July 28, 2005 8k Ex 10.1


    


    Exhibit
      10.1

    


                                                 
      ASSET PURCHASE AGREEMENT

    


    AMONG

     

    FARWELL
      EQUITY PARTNERS, LLC

     

    OBLIO
      TELECOM, INC.

     

    OBLIO
      TELECOM L.L.P.,

     

    SAMMY
      JIBRIN

     

    AND

     

    RADU
      ACHIRILOAIE

    


    


    


    


    Dated
      as of July 28, 2005

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

    
      	ARTICLE I.
              PURCHASE AND SALES ASSETS. 	1
	 	 
	
              1.1.

            	
              Sale
                of Assets

            	 
	
              1.2.

            	
              Excluded
                Assets

            	
              2

            
	
              1.3.

            	
              Assumed
                Liabilities; Excluded Liabilities; Employees.

            	
              2

            
	
              1.4.

            	
              Purchase
                Price; Adjustment; Payment.

            	
              3

            
	
              1.5.

            	
              Purchase
                Price Allocation

            	
              5

            
	
              1.6.

            	
              Records
                and Contracts

            	
              5

            
	
              1.7.

            	
              Further
                Assurances

            	
              5

            
	
              1.8.

            	
              Sales
                and Transfer Taxes

            	
              5

            
	
              1.9.

            	
              Transfer
                of Subject Assets

            	
              5

            
	
              ARTICLE
                II. CLOSING AND TERMINATION

            	
              6

            
	
              2.1.

            	
              Closing
                Date

            	
              6

            
	
              2.2.

            	
              Termination
                of Agreement

            	
              7

            
	
              2.3.

            	
              Procedure
                Upon Termination

            	
              7

            
	
              2.4.

            	
              Effect
                of Termination

            	
              7

            
	
              ARTICLE

              III.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE SELLER AND THE OWNERS

            	
               

              7

            
	
              3.1.

            	
              Organization
                and Good Standing

            	
              7

            
	
              3.2.

            	
              Authorization
                of Agreement

            	
              8

            
	
              3.3.

            	
              Ownership
                of Seller

            	
              8

            
	
              3.4.

            	
              No
                Subsidiaries

            	
              8

            
	
              3.5.

            	
              Conflicts;
                Consents of Third Parties.

            	
              8

            
	
              3.6.

            	
              Ownership
                and Transfer of Assets

            	
              9

            
	
              3.7.

            	
              Financial
                Statements

            	
              9

            
	
              3.8.

            	
              No
                Undisclosed Liabilities

            	
              9

            
	
              3.9.

            	
              Absence
                of Certain Developments

            	
              10

            
	
              3.10.

            	
              Taxes.

            	
              11

            
	
              3.11.

            	
              Real
                Property.

            	
              13

            
	
              3.12.

            	
              Tangible
                Personal Property.

            	
              14

            
	
              3.13.

            	
              Intangible
                Property

            	
              14

            
	
              3.14.

            	
              Material
                Contracts

            	
              15

            
	
              3.15.

            	
              Employee
                Benefits.

            	
              15

            
	
              3.16.

            	
              Labor.

            	
              16

            
	
              3.17.

            	
              Litigation

            	
              17

            
	
              3.18.

            	
              Compliance
                with Laws; Permits.

            	
              17

            
	
              3.19.

            	
              Environmental
                Matters

            	
              17

            
	
              3.20.

            	
              Insurance

            	
              18

            
	
              3.21.

            	
              Inventories;
                Receivables; Payables.

            	
              18

            
	
              3.22.

            	
              Customers
                and Suppliers

            	
              18

            
	
              3.23.

            	
              Banks

            	
              19

            


    

    


    


    


    -
      i
      -

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
              3.24.

            	
              No
                Misrepresentations

            	
              19

            
	
              3.25.

            	
              Financial
                Advisors

            	
              19

            
	
              3.26.

            	
              Investment
                Intention

            	
              19

            
	
              3.27.

            	
              Accredited
                Investor

            	
              19

            
	
              3.28.

            	
              Patriot
                Act

            	
              19

            
	
              ARTICLE

              IV.

            	
              REPRESENTATIONS
                AND WARRANTIES OF PURCHASER AND ACQUISITION SUB

            	
               

              20

            
	
              4.1.

            	
              Organization
                and Good Standing.

            	
              20

            
	
              4.2.

            	
              Authorization
                of Agreement.

            	
              20

            
	
              4.3.

            	
              Conflicts;
                Consents of Third Parties.

            	
              21

            
	
              4.4.

            	
              Litigation

            	
              21

            
	
              4.5.

            	
              Financial
                Advisors

            	
              21

            
	
              4.6.

            	
              Patriot
                Act

            	
              21

            
	
              4.7.

            	
              No
                Knowledge of Breaches

            	
              21

            
	
              ARTICLE
                V. COVENANTS

            	
              22

            
	
              5.1.

            	
              Access
                to Information

            	
              22

            
	
              5.2.

            	
              Conduct
                of the Business Pending the Closing.

            	
              22

            
	
              5.3.

            	
              Consents

            	
              23

            
	
              5.4.

            	
              Other
                Actions

            	
              24

            
	
              5.5.

            	
              No
                Solicitation

            	
              24

            
	
              5.6.

            	
              Preservation
                of Records

            	
              24

            
	
              5.7.

            	
              Publicity

            	
              24

            
	
              5.8.

            	
              Use
                of Name

            	
              25

            
	
              5.9.

            	
              Employment
                Agreements

            	
              25

            
	
              5.10.

            	
              Financing
                Terms

            	
              25

            
	
              ARTICLE

              VI.

            	
              CONDITIONS
                TO CLOSING

            	
               

              25

            
	
              6.1.

            	
              Conditions
                Precedent to Obligations of Parent and Acquisition Sub

            	
              25

            
	
              6.2.

            	
              Conditions
                Precedent to Obligations of the Seller and Owners

            	
              26

            
	
              ARTICLE

              VII.

            	
              DOCUMENTS
                TO BE DELIVERED

            	
               

              27

            
	
              7.1.

            	
              Documents
                to be Delivered by the Seller

            	
              27

            
	
              7.2.

            	
              Documents
                to be Delivered by the Parent

            	
              27

            
	
              ARTICLE

              VIII.

            	
              INDEMNIFICATION

            	
               

              27

            
	
              8.1.

            	
              Indemnification.

            	
              27

            
	
              8.2.

            	
              Limitations
                on Indemnification

            	
              29

            
	
              8.3.

            	
              Indemnification
                Procedures.

            	
              29

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              ARTICLE

              IX.

            	
              MISCELLANEOUS

            	
               

              30

            
	
              9.1.

            	
              Payment
                of Sales, Use or Similar Taxes

            	
              30

            
	
              9.2.

            	
              Survival
                of Representations and Warranties

            	
              30

            
	
              9.3.

            	
              Expenses

            	
              30

            
	
              9.4.

            	
              Specific
                Performance

            	
              30

            
	
              9.5.

            	
              Further
                Assurances

            	
              31

            
	
              9.6.

            	
              Submission
                to Jurisdiction; Consent to Service of Process

            	
              31

            
	
              9.7.

            	
              Entire
                Agreement; Amendments and Waivers

            	
              31

            
	
              9.8.

            	
              Table
                of Contents and Headings

            	
              32

            
	
              9.9.

            	
              Notices

            	
              32

            
	
              9.10.

            	
              Severability

            	
              33

            
	
              9.11.

            	
              Binding
                Effect; Assignment

            	
              33

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ASSET
      PURCHASE AGREEMENT

    


    ASSET
      PURCHASE AGREEMENT, dated as of July 28, 2005 (the “Agreement”), between Farwell
      Equity Partners, LLC , a Delaware limited liability company (the “Parent”),
      Oblio Telecom, Inc., a corporation existing under the laws of Delaware and
      a
      wholly owned
      subsidiary of Parent (“Acquisition Sub”), Oblio Telecom L.L.P., a privately held
      limited liability partnership existing under the laws of
      Texas
      (the “Seller”), and Sammy Jibrin and Radu Achiriloaie (the
“Owners”).

    


    W
      I T N E S S E T H:

    


    WHEREAS,
      subject to the terms and conditions hereof, Seller desires to sell, transfer
      and
      assign to Acquisition Sub, and Acquisition Sub
      desires to purchase from Seller, all of the properties, rights and assets
      constituting the business of Seller, which is engaged in the
      creation,
      marketing, and distribution of prepaid telephone products for the wire line
      and
      wireless markets (the “Business”); and

    


    WHEREAS,
      immediately following the completion of the transactions contemplated hereunder,
      Parent intends to transfer its ownership interest in Acquisition Sub to
      Ventures-National Incorporated, an Affiliate (as such term is defined herein)
      of
      Parent (“VNI”);

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements hereinafter contained, the parties hereby agree as
      follows:

     

                                                        
      ARTICLE I.

                                
      PURCHASE
      AND SALE OF ASSETS.

    


    1.1. Sale
      of Assets. Seller
      agrees to sell, assign, transfer and deliver to Acquisition Sub, and Acquisition
      Sub agrees to purchase
      from
      Seller, all of Seller’s right, title and interest in and to all of the
      properties, assets and business of the Business, of every kind and description,
      tangible and intangible, real, personal or mixed, and wherever located, but
      excluding the Excluded Assets, including, without limitation, the
      following:

    


    (a) Equipment.
      All
      assets of any kind or nature, including all fixed assets, equipment, furniture,
      fixtures, leasehold improvements located within the Seller’s office located at
      407 International Parkway, Suite 403, Richardson, Texas, inventory, office
      materials, software, supplies and other tangible personal property of every
      kind
      and description owned by Seller and used or held for use in connection with
      the
      Business, all as set forth on Schedule 1.1(a) attached hereto
      (“Equipment”);

    


    (b) Contracts.
      All
      of
      the rights of Seller under, and interest of Seller in and to, all contracts
      relating to the Business, a true, correct and complete list of which contracts
      is attached hereto as Schedule 1.1(b) (“Contracts”);

    


    (c) Intellectual
      Property. All
      of
      Seller’s Intellectual Property relating to the Business, as set forth on
      Schedule 1.1(c) attached hereto;

    


    


     

    
      -1-

      
        

      

    

     

    (d) Goodwill.
      All
      of
      the goodwill of Seller in, and the going concern value of, the Business, and
      all
      of the business and customer lists and accounts, proprietary information,
      marketing materials and trade secrets related to the Business;

    


    


    (e) Claims.
      All
      claims, entitlements, rebates, refunds, settlements, awards or other rights
      related to any Assets or the operation of the Business prior to the Closing
      Date;

    


    (f) Records.
      All
      of
      Seller’s customer logs, location files and records, and other business files and
      records, in each case relating to the Business; and

    


    (g) Stock.
      All
      outstanding shares of common stock of Pinless, Inc. (“Pinless”), which will be
      contributed by the Owners to Seller immediately prior to the
      Closing.

    


    The
      assets, properties and business of Seller being sold to and purchased by Parent
      under this Section 1.1 are referred to herein collectively as the
“Assets.”

    


    1.2. Excluded
      Assets. There
      shall be excluded from the Assets and retained by Seller, the following assets
      (the “Excluded

    Assets”):

    


    (a) Assets.
      All
      assets identified on Schedule 1.2(a) attached hereto, and all other assets
      of
      Seller which are not used or held for use in connection with the Business or
      otherwise necessary to the operation of the Business; and

    


    (b) Partnership
      Records. All
      of
      Seller’s partnership and other organizational records.

    


    1.3. Assumed
      Liabilities; Excluded Liabilities; Employees.

     

    (a) Assumed
      Liabilities. Acquisition
      Sub shall accept and assume, and shall become and be fully liable and
      responsible for, and other
      than as expressly set forth herein Seller shall have no further liability or
      responsibility for or with respect to, (i) liabilities and
      obligations
      arising
      out of events occurring on and after the Closing Date related to Acquisition
      Sub’s ownership of the Assets and Acquisition Sub’s operation
      of the Business after the consummation of the transactions contemplated herein;
      (ii) all obligations and liabilities of Seller which are
      to be
      performed after the Closing Date arising under the Contracts; and (iii) the
      liabilities identified on Schedule 1.3(a) attached hereto (collectively, the
      “Assumed Liabilities”). The assumption of the Assumed Liabilities by Acquisition
      Sub hereunder shall not enlarge any rights of third parties under contracts
      or
      arrangements with Parent or Seller or any of their respective affiliates or
      subsidiaries.

