Exhibit
10.1


AGREEMENT
AND PLAN OF MERGER


This AGREEMENT AND
PLAN OF MERGER (this “Agreement”)
is made and entered into as of April 4, 2007, by and among Shea Development
Corp., a Nevada corporation (“Parent”),
Shea Development Acquisition No. 2 Corp., a Nevada corporation and a
wholly-owned subsidiary of Parent (“Merger Sub”),
Riptide Software, Inc., a Florida corporation (the “Company”),
and certain holders of the majority of the outstanding capital stock of the
Company, as listed on Schedule 1 hereto (“Certain
Company Shareholders”). 
Holders of capital stock of the Company are collectively referred to
herein as the “Company Shareholders,”
and individually as a “Company Shareholder”.  Capitalized terms used and not otherwise
defined herein have the meanings set forth in Article 10.


RECITALS


A.            The respective Boards of Directors
of Parent, Merger Sub and the Company each have approved and declared advisable
this Agreement and the merger of Merger Sub with and into the Company (the “Merger”), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $.001 per share, of the Company (“Company Common Stock”), including
shares of Company Common Stock issued or issuable pursuant to the Eligible
Options (as that capitalized term is herein defined) pursuant to the terms of
this Agreement (other than shares of Company Common Stock owned by Parent,
Merger Sub or the Company), will be converted into the right to receive common
stock, par value $.001 per share, of Parent (“Parent
Common Stock”) and cash as provided herein.


B.            The respective shareholders of
Parent, Merger Sub and the Company have, or will have, prior to the Closing
Date, by the legally required vote, approved and adopted the Merger.


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


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


ARTICLE 1

THE MERGER


1.1           Merger.  At the Effective Time as defined below, in
accordance with this Agreement and applicable law, Merger Sub will be merged
with and into the Company, the separate corporate existence of Merger Sub will
cease and the Company will continue as the surviving corporation in the Merger
and shall become a wholly-owned Subsidiary of Parent.  The













Company, as the surviving
corporation after the Merger, is sometimes referred to herein as the “Surviving Corporation.”


1.2           Closing.  Subject to the terms and conditions of this
Agreement, the closing of the Merger (the “Closing”)
will take place at the offices of Dunnington, Bartholow & Miller, LLP
located at 477 Madison Avenue, New York, NY 10022 or at such other place as
Parent and the Company mutually agree, at 10:00 a.m. local time on the later to
occur of May 30, 2007 or the second Business Day after the day on which the
last of the closing conditions set forth in Article 6 below has been satisfied
or waived, or such other date as Parent and the Company mutually agree upon in
writing (the “Closing Date”).  On the Closing Date: (a) the parties hereto
will cause the Merger to be consummated by filing with the Secretaries of State
of the State of Florida and the State of Nevada a certificate of merger and any
required related documents, in such form or forms as are required by, and
executed in accordance with, applicable law (the date and time of such filing
being the “Effective Time” and the date
upon which the Effective Time occurs, being the “Effective
Date”); (b) Parent will deliver the merger consideration to the
Company Shareholders in accordance with Section 1.6; and (c) Merger Sub,
Company and Parent will cross-deliver the certificates and other documents and
instruments to be cross-delivered pursuant to Article 6 below.


1.3           Effect of the Merger.  At the Effective Time, the effect of the
Merger will be as provided in this Agreement and under applicable law.  Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of Merger Sub and the Company will vest in
the Surviving Corporation, and all debts, liabilities and duties of Merger Sub
and the Company will become the debts, liabilities and duties of the Surviving
Corporation.  As of the Effective Time,
the Surviving Corporation will be a wholly-owned subsidiary of Parent.


1.4           Effect of Merger on Capital Stock
of the Parent.   Each share of
capital stock of Parent issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and after the Effective
Time.


1.5           Effect of Merger on Capital Stock
of Merger Sub.  At the Effective
Time, each share of common stock, par value $.001 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holders thereof, be
converted into and become one validly issued, fully paid and non-assessable
share of common stock, par value $.001 per share, of the Surviving Corporation.


1.6           Effect of Merger on Capital Stock
of Company.


(a)           Company Common Stock. 
At the Effective Time, each Participating Company Share shall, by virtue
of the Merger and without any action on the part of the holders thereof, be
converted into the right to receive the following (the “Merger Consideration”):


(i)                                     a
pro rata share of 5,000,000 shares of Parent Common Stock (referred to
collectively herein as the “Parent’s
Shares”) as set forth on Schedule 1.6(a)(i), which shares
shall not have been registered under the Securities Act and shall be “restricted



 2
 









securities” as that term is defined in Rule 144 under the Securities
Act.


(ii)                                  a
pro rata share of $4,000,000 payable in cash as set forth on Schedule
1.6(a)(ii) by wire transfer of same day funds to the account designated by
each holder of Participating Company Shares.


(iii)                               a
pro rata share of $5,000,000 as set forth on Schedule 1.6(a)(iii)
evidenced by delivery to each holder of Participating Company Shares of a
Convertible Subordinate Note (each, a “Note”
and, collectively, the “Notes”)
in the form set forth at Exhibit A. 
For the avoidance of doubt, Parent shall remit such funds to the Company
as are necessary to satisfy the payment requirements under each Note.


(b)           Company Options.  At
the Effective Time, each outstanding option to purchase Company Common Stock
granted under the Company’s stock option plans, if any (“Option Plans”), which has not
previously expired or been exercised in full (each such option, an “Eligible Option”), whether or not
vested or exercisable on the Closing Date, shall be deemed to have been
exercised immediately prior to the Effective Time for the number of shares of
Company Common Stock issuable upon exercise of such Eligible Option and shall
be exchanged for the right to receive the Merger Consideration for each
resulting Participating Company Share pursuant to Section 1.6(a), subject to
the deduction of applicable withholding Taxes and provided that the cash
portion of the Merger Consideration payable with respect to each such
Participating Company Share pursuant to Section 1.6(a)(ii) shall be reduced by
an amount equal to (x) the exercise price of such Eligible Option multiplied by
(y) the number of shares of Company Common Stock issuable under such Eligible
Option.  No payment of Merger
Consideration with respect to an Eligible Option shall be made to the holder of
such Eligible Option until receipt by the Parent of an Option Cancellation
Agreement, substantially in the form set forth at Exhibit B (“Option Cancellation Agreement”), with
respect to all Eligible Options signed by the holder of such Eligible
Option.  The Parent shall deliver to the
Surviving Corporation all such executed Option Cancellation Agreements promptly
after receipt.


