:**/s/
              Dale S. BarkerName: Dale S.
              Barker




/s/
              Barbara PyleName: Barbara
              Pyle




/s/
              Wesley W. BuckmasterBuckmaster Law Offices,
              PCBy: Wesley W.
              BuckmasterTitle:
              President




28


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




By:
            /s/
              Bud HarrisName: Bud
              Harris











**[EXECUTED
      IN SEPARATE COUNTERPART]**




29


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




By:
            /s/
              Roy BuckName: Roy
              Buck









**[EXECUTED
      IN SEPARATE COUNTERPART]**




30


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




By:
            /s/
              Sam GloverName: Sam
              Glover











**[EXECUTED
      IN SEPARATE COUNTERPART]**




31


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




By:
            /s/
              Jim DowlingName: Jim
              Dowling











**[EXECUTED
      IN SEPARATE COUNTERPART]**




32


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




By:
            /s/
              George McKeeverName: George
              McKeever





**[EXECUTED
      IN SEPARATE COUNTERPART]**




33


**IN
      WITNESS WHEREOF** ,
      the
      parties hereto have caused this Share Exchange Agreement to be executed and
      delivered by their respective corporate officers thereunto duly authorized
      on
      the day and year first above written.




**PURCHASER:****O2Diesel
              Corporation**By:
            /s/
              Alan RaeName: Alan RaeTitle: Chief Executive
              Officer





34


**SCHEDULE I**





**COMPANY
      SHARES TO BE EXCHANGED**





Name
            
            No.
                of Shares
            
            Certificate
                No.
            
            Percent
                of Total Company SharesDale
                Barker
              Barbara
                Pyle
              Buckmaster
                Law Offices, PC
              Jim
                Dowling
              George
                McKeever
              Sam
                Glover
              Roy
                Buck
              Bud
                Harris
            
            
            30,000,000
              13,800,000
              6,896,000
              3,672,000
              3,904,000
              3,440,000
              3,672,000
              3,216,000
            
            
            010
              011
              012
              013
              014
              015
              016
              017
            
            
            43.73
              20.12
              10.05
              5.35
              5.69
              5.01
              5.35
              4.69
            %
              %
              %
              %
              %
              %
              %
              %Total
            
            
            68,600,000
            
            
            
            
            
            100
            %




I-1


**TRANSACTION
      SHARES TO BE EXCHANGED**





**Total
                No. of Shares**
            
            **Release
                Schedule for Earnout Shares****Name**
            
            **Closing**
              **Shares**
            
            **Earnout
                Shares**
            
            **20%**
            
            **20%**Dale
                Barker
              Barbara
                Pyle
              Buckmaster
                Law Offices, PC
              Jim
                Dowling
              George
                McKeever
              Sam
                Glover
              Roy
                Buck
              Bud
                Harris
            
            
            2,407,254
              1,107,337
              553,347
              294,648
              313,264
              276,031
              294,648
              258,057
            
            
            1,604,836
              738,225
              368,898
              196,432
              208,843
              184,021
              196,432
              172,039
            
            
            802,418
              369,112
              184,449
              98,216
              104,422
              92,010
              98,216
              86,020
            
            
            802,418
              369,113
              184,449
              98,216
              104,421
              92,011
              98,216
              86,019Total
            
            
            5,504,586
            
            
            3,669,726
            
            
            1,834,863
            
            
            1,834,863





I-2


**Schedule
      II**


**Project
      Milestones**





Milestone
            
            
            Percentage
                of Earnout Shares to be Distributed1.
                Completion of construction on first Train
            
            
            20%
                of the Earnout Shares2.
                Commencement of construction on the final Train
            
            
            20%
                of the Earnout Shares





II-1


**SCHEDULE
      III**





**UPDATED
      COMPANY DISCLOSURE SCHEDULE AS OF 3/19/07**





**Schedule
              2.2**
            **Authority;
                No Breach**





Sellers
      and Company have all requisite authority to execute and deliver the Agreement
      and to perform the obligations defined therein. In doing so the execution of
      the
      Agreement is not a breach of any organizational formation document or the
      violation of any statute, rule, regulation, ordinance, quote or other law.