    


    (b) Excluded
      Liabilities. It
      is
      expressly understood that, except for the Assumed Liabilities, Acquisition
      Sub
      shall not assume, pay
      or be
      liable for any liability or obligation of Seller of any kind or nature at any
      time existing or asserted, whether, known, unknown, fixed,
      contingent or otherwise, not specifically assumed herein by Parent or
      Acquisition Sub, and any liability or obligation relating to, resulting from
      or
      arising out of (i) the Excluded Assets, (ii) the employees of the Business
      or
      (iii) any fact existing or event occurring prior to, or relating to the
      operation of the Business prior to, the date hereof.

    


    


    
    

    
      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
         

      

    

    
      (c)
        Employees, Wages and Benefits.

    

    


    (i) Seller
      shall terminate or reassign all of its employees related to the Business
      effective as of the Closing Date and neither
      Parent nor Acquisition Sub shall assume or have any obligations or liabilities
      with respect to such employees or such terminations,
      including, without limitation, any severance obligation.

    


    (ii) Parent
      and Acquisition Sub specifically reserve the right, on or after the date hereof,
      to employ or reject any of Seller’s employees or other applicants in its sole
      and absolute discretion. Nothing in this Agreement shall be construed as a
      commitment or obligation
      of Parent to accept for employment, or otherwise continue the employment of,
      any
      of Seller’s employees, and no employee shall be
      a third
      party beneficiary of this Agreement.

    


    (iii) Seller
      shall pay all wages, salaries, commissions, and the cost of all fringe benefits
      provided to its employees which shall have become due for work performed as
      of
      and through the date hereof, and Seller shall collect and pay all Taxes in
      respect of such wages, salaries, commissions and benefits.

    


    (iv) Seller
      acknowledges and agrees that neither Parent nor Acquisition Sub shall acquire
      any rights or interests of Seller in,
      or
      assume or have any obligations or liabilities of Seller under, any benefit
      plans
      maintained by Seller, or for the benefit of any employees
      of
      Seller, including, without limitation, obligations for severance; provided,
      however, that for the year 2005 Acquisition Sub shall honor all vacation
      policies of Seller with respect to former employees of Seller who are hired
      by
      Acquisition Sub.

    


    1.4.
      Purchase Price; Adjustment; Payment.

     

    (a) Purchase
      Price. In
      consideration of the sale by Seller to Acquisition Sub of the Assets, and
      subject to the assumption by Acquisition
      Sub of the Assumed Liabilities and satisfaction of the conditions contained
      herein, Parent shall pay to Seller an amount equal to
      Thirty
      Million Five Hundred Thousand Dollars ($30,500,000), which amount shall be
      adjusted in accordance with Section 1.4(b)(ii) and Acquisition Sub shall assume
      the Assumed Liabilities.

    


    (b) Payment
      of Purchase Price. The
      Purchase Price will be paid as follows:

    


    (i) Closing
      Payment. On
      the
      Closing Date hereof (as hereafter defined), the Parent shall deliver to the
      Seller (a) $19,000,000
      (the “Cash Price”), subject to adjustment as set forth in Section 1.4(b)(ii)
      below, via wire transfer of immediately available funds
      into an
      account designated by the Seller, (b) a secured promissory note in the principal
      amount of $2,500,000 substantially in the form of Exhibit A (the “Promissory
      Note”), and (c) 9,000 shares of Series A Convertible Preferred Stock of
      Acquisition Sub with an initial stated value of $9,000,000, the terms of which
      are set forth in the Certificate of Designations attached hereto as Exhibit
      B
      (the “Shares”). On the Closing
      Date, $1,000,000 of the Cash Price shall be placed in escrow (the “Escrow
      Account”) pursuant to the terms and provisions of the form
      of
      escrow agreement attached hereto as Exhibit D (the “Escrow Agreement”). In
      addition, on the Closing Date, VNI shall issue to the Seller 150,000 shares
      of
      its common stock, par value $0.001 per share (the “VNI Shares”). The Shares and
      the VNI Shares are herein collectively referred to as the
“Securities.”

    


    


     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    



    (ii) Cash
      Price Adjustment. At
      the
      Closing (as hereinafter defined), the Seller shall provide to the Parent a
      working capital certificate (the “Closing Working Capital Certificate”)
      determined in accordance with generally accepted accounting principles (“GAAP”)
      applied consistently with historical procedures, certified by the President,
      Chief Financial Officer or other executive officer of Seller, setting forth
      the
      current assets and current liabilities of the Seller as of the close of business
      on the date immediately prior to the Closing Date (the “Closing Net Working
      Capital”). “Current assets” shall include, but not be limited to (i) cash and
      cash equivalents, (ii) accounts receivable, (iii) inventory (excluding cell
      phones purchased from Sprint, the Sprint support contract which totals
      approximately $2,000,000),
      (iv) prepaid expenses and (v) unbilled revenues. “Current liabilities” shall
      include, but not be limited to (a) accounts payable, (b) advances
      and accrued but unbilled expenses, (c) accrued taxes and (d) unearned revenues.
      Seller may make a distribution of cash to its owners
      immediately prior to the Closing Date to make Closing Net Working Capital equal
      to zero. Prior to the Closing Date, the Seller will make payments to vendors
      and
      suppliers on a basis consistent with historical payment procedures and
      terms.

    


    


    (iii) Within
      fifty (50) business days of Closing the Seller shall deliver to Parent the
      final
      working capital certificate (the “Final Working Capital Certificate”). Seller
      and Parent agree that the Final Working Capital Certificate shall include as
      assets the actual cost of the cell phones purchased from Sprint, the Sprint
      support contract, and the Telecordia contract which cumulatively total
      approximately $2,250,000. Such amount shall be included as assets in the Final
      Working Capital Certificate whether or not they are properly classified as
      long
      term or short term assets in accordance with GAAP. Unless within ten (10)
      business days of delivery of the Final Working Capital Certificate by Seller
      to
      Parent, Seller has received a written objection from Parent, the Final Working
      Capital Certificate shall be considered final. If within ten (10) business
      days
      of delivery of the Final Working Capital Certificate by Seller to Parent, Seller
      receives a written objection
      from Parent, then the Seller and Parent shall attempt to reconcile their
      differences diligently and in good faith and any resolution by
      them
      shall be final, binding and conclusive. If the Seller and the Parent are unable
      to reach a resolution with such effect within ten (10) business days of the
      Parent’s written notice to Seller, the Seller and the Parent shall submit such
      dispute for resolution to an independent accounting
      firm mutually appointed by the Sellers and the Purchaser (the “Independent
      Accounting Firm”), which shall determine and report
      to the
      parties and such report shall be final, binding and conclusive on the parties
      hereto. The fees and disbursements of the Independent Accounting
      Firm shall be shared equally by the Sellers and the Purchaser or as the
      Independent Accounting Firm shall otherwise determine in
      light of
      the bona fides of the disputed positions being taken by the parties. The total
      of the current assets of the Seller, less the current liabilities of the Seller
      as set for the on the Final Working Capital Certificate shall equal the “Final
      Net Working Capital”. If the Final Net Working
      Capital is less than zero, the Cash Price shall be reduced by the amount of
      the
      Final Net Working Capital (the “Shortfall”). Any such amount
      due by Seller shall be paid first from the Escrow Account. Any amount of
      Shortfall which is in excess of the Escrow Account shall be paid
      directly by the Seller. If there is no Shortfall or the Shortfall is less than
      the Escrow Account, the funds remaining in the Escrow Account and
      any
      positive Final Net Working Capital (estimated at approximately $2,250,000)
      shall
      be delivered to the Seller. Any such amount due by
      Parent
      shall be paid to Seller. All such amounts shall be delivered within five (5)
      business days of the date of the Final Working Capital Certificate and the
      parties agree to present instructions to the escrow agent under the Escrow
      Account consistent with the provisions of this Section.

    


    


    


    


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    (iv) In
      addition to the foregoing, in the event any of the accounts receivable of the
      Seller which constitute a portion of the
      Assets
      shall remain uncollected for a period of 90 days or more following the Closing
      Date, the Seller shall pay the full amount of such uncollected account
      receivable to the Parent within five (5) business days of a written request
      for
      payment and Parent shall assign the account receivable to the
      Seller.

    


    1.5.Purchase
      Price Allocation. Parent,
      Acquisition Sub and Seller shall mutually agree on the allocation of the
      Purchase Price. Such
      allocation shall be binding upon Parent, Acquisition Sub and Seller for all
      purposes (including financial accounting purposes, financial
      and
      regulatory reporting purposes and tax purposes). Parent, Acquisition Sub and
      Seller each further agrees to file its Federal income tax returns
      and its other tax returns reflecting such allocation, Form 8594 and any other
      reports required by Section 1060 of the Internal Revenue
      Code of
      1986, as amended (the “Code”).

    


    1.6.Records
      and Contracts. Seller
      shall deliver to Parent and Acquisition Sub all of the Contracts, with such
      assignments thereof
      and consents to assignments as are necessary to assure Parent and Acquisition
      Sub of the full benefit of the same. Seller shall also
      deliver
      to Parent and Acquisition Sub all of Seller’s files and records constituting
      Assets.

    


    1.7.Further
      Assurances. Seller
      shall, from time to time after the consummation of the transactions contemplated
      herein, at the request
      of Parent or Acquisition Sub and without further consideration, execute and
      deliver further instruments of transfer and assignment and
      take
      such other action as Parent or Acquisition Sub may reasonably require to more
      effectively transfer and assign to, and vest in, Parent or Acquisition Sub
      the
      Assets free and clear of all Liens.

    


     1.8.
      Sales and Transfer Taxes. All
      sales, transfer, use, recordation, documentary, stamp, excise taxes, personal
      property taxes, fees
      and
      duties (including any real estate transfer taxes) under applicable law incurred
      in connection with this Agreement or the transactions
      contemplated hereby will be borne and paid by Parent.

    


     1.9.
      Transfer of Subject Assets. Seller
      shall deliver or cause to be delivered to Acquisition Sub good and sufficient
      instruments of transfer transferring to Acquisition Sub title to all of the
      Assets, together with all required consents. Such instruments of transfer (a)
      shall contain appropriate warranties and covenants which are usual and customary
      for transferring the type of property involved under the laws of the
      jurisdictions applicable to such transfers, (b) shall be in form and substance
      reasonably satisfactory to Acquisition Sub and its counsel, (c) shall
      effectively vest in Acquisition Sub good and marketable title to all of the
      Assets free and clear of all Liens (as hereafter defined), and (d)
      where
      applicable, shall be accompanied by evidence of the discharge of all Liens
      against the Assets.

    


    


    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    


    ARTICLE
      II.

    CLOSING
      AND TERMINATION

    


    2.1. Closing
      Date. Subject
      to the satisfaction of the conditions set forth in Sections 6.1 and 6.2 hereof
      (or the waiver thereof by the
      party
      entitled to waive that condition), the closing of the sale and purchase of
      the
      Assets provided for in Section 1.1 hereof (the “Closing”)
      shall
      take place at the offices of Sichenzia Ross Friedman Ference LLP located at
      1065
      Avenue of the Americas, 21st Floor, New York, NY 10018 (or at such other place
      as the parties may mutually agree upon) on August 10, 2005. . The date on which
      the Closing shall be held is referred to in this Agreement as the “Closing
      Date”

    


    2.2.
      Closing Procedures. It
      is
      contemplated that immediately following the Closing, Parent will transfer its
      ownership interest in Acquisition
      Sub to VNI, a Utah corporation and publicly traded entity whose common stock
      is
      registered under Section 12(g) of the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”), pursuant to a Stock Purchase
      Agreement (the “Purchase Agreement”) to be entered
      into
      between Parent and VNI on the Closing Date. By signing this Agreement, VNI
      hereby:

    


    (a) permits
      Seller and the Owners to rely on VNI’s representations and warranties made in
      the Purchase Agreement to the same extent as if they were made
      herein;

     

    (b) agrees
      to
      be bound by the provisions of Section 5.4, 5.6, 5.7, 5.10 and Article VIII
      hereof;

     

    (c) undertakes
      to issue the VNI Shares as set forth in Section 1.4(b);

     

    (d) undertakes
      to issue its shares of common stock upon conversion of the Shares in accordance
      with their terms;

     

    (e) represents
      and warrants that:

     

    (i) the
      VNI
      Shares are duly authorized and, when issued in accordance with this Agreement,
      will be duly and validly issued,
      fully paid and nonassessable, free and clear of all other than restrictions
      on
      transfer provided for under the Securities Act of 1933, as
      amended
      (the “Securities Act”)

    


    (ii) VNI’s
      shares of common stock issuable upon conversion of the Shares (the “Underlying
      Shares”), when issued in accordance
      with the terms of the Certificate of Designation of the Series A Cumulative
      Convertible Preferred Stock, will be validly issued,
      fully
      paid and nonassessable, free and clear of all Liens; and

    (iii) VNI
      has
      reserved from its duly authorized capital stock a sufficient number of shares
      of
      its common stock for issuance of the Underlying Shares; and   

     

         
      (f) unconditionally
      guarantees Acquisition Sub’s obligations under the Promissory Note.
      -6-

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    


    2.3.
      Termination of Agreement. This
      Agreement may be terminated prior to the Closing as follows:

    


    (a) at
      the
      election of the Seller or the Parent on or after August 10, 2005, if the Closing
      shall not have occurred by the close of business on such date, provided that
      the
      terminating party is not in default of any of its obligations
      hereunder;

    


    (b) by
      the
      Parent if in its reasonable business judgment it becomes impracticable to obtain
      third party financing to complete the transactions contemplated by this
      Agreement;

    


    (c) by
      mutual
      written consent of the Seller and the Parent; or

    


    (d) by
      the
      Seller or the Parent if there shall be in effect a final nonappealable order
      of
      a court, government or governmental agency
      or
      body of competent jurisdiction (“Governmental Body”) of competent jurisdiction
      restraining, enjoining or otherwise prohibiting the
      consummation of the transactions contemplated hereby; it being agreed that
      the
      parties hereto shall promptly appeal any adverse determination which is not
      nonappealable (and pursue such appeal with reasonable diligence).