(c)           As
a result of the Merger and without any action on the part of the holders of
Company Common Stock, at the Effective Time, all shares of Company Common Stock
shall cease to be outstanding and shall be cancelled and retired and shall
cease to exist, and each holder of a share of Company Common Stock (other than
the Company, the Parent, and the Merger Sub) shall thereafter cease to have any
rights with respect to such shares of Company Common Stock, except that holders
of Participating Company Shares shall have the right to receive, without
interest (except as provided under the Notes), the Merger Consideration in
accordance with Section 1.6(a) upon the surrender of the certificate or
certificates representing such shares of Company Common Stock (if any such
certificates had been issued by the Company with respect to such shares of
Company Common Stock).


(d)           At
the Effective Time, each share of Company Common Stock held by the Parent or
the Merger Sub or held in the Company’s treasury at the Effective Time, if any,
shall,



 3
 









by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding and shall be cancelled and retired
without payment of any Merger Consideration or any other consideration
therefor.


(e)           At
the Effective Time, all Option Plans shall be terminated and all Company
Options and agreements or certificates representing Company Options, if any,
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a Company Option (and of a
certificate representing a Company Option, if any) shall cease to have any
rights with respect thereto, other than and subject to the rights of holders of
Eligible Options to receive the Merger Consideration pursuant to Section
1.6(b).  The Company’s board of
directors, or any committee or administrator appointed by the Company’s board
of directors to administer the Option Plans, shall take any and all actions
reasonably required to vest and make fully exercisable all of the Eligible
Options granted under the Option Plans and to provide all of the holders of
such Eligible Options with the right to exercise all of such Eligible Options
regardless of whether such Eligible Options were exercisable on the date of
this Agreement or would be exercisable at Closing.


1.7           Delivery of Certificates and
Option Cancellation Agreements.  At
and after the Effective Time, Parent will make available, and each holder of
Participating Company Shares will be entitled to receive, (i) upon surrender to
Parent or its representatives of any certificates evidencing Company Common
Stock (the “Certificates”) for
cancellation and a letter of transmittal or assignment separate from
certificate in customary form (which will be in such form and have such other
provisions as Parent will reasonably specify) (the “Transmittal
Letter”); or (ii) delivery to Parent or its representatives of
Option Cancellation Agreements, the pro-rata Merger Consideration into which
such Participating Company Shares have been converted into pursuant to the Merger,
and upon such surrender of each Certificate and/or Option Cancellation
Agreements and delivery by Parent of the aggregate Merger Consideration in
exchange therefor, such Participating Company Shares will forthwith be
cancelled.  Until surrendered or
delivered as contemplated by this Section 1.7, each Certificate or Option
Cancellation Agreement, as applicable, will be deemed at any time after the
Effective Time for all purposes to evidence only the right to receive upon such
surrender the corresponding pro rata portion of the Merger Consideration.


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


1.9           No Further Ownership Rights.  The Merger Consideration delivered upon the
surrender for exchange of Certificates or the delivery of Option Cancellation
Agreements in accordance with the terms hereof will be deemed to have been issued
in full satisfaction of all rights pertaining to such Participating Company
Shares, and there will be no further registration of transfers of such shares
which were outstanding immediately prior to the Effective Time on the records
of the Surviving Corporation.  If, after
the Effective Time, Certificates or Option Cancellation Agreements are
presented to the Surviving Corporation, they will be cancelled and exchanged as
provided in this Article 1.



 4
 









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


1.11         Charter Documents; Directors and
Officers.  Unless otherwise agreed by
the Company and Parent prior to the Closing, at and as of the Effective Time,
without any further action on the part of Parent, Merger Sub or the Company:
(i) the Articles of Incorporation and the Bylaws of the Company as in effect
immediately prior to the Effective Time will be the Articles of Incorporation
and Bylaws of the Surviving Corporation at and after the Effective Time until
thereafter amended as provided by applicable law and such Articles of
Incorporation and Bylaws, as applicable; (ii) the directors of the Company
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation from and after the Effective Time, until their successors
are elected and qualified or until their resignation or removal; (iii) the
officers of the Company immediately prior to the Effective Time shall serve in
their respective offices of the Surviving Corporation from and after the
Effective Time, until their successors are elected or appointed and qualified
or until their resignation or removal. 
The Board of Directors of the Company will adopt a resolution to be
effective as of the Effective Time electing Francis E. Wilde to the Surviving
Corporation’s Board of Directors and appointing E. Joseph Vitetta, Jr. as
Corporate Secretary of the Surviving Corporation.


1.12         Earn-Out Payments.


(a)           Year 1 Earn-Out Payments. 
Subject to the Surviving Corporation’s gross revenue(s) exceeding eighty
percent (80%) of $10,000,000 and the Surviving Corporation’s EBITDA exceeding
eighty percent (80%) of $1,300,000 for the first twelve (12) month period
following the Effective Date (the “Year 1
Earn-Out Period”), Parent shall pay a pro rata share of twenty
percent (20%) of the Surviving Corporation’s EBITDA (the “Year 1 Earn-Out Payment”), as measured
during the Year 1 Earn-Out Period, to the individuals and in the proportion set
forth on Schedule 1.12.  Any
person named on Schedule 1.12 may, at such person’s option, designate
one or more Surviving Corporation employees to whom such person’s pro rata
share of the Year 1 Earn-Out Payment shall be paid in the form of an individual
cash bonus in such proportions as such person may designate.


(b)           Year 2 Earn-Out Payments. 
Subject to the Surviving Corporation’s gross revenue(s) exceeding eighty
percent (80%) of $13,000,000 and the Surviving Corporation’s EBITDA exceeding
eighty percent (80%) of $1,600,000 for the twelve (12) month period following
the first anniversary of the Effective Date (the “Year 2 Earn-Out Period”), Parent shall pay a pro rata
share of twenty percent (20%) of the Surviving Corporation’s EBITDA (the “Year 2 Earn-Out Payment” and, together
with the Year 1 Earn-Out Payment, the “Earn-Out
Payments”), as measured during the Year 2 Earn-Out Period, to
the individuals and in the proportion set forth on Schedule 1.12.  Any person named on Schedule 1.12 may,
at such person’s option, designate one or more Surviving Corporation employees
to whom such person’s



 5
 









pro rata share of the Year 2 Earn-Out Payment shall be paid in the form
of an individual cash bonus in such proportions as such person may designate.


(c)           EBITDA Calculations. 
The parties agree that, for the purpose of computing the Earn-Out
Payments, the Surviving Corporation shall be credited with the entire
revenue(s) of the Surviving Corporation and its Affiliates, including any joint
ventures, license agreements or products co-developed with Parent or its
Subsidiaries, and EBITDA recognized by the Parent (and/or its Subsidiaries or
any other Affiliates) associated with each such joint venture, license
agreement, product, service and/or solution developed or co-developed by the
Surviving Corporation, Parent and/or its Subsidiaries.