**Schedule
              2.3**
            **Corporate
                Matters**





A
      copy of
      the Company’s Articles of Incorporation and any amendments thereto; applicable
      resolutions; by-laws containing a current list of all shareholders, officers
      and
      directors of the company are attached hereto as Schedule III paragraph 2.3
      exhibits.





**Schedule
              2.4**
            **Capitalization**





Pro
      has
      issued Certificates to 8 shareholders representing 85,750,000 shares which
      is
      85.75% of the total authorized stock of 100,000,000 shares with a par value
      of
      $.0001 (1/1000).





**Schedule
              2.6**
            **Financial
                Statement**





The
      Company came into existence on November 21, 2006. The only cash proceeds
      received in the Company are loan funds advanced pursuant to the Term Loan
      Agreement and attending documents and an advance from one of the
      Company's stockholders.





**Schedule
              2.9**
            **Litigation;
                Compliance With Law**





None





**Schedule
              2.10**
            **Proprietary
                Information of Third
                Parties**





None





**Schedule
              2.11**
            **Title
                to and Sufficiency of Assets;
                Insurance**





The
      Company has not acquired title to any capital assets.





**Schedule
              2.15**
            **No
                Material Adverse
                Change**





None




III-1





**Schedule
              2.22**
            **Government
                Authorizations**





The
      Company is in the process of making applications for all governmental permits,
      licenses and franchises required to complete the potential Project.





**Schedule
              2.24**
            **Tax
                Matters**





No
      tax
      returns have been filed nor are any tax returns presently past due.





**Schedule
              2.25**
            **Environmental
                Matters**





None


**Schedule
                2.26**
            **ERISA
                and Employee Benefits**





The
      Company reaffirms the representations in paragraph 2.26 of the Agreement.





**Schedule
              2.28**
            **Transactions
                with Certain Persons**





Everett
      (Bud) Harris is a first cousin of Dale S. Barker who will assist with
      procurement activities.




III-2


**Schedule
      IV**





**Updated
      Purchaser Disclosure Schedule as of 3/19/07**





**Schedule
              3.1**
            **Organization,
                Execution and Delivery; Valid and Binding
                Agreements**





*Foreign
      Qualifications*





Maryland


California


Colorado


Ohio


Texas


Virginia


Brazil


Ireland


United
      Kingdom


Spain





*Other
      Names*





AAE
      Technologies International Plc





*Directors
      & Officers*





Alan
      Rae,
      Chief Executive Officer, Director & Secretary


Richard
      Roger, President and Chief Operating Officer


David
      Shipman, Chief Financial Officer


Arthur
      Meyer, Chairman of the Board of Directors


David
      Koontz, Director


E.
      Holt
      Williams, Director


Hendrik
      Rethwilm, Director


Karim
      Jobanputra, Director


Gerson
      Santos-Leon, Director





*Subsidiaries*





Name
            State or Jurisdiction of
              OrganizationO2Diesel, Inc.
            DelawareO2Diesel Químicos, Ltda.
            BrazilO2Diesel R&D SPA, S.L.
            SpainO2Diesel Europe PLC
            Ireland





**Schedule
              3.2**
            **Authority;
                No Breach or Conflicts**





None.




IV-1





**Schedule
              3.4**
            **Capitalization**




*Authorized
              Shares*Issued as of
              12/31/06
            75,125,014Restricted shares issued
              to Richard
              Roger as of 12/31/06
            500,000Options issued as of
              12/31/06
            7,500,000Warrants remaining as of
              12/31/06
            12,306,636Issued and Outstanding as
              of
              12/31/06
            95,431,650




**Schedule
              3.5**
            **Purchaser
                Reports; Financial
                Statements**





None.





**Schedule
              3.7**
            **Litigation;
                Compliance with Law**





None.





**Schedule
              3.8**
            **Proprietary
                Information of Third
                Parties**





*Purchaser
      Key Employees*





Alan
      Rae


David
      Shipman


Richard
      Roger





**Schedule
              3.9**
            **Title
                to and Sufficiency of Assets;
                Insurance**





Provided
      under separate cover





**Schedule
              3.10**
            **Intellectual
                Property Assets**





None.





**Schedule
              3.12**
            **No
                Brokers or Finders**





Tom
      Slunecka





**Schedule
              3.13**
            **No
                Material Adverse Change**





None.




IV-2