    


    2.4.
      Procedure Upon Termination. In
      the
      event of termination and abandonment by the Parent or the Seller, or both,
      pursuant to Section 2.2 hereof, written notice thereof shall forthwith be given
      to the other party or parties, and this Agreement shall terminate, and the
      purchase of the Assets hereunder shall be abandoned, without further action
      by
      the Parent or the Seller. If this Agreement is terminated as provided herein
      each party shall redeliver all documents, work papers and other material of
      any
      other party relating to the transactions contemplated hereby, whether so
      obtained before or after the execution hereof, to the party furnishing the
      same.

    


    2.5. Effect
      of Termination. In
      the
      event that this Agreement is validly terminated as provided herein, then each
      of
      the parties shall
      be
      relieved of their duties and obligations arising under this Agreement after
      the
      date of such termination and such termination shall be
      without
      liability to the Parent or the Seller; provided, however, that nothing in this
      Section 2.4 shall relieve the Parent or the Seller of any liability for a breach
      of this Agreement.

     

                                           
      ARTICLE III.

                                              REPRESENTATIONS
      AND WARRANTIES OF THE SELLER AND THE OWNERS

    


    The
      Seller and the Owners, jointly and severally hereby represent and warrant to
      the
      Parent and Acquisition Sub that:

    3.1. Organization
      and Good Standing. The
      Seller is a limited liability partnership duly organized, validly existing
      and
      in good standing under the laws of the jurisdiction of its incorporation as
      set
      forth above and has all requisite partnership power and authority to own, lease
      and operate its properties and to carry on its business as now conducted. The
      Seller is duly qualified or authorized to do business as a foreign partnership
      and is in good standing under the laws of each jurisdiction in which it owns
      or
      leases real property and each other jurisdiction in which the conduct of its
      business or the ownership of its properties requires such qualification or
      authorization, except where failure to be so qualified would not have a material
      adverse effect on the business, assets or financial condition of the Seller
      taken as a whole (“Material
      Adverse Effect”). Pinless is a corporation duly organized, validly existing and
      in good standing under the laws of the jurisdiction of its
      incorporation as set forth above and has all requisite corp[orate power and
      authority to own, lease and operate its properties and to carry on
      its
      business as now conducted. Pinless is duly qualified or authorized to do
      business as a foreign partnership and is in good standing under the laws of
      each
      jurisdiction in which it owns or leases real property and each other
      jurisdiction in which the conduct of its business or the ownership of its
      properties requires such qualification or authorization, except where failure
      to
      be so qualified would not have a Material Adverse Effect

    


    


    


    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    


    3.2. Authorization
      of Agreement. The
      Seller and the Owners have all requisite partnership or personal, as the case
      may be, power, authority and legal capacity to execute and deliver this
      Agreement, and each other agreement, document, or instrument or certificate
      contemplated by this Agreement or to be executed by the Seller or the Owners
      in
      connection with the consummation of the transactions contemplated by this
      Agreement (together with this Agreement, the “Seller Documents”), and to
      consummate the transactions contemplated hereby and thereby. This Agreement
      has
      been, and each of the Seller Documents will be at or prior to the Closing,
      duly
      and validly executed and
      delivered by the Seller or the Owners and (assuming the due authorization,
      execution and delivery by the other parties hereto and thereto)
      this
      Agreement constitutes, and each of the Seller Documents when so executed and
      delivered will constitute, legal, valid and binding obligations of the Seller,
      enforceable against the Seller or the Owners, as applicable, in accordance
      with
      their respective terms, subject to applicable bankruptcy, insolvency,
      reorganization, moratorium and similar laws affecting creditors’ rights and
      remedies generally, and subject, as to enforceability, to general principles
      of
      equity, including principles of commercial reasonableness, good faith and fair
      dealing (regardless of whether enforcement is sought in a proceeding at law
      or
      in equity).

    


    


    3.3. Ownership
      of Seller. The
      Owners collectively own 100% of the partnership interests of the Seller, free
      and clear of any and
      all
      liens, charges or encumbrances or any kind or nature.

    


    3.4. No
      Subsidiaries. The
      Seller has no subsidiaries, except as contemplated by Section 1.1(g)
      hereof.

     

    3.5. Conflicts;
      Consents of Third Parties.

    


    (a) Except
      as
      set forth in Schedule 3.5(a), none of the execution and delivery by the Seller
      or Owners of this Agreement and the Seller Documents, the consummation of the
      transactions contemplated hereby or thereby, or compliance by the Seller with
      any of the provisions hereof or thereof will (i) conflict with, or result in
      the
      breach of, any provision of the partnership certificate or partnership agreement
      of the Seller; (ii) conflict with, violate, result in the breach or termination
      of, or constitute a default under any note, bond, mortgage,
      indenture, license, agreement or other instrument or obligation to which the
      Seller or any Owner is a party or by which any of them
      or any
      of their respective properties or assets is bound; (iii) violate any statute,
      rule, regulation, order or decree of any governmental body or authority by
      which
      the Seller is bound; or (iv) result in the creation of any Lien upon the
      properties or assets of the Seller except, in case of clauses (ii), (iii) and
      (iv), for such violations, breaches or defaults as would not, individually
      or in
      the aggregate, have a Material Adverse Effect.

    


    


    


    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    (b) No
      consent, waiver, approval, order, permit or authorization of, or declaration
      or
      filing with, or notification to, any person or
      Governmental Body is required on the part of the Seller, the Seller in
      connection with the execution and delivery of this Agreement or the Seller
      Documents, or the compliance by the Seller as the case may be, with any of
      the
      provisions hereof or thereof.

    


    3.6. Ownership
      and Transfer of Assets. Seller
      has good and marketable title to all of the Assets free and clear of all
      mortgages, pledges, security interests, charges, liens, restrictions and
      encumbrances of any kind (collectively, “Liens”) whatsoever. Upon the sale,
      assignment, transfer and delivery of the Assets to the Acquisition Sub hereunder
      and under the Seller Documents, there will be vested in the Acquisition Sub
      good, marketable and indefeasible title to the Assets, free and clear of all
      Liens. The Assets include all of the assets and properties (i) held for use
      by
      Seller to conduct the Business as presently conducted and (ii) necessary for
      Acquisition Sub to operate the Business in the same manner as such business
      is
      currently operated by Seller. All of the tangible Assets are in good repair,
      have been well maintained
      and are in good operating condition, do not require any material modifications
      or repairs, and comply in all material respects with
      applicable laws, ordinances and regulations, ordinary wear and tear
      excepted.

    


    3.7. Financial
      Statements. The
      Seller has delivered or caused to be delivered to the Parent copies of (i)
      the
      audited consolidated balance
      sheets of the Seller as at December 31, 2004 and 2003 and the related audited
      consolidated statements of income and of cash flows of
      the
      Seller for the years then ended and (ii) the unaudited but reviewed consolidated
      balance sheet of the Seller as at March 31, 2005 and the related consolidated
      statements of income and cash flows of the Seller for the three-month period
      then ended (such audited and unaudited statements, including the related notes
      and schedules thereto, are referred to herein as the “Seller Financial
      Statements”). Each of the Seller Financial Statements is complete and correct in
      all material respects, will be prepared in accordance with GAAP (subject to
      normal year-end adjustments in the case of the unaudited statements) and in
      conformity with the practices consistently applied by the Seller without
modification
      of the accounting principles used in the preparation thereof and will present
      fairly the financial position, results of operations and cash
      flows of the Seller as at the dates and for the periods indicated. For the
      purposes hereof, the unaudited but reviewed consolidated balance
      sheet of
      the Seller as at March 31, 2005 is referred to as the “Seller Balance Sheet” and
      March 31, 2005 is referred to as the “Seller Balance Sheet Date”.

    


    3.8. No
      Undisclosed Liabilities. The
      Seller has no indebtedness, obligations or liabilities of any kind (whether
      accrued, absolute,
      contingent or otherwise, and whether due or to become due) that would have
      been
      required to be reflected in, reserved against or otherwise described on the
      Seller Balance Sheet or in the notes thereto in accordance with GAAP which
      was
      not fully reflected in, reserved against or otherwise
      described in the Seller Balance Sheet or the notes thereto or was not incurred
      in the ordinary course of business consistent with past
      practice
      since the Seller Balance Sheet Date. Pinless has no material liabilities, taking
      Pinless and the Seller as a whole.

    


    


    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    3.9.
      Absence of Certain Developments. Except
      as
      expressly contemplated by this Agreement or as set forth on Schedule 3.9, since
      the Seller Balance Sheet Date:

    


    (i) there
      has
      not been an event which had a Material Adverse Effect nor has there occurred
      any
      event which is reasonably likely to result in a Material Adverse
      Effect;

    


    (ii) there
      has
      not been any damage, destruction or loss, whether or not covered by insurance,
      with respect to the property and assets of the Seller having a replacement
      cost
      of more than $50,000 for any single loss or $100,000 for all such
      losses;

    


    (iii) there
      has
      not been any declaration, setting aside or payment of any distribution in
      respect of any partnership interest of
      the
      Seller or any repurchase, redemption or other acquisition by the Seller of
      any
      outstanding partnership, or other ownership interest in, the
      Seller;

    


    (iv) the
      Seller has not awarded or paid any bonuses to employees of the Seller with
      respect to the fiscal year ended 2004, except to the extent accrued on the
      Seller Balance Sheet or entered into any employment, deferred compensation,
      severance or similar agreement
      (nor amended any such agreement) or agreed to increase the compensation payable
      or to become payable by it to any of the Seller’s
      directors, officers, employees, agents or representatives or agreed to increase
      the coverage or benefits available under any severance pay, termination
      pay, vacation pay, company awards, salary continuation for disability, sick
      leave, deferred compensation, bonus or other incentive
      compensation, insurance, pension or other employee benefit plan, payment or
      arrangement made to, for or with such directors, officers, employees, agents
      or
      representatives (other than normal increases in the ordinary course of business
      consistent with past practice and that in the aggregate have not resulted in
      a
      material increase in the benefits or compensation expense of the
      Seller);

    


    


    (v) there
      has
      not been any change by the Seller in accounting or Tax reporting principles,
      methods or policies;

     

    (vi) the
      Seller has not entered into any transaction or Contract or conducted its
      business other than in the ordinary course consistent with past
      practice;

    


    (vii) the
      Seller has not failed to promptly pay and discharge current liabilities except
      where disputed in good faith by appropriate proceedings;

    


    (viii) the
      Seller has not made any loans, advances or capital contributions to, or
      investments in, any Person or paid any fees or expenses to the Seller or any
      Affiliate of the Seller;

    


    (ix) the
      Seller has not mortgaged, pledged or subjected to any Lien any of its assets,
      or
      acquired any assets or sold, assigned, transferred, conveyed, leased or
      otherwise disposed of any assets of the Seller, except for assets acquired
      or
      sold, assigned, transferred, conveyed, leased or otherwise disposed of in the
      ordinary course of business consistent with past practice;

    


    


    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    (x) the
      Seller has not discharged or satisfied any Lien, or paid any obligation or
      liability (fixed or contingent), except in the ordinary course of business
      consistent with past practice and which, in the aggregate, would not be material
      to the Seller;

    


    (xi) the
      Seller has not canceled or compromised any debt or claim or amended, canceled,
      terminated, relinquished, waived
      or
      released any Contract or right except in the ordinary course of business
      consistent with past practice and which, in the aggregate,
      would
      not be material to the Seller;

    


    (xii) the
      Seller has not made or committed to make any capital expenditures or capital
      additions or betterments in excess of $25,000 individually or $100,000 in the
      aggregate;

    


    (xiii) the
      Seller has not instituted or settled any material legal proceeding;
      and

     

    (xiv) the
      Seller has not agreed to do anything set forth in this Section 3.9.