1.13         Employment Agreements.  At the Effective Time, the Surviving
Corporation will offer employment to and will employ the senior management team
listed in Schedule 1.13 Part I (the “Senior
Management Team”) for a period of three (3) years under the
terms and conditions of Senior Management Employment Agreements, in the form
set forth at Schedule 1.13 Part II, such employment agreements to be
executed concurrently with the Closing.


1.14         Stock Options.  Parent will establish an incentive stock
option program in which employees of the Surviving Corporation are eligible to
participate (the “ISO Plans”)
and will use its best efforts to establish the effectiveness of such ISO Plans
within sixty (60) days of the Closing Date. 
The attached Schedule 1.14 outlines the Certain Company
Shareholders’ initial recommended allocation of the incentive stock option pool
to Company employees.  It is understood
by the parties that such recommendation shall require approval of the Parent’s
Board of Directors and that the Parent’s Board of Directors shall, in its sole
discretion, finally determine those Surviving Corporation employees to whom
incentive stock options will be granted.


1.15         Board of Directors.  For a period of three (3) years from the
Closing, the Parent will nominate for election at all meetings of shareholders
of the Parent held for the purpose of electing directors, and recommend to its
shareholders, that Philip Loeffel (or in the event he is unable or unwilling to
serve, such other person as the Certain Company Shareholders shall designate)
be elected to serve on the board of directors of the Parent.  Parent shall obtain, at its expense,
directors’ and officers’ liability insurance within thirty (30) days of the
Closing in customary amounts from established and reputable insurers with
respect to which the Company Director shall be named as an insured.  In addition, Philip Loeffel will benefit from
indemnification provisions set forth in the Bylaws of the Parent and the Bylaws
of the Surviving Corporation, respectively.


1.16         Company Tax Liability.  Notwithstanding the terms contained herein,
the Surviving Corporation shall pay up to $830,000 in Taxes (as stated on the
Company’s audited balance sheet) associated with its Internal Revenue Service
mandated migration from cash to accrual accounting methods (the “Tax Liability”) for fiscal years 2004,
2005 and 2006, incurred by the Company at or prior to Closing.  The parties agree that such Tax Liability
shall be reimbursed to the Surviving Corporation by the Company Shareholders
according to the percentages set forth on Schedule 1.16 in three annual installment
payments, each payment to be made within ten (10) days following each principal
payment to such Company Shareholders under the Notes (as provided in Section 2
of the Notes), provided the Company
is not then in



 6
 









default under the terms
of the Note.  The Company Shareholders
shall also be responsible for paying any additional Tax Liability incurred in
fiscal year 2007 through the day prior to the Closing, to the extent that such
Tax Liability exceeds any reserve for 2007 Taxes set forth on the Company’s
Closing Date Balance Sheet (as defined in Section 5.8).


1.17         Employee Retention Bonus.  The Company will offer to each of its
employees set forth on Schedule 1.17 attached hereto, a one (1) year
retention bonus (“Retention Bonus”)
in the amount set forth on Schedule 1.17; provided such employees to
whom a Retention Bonus is offered agree in writing at or prior to the Closing
to remain in the employ of the Surviving Corporation until at least the
one-year anniversary of the Closing.  The
parties agree that the aggregate Retention Bonus amount shall be reimbursed to
the Surviving Corporation by the Company Shareholders according to the
percentages set forth on Schedule 1.17(i) within ten (10) days following
the first principal payment to the Company Shareholders under the Notes (as
provided in Section 2 of the Notes), provided the Company is not then in
default under the Notes.  Furthermore,
the Company shall (i) incur the cost of the employer portion of the employment
tax and (ii) gross up the amount paid in bonus so that each employee receives,
on an after tax basis, an amount approximately equal to the Retention Bonus
designated to be received by such employee as set forth on Schedule 1.17.


1.18         Company Shareholders Broker Fees.  Notwithstanding the terms contained herein,
the parties agree that the Company Shareholders’ broker fees (as set forth in Schedule
2.24) shall be paid at Closing to the broker by the Parent.  The parties further agree that seventy
percent (70%) of the broker fees paid by Parent pursuant to the foregoing
sentence shall be deducted from the first principal payment to the Company
Shareholders under the Notes (as provided in Section 2 of the Notes), provided
the Company is not then in default under the Notes, according to the
percentages set forth on Schedule 1.18.


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


ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE

COMPANY AND CERTAIN COMPANY SHAREHOLDERS


The Company and
each of the Certain Company Shareholders hereby represent and warrant, jointly
and severally, to Parent subject to such exceptions as are disclosed in the
corresponding Schedules with respect to specific sections of this Article 2 and
subject to the right of the Company and the Certain Company Shareholders to
update, revise, supplement and/or correct such Schedules through the Closing
Date, as follows:



 7
 









2.1           Organization and Qualification.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida,
and has full corporate power and authority to conduct its business as now
conducted and to own, use, license and lease its Assets and Properties.  The Company maintains an ownership interest
in the Subsidiaries listed in Schedule 2.1(a).  The Company is duly qualified, licensed or
admitted to do business and is in good standing in each jurisdiction in which
the ownership, use, licensing or leasing of its Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for such jurisdictions in which the failure to be
so qualified would not have a Material Adverse Effect on the Company.  Schedule 2.1(b) sets forth each
jurisdiction where the Company is so qualified, licensed or admitted to do
business.


2.2           Authority Relative to this
Agreement.  The Company has full
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby.  The execution and delivery by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by all necessary
action by the Board of Directors of the Company, and no other action on the part
of the Board of Directors of the Company is required to authorize the
execution, delivery and performance of this Agreement and the consummation by
the Company of the transactions contemplated hereby.  This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery hereof by Parent and Merger Sub, constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws relating to the enforcement of creditors’ rights generally
and by general principles of equity.