     

    3.10. Taxes.

    


    (a) Except
      as
      set forth on Schedule 3.10, to the best of the Seller’s knowledge, (A) all Tax
      returns required to be filed by or on behalf
      of
      the Seller have been properly prepared and duly and timely filed with the
      appropriate taxing authorities in all jurisdictions in which
      such Tax
      returns are required to be filed (after giving effect to any valid extensions
      of
      time in which to make such filings), and all such Tax returns
      were true, complete and correct in all material respects; (B) all Taxes payable
      by or on behalf of the Seller or in respect of its income,
      assets
      or operations have been fully and timely paid, and adequate reserves or accruals
      for Taxes have been provided in the Seller Balance Sheet with respect to any
      period for which Tax Returns have not yet been filed or for which Taxes are
      not
      yet due and owing; and (C) the Seller has not executed or filed with the
      Internal Revenue Service (the “IRS”) or any other taxing authority any
      agreement, waiver or other document or arrangement extending or having the
      effect of extending the period for assessment or collection of Taxes (including,
      but not limited
      to, any applicable statute of limitation), and no power of attorney with respect
      to any Tax matter is currently in force. “Tax or Taxes”
      means
      all federal, state, local or other taxes or similar governmental charges, fees,
      levies or assessments.

    


    


    (b) The
      Seller has complied in all material respects with all applicable laws (as
      defined in Section 3.18), rules and regulations relating
      to the payment and withholding of Taxes and has duly and timely withheld from
      employee salaries, wages and other compensation
      and has
      paid over to the appropriate taxing authorities all amounts required to be
      so
      withheld and paid over for all periods under all Laws.

    


    (c) Parent
      has received complete copies of (A) all federal, state, local and foreign income
      or franchise Tax Returns of the Seller relating to the taxable periods since
      2002 and (B) any audit report issued within the last three years relating to
      any
      material Taxes due from or with respect to the its income, assets or operations.
      All income and franchise Tax returns filed by or on behalf of the Seller for
      the
      taxable years
      ended on the respective dates set forth on Schedule 3.10 have been examined
      by
      the relevant taxing authority or the statute of limitations
      with
      respect to such Tax Returns has expired.

    


    


    


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    (d) Schedule
      3.10 lists all material types of Taxes paid and material types of Tax returns
      filed by or on behalf of the Seller. Except as set forth on Schedule 3.10,
      no
      claim has been made by a taxing authority in a jurisdiction where the Seller
      does not file Tax Returns such that it is or may be subject to taxation by
      that
      jurisdiction.

    


    (e) Except
      as
      set forth on Schedule 3.10, all deficiencies asserted or assessments made as
      a
      result of any examinations by the IRS or any other taxing authority of the
      Tax
      Returns of or covering or including the Seller that are owed by the Seller
      have
      been fully paid, and there are no other audits or investigations by any taxing
      authority in progress, nor has the Seller received any written notice from
      any
      taxing authority
      that it intends to conduct such an audit or investigation. No issue has been
      raised in writing by a federal, state, local or foreign taxing
      authority in any current or prior examination which, by application of the
      same
      or similar principles, could reasonably be expected to result in a proposed
      deficiency for any subsequent taxable period.

    


    (f) Except
      as
      set forth on Schedule 3.10, the Seller has not (A) agreed to or is not required
      to make any adjustments pursuant to Section
      48 1(a) of the Code or any similar provision of state, local or foreign law
      by
      reason of a change in accounting method initiated by the Seller
      or
      has any knowledge that the IRS has proposed any such adjustment or change in
      accounting method, or has any application pending with
      any
      taxing authority requesting permission for any changes in accounting methods
      that relate to the business or operations of the Seller,
      (B)
      executed or entered into a closing agreement pursuant to Section 7121 of the
      Code or any predecessor provision thereof or any similar provision
      of state, local or foreign law with respect to the Seller, or (C) requested
      any
      extension of time within which to file any Tax Return,
      which
      Tax Return has since not been filed within the period of
      limitations.

    


    (g) No
      property owned by the Seller is (i) 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 Tax
      Reform
      Act of 1986, (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) of the Code.

    


    (h) The
      Seller is not a foreign person within the meaning of Section 1445 of the
      Code.

    


    (i) The
      Seller is not a party to any tax sharing or similar agreement or arrangement
      (whether or not written) pursuant to which it will have any obligation to make
      any payments after the Closing.

    


    (j) There
      is
      no contract, agreement, plan or arrangement covering any person that,
      individually or collectively, could give rise to the
      payment of any amount that would not be deductible by the Parent, the Affiliates
      or their respective affiliates by reason of Section 280G of
      the
      Code, or would constitute compensation in excess of the limitation set forth
      in
      Section 162(m) of the Code.

    


    


    


    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    


    (k) The
      Seller is not subject to any private letter ruling of the IRS or comparable
      rulings of other taxing authorities.

    


    (l) There
      are
      no liens as a result of any unpaid Taxes upon any of the assets of the
      Seller.

     

    (m) Except
      as
      set forth on Schedule 3.10, the Seller has no elections in effect for federal
      income tax purposes under Sections 108, 168, 441, 463, 472, 1017, 1033 or 4977
      of the Code.

    


    (n) The
      Seller has never owned any Subsidiaries and has never been a member of any
      consolidated, combined or affiliated group of corporations for any Tax
      purposes.

    


    3.11. Real
      Property.

     

    (a) Neither
      Seller nor Pinless owns any interest in any real property. Pinless does not
      have
      any real property interests or leases. Schedule
      3.11(a) sets forth a complete list of all real property and interests in real
      property leased by the Seller (individually, a “Real Property
      Lease”
      and the real properties specified in such leases being referred to herein
      individually as a “Seller Property” and collectively as the “Seller Properties”)
      as lessee or lessor. The Seller Property constitutes all interests in real
      property currently used or currently held for use in connection
      with the Business of the Seller and which are necessary for the continued
      operation of the Business of the Seller as the Business is
      currently conducted. The Seller has a valid and enforceable leasehold interest
      under each of the Real Property Leases, subject to applicable bankruptcy,
      insolvency, reorganization, moratorium and similar laws affecting creditors’
      rights and remedies generally and subject, as to enforceability,
      to general principles of equity (regardless of whether enforcement is sought
      in
      a proceeding at law or in equity), and Seller has not
      received any written notice of any default or event that with notice or lapse
      of
      time, or both, would constitute a default by the Seller under any
      of
      the Real Property Leases. All of the Seller Property, buildings, fixtures and
      improvements thereon owned or leased by the Seller are in good
      operating condition and repair (subject to normal wear and tear). The Seller
      has
      delivered or otherwise made available to the Parent true,
      correct
      and complete copies of the Real Property Leases, together with all amendments,
      modifications or supplements, if any, thereto.

    


    


    (b) The
      Seller has all material certificates of occupancy and Permits of any
      Governmental Body necessary or useful for the current use and operation of
      each
      Seller Property, and the Seller has fully complied with all material conditions
      of the Permits applicable to it. No default or violation, or event that with
      the
      lapse of time or giving of notice or both would become a default or violation,
      has occurred in the due observance of any Permit.

    


    (c) There
      does not exist any actual or, to the best knowledge of the Seller, threatened
      or
      contemplated condemnation or eminent domain proceedings that affect any Seller
      Property or any part thereof, and the Seller has not received any notice, oral
      or written, of the intention of any Governmental Body or other Person to take
      or
      use all or any part thereof.

    


    (d) The
      Seller has not received any written notice from any insurance company that
      has
      issued a policy with respect to any Seller Property requiring performance of
      any
      structural or other repairs or alterations to such Seller Property.

    


    


    


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    (e) The
      Seller does not own or hold, and is not obligated under or a party to, any
      option, right of first refusal or other contractual right to purchase, acquire,
      sell, assign or dispose of any real estate or any portion thereof or interest
      therein.

    


    3.12. Tangible
      Personal Property.

    


    (a) Schedule
      3.12(a) sets forth all leases of personal property (“Personal Property Leases”)
      involving annual payments in excess of
      $10,000 relating to personal property used in the business of the Seller or
      Pinless or to which the Seller or Pinless is a party or by which the
      properties or assets of the Seller or Pinless is bound. The Seller and Pinless
      have delivered or otherwise made available to the Parent true, correct and
      complete copies of the Personal Property Leases, together with all amendments,
      modifications or supplements thereto.

    


    (b) The
      Seller and Pinless have a valid leasehold interest under each of the Personal
      Property Leases under which it is a lessee, subject
      to applicable bankruptcy, insolvency, reorganization, moratorium and similar
      laws affecting creditors’ rights and remedies generally
      and
      subject, as to enforceability, to general principles of equity (regardless
      of
      whether enforcement is sought in a proceeding at law or in equity),
      and there is no default under any Personal Property Lease by the Seller, Pinless
      or, to the best knowledge of the Seller or Pinless, by
      any
      other party thereto, and no event has occurred that with the lapse of time
      or
      the giving of notice or both would constitute a default thereunder.

    


    (c) The
      Seller has good and marketable title to all of the items of tangible personal
      property reflected in the Seller Balance Sheet (except
      as sold or disposed of subsequent to the date thereof in the ordinary course
      of
      business consistent with past practice), free and clear of any
      and
      all liens other than as set forth on Schedule 3.12. All such items of tangible
      personal property which, individually or in the aggregate,
      are
      material to the operation of the business of the Seller are in good condition
      and in a state of good maintenance and repair (ordinary wear and tear excepted)
      and are suitable for the purposes used.

    


    (d) All
      of
      the items of tangible personal property used by the Seller under the Personal
      Property Leases are in good condition and repair (ordinary wear and tear
      excepted) and are suitable for the purposes used.

    


    3.13. Intangible
      Property. Schedule
      3.13 contains a complete and correct list of each patent, trademark, trade
      name,
      service mark
      and
      copyright owned or used by the Seller or Pinless as well as all registrations
      thereof and pending applications therefor, and each license or other
      agreement relating thereto. Except as set forth on Schedule 3.13, each of the
      foregoing is owned by the party shown on such Schedule as
      owning
      the same, free and clear of all mortgages, claims, liens, security interests,
      charges and encumbrances and is in good standing and not the
      subject of any challenge. There have been no claims made and neither the Seller
      nor Pinless has received any notice or otherwise knows or
      has
      reason to believe that any of the foregoing is invalid or conflicts with the
      asserted rights of others. The Seller and Pinless each possesses, owns or
      licenses all patents, patent licenses, trade names, trademarks, service marks,
      brand marks, brand names, copyrights, know-how, formulate
      and other proprietary and trade rights necessary for the conduct of its business
      as now conducted, not subject to any restrictions and
      without
      any known conflict with the rights of others and has not forfeited or otherwise
      relinquished any such patent, patent license, trade name,
      trademark, service mark, brand mark, brand name, copyright, know-how, formulate
      or other proprietary right necessary for the conduct
      of its
      business as conducted on the date hereof. Neither the Seller nor Pinless is
      under any obligation to pay any royalties or similar payments in connection
      with
      any license to any Affiliate thereof. As used in this Agreement, “Affiliate”
      means, with respect to any person, any other person directly or indirectly
      controlling, controlled by or under common control with such person and for
      purposes of individuals, Affiliates would include an individual’s spouse and
      minor children.

    


    


    


    


    
      
        
        

      

      
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    3.14. Material
      Contracts. Schedule
      3.14 sets forth all of the following Contracts to which the Seller or Pinless
      is
      a party or by which it is bound (collectively, the “Material Contracts”): (i)
      Contracts with any current officer or director of the Seller or Pinless; (ii)
      Contracts
      with any labor union or association representing any employee of the Seller
      or
      Pinless; (iii) Contracts pursuant to which any party is
      required
      to purchase or sell a stated portion of its requirements or output from or
      to
      another party; (iv) Contracts for the sale of any of the assets of the Seller
      or
      Pinless other than in the ordinary course of business or for the grant to any
      person of any preferential rights to purchase any of its assets; (v) joint
      venture agreements; (vi) material Contracts containing covenants of the Seller
      or Pinless not to compete in any line of business or with any person in any
      geographical area or covenants of any other person not to compete with the
      Seller or Pinless in any line of business or in any geographical area; (vii)
      Contracts relating to the acquisition by the Seller or Pinless of any operating
      business or the capital stock of any other person; (viii) Contracts relating
      to
      the borrowing of money; or (ix) any other Contracts, other than Real Property
      Leases, which involve the expenditure of more than $100,000 in the aggregate
      or
      $50,000 annually or require performance by any party more than one year from
      the
      date hereof. There have been made available to the Parent, its affiliates and
      their representatives true and complete copies of all of the Material Contracts.
      Except as set forth on Schedule 3.14, all of the Material Contracts and other
      agreements are in full force and effect and are the legal, valid and binding
      obligation of the Seller, enforceable against it in accordance with its terms,
      subject to applicable
      bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
      creditors’ rights and remedies generally and subject, as
      to
      enforceability, to general principles of equity (regardless of whether
      enforcement is sought in a proceeding at law or in equity). Except
      as
      set
      forth on Schedule 3.14, the Seller is not in default in any material respect
      under any Material Contracts, nor, to the knowledge of the Seller, is any other
      party to any Material Contract in default thereunder in any material
      respect.

    


    


    


    3.15. Employee
      Benefits.

    (a) Schedule
      3.15(a) sets forth a complete and correct list of (i) all “employee benefit
      plans”, as defined in Section 3(3) of the Employee Retirement Income Security
      Act of 1974, as amended (“ERISA”), and any other pension plans or employee
      benefit arrangements, programs or payroll practices (including, without
      limitation, severance pay, vacation pay, company awards, salary continuation
      for
      disability, sick leave, retirement, deferred compensation, bonus or other
      incentive compensation, stock purchase arrangements or policies,
      hospitalization, medical insurance, life insurance and scholarship programs)
      maintained by the Seller or to which the Seller contributes or is obligated
      to
      contribute thereunder with respect to employees of the Seller (“Employee Benefit
      Plans”) and (ii) all “employee pension plans”, as defined in Section 3(2) of
      ERISA, maintained by the Seller or any trade or business (whether or not
      incorporated) which are under control, or which are treated as a single
      employer, with Seller under Section 414(b), (c), (m) or (o) of the Code (“ERISA
      Affiliate”) or to which the Seller or any ERISA Affiliate contributed or is
      obligated to contribute thereunder (“Pension Plans”). Schedule 3.15(a)
      identifies, in separate categories,
      Employee Benefit Plans or Pension Plans that are (i) subject to Section 4063
      and
      4064 of ERISA (“Multiple Employer Plans”), (ii)
      multiemployer plans (as defined in Section 400 1(a)(3) of ERISA) (“Multiemployer
      Plans”) or (iii) “benefit plans”, within the meaning of Section
      5000(b)(1) of the Code providing continuing benefits after the termination
      of
      employment (other than as required by Section 4980B of
      the Code
      or Part 6 of Title I of ERISA and at the former employee’s or his beneficiary’s
      sole expense).

    


    


    


    


    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    


    (b) Each
      of
      the Employee Benefit Plans and Pension Plans intended to qualify under Section
      401 of the Code (“Qualified Plans”) so
      qualifies and the trusts maintained thereto are exempt from federal income
      taxation under Section 501 of the Code, and, except as disclosed
      on
      Schedule 3.15(b), nothing has occurred with respect to the operation of any
      such
      plan which could cause the loss of such qualification or exemption or the
      imposition of any liability, penalty or tax under ERISA or the
      Code.

    


    (c) All
      contributions and premiums required by Law or by the terms of any Employee
      Benefit Plan or Pension Plan which are money
      purchase plans or any agreement relating thereto have been timely made (without
      regard to any waivers granted with respect thereto)
      to any
      funds or trusts established thereunder or in connection therewith, and no
      accumulated funding deficiencies exist in any of such plans subject to Section
      412 of the Code.

    


    (d) No
      Employee Benefit Plans and Pension Plans are subject to Title IV of
      ERISA.

     

    (e) Each
      of
      the Employee Benefit Plans and Pension Plans has been maintained, in all
      material respects, in accordance with its terms and all provisions of applicable
      Law.

    


    3.16. Labor.

    


    (a) Except
      as
      set forth on Schedule 3.16(a), the Seller is not party to any labor or
      collective bargaining agreement and there are no labor or collective bargaining
      agreements which pertain to employees of the Seller. The Seller has delivered
      or
      otherwise made available to the Parent true, correct and complete copies of
      the
      labor or collective bargaining agreements listed on Schedule 3.16(a), together
      with all amendments, modifications or supplements thereto.

    


    (b) Except
      as
      set forth on Schedule 3.16(b), no employees of the Seller are represented by
      any
      labor organization. No labor organization or group of employees of the Seller
      has made a pending demand for recognition, and there are no representation
      proceedings or petitions seeking a representation proceeding presently pending
      or, to the best knowledge of the Seller, threatened to be brought or filed,
      with
the
      National Labor Relations Board or other labor relations tribunal. There is
      no
      organizing activity involving the Seller pending or, to the best
      knowledge of the Seller, threatened by any labor organization or group of
      employees of the Seller.

    


    (c) There
      are
      no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or (ii)
      material grievances or other labor disputes pending or, to the best knowledge
      of
      the Seller, threatened against or involving the Seller. There are no unfair
      labor practice charges, grievances or complaints pending or, to the best
      knowledge of the Seller, threatened by or on behalf of any employee or group
      of
      employees of the Seller.

    


    


     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    



    3.17. Litigation.
      Except
      as
      set forth in Schedule 3.17, there is no suit, action, proceeding, investigation,
      claim or order pending or,
      to the
      knowledge of the Seller, overtly threatened against the Seller or Pinless (or
      to
      the knowledge of the Seller or Pinless, pending or threatened, against any
      of
      the officers, directors or key employees of the Seller with respect to their
      business activities on behalf of the Seller or
      Pinless, or to which the Seller or Pinless is otherwise a party, which, if
      adversely determined, would have a Material Adverse Effect, before
      any
      court, or before any governmental department, commission, board, agency, or
      instrumentality; nor to the knowledge of the Seller or Pinless is there any
      reasonable basis for any such action, proceeding, or investigation. Neither
      the
      Seller nor Pinless is not subject to any judgment, order or decree of any court
      or governmental agency except to the extent the same are not reasonably likely
      to have a Material Adverse Effect and is not engaged in any legal action to
      recover monies due it or for damages sustained by it.

    


    3.18.
      Compliance with Laws; Permits.

    


    (a) The
      Seller and Pinless are each in compliance with all federal, state and local
      statutes, laws, rules, regulations, orders and ordinances
      (“Laws”) applicable to it or to the conduct of its business or operations or the
      use of its properties (including any leased properties)
      and
      assets, except for such non-compliances as would not, individually or in the
      aggregate, have a Material Adverse Effect. The Seller and Pinless have all
      governmental permits and approvals from state, federal or local authorities
      which are required for it to operate its business, except for those the absence
      of which would not, individually or in the aggregate, have a Material Adverse
      Effect.

    


    3.19. Environmental
      Matters. Except
      as
      set forth on Schedule 3.19 hereto:

    


    (a) the
      operations of the Seller are in compliance with all applicable laws promulgated
      by any governmental entity which prohibit, regulate or control any hazardous
      material or hazardous material activity (“Environmental Laws”) and all permits
      issued pursuant to Environmental Laws or otherwise;

    


    (b) the
      Seller has obtained all permits required under all applicable Environmental
      Laws
      necessary to operate its business;

    


    (c) the
      Seller is not the subject of any outstanding written order or Contract with
      any
      governmental authority or person respecting (i) Environmental Laws, (ii)
      Remedial Action or (iii) any release or threatened release of a Hazardous
      Material (“Release”);

    


    (d) the
      Seller has not received any written communication alleging either or both that
      it may be in violation of any Environmental Law, or any permit issued pursuant
      to Environmental Law, or may have any liability under any Environmental
      Law;

    


    (e) the
      Seller does not have any current contingent liability in connection with any
      Release into the indoor or outdoor environment (whether on-site or
      off-site);

    


    


    


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    


    (f) there
      are
      no investigations of the business, operations, or currently or previously owned,
      operated or leased property of the Seller
      pending or, to the Seller’s knowledge, threatened which could lead to the
      imposition of any liability pursuant to Environmental Law;

    


    (g) to
      the
      Seller’s knowledge, there is not located at any of the properties of the Seller
      any (i) underground storage tanks, (ii) asbestos-containing material or (iii)
      equipment containing polychlorinated biphenyls; and,

    


    (h) the
      Seller has provided to the Parent all environmentally related audits, studies,
      reports, analyses, and results of investigations that have been performed with
      respect to the currently or previously owned, leased or operated properties
      of
      the Seller.

    


    3.20. Insurance.
      Schedule
      3.20 sets forth a complete and accurate list of all policies of insurance of
      any
      kind or nature covering the Seller, Pinless or any of their employees,
      properties or assets, including, without limitation, policies of life,
      disability, fire, theft, workers compensation, employee fidelity and other
      casualty and liability insurance. All such policies are in full force and
      effect, and, to the Seller’s knowledge,
      it is not in default of any provision thereof, except for such defaults as
      would
      not, individually or in the aggregate, have a Material
      Adverse
      Effect.

    


    3.21. Inventories;
      Receivables; Payables.

     

    (a) The
      inventories of the Seller and Pinless are in good and marketable condition,
      and
      are saleable in the ordinary course of

    business.

    


    (b) All
      accounts receivable of the Seller and Pinless have arisen from bona fide
      transactions in the ordinary course of business consistent with past practice.
      All accounts receivable of the Seller reflected on the Seller Balance Sheet
      are
      good and collectible at the aggregate recorded amounts thereof, net of any
      applicable reserve for returns or doubtful accounts reflected thereon, which
      reserves are adequate and were calculated in a manner consistent with past
      practice and in accordance with GAAP consistently applied. All accounts
receivable
      arising after the Seller Balance Sheet Date are good and collectible at the
      aggregate recorded amounts thereof, net of any applicable
      reserve
      for returns or doubtful accounts, which reserves are adequate and were
      calculated in a manner consistent with past practice and in accordance with
      GAAP
      consistently applied. The parties agree and acknowledge that Buyer’s sole remedy
      for a breach of this representation and warranty shall be to require Seller
      to
      repurchase uncollected accounts receivable as per Section 1 .4(b)(ii)
      hereof.

    


    


    (c) All
      accounts payable of the Seller reflected in the Seller Balance Sheet or arising
      after the date thereof are the result of bona fide transactions in the ordinary
      course of business and have been paid or are not yet due and
      payable.

    


    


     

    


    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    


     3.22.
      Customers and Suppliers. Schedule
      3.22 sets forth a list of the twenty (20) largest customers and the twenty
      (20)
      largest suppliers
      of the Seller, as measured by the dollar amount of purchases therefrom or
      thereby, during each of the fiscal years ended 2004 and
      2003,
      showing the approximate total sales by the Seller to each such customer and
      the
      approximate total purchases by the Seller from each such supplier, during such
      period. Since the Seller Balance Sheet Date, there has not been any material
      adverse change in the business

    relationship
      of the Seller with any customer or supplier listed on Schedule
      3.22.

    


     3.23.
      Banks. Schedule
      3.23 contains a complete and correct list of the names and locations of all
      banks in which the Seller or Pinless
      has accounts or safe deposit boxes and the names of all persons authorized
      to
      draw thereon or to have access thereto. Except as set
      forth on
      Schedule 3.24, no person holds a power of attorney to act on behalf of the
      Seller or Pinless.

    


    3.24.No
      Misrepresentations. No
      representation or warranty of the Seller contained in this Agreement or in
      any
      schedule hereto
      or in
      any certificate or other instrument furnished by the Seller to the Parent
      pursuant to the terms hereof, taken as a whole, contains any untrue statement
      of
      a material fact or omits to state a material fact necessary to make the
      statements contained herein or therein not misleading.

    


     3.25.
      Financial Advisors. Except
      for Citigroup Geneva Capital Strategies, no Person has acted, directly or
      indirectly, as a broker, finder or financial advisor for the Seller in
      connection with the transactions contemplated by this Agreement and no Person
      is
      entitled to any fee or commission or like payment in respect
      thereof.