2.3           Capital Stock.  As of the date hereof, the authorized capital
stock of the Company consists of 10,000,000 shares of Company Common Stock, of
which 760,000 shares are issued and outstanding.  There are options exercisable or convertible
into 11,535 shares of Company Common Stock (“Company
Options”), the holders of which are set forth on Schedule 2.3
(the “Company Option Holders”).  All of the issued and outstanding shares of
Company Common Stock are validly issued, fully paid and nonassessable, and have
been issued in compliance with all applicable federal, state and foreign
securities Laws.  No shares of Company
Common Stock are held as treasury stock. 
Schedule 1 lists the name and state of residence of each holder
of Company Common Stock provided to the Company by such holder and the number
of shares of Company Common Stock held by each such holder.  There are 11,535 shares of Company Common
Stock reserved for issuance upon exercise of the Company Options and, except as
disclosed in Schedule 2.3, there are no other Equity Equivalents,
commitments or agreements of any character (whether created by statute, the
Articles of Incorporation or Bylaws of the Company, or any agreement or
otherwise) to which the Company is a party or by which it is bound, obligating
the Company to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of capital stock
of the Company or obligating the Company to grant, extend, accelerate the
vesting of, change the price or otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement. 
Except as set forth in Schedule 2.3(a), the Company is not a
party or subject to any agreement or



 8
 









understanding, and, to
the Company’s knowledge, there is no agreement, arrangement or understanding
between or among any Persons, which affects, restricts or relates to voting,
giving of written consents, dividend rights or transferability of shares with
respect to the shares of Company Common Stock, including without limitation any
voting trust agreement or proxy.


2.4           No Conflicts.  Except as set forth in Schedule 2.4,
the execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not and
will not:


(a)           conflict
with or result in a violation or breach of any terms, conditions or provisions
of the Articles of Incorporation or Bylaws, as amended, or equivalent documents
of the Company except for any of the foregoing which would not
reasonably be expected to give rise to a Material Adverse Effect;


(b)           conflict
with or result in a violation or breach of any Law or Order applicable to the
Company or by which any of its Assets and Properties is bound or affected, except
for any of the foregoing which would not reasonably be expected to give rise to
a Material Adverse Effect; or


(c)           (i)
conflict with or result in a violation or breach of, (ii) constitute a default
(or an event that, with or without notice or lapse of time or both, would
constitute a default) under, (iii) require the Company to obtain any consent,
approval or action of, make any filing with or give any notice to any Person as
a result or under the terms of, (iv) result in or give to any Person any right
of termination, cancellation, acceleration or modification in or with respect
to, (v) result in or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments or performance under,
(vi) result in the creation or imposition of (or the obligation to create or
impose) any Lien upon the Company or any of its Assets and Properties under or
(vii) result in the loss of a material benefit under, any of the terms,
conditions or provisions of any Contract or License to which the Company is a
party or by which the Company or its Assets and Properties is bound or
affected, except (x) where the Company or any of its Subsidiaries has
obtained or will obtain prior to the Closing the necessary written agreements,
waivers or consents of the other parties to any Company Contracts or Licenses
to avoid, release or waive any such default, conflict, breach, violation,
termination, right to terminate or accelerate, or triggering of payment with
respect to such Company Contracts or Licenses, or (y) where any such default, conflict,
breach, violation, termination, right to terminate or accelerate, or triggering
of payment with respect to such Company Contracts or Licenses would not
constitute a Material Adverse Effect.


2.5           Books and Records; Organizational
Documents.  The minute books,
including the share registers, and other similar records of the Company that
have been provided or made available to Parent, its representatives or its
counsel prior to the execution of this Agreement, are complete and correct in
all material respects and have been maintained in accordance with sound
business practices.  Such minute books
contain a true and complete record of all material actions taken at all
meetings and by all written consents in lieu of meetings of the directors,
shareholders and committees of the Board of Directors of the Company through
the date hereof.  The Company has
delivered a true, correct and complete copy of its Articles of Incorporation,
as set forth in Schedule 2.5(a), and its Bylaws, as set forth in Schedule
2.5(b), or other charter



 9
 









documents, as applicable,
of the Company as amended to date, to Parent. 
To Company’s knowledge, the Company is not in violation of any
provisions of its Articles of Incorporation or equivalent documents.


2.6           Company Financial Statements.


(a)           The
Company Financials, as set forth in Schedule 2.6(a), have been delivered
to the Parent.  The Company Financials
delivered to Parent have been audited and, to Company’s knowledge, were correct
and complete in all material respects as at the dates thereof.  The Company Financials present fairly and
accurately the financial condition and operating results of the Company as of
the dates and during the periods indicated therein, subject, in the case of any
interim financial statements, to normal year-end adjustments, which adjustments
will not be material in amount or significance and except that any interim
financial statements may not contain footnotes. 
Except as set forth in Schedule 2.6(b), since the Financial
Statement Date, there has been no change in any accounting policies,
principles, methods or practices, including any change with respect to reserves
(whether for bad debts, contingent liabilities or otherwise), of the Company
that would be likely to have a Material Adverse Effect.


(b)           Neither
the Company nor, to the knowledge of Company, the Company’s independent
auditors has identified or been made aware of (i) any fraud, whether or not
material, that involves the management of the Company or other employees of the
Company who have a role in the preparation of financial statements or the
internal accounting controls utilized by the Company or (ii) any claim or
allegation regarding any of the foregoing.


(c)           The Company has maintained and
utilized an information system and set of financial and accounting tools that
have substantiated the information gathered in connection with the preparation
of the Company Financials in accordance with GAAP, including policies and
procedures that the Company deems appropriate for a company of its size that:  a) require the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
disposition of the assets of the company, b) provide reasonable assurances that
the transactions are recorded as necessary to permit the preparation of
financial statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made with appropriate authorizations of
management and the Board of Directors of the Company and c) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the assets of the Company, except where the failure to
maintain or utilize any of the foregoing would not reasonably be expected to
give rise to a Material Adverse Effect.


2.7           Absence of Changes.  Since the Financial Statement Date, there has
not been any Material Adverse Change in the Business or Condition of the
Company or any occurrence or event, which, individually or in the aggregate
could be reasonably expected to have any Material Adverse Change in the
Business or Condition of the Company.  In
addition, without limiting the foregoing, except as expressly contemplated
hereby, there has not occurred, on the part of the Company, during the period
commencing on the Financial Statement Date and terminating on the date hereof:



 10
 









(a)           except
with respect to the new five-year lease for a 10,000 square foot facility
disclosed on Schedule 2.29, the entering into of any Contract,
commitment or transaction or the incurrence of any Liabilities outside of the
ordinary course of business consistent with the Company’s past practice;


(b)           the
entering into of any Contract in connection with any transaction involving a
Business Combination other than this Agreement and the transactions related to
the Merger;


(c)           the
alteration, or entering into of any Contract or other commitment to alter, its
interest in any Person in which the Company directly or indirectly holds a
greater than 1% interest on the date hereof;


(d)           the
entering into of any strategic alliance, joint development or joint marketing
Contract other than joint marketing or development efforts in the ordinary
course of business consistent with the Company’s past practice;


(e)           any
material amendment or other modification (or agreement to do so), except in the
ordinary course of business consistent with the Company’s past practice, or
violation of a material term of, any of the Contracts set forth or described
herein;


(f)            the
entering into of any material transaction with any officer, director,
shareholder, Affiliate or Associate of the Company, other than pursuant to any
Contract in effect on the Financial Statement Date and disclosed to Parent
pursuant to the Schedules or otherwise contemplated by this Agreement or any
agreement or instrument related to this Agreement;


(g)           the
entering into or amendment of any Contract pursuant to which any other Person
is granted manufacturing, marketing, distribution, licensing or similar rights
of any type or scope with respect to any products of the Company or Company
Intellectual Property other than as contemplated by the Contracts or Licenses
of the Company disclosed herein or otherwise in the ordinary course of business
consistent with the Company’s past practice or which would not have a Material
Adverse Effect;


(h)           to
the Company’s knowledge, the commencement of any Action or Proceeding;


(i)            except
as set forth in Schedule 2.7(i), the declaration, setting aside or
payment of any dividends on or making of any other distributions (whether in
cash, stock or property) in respect of any Company Common Stock, or any split,
combination or reclassification of any shares of Company Common Stock or
issuance or authorization of the issuance of any other securities in respect
of, in lieu of or in substitution for shares of Company Common Stock, or the
repurchase, redemption or other acquisition, directly or indirectly, of any
shares of Company Common Stock by the Company except for repurchases of shares
of Company Common Stock upon termination of employment;


(j)            except
as set forth in Schedule 2.7(j), the issuance, grant, delivery, sale or
authorization of or proposal to issue, grant, deliver or sell, or purchase or
proposal to purchase, any shares of Company Common Stock or modification or
amendment of the rights of any



 11
 









holder of any outstanding shares of Company Common Stock, nor have
there been any agreements, arrangements, plans or understandings with respect
to any such modification or amendment except as contemplated by this Agreement;


(k)           except
as set forth in Schedule 2.7(k), any amendments to the Company’s
Articles of Incorporation or Bylaws;


(l)            any
transfer (by way of a License or otherwise) to any Person of rights to any
Company Intellectual Property other than non-exclusive transfers to the Company’s
customers, distributors or other licensees in the ordinary course of business
consistent with the Company’s past practice;


(m)          to
the Company’s knowledge, any disposition or sale of, waiver of rights to,
license or lease of, or incurrence of any Lien on, any Assets and Properties
(other than Company Intellectual Property) of the Company, other than
dispositions of inventory, or licenses of products to Persons in the ordinary
course of business of the Company consistent with the Company’s past practice;


(n)           any
purchase or lease of any Assets and Properties of any Person or the making of
any capital expenditures, lease commitments or other capital commitments by the
Company other than acquisitions of inventory, leasing of office space, or
licenses of products, in the ordinary course of business of the Company,
consistent with Company’s past practice and in an amount not in excess of one
hundred thousand dollars ($100,000) unless otherwise approved by Parent;


(o)           the
making of any capital expenditures or commitments by the Company for additions
to property, plant or equipment of the Company constituting capital assets
individually or in the aggregate in an amount exceeding twenty-five thousand
dollars ($25,000) except in the ordinary course of business consistent with the
Company’s past practice;


(p)           except
as set forth in Schedule 2.7(p), the write-off or write-down or making
of any determination to write off or write-down, or revalue, any of the Assets
and Properties of the Company, or change in any reserves or liabilities
associated therewith;


(q)           except
as set forth in Schedule 2.7(q), the payment, discharge or satisfaction
of any material claim or Liability, other than the payment, discharge or
satisfaction in the ordinary course of business of Liabilities reflected or
reserved against in the Company Financials or incurred in the ordinary course
of the Company’s business since the Financial Statement Date;


(r)            except
as set forth in Schedule 2.7(r), the failure to pay or otherwise satisfy
material Liabilities of the Company or its Subsidiaries when due;


(s)           the
incurrence of any Indebtedness or guarantee of any such Indebtedness or
issuance or sale of any debt securities of the Company or guarantee of any debt
securities of others, except as otherwise incurred in the ordinary course of
the Company’s business;



 12















(t)            the grant of any
severance or termination pay to any director, officer employee or consultant,
except payments made as required by Law or pursuant to written Contracts
outstanding on the date hereof,


(u)           except as set forth
in Schedule 2.7(u), a change to salary, rate of commissions, rate of
consulting fees or any other compensation of any current officer, director,
shareholder, employee, independent contractor or consultant of the Company
except in the ordinary course of business consistent with the Company’s past
practice;


(v)           except as set forth
in Schedule 2.7(v), the payment of any consideration of any nature
whatsoever (other than, in the ordinary course of business, salary, bonus,
commissions or consulting fees and customary benefits and out of pocket
expenses paid to any current or former officer, director, shareholder, employee
or consultant of the Company) to any current or former officer, director,
shareholder, employee, independent contractor or consultant of the Company;


(w)          the establishment or
modification of (i) targets, goals, pools or similar provisions under any
employment Contract or other employee compensation arrangement or independent
contractor Contract or other compensation arrangement or (ii) salary ranges,
increased guidelines or similar provisions in respect of any employment
Contract or other employee compensation arrangement or independent contractor
Contract or other compensation arrangement, except for those made in the
ordinary course of the Company’s business;


(x)            the adoption,
entering into, amendment, modification or termination (partial or complete) of
any Benefit Plan;


(y)           the payment of any
discretionary or stay bonus except in the ordinary course of business
consistent with the Company’s past practice;


(z)            to Company’s
knowledge, any action which would be reasonably likely to interfere in a
material way with Parent’s ability to account for or complete the transactions
contemplated hereby;


(aa)         the making or
changing of any election in respect of Taxes, adoption or change in any
accounting method in respect of Taxes, the entering into of any tax allocation
agreement, tax sharing agreement, tax indemnity agreement or closing agreement,
settlement or compromise of any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes with any Taxing Authority or otherwise,
except for any of the foregoing which would not reasonably be expected
to give rise to a Material Adverse Effect;


(bb)         Except as set forth
in Schedule 2.7(bb), the making of any change in the accounting
policies, principles, methods, practices or procedures of the Company
(including without limitation for bad debts, contingent liabilities or
otherwise, respecting capitalization or expense of research and development
expenditures, depreciation or amortization rates or timing of recognition of
income and expense), except for any of the foregoing which would not
reasonably be expected to give rise to a Material Adverse Effect;



 13
 









(cc)         other than in the
ordinary course of the Company’s business, the making of any representation or
proposal to, or engagement in substantive discussions with, any of the holders
(or their representatives) of any Indebtedness, or to or with any party which
has issued a letter of credit which benefits the Company;


(dd)         the commencement or
termination of, or change in, any line of business of the Company other than in
the ordinary course of business;