    


    3.26.Investment
      Intention. The
      Seller is acquiring the Securities for its own account, for investment purposes
      only and not with a
      view to
      the distribution (as such term is used in Section 2(11) of the Securities Act
      of
      1933. The Seller understands that the Securities have not
      been
      registered under the Securities Act and cannot be sold unless subsequently
      registered under the Securities Act or an exemption from
      such
      registration is available.

    


    3.27.Accredited
      Investor. The
      Seller is an “accredited investor” within the meaning of Rule 501 promulgated
      under the Securities
      Act. The Seller is in a financial position to hold the Securities and is able
      to
      bear the economic risk and withstand a complete loss of
      the
      Seller’s investment in the Securities. The Seller recognizes that the Securities
      involve a high degree of risk. The Seller is a sophisticated investor, is able
      to fend for itself in the transaction contemplated by this Agreement, and has
      such knowledge and experience in financial and business matters that the Seller
      is capable of evaluating the merits and risks of the prospective investment
      in
      the Securities.

    


    3.28.Patriot
      Act. The
      Seller certifies that, to the best of the Seller’s knowledge, the Seller has not
      been designated, and is not owned
      or
      controlled, by a “suspected terrorist” as defined in Executive Order 13224. The
      Seller hereby acknowledges that the Parent seeks to
      comply
      with all applicable Laws concerning money laundering and related activities.
      In
      furtherance of those efforts, the Seller hereby represents,
      warrants and agrees that: (i) none of the cash or property owned by the Seller
      has been or shall be derived from, or related to, any
      activity
      that is deemed criminal under United States law; and (ii) no contribution or
      payment by the Seller has, and this Agreement will not, cause the Seller to
      be
      in violation of the United States Bank Secrecy Act, the United States
      International Money Laundering Control Act of 1986 or the United States
      International Money Laundering Abatement and Anti-Terrorist Financing Act of
      2001.

    


    


    


    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    


    ARTICLE
      IV.

    REPRESENTATIONS
      AND WARRANTIES OF

    PURCHASER
      AND ACQUISITION SUB

    


    The
      Parent and the Acquisition Sub jointly and severally represent and warrant
      that:

     

    4.1.
      Organization and Good Standing.

     

    (a) The
      Parent is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the State of Delaware; and

    


    (b) Acquisition
      Sub is a corporation duly incorporated and validly existing and in good standing
      under the laws of the State of Delaware.

    


    4.2.
      Authorization of Agreement.

    (a) The
      Parent and the Acquisition Sub have full corporate power and authority to
      execute and deliver this Agreement, the Employment Agreement and each other
      agreement, document, instrument or certificate contemplated by this Agreement
      or
      to be executed by the Parent in connection with the consummation of the
      transactions contemplated hereby and thereby (together with the Employment
      Agreement, the “Parent Documents”), and to consummate the transactions
      contemplated hereby and thereby. The execution, delivery and performance by
      the
      Parent and Acquisition Sub of this Agreement and each Parent Document have
      been
      duly authorized by all necessary corporate action on behalf of the Parent and
      Acquisition Sub. This Agreement has been, and each Parent Document will be
      at or
      prior to the Closing,
      duly executed and delivered by the Parent and (assuming the due authorization,
      execution and delivery by the other parties hereto and
      thereto)
      this Agreement constitutes, and each Parent Document when so executed and
      delivered will constitute, legal, valid and binding obligations of the Parent
      and Acquisition Sub, enforceable against the Parent and Acquisition Sub in
      accordance with their respective terms, subject to applicable bankruptcy,
      insolvency, reorganization, moratorium and similar laws affecting creditors’
      rights and remedies generally, and
      subject, as to enforceability, to general principles of equity, including
      principles of commercial reasonableness, good faith and fair dealing
      (regardless of whether enforcement is sought in a proceeding at law or in
      equity).

     

    (b) Acquisition
      Sub has the corporate power, capacity and authority to enter into and complete
      this Agreement; 

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    4.3. Conflicts;
      Consents of Third Parties.

    


    (a) Except
      as
      set forth on Schedule 4.3 hereto, neither of the execution and delivery by
      the
      Parent or Acquisition Sub of the Parent Documents, nor the compliance by the
      Parent Acquisition Sub with any of the provisions hereof or thereof will (i)
      conflict with, or result in the breach of, any provision of the certificate
      of
      incorporation, or certificate of formation, or by-laws, or limited liability
      company agreement of the Parent or Acquisition Sub, respectively, (ii) conflict
      with, violate, result in the breach of, or constitute a default under any note,
      bond, mortgage, indenture, license, agreement or other obligation to which
      the
      Parent or Acquisition Sub is a party or by which the Parent, Acquisition Sub
      or
      their respective properties or assets are bound or (iii) violate any statute,
      rule, regulation, order or decree of any governmental body or authority by
      which
      the Parent or Acquisition Sub is bound, except, in the case of clauses (ii)
      and
      (iii), for such violations, breaches or defaults as would not, individually
      or
      in the aggregate, have a material adverse effect on the business, properties,
      results of operations, prospects, conditions (financial or otherwise) of the
      Parent and its subsidiaries, taken as a whole.

    


    


    (b) No
      consent, waiver, approval, order, permit or authorization of, or declaration
      or
      filing with, or notification to, any Person or Governmental Body is required
      on
      the part of the Parent in connection with the execution and delivery of this
      Agreement or the Parent Documents or the compliance by Parent with any of the
      provisions hereof or thereof.

    


    4.4. Litigation.
      There
      are
      no Legal Proceedings pending or, to the best knowledge of the Parent, threatened
      that are reasonably
      likely
      to prohibit or restrain the ability of the Parent or Acquisition Sub to enter
      into this Agreement or consummate the transactions contemplated
      hereby.

    


    4.5.
      Financial Advisors. No
      person
      has acted, directly or indirectly, as a broker, finder or financial advisor
      for
      the Parent in connection
      with the transactions contemplated by this Agreement and no person is entitled
      to any fee or commission or like payment in
      respect
      thereof.

    


    4.6. Patriot
      Act. The
      Parent certifies that, to the best of the Parent’s knowledge, the Parent has not
      been designated, and is not owned
      or
      controlled, by a “suspected terrorist” as defined in Executive Order 13224. The
      Parent hereby acknowledges that the Seller seeks to
      comply
      with all applicable Laws concerning money laundering and related activities.
      In
      furtherance of those efforts, the Parent hereby represents,
      warrants and agrees that: (i) none of the cash or property owned by the Seller
      has been or shall be derived from, or related to, any activity
      that is deemed criminal under United States law; and (ii) no contribution or
      payment by the Parent has, and this Agreement will not,
      cause
      the Parent to be in violation of the United States Bank Secrecy Act, the United
      States International Money Laundering Control Act of 1986 or the United States
      International Money Laundering Abatement and Anti-Terrorist Financing Act of
      2001.

    


    4.7.
      No Knowledge of Breaches. Parent
      does not have actual knowledge of any breach of any representation and warranty
      made by Seller and the Owners hereunder.

    


    


    


    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    


    ARTICLE
      V. 

    COVENANTS

    


    5.1. Access
      to Information. The
      Seller and Owners agree that, prior to the Closing Date, the Parent shall be
      entitled, through its officers, employees and representatives (including,
      without limitation, its legal advisors and accountants), to make such
      investigation of the properties, businesses and operations of the Seller and
      such examination of the books, records and financial condition of the Seller
      as
      it reasonably requests and to make extracts and copies of such books and
      records. Any such investigation and examination shall be conducted during
      regular business hours and under reasonable circumstances, and the Seller shall
      cooperate fully therein. No investigation by the Parent
      prior to
      or after the date of this Agreement shall diminish or obviate any of the
      representations, warranties, covenants or agreements of the Seller contained
      in
      the Seller Documents. In order that the Parent may have full opportunity to
      make
      such physical, business, accounting and legal review, examination or
      investigation as it may reasonably request of the affairs of the Seller, Seller
      shall cause its officers, employees, consultants, agents, accountants, attorneys
      and other representatives to cooperate fully with such representatives in
      connection with such review and examination.

    


    


    5.2. Conduct
      of the Business Pending the Closing.

     

    (a) Except
      as
      otherwise expressly contemplated by this Agreement or with the prior written
      consent of the Parent, the Seller shall:

    


    (i) conduct
      its business only in the ordinary course consistent with past
      practice;

     

    (ii) use
      its
      best efforts to (A) preserve its present business operations, organization
      (including, without limitation, management
      and the sales force) and goodwill and (B) preserve its present relationship
      with
      Persons having business dealings with it;

    


    (iii) maintain
      (A) all of its assets and properties in their current condition, ordinary wear
      and tear excepted and (B) insurance
      upon all of its properties and assets in such amounts and of such kinds
      comparable to that in effect on the date of this Agreement;

    


    (iv) (A)
      maintain its books, accounts and records in the ordinary course of business
      consistent with past practices, (B) continue
      to collect accounts receivable and pay accounts payable utilizing normal
      procedures and without discounting or accelerating payment
      of such
      accounts, and (C) comply with all contractual and other obligations applicable
      to its operation; and

    


    (v) comply
      in
      all material respects with applicable Laws.

     

    (b) Except
      as
      otherwise expressly contemplated by this Agreement or with the prior written
      consent of the Parent, the Seller shall not:

    


    (i)
      except
      for trade payables and for indebtedness for borrowed money incurred in the
      ordinary course of business and consistent
      with past practice, borrow monies for any reason or draw down on any line of
      credit or debt obligation, or become the guarantor,
      surety,
      endorser or otherwise liable for any debt, obligation or liability (contingent
      or otherwise) of any other Person;

    


    


     

    


    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    


    (ii) subject
      to any Lien (except for liens that do not materially impair the use of the
      property subject thereto in their respective businesses as presently conducted),
      any of its properties or assets (whether tangible or intangible);

    


    (iii) acquire
      any material properties or assets or sell, assign, transfer, convey, lease
      or
      otherwise dispose of any of its material properties or assets (except for fair
      consideration in the ordinary course of business consistent with past
      practice);

    


    (iv) cancel
      or
      compromise any debt or claim or waive or release any material right except
      in
      the ordinary course of business consistent with past practice;

    


    (v) enter
      into any commitment for capital expenditures in excess of $25,000 for any
      individual commitment and $100,000 for all commitments in the
      aggregate;

    


    (vi) introduce
      any material change with respect to its operation, including any material change
      in the types, nature, composition
      or quality of its products or services, experience any material change in any
      contribution of its product lines to its revenues or net income,
      or, other than in the ordinary course of business, make any change in product
      specifications or prices or terms of distributions of such
      products;

    


    (vii) enter
      into any transaction or make or enter into any Contract which by reason of
      its
      size or otherwise is not in the ordinary course of business consistent with
      past
      practice;

    


    (viii) enter
      into or agree to enter into any merger or consolidation with, any corporation
      or
      other entity, and not engage in any new business or invest in, make a loan,
      advance or capital contribution to, or otherwise acquire the securities of
      any
      other Person;

    


    (ix) except
      for transfers of cash pursuant to normal cash management practices, make any
      investments in or loans to, or pay any fees or expenses to, or enter into or
      modify any Contract with any Affiliate; or

    


    (x) agree
      to
      do anything prohibited by this Section 5.2 or anything which would make any
      of
      the representations and warranties of the Seller in this Agreement or the Seller
      Documents untrue or incorrect in any material respect as of any time through
      and
      including the Effective Time.

    


    5.3. Consents.
      The
      Seller shall use its best efforts, and the Parent shall cooperate with the
      Seller, to obtain at the earliest practicable date all consents and approvals
      required to consummate the transactions contemplated by this Agreement,
      including, without limitation,
      the consents and approvals referred to in Section 3.5(b) hereof; provided,
      however, that neither the Seller nor the Parent shall be
      obligated to pay any consideration therefor to any third party from whom consent
      or approval is requested.

    


    


     

    


    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    


     5.4.
      Other Actions. Each
      of
      the Seller, Owners, Parent and Acquisition Sub shall use its best efforts to
      (i)
      take all actions necessary or appropriate to consummate the transactions
      contemplated by this Agreement and (ii) cause the fulfillment at the earliest
      practicable
      date of all of the conditions to their respective obligations to consummate
      the
      transactions contemplated by this Agreement.