(ee)         the cancellation,
amendment or failure to renew any insurance policy other than in the ordinary
course of business consistent with past practice, or failure to use
commercially reasonable efforts to give all notices and present all claims
under all such policies in a timely fashion, except for any of the
foregoing which do not give rise to a Material Adverse Effect;


(ff)           any amendment,
failure to renew, or failure to use commercially reasonable efforts to
maintain, its existing Approvals or failure to observe any Law or Order
applicable to the conduct of the business of the Company or the Assets and
Properties of the Company, except for any of the foregoing which would
not reasonably be expected to give rise to a Material Adverse Effect;


(gg)         to Company’s
knowledge, any failure to pay or otherwise satisfy any obligations to procure,
maintain, renew, extend or enforce any Company Intellectual Property,
including, but not limited to, submission of required documents or fees during
the prosecution of patent, trademark or other applications for Registered
Intellectual Property rights other than in the ordinary course of business or
which would not reasonably be expected to give rise to a Material Adverse
Effect;


(hh)         any physical damage,
destruction or other casualty loss (whether or not covered by insurance)
affecting any of the real or personal property or equipment of the Company
individually or in the aggregate in an amount exceeding fifteen thousand
dollars ($15,000);


(ii)           the repurchase,
cancellation or modification of the terms of any Company Common Stock, or other
financial instrument that derives the majority of its value from its
convertibility into Company Common Stock, other than transactions entered into
in the ordinary course of business and pursuant to contractual provisions in
effect at the date of this Agreement; or


(jj)           any entering into
any agreement to do any of the foregoing.


                2.8           No Undisclosed Liabilities.  Except as set forth in Schedule 2.8,
the Company has no obligations or liabilities of any nature (matured or
unmatured, fixed or contingent) other than (i) those set forth or reserved
against in the Company Financials, (ii) those incurred in connection with this
Agreement or the transactions contemplated hereby, (iii) those incurred in the
ordinary course of business consistent with the Company’s past practice, and
(iv) those set forth in this Agreement or the Schedules hereto.


                



 14
 









                2.9           Restrictions on Business
Activities.  Except as set forth in Schedule
2.9, there is no agreement or Order binding upon the Company, or any of its
assets or properties which has had or could reasonably be expected to have the
effect of prohibiting or impairing any current or future business practice of
the Company, any acquisition of property by the Company or the conduct of
business by the Company as currently conducted or as proposed to be conducted
by the Company other than in the ordinary course of business or which would not
reasonably be expected to give rise to a Material Adverse Effect.


                2.10         Taxes.  Subject to Section 1.16 as it relates to the
Tax Liability:


(a)           The Company has
timely filed and paid any taxes due through the Tax year ended December 31,
2005.  The Company, having obtained an
extension to file its Tax Returns for the Tax year ended December 31, 2006, has
filed such Tax Returns for the Tax year ended December 31, 2006 and has paid
any Taxes due with respect to such Tax year. 
The Company has prepared and maintained adequate records so as to
facilitate the prompt filing of Tax Returns when they become due.


(b)           The Company has not
incurred any material liability for Taxes other than as reflected on the
Company Financials.  The unpaid Taxes of
the Company (i) did not, as of the most recent fiscal month end, exceed by any
material amount the reserve for liability for Income Tax (other than the
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the Company’s most recent balance
sheet and (ii) will not, to Company’s knowledge, exceed by any material amount
that reserve as adjusted for operations and transactions through the Closing
Date.


(c)           The Company is not
presently a party to any agreement extending the time within which to file any
Tax Return.  To Company’s knowledge, no
claim has ever been made by a Taxing Authority of any jurisdiction in which the
Company does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction.


(d)           To Company’s
knowledge, the Company or its agents, if applicable, have collected or withheld
all amounts required to be collected or withheld by it on account of Taxes or
otherwise, and have remitted the same to the appropriate governmental authority
in the manner and within the time required under any applicable legislation or,
if it is not yet due, have set it aside in appropriate accounts for payment
when due.


(e)           The Company does not
have knowledge of any actions by any Taxing Authority in connection with
assessing a material amount of additional Taxes against and in respect of the
Company for any past period.  There is no
dispute or claim concerning any Tax liability of the Company (i) threatened,
claimed or raised by any Taxing Authority and (ii) of which the Company is
aware.  There are no Liens for Taxes upon
the Assets and Properties of the Company other than liens for Taxes not yet due
or which are being contested by the Company in good faith.


(f)            There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any Tax Returns required to be filed by, or which include or are 



 15
 









treated as including, the Company with respect to any Tax assessment or
deficiency affecting the Company.


(g)           The Company has not
received any written ruling related to Taxes or entered into any agreement with
a Taxing Authority relating to Taxes.


(h)           The Company has no
material liability for the Taxes of any Person other than the Company or (i) as
a transferee or successor, or (ii) by Contract or (iii) otherwise.


(i)            The Company has not
agreed to make and is not required to make any adjustment under Section 481 or
263A of the Code or any comparable provision under state laws by reason of a
change in accounting method or as a result of transactions or events prior to
the date hereof.


(j)            The Company is not a party to or
bound by any obligations under any Tax sharing, Tax allocation, Tax indemnity
or similar agreement or arrangement.


(k)           The Company is not
involved in, subject to, or a party to any joint venture, partnership, Contract
or other arrangement that is treated as a partnership for federal, state, local
or foreign Income Tax purposes.


(l)            The Company was not
included and is not includible in the Tax Return of any parent corporation
other than such a return of which the Company is the common parent corporation.


(m)          Except as set forth
in Schedule 2.10(m), the Company has not:


(i)                                     acquired
or had the use of any property from a Person with whom it was not dealing at
arm’s length other than at fair market value; or


(ii)                                  disposed
of any material asset to a Person with whom it was not dealing at arm’s length
for proceeds less than the fair market value thereof.


(n)           The Company is not
nor has it ever been a United States real property holding corporation within
the meaning of Section 897(c)(1)(A)(ii) of the Code.


(o)           The Company is not a
personal holding company.


(p)           To Company’s
knowledge, the Company is in full compliance with all terms and conditions of
any Tax exemptions or other Tax-sharing agreement or Order of a foreign
government and the consummation of the transactions contemplated hereby will
not have any Material Adverse Effect on the continued validity and
effectiveness of any such Tax exemptions or other Tax-sharing agreement or
Order.



 16
 









                2.11         Legal Proceedings.


(a)           Except as set forth
in Schedule 2.11:


(i)                                     there
are no Actions or Proceedings brought or, to the knowledge of the Company,
pending or threatened against the Company or its Assets and Properties;


(ii)                                  there
are no facts or circumstances known to the Company that could reasonably be
expected to give rise to any material Action or Proceeding against the Company;
and


(iii)                               the
Company has not received notice of, and does not otherwise have knowledge of,
any Orders outstanding against the Company.


(b)           Prior to the
execution of this Agreement, the Company has delivered to Parent upon Parent’s
written request, all responses of counsel for the Company to auditor’s requests
for information (together with any updates provided by such counsel) for the
last three (3) years regarding Actions or Proceedings pending or, to the
knowledge of the Company, threatened against, relating to or affecting the
Company.  Schedule 2.11 sets forth
all Actions or Proceedings against or by the Company during the last three (3)
years.


                2.12         Compliance With Laws and Orders.  To Company’s knowledge, the Company has not
violated, and is not currently in violation or default under, any material Law
or Order applicable to the Company or any of its Assets and Properties.


                2.13         Benefit Plans.  The Company has provided summary information
regarding its Benefit Plans to the Parent as set forth in Schedule 2.13.


                2.14         Title to Property.  The Company has good and marketable title to
all of its properties, interests in properties and assets, real and personal,
reflected in the Company Financials or acquired after the Financial Statement
Date (except properties, interests in properties and assets sold or otherwise
disposed of since the Financial Statement Date in the ordinary course of
business), or with respect to leased properties and assets, valid leasehold
interests in, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any kind or character, except (i) the lien of current Taxes not
yet due and payable or which are being contested by the Company in good faith,
(ii) such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties, (iii) liens securing debt which is reflected on the
Company Financials and (iv) Liens listed on Schedule 2.14.  The property and equipment of the Company
that are used in the operations of its business are in good operating condition
subject to normal wear and tear.  All
material properties used in the operations of the Company are reflected in the
Company Financials.  The Company owns no
real property.


                2.15         Intellectual Property.


(a)           Except
as set forth on Schedule 2.15(a), the Company owns, or is licensed or
otherwise possesses legally enforceable rights to use, all Intellectual
Property that is used or 



 17
 









currently proposed to be used in the business
of the Company as currently conducted or as presently proposed by the Company
to be conducted in the immediate future.


(b)           Except
as set forth in Schedule 2.15(b), the Company has not (i) licensed any
Company Intellectual Property in source code form to any third party or (ii)
entered into any exclusive agreements relating to any Company Intellectual
Property with any third party.


(c)           Schedule
2.15(c) lists (i) all patents and patent applications and all registered
trademarks, trade names and service marks, registered copyrights, domain names,
and maskworks, included in the Company Intellectual Property, including the
jurisdictions in which each such Intellectual Property right has been issued or
registered or in which any application for such issuance and registration has
been filed, (ii) all licenses, sublicenses and other agreements as to which the
Company is a party and pursuant to which any other Person is authorized to use
any Intellectual Property, and (iii) all licenses, sublicenses and other
agreements as to which the Company is a party and pursuant to which the Company
is authorized to use any third-party Intellectual Property (“Third Party Intellectual Property Rights”)
which are incorporated in, are, or form a part of any Company product or which
are otherwise used (or currently proposed to be used) by the Company in the
business of the Company as currently conducted or as proposed to be conducted by
the Company, other than off-the-shelf software programs licensed under standard
Shrink Wrap License Agreements.


(d)           To
Company’s knowledge, no Person (including employees and former employees of the
Company) is infringing, misappropriating or otherwise making any unauthorized
use or disclosure of any Intellectual Property rights of the Company or any
Third Party Intellectual Property Rights to the extent licensed by or through
the Company.  The Company has not entered
into any agreement to indemnify any other Person against any charge of
infringement of any Company Intellectual Property, except as set forth in Schedule
2.15(d).


(e)           To
Company’s knowledge, the Company is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any license, sublicense or other agreement
relating to the Company Intellectual Property or Third Party Intellectual
Property Rights.


(f)            To
Company’s knowledge, all patents, registered trademarks, domain names, service
marks and copyrights held by the Company are valid and subsisting, and the
manufacturing, marketing, licensing or sale of its products, to the knowledge
of the Company, does not infringe any patent, trademark, service mark, copyright,
trade secret or other proprietary right of any third party.  Except as set forth on Schedule 2.15(f),
during the last three (3) years, the Company (i) has not been sued in any suit,
action or proceeding which involves a claim of infringement of any patents,
trademarks, service marks, copyrights or violation of any trade secret or other
proprietary right of any third party; and (ii) has not brought any action, suit
or proceeding for infringement of Intellectual Property or breach of any
license or agreement involving Intellectual Property against any third party.


(g)           The
Company has secured valid written assignments and waiver of any moral rights
from consultants and employees who contributed to the creation or development
of 



 18
 









Company Intellectual Property of the rights to such contributions that
the Company does not already own by operation of law.


(h)           The
Company has taken reasonably necessary and appropriate steps to protect and
preserve the confidentiality of all Company Intellectual Property not otherwise
protected by patents, patent applications or copyright (“Confidential Information”).  All use, disclosure or appropriation of
Confidential Information by the Company by or to a third party has been
pursuant to the terms of a written agreement between the Company and such third
party, except where the failure to do so would not constitute a Material
Adverse Effect.


                2.16         Contracts.


(a)           Schedule
2.16(a) contains a true and complete list of each of the material Contracts
(true and complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all amendments and supplements thereto and
all continuing waivers of any material terms thereof, have been made available
to Parent prior to the execution of this Agreement) of the Company.  Schedule 2.16(a) contains a true and
complete list of each Contract (denoted with an asterisk) of the Company not
terminable by the Company upon 30 days (or less) notice by the Company without
penalty or obligation to make payments based on such termination.


(b)           Each
Contract disclosed in Schedule 2.16(a), unless otherwise stated therein,
is in full force and effect and constitutes, to Company’s knowledge, a legal,
valid and binding agreement, enforceable in accordance with its terms, and, to
the knowledge of the Company, no party to such Contract is, nor has received
notice that it is, in violation or breach of or default under any such Contract
(or with notice or lapse of time or both, would be in violation or breach of or
default under any such Contract).


(c)           Except
as set forth on Schedule 2.16(c), the Company is not a party to or bound
by any Contract that (i) automatically terminates or allows termination by the
other party thereto upon consummation of the transactions contemplated by this
Agreement or (ii) contains any covenant or other provision which limits the
ability of the Company to compete with any Person in any line of business or in
any area or territory.