    


    5.5.No
      Solicitation. The
      Seller will not, and will not cause or permit any of its partners, officers,
      employees, representatives or agents (collectively, the “Representatives”) to,
      directly or indirectly, (i) discuss, negotiate, undertake, authorize, recommend,
      propose or enter into, either as the proposed surviving, merged, acquiring
      or
      acquired corporation, any transaction involving a merger, consolidation,
      business combination, purchase or disposition of any amount of the assets or
      capital stock or other equity interest in it other than the transactions
      contemplated by this Agreement (an “Acquisition Transaction”), (ii) facilitate,
      encourage, solicit or initiate discussions, negotiations or submissions of
      proposals or offers in respect of an Acquisition Transaction, (iii) furnish
      or
      cause to be furnished, to any Person, any information concerning its business,
      operations, properties or assets in connection with an Acquisition Transaction,
      or (iv) otherwise cooperate
      in any way with, or assist or participate in, facilitate or encourage, any
      effort or attempt by any other Person to do or seek any of the
      foregoing. The Seller will inform the Parent in writing immediately following
      the receipt by the Seller or any Representative of any proposal or inquiry
      in
      respect of any Acquisition Transaction.

    


    


    5.6.Preservation
      of Records. The
      Seller, Owners, the Parent and Acquisition Sub agree that each of them shall
      preserve and keep the records held by it relating to the business of the Seller
      for a period of three years from the Closing Date (six years with respect to
      tax
      related records) and shall make such records and personnel available to the
      other as may be reasonably required by such party in connection with, among
      other things, preparation of financial statements, disclosure of information
      to
      the Securities and Exchange Commission, stock exchange or similar entity, any
      insurance claims by, legal proceedings against or governmental investigations
      of
      the Seller, the Parent or Acquisition Sub or any of their Affiliates or in
      order
      to enable the Seller, the Parent or Acquisition Sub to comply with their
      respective obligations under this Agreement, the Employment Agreements and
      each
      other agreement, document or instrument contemplated hereby or thereby. In
      the
      event the Seller, the Parent or Acquisition Sub wishes to destroy such records
      after that time, such party shall first give ninety (90)
      days
      prior written notice to the other and such other party shall have the right
      at
      its option and expense, upon prior written notice given to such
      party within that ninety (90) day period, to take possession of the records
      within one hundred and eighty (180) days after the date of such
      notice.

    


    


    5.7.Publicity.
      Neither
      the Seller, the Parent nor the Acquisition Sub shall issue any press release
      or
      public announcement concerning this Agreement or the transactions contemplated
      hereby without obtaining the prior written approval of the other party hereto,
      which approval will not be unreasonably withheld or delayed, unless, in the
      sole
      judgment of the Parent or the Seller, disclosure is otherwise required
      by applicable Law or by the applicable rules of any stock exchange on which
      the
      Parent or the Seller lists securities, provided that, to
      the
      extent required by applicable Law, the party intending to make such release
      shall use its best efforts consistent with such applicable Law to consult with
      the other party with respect to the text thereof.

    


    


    


    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    


    5.8.
      Use of Name. The
      Seller hereby agrees that upon the consummation of the transactions contemplated
      hereby, the Parent and Acquisition
      Sub shall have the sole right to the use of the name “Oblio Telecom” and
      variations thereof and the Seller shall not, and shall not
      cause or
      permit any Affiliate to use such name or any variation or simulation
      thereof.

    


    5.9.
      Employment Agreements. The
      Owners hereby agree that, on or prior to the Closing Date, the Owners shall
      execute and deliver
      to Parent and Acquisition Sub employment agreements, substantially in the form
      of Exhibit B hereto (the “Employment Agreements”).

    


    5.10. Financing
      Terms. In
      order
      to obtain the funds necessary to pay the Cash Price to the Seller, the Parent
      agrees not to sell
      Common
      Stock or securities convertible into Common Stock at an effective price below
      $3.00 per share.

    


    ARTICLE
      VI.

    CONDITIONS
      TO CLOSING

    


    6.1. Conditions
      Precedent to Obligations of Parent and Acquisition Sub. The
      obligation of the Parent and Acquisition Sub to
      consummate the transactions contemplated by this Agreement is subject to the
      fulfillment, on or prior to the Closing Date, of each of the following
      conditions (any or all of which may be waived by the Parent in whole or in
      part
      to the extent permitted by applicable Law):

    


    (a) all
      representations and warranties of the Seller and Owners contained herein shall
      be true and correct as of the date hereof;

     

    (b) all
      representations and warranties of the Seller contained herein qualified as
      to
      materiality shall be true and correct, and the representations
      and warranties of the Seller contained herein not qualified as to materiality
      shall be true and correct in all material respects, at
      and as
      of the Closing Date with the same effect as though those representations and
      warranties had been made again at and as of that time;

    


    (c) the
      Seller shall have performed and complied in all material respects with all
      obligations and covenants required by this Agreement to be performed or complied
      with by it on or prior to the Closing Date;

    


    (d) the
      Parent shall have been furnished with certificates (dated the Closing date
      and
      in form and substance reasonably satisfactory to the Parent) executed by the
      Seller certifying as to the fulfillment of the conditions specified in Sections
      6.1(a), 6.1(b) and 6.1(c) hereof;

    


    (e) the
      Parent shall have obtained all consents and waivers referred to in Section
      4.3
      hereof with respect to the transactions contemplated by this Agreement and
      the
      Parent Documents;

     
              
    (f)  there shall not have been or occurred any event which will have 
    a Material Adverse Effect;
    


                                                                                                                                                                  

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (g) the
      Seller shall have obtained all consents and waivers referred to in Section
      3.5
      hereof, in a form reasonably satisfactory to the Parent, with respect to the
      transactions contemplated by this Agreement and the Seller
      Documents;

    


    (h) no
      Legal
      Proceedings shall have been instituted or threatened or claim or demand made
      against the Seller or the Parent seeking to restrain or prohibit or to obtain
      substantial damages with respect to the consummation of the transactions
      contemplated hereby, and there shall not be in effect any order by a
      Governmental Body of competent jurisdiction restraining, enjoining or otherwise
      prohibiting the consummation of the transactions contemplated
      hereby;

    


    (i) the
      Owners shall have entered into the Employment Agreements with the Parent,
      substantially in the form of Exhibit B hereto;

     

    (j) the
      Parent shall have obtained the financing required to consummate the transaction
      contemplated hereunder on terms reasonably satisfactory to it; and

    


    (k) the
      Parent shall have received disclosure schedules required pursuant to Article
      3
      hereof, which shall be reasonably satisfactory to the Parent.

    


    6.2.
      Conditions Precedent to Obligations of the Seller and Owners.
The
      obligations of the Seller and Owners to consummate the transactions contemplated
      by this Agreement are subject to the fulfillment, prior to or on the Closing
      Date, of each of the following conditions (any or all of which may be waived
      by
      the Seller in whole or in part to the extent permitted by applicable
      law):

    


    (a) all
      representations and warranties of the Parent and Acquisition Sub contained
      herein shall be true and correct as of the date hereof;

    


    (b) all
      representations and warranties of the Parent and Acquisition Sub contained
      herein qualified as to materiality shall be true and correct, and all
      representations and warranties of the Parent and Acquisition Sub contained
      herein not qualified as to materiality shall be true
      and
      correct in all material respects, at and as of the Closing Date with the same
      effect as though those representations and warranties had
      been
      made again at and as of that date;

    


    (c) the
      Parent and Acquisition Sub shall have performed and complied in all material
      respects with all obligations and covenants required by this Agreement to be
      performed or complied with by Parent and Acquisition Sub on or prior to the
      Closing Date;

    


    (d) the
      Seller shall have been furnished with certificates (dated the Closing Date
      and
      in form and substance reasonably satisfactory to the Seller) executed by the
      Chief Executive Officer and Chief Financial Officer of the Parent and the
      Acquisition Sub certifying as to the fulfillment of the conditions specified
      in
      Sections 6.2(a), 6.2(b) and 6.2(c), and resolutions of the Board of Directors
      of
      the Parent and Acquisition Sub authorizing the acquisition of the
      Seller;

    


    (e) there
      shall not be in effect any order by a Governmental Body of competent
      jurisdiction restraining, enjoining or otherwise prohibiting the consummation
      of
      the transactions contemplated hereby; and

    


    


    


    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        
                
        (f) the Parent and Acquisition Sub shall have entered into the
        Employment Agreements, substantially in the form of Exhibit B

    

    hereto.

    ARTICLE
      VII.

    DOCUMENTS
      TO BE DELIVERED

    


    7.1. Documents
      to be Delivered by the Seller. At
      the
      Closing, the Seller shall deliver, or cause to be delivered, to the Parent
      and
      Acquisition Sub the following:

    


    (a) the
      opinion of Jackson Walker L.L.P., counsel to the Seller, in a mutually
      acceptable form;

     

    (b) copies
      of
      all consents and waivers referred to in Section 6.1(g) hereof;

     

    (c) Employment
      Agreements, substantially in the form of Exhibit B hereto, duly executed;
      and

    


    (d) such
      other documents as the Parent and Acquisition Sub shall reasonably
      request.

     

    7.2. Documents
      to be Delivered by the Parent. At
      the
      Closing, the Parent and Acquisition Sub shall deliver to the Seller
      the
      following:

    


    (a) evidence
      of the wire transfer referred to in Section 1.4(b) hereof;

     

    (b) the
      Shares

    


    (c) the
      Promissory Note

     

    (d) on
      behalf
      of VNI, the VNI Shares;

    


    (e) the
      certificates and resolutions referred to in Section 6.2(d) hereof;

     

    (f) the
      opinion of Sichenzia Ross Friedman Ference LLP, counsel to the Parent and
      Acquisition Sub, in a mutually acceptable form;

    


    (g) a
      Registration Rights Agreement in a mutually acceptable form; and

     

    (h) such
      other documents as the Seller shall reasonably request.

     

    ARTICLE
      VIII.

    INDEMNIFICATION

    


    8.1. Indemnification.

    


    (a) Subject
      to Section 8.2 hereof, the Seller and the Owners hereby agree to indemnify
      and
      hold the Parent, Acquisition Sub and
      their
      respective directors, officers, employees, Affiliates, agents, successors and
      assigns (collectively, the “Parent Indemnified Parties”) harmless from and
      against:

    


    


     

    


    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    


    (i) any
      and
      all liabilities of the Seller of every kind, nature and description, absolute
      or
      contingent, existing as against the Seller prior to and including the Closing
      Date or thereafter coming into being or arising by reason of any state of facts
      existing, or any transaction entered into, on or prior to the Closing Date,
      except to the extent that the same have been fully provided for (and accrued
      and
      applied as a liability) in the Parent Balance Sheet or were incurred in the
      ordinary course of business between the Parent Balance Sheet Date and the
      Closing Date;

    


    (ii) subject
      to Section 9.3, any and all losses, liabilities, obligations, damages, costs
      and
      expenses based upon, attributable to or resulting from the failure of any
      representation or warranty of the Seller set forth in Section 3 hereof, or
      any
      representation or warranty contained in any certificate delivered by or on
      behalf of the Seller pursuant to this Agreement, to be true and correct in
      all
      respects as of the date made;

    


    (iii) any
      and
      all losses, liabilities, obligations, damages, costs and expenses based upon,
      attributable to or resulting from the breach of any covenant or other agreement
      on the part of the Seller under this Agreement;

    


    (iv) any
      and
      all notices, actions, suits, proceedings, claims, demands, assessments,
      judgments, costs, penalties and expenses, including attorneys’ and other
      professionals’ fees and disbursements (collectively, “Expenses”) incident to any
      and all losses, liabilities,
      obligations, damages, costs and expenses with respect to which indemnification
      is provided hereunder (collectively, “Losses”).

    


    (b) Subject
      to Section 8.2, Parent and Acquisition Sub hereby agree to indemnify and hold
      the Seller, the Owners and their
      Affiliates, agents, successors and assigns (collectively, the “Seller
      Indemnified Parties”) harmless from and against:

    


    (i) subject
      to Section 9.3, any and all Losses based upon, attributable to or resulting
      from
      the failure of any representation or warranty of the Parent and Acquisition
      Sub
      set forth in Section 4 hereof, or any representation or warranty contained
      in
      any certificate delivered by or on behalf of the Parent pursuant to this
      Agreement, to be true and correct as of the date made;

    


    (ii) any
      and
      all Losses based upon, attributable to or resulting from the breach of any
      covenant or other agreement on the part of the Parent and Acquisition Sub under
      this Agreement;

    


    (iii) any
      and
      all Losses of the Parent or Acquisition Sub of every kind, nature and
      description, absolute or contingent, existing
      as against the Parent or Acquisition Sub after the Closing Date coming into
      being or arising by reason of any state of facts existing, or
      any
      transaction entered into, after the Closing Date, except for (A) such Losses
      for
      which Seller and the Owners have an obligation to indemnify
      the Parent Indemnified Parties pursuant to Section 8.1 and (B) such Losses
      that
      affect all shareholders of Parent or Acquisition Sub
      by
      virtue of their status as shareholders; and

    


    


    


    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    


    (iv) any
      and
      all Expenses incident to the foregoing.