                2.17         Insurance.  The Company’s current insurance policies, if
any, are listed on Schedule 2.17.


                2.18         Affiliate Transactions.


(a)           Except
as disclosed in Schedule 2.18(a) or as otherwise disclosed or discussed
herein or contemplated hereby, (i) there are no Contracts or Liabilities
between the Company, on the one hand, and (1) any current or former officer,
director, shareholder, or to the knowledge of the Company, any Affiliate or
Associate of the Company or (2) any Person who, to the knowledge of the
Company, is an Associate of any such officer, director, shareholder or
Affiliate, on the other hand, (ii) the Company does not provide or cause to be
provided any assets, services or facilities to any current or former officer,
director, shareholder, Affiliate or Associate of the Company, (iii) no current
or former officer, director, shareholder, Affiliate or Associate of the Company
provides or causes to be provided any assets, services or facilities to 



 19
 









the Company and (iv) the Company does not
beneficially own, directly or indirectly, any Investment Assets of any current
or former officer, director, shareholder, Affiliate or Associate of the
Company.


(b)           Each
of the Contracts and Liabilities listed in Schedule 2.18(a), if any, was
entered into or incurred, as the case may be, on terms no less favorable to the
Company (in the reasonable judgment of the Company) than if such Contract or
Liability was entered into or negotiated on an arm’s length basis on
competitive terms.  Any Contract to which
the Company is a party and in which any director of the Company has a financial
interest in such Contract was approved in accordance with applicable law.


                2.19         Employees; Labor Relations.


(a)           To
Company’s knowledge, the Company is in compliance in all material respects with
all currently applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, and is not engaged
in any material respect in any unfair labor practice except where
non-compliance with any of the foregoing by the Company will not constitute a
Material Adverse Effect.  To Company’s
knowledge, the Company is not liable for any payment to any trust or other fund
or to any governmental or administrative authority, with respect to employment
insurance, social security, workers compensation, health or other benefits or
obligations for employees (other than routine payments to be made in the normal
course of business and consistent with past practice).  There are no pending claims against the Company
under any workers compensation plan or policy or for long term disability which
constitutes a Material Adverse Effect. 
There are no controversies pending or, to the knowledge of the Company,
threatened, between the Company and any of its employees, which controversies
have or could reasonably be expected to result in an action, suit, proceeding,
claim, arbitration or investigation before any agency, court or tribunal,
foreign or domestic, which, in any of the foregoing cases, constitutes a
Material Adverse Effect.  The Company is
not a party to any collective bargaining agreement or other labor union
Contract nor does the Company know of any activities or proceedings of any
labor union to organize any such employees. 
To the best of the Company’s knowledge, no employees of the Company are
in violation of any term of any employment Contract, patent disclosure
agreement, non-competition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or proposed to be
conducted by the Company or to the use of trade secrets or proprietary
information of others.  No employees of
the Company have given notice to the Company, nor is the Company otherwise
aware, that any such employee intends to terminate his or her employment with
the Company.


(b)           Except
as set forth in Schedule 2.19(b), all employees of the Company are
terminable by the Company upon reasonable notice in accordance with applicable
Law.  Schedule 2.19(b) sets forth,
individually and by category, the name of each officer, employee and
consultant, together with such person’s position or function, annual base
salary or wage and any incentive, severance or bonus arrangements with respect to
such person.  The completion of the
transactions contemplated by this Agreement will not result in any payment or
increased payment becoming due from the Company to any officer, director, or
employee of, or consultant 



 20
 









to, the Company other than as set forth in
Article 1 hereof.  To Company’s
knowledge, the Company is not a party to any agreement for the provision of
labor from any outside agency that would result in treatment of such providers
of labor as an employee of the Company. 
To Company’s knowledge, there have been no claims by employees of such
outside agencies, if any, with regard to employees assigned to work for the
Company, and no claims by any governmental agency with regard to such
employees.


(c)           Except
as disclosed on Schedule 2.19(c), during the last three (3) years, there
have been no federal or state claims based on employment equity, sex, sexual or
other harassment, age, disability, race or other discrimination or common law
claims, including claims of wrongful dismissal, severance pay, payment in lieu
of notice or bad faith termination, by any employees of the Company or by any
of the employees performing work for the Company but provided by an outside
employment agency, and there are no facts or circumstances known to the Company
that could reasonably be expected to give rise to such complaint or claim.


(d)           The
Company has written employment policies and/or employee handbooks or manuals to
the extent required by Law.  To the
knowledge of the Company, no officer, employee or consultant of the Company is
obligated under any Contract or other agreement or subject to any Order or Law
that would interfere with the Company’s business as currently conducted.


                2.20         Environmental Matters.  The Company does not now own, and has never
owned, any fee simple interest in real property.


                2.21         Substantial Customers and Suppliers.  Schedule 2.21 lists the 15 largest
customers of the Company, collectively, on the basis of revenues collected or
accrued for the most recent completed fiscal year.  Schedule 2.21 also lists the 15
largest suppliers of the Company on the basis of cost of goods or services
purchased for the most recent fiscal year ended.  To the knowledge of the Company, no such
customer or supplier is threatened with bankruptcy or insolvency.


                2.22         Accounts Receivable.  To Company’s knowledge, except as set forth
in Schedule 2.22 the accounts and notes receivable of the Company
reflected on the Company Financials, and all accounts and notes receivable
arising subsequent to the Financial Statement Date, (a) arose from bona fide
sales transactions in the ordinary course of business, consistent with past
practice, and are payable on ordinary trade terms, (b) are legal, valid and
binding obligations of the respective debtors enforceable in accordance with
their respective terms, (c) are not subject to any valid set-off or
counterclaim and (d) do not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement.


                2.23         Inventory.  The Company maintains inventory, as listed in
Schedule 2.23, to ensure the timely delivery of products sold to end
customers.  This inventory is maintained
in storage facilities in and around Orlando, Florida.  The Company also maintains small quantities
of immaterial office supplies inventory in its offices in Orlando, Florida.


                



 21
 









                2.24         Other Negotiations; Brokers; Third
Party Expenses.  Except as set forth
in Schedule 2.24, neither the Company nor, to the knowledge of the
Company, any of its Affiliates (nor any investment banker, financial advisor,
attorney, accountant or other Person retained by, and in connection with its
actions, for or on behalf of the Company or any such Affiliate) (i) has entered
into any Contract that conflicts with any of the transactions contemplated by
this Agreement or (ii) has entered into any Contract or had any discussions
with any Person regarding any transaction involving the Company which could
result in the Company’s being subject to any claim for liability to said Person
as a result of entering into this Agreement or consummating the transactions
contemplated hereby.  Without limiting
the foregoing, except as set forth in Schedule 2.24, no finder, broker,
agent, financial advisor, or other intermediary has acted on behalf of the
Company in connection with the Merger or the negotiation or consummation of
this Agreement or any of the transactions contemplated hereby.  Schedule 2.24 sets forth a reasonable
estimate of all Third Party Expenses