     

    8.2. Limitations
      on Indemnification. An
      indemnifying party shall not have any liability under Section 8. 1(a)(ii) or
      Section 8.1(b)
      (i)
      hereof unless the aggregate amount of Losses and Expenses to the indemnified
      parties finally determined to arise thereunder based upon, attributable to
      or
      resulting from the failure of any representation or warranty to be true and
      correct, exceeds $100,000 (the “Basket”) and, in such event, the indemnifying
      party shall be required to pay the entire amount of such Losses and Expenses
      in
      excess of $100,000 (the “Deductible”). Notwithstanding anything herein to the
      contrary, no Owner shall be responsible for more than 50% of the amount of
      Losses or Expenses due to the Parent Indemnified Parties hereunder. In no event
      shall the aggregate liability for indemnification hereunder exceed (A)
      $21,000,000 cash (less any adjustments pursuant to Section 1 .4(b)(2)) and
      the
      Stated Value of the Shares (it being understood that Seller or Owners, as the
      case may be, may forfeit shares in lieu of paying an amount equal to the Stated
      Value thereof, after the payment of $21,000,000 in cash) with respect to
      Seller’s and Owners’ liability, and (B) $9,000,000 with respect to Parent’s and
      Acquisition Sub’s liability.

    


    


    8.3. Indemnification
      Procedures.

    


    (a) In
      the
      event that any Legal Proceedings shall be instituted or that any claim or demand
      (“Claim”) shall be asserted by any Person
      in
      respect of which payment may be sought under Section 8.1 hereof (regardless
      of
      the Basket or the Deductible referred to above), the
      indemnified party shall reasonably and promptly cause written notice of the
      assertion of any Claim of which it has knowledge which is covered by this
      indemnity to be forwarded to the indemnifying party. The indemnifying party
      shall have the right, at its sole option and expense, to be represented by
      counsel of its choice, which must be reasonably satisfactory to the indemnified
      party, and to defend against, negotiate, settle or otherwise deal with any
      Claim
      which relates to any Losses indemnified against hereunder. If the indemnifying
      party elects to
      defend
      against, negotiate, settle or otherwise deal with any Claim which relates to
      any
      Losses indemnified against hereunder, it shall within
      five (5)
      days (or sooner, if the nature of the Claim so requires) notify the indemnified
      party of its intent to do so. If the indemnifying party elects
      not to defend against, negotiate, settle or otherwise deal with any Claim which
      relates to any Losses indemnified against hereunder, fails
      to
      notify the indemnified party of its election as herein provided or contests
      its
      obligation to indemnify the indemnified party for such Losses under this
      Agreement, the indemnified party may defend against, negotiate, settle or
      otherwise deal with such Claim. If the indemnified party defends any Claim,
      then
      the indemnifying party shall reimburse the indemnified party for the Expenses
      of
      defending such Claim upon submission of periodic bills. If the indemnifying
      party shall assume the defense of any Claim, the indemnified party may
      participate, at his or its own expense, in the defense of such Claim; provided,
      however, that such indemnified party shall be entitled to participate in any
      such defense
      with separate counsel at the expense of the indemnifying party if, (i) so
      requested by the indemnifying party to participate or (ii) in the
      reasonable opinion of counsel to the indemnified party, a conflict or potential
      conflict exists between the indemnified party and the indemnifying party that
      would make such separate representation advisable; and provided, further, that
      the indemnifying party shall not be required
      to pay for more than one such counsel for all indemnified parties in connection
      with any Claim. The parties hereto agree to cooperate
      fully
      with each other in connection with the defense, negotiation or settlement of
      any
      such Claim.

    


    


    


    


    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    


    (b) After
      any
      final judgment or award shall have been rendered by a court, arbitration board
      or administrative agency of competent
      jurisdiction and the expiration of the time in which to appeal therefrom, or
      a
      settlement shall have been consummated, or the indemnified
      party and the indemnifying party shall have arrived at a mutually binding
      agreement with respect to a Claim hereunder, the indemnified
      party shall forward to the indemnifying party notice of any sums due and owing
      by the indemnifying party pursuant to this
      Agreement with respect to such matter and the indemnifying party shall be
      required to pay all of the sums so due and owing to the indemnified party by
      wire transfer of immediately available funds within 10 business days after
      the
      date of such notice.

    


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

    


    ARTICLE
      IX.

    MISCELLANEOUS

    


    9.1. Payment
      of Sales, Use or Similar Taxes. All
      sales, use, transfer, intangible, recordation, documentary stamp or similar
      Taxes
      or
      charges, of any nature whatsoever, applicable to, or resulting from, the
      transactions contemplated by this Agreement shall be borne
      by the
      Parent.

    


    9.2. Survival
      of Representations and Warranties. The
      parties hereto hereby agree that the representations and warranties contained
      in
      this Agreement or in any certificate, document or instrument delivered in
      connection herewith, shall survive the execution and delivery
      of this Agreement, and the Closing hereunder, regardless of any investigation
      made by the parties hereto; provided, however, that any
      claims
      or actions with respect thereto (other than claims for indemnifications with
      respect to the representation and warranties contained in Sections 3.7, 3.10,
      3.17, 3.19, 4.4 and 4.5 which shall survive for periods coterminous with any
      applicable statutes of limitation) shall terminate unless within twelve (12)
      months after the Closing Date written notice of such claims is given to the
      Seller or such actions are commenced.

    


    9.3. Expenses.
      Except
      as
      otherwise provided in this Agreement, the Seller, the Parent and Acquisition
      Sub
      shall each bear its own
      expenses
      incurred in connection with the negotiation and execution of this Agreement
      and
      each other agreement, document and instrument contemplated by this Agreement
      and
      the consummation of the transactions contemplated hereby and
      thereby.

    


    9.4.
      Specific Performance. The
      Seller and Owners acknowledge and agree that the breach of this Agreement would
      cause irreparable damage to the Parent and Acquisition Sub and that the Parent
      and Acquisition Sub will not have an adequate remedy at law. Therefore, unless
      validly terminated pursuant to Section 2.2 above, the obligations of the Seller
      under this Agreement, including, without limitation,
      the Seller’s obligation to sell the Assets to the Parent and Acquisition Sub,
      shall be enforceable by a decree of specific performance
      issued
      by any court of competent jurisdiction, and appropriate injunctive relief may
      be
      applied for and granted in connection therewith. Such remedies shall, however,
      be cumulative and not exclusive and shall be in addition to any other remedies
      which any party may have under this Agreement or otherwise.

    


    


    


    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    


    9.5. Further
      Assurances. The
      Seller, the Parent and Acquisition Sub each agrees to execute and deliver such
      other documents or agreements and to take such other action as may be reasonably
      necessary or desirable for the implementation of this Agreement and the
      consummation of the transactions contemplated hereby.

    


    9.6. Submission
      to Jurisdiction; Consent to Service of Process

    


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

    


    (b) Each
      of
      the parties hereto hereby consents to process being served by any party to
      this
      Agreement in any suit, action or proceeding by the mailing of a copy thereof
      in
      accordance with the provisions of Section 9.9.

    


    9.7.
      Entire Agreement; Amendments and Waivers. This
      Agreement (including the schedules and exhibits hereto) represents the
entire
      understanding and agreement between the parties hereto with respect to the
      subject matter hereof and can be amended, supplemented or changed,
      and any provision hereof can be waived, only by written instrument making
      specific reference to this Agreement signed by the party
      against
      whom enforcement of any such amendment, supplement, modification or waiver
      is
      sought. No action taken pursuant to this

    Agreement,
      including without limitation, any investigation by or on behalf of any party,
      shall be deemed to constitute a waiver by the party taking such action of
      compliance with any representation, warranty, covenant or agreement contained
      herein. The waiver by any party hereto of a breach of any provision of this
      Agreement shall not operate or be construed as a further or continuing waiver
      of
      such breach or as a waiver of any other or subsequent breach. No failure on
      the
      part of any party to exercise, and no delay in exercising, any right, power
      or
      remedy hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise of such right, power or remedy by such party preclude any
      other
      or further exercise thereof or the exercise of any other right, power or remedy.
      All remedies hereunder are cumulative and are not exclusive of any other
      remedies provided by law.

    


    (a)
      Governing Law. This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware.

     

                                        

    


    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    


    9.8. Table
      of Contents and Headings. The
      table
      of contents and section headings of this Agreement are for reference
      purposes
      only and
      are to be given no effect in the construction or interpretation of this
      Agreement.

    


    9.9.
      Notices. All
      notices and other communications under this Agreement shall be in writing and
      shall be deemed given when delivered personally or mailed by certified mail,
      return receipt requested, to the parties (and shall also be transmitted by
      facsimile to the Persons
      receiving copies thereof) at the following addresses (or to such other address
      as a party may have specified by notice given to the
      other
      party pursuant to this provision):

    


    If
      to
      Parent or Acquisition Sub:

     

                   
      Farwell Equity Partners LLC

                    1818
      North Farwell Avenue,

                    Milwaukee,
      WI 53202

                   
      Attn: David Marks 

                   
      Managing
      Member                
      

                   
      Phone: 510-824-1200 Fax: 312-873-3739

    


    With
      a
      copy to:

    Thomas
      A.
      Rose, Esq.

    Sichenzia
      Ross Friedman Ference LLP

    1065
      Avenue of the Americas

    New
      York,
      New York 10018

    Phone:
      212-930-9700

    Fax:
      212-930-9725

    


    If
      to
      Seller or Owners:

    OBLIO
      Telecom L.L.P.

    407
      International Parkway, Suite 403

     Richardson,
      Texas 75081

    Attn:
      Sammy Jibrin

    Phone:
      ______________________ 

    Fax:
      972-470-9105

    OBLIO
      Telecom L.L.P.

    407
      International Parkway, Suite 403

    Richardson,
      Texas 75081

    Attn:
      Radu Achiriloaie

    Phone:
      ______________________ 

    Fax:
      972-470-9105

    


     

    


    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    


    With
      a
      copy to:

    Jackson
      Walker L.L.P.

    901
      Main
      Street, Suite 6000
      Dallas,
      Texas 75202

    Attn:
      Brad L. Whitlock
      Phone:
      214-953-5687

    Fax:
      214-661-6814

    


    9.10.Severability.
      If
      any
      provision of this Agreement is invalid or unenforceable, the balance of this
      Agreement shall remain in
      effect.

    


    9.11.Binding
      Effect; Assignment. This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective
      successors and permitted assigns. Nothing in this Agreement shall create or
      be
      deemed to create any third party beneficiary rights
      in any
      person or entity not a party to this Agreement except as provided below. No
      assignment of this Agreement or of any rights or obligations hereunder may
      be
      made by either the Seller or the Parent (by operation of law or otherwise)
      without the prior written consent of the other parties hereto and any attempted
      assignment without the required consents shall be void; provided, however,
      that
      the Parent may assign
      this Agreement and any or all rights or obligations hereunder (including,
      without limitation, the Parent’s rights to purchase the Assets,
      the
      Parent’s rights to seek indemnification and the Parent’s rights to rely on any
      of Seller’s or the Owners’ representations and warranties made hereunder) to VNI
      or any Affiliate of the Parent. Upon any such permitted assignment, the
      references in this Agreement to the Parent shall also apply to any such assignee
      unless the context otherwise requires.

     

    [SIGNATURE
      PAGE TO ASSET PURCHASE AGREEMENT]

     

    


    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    


    Farwell
      Equity Partners, LLC

    


    


                                            
      By: /s/
      David Marks

                                        
      David Marks, Managing Member

    


    


    


                                            
      OBLIO TELECOM, INC.

    


    


                                            
      By: /s/
      David Marks

                                         David
      Marks, Chairman

     

                                        
      OBLIO TELECOM L.L.P.

    


    


                                       
      By: /s/
      Radu Achiriloaie

                                          
      Achiriloaie,
      Partner

    
 

    /s/
      Sammy Jibrin  

                                                                                                                                                      
        Sammy Jibrin

    


    


    /s/
      Radu Achiriloaie 

                                                         
      Radu Achiriloaie

    


    VENTURES-NATIONAL
      INCORPORATED

    


    


    By:
      /s/
      David Marks

    David
      Marks, Chairman (As to Section 2.2 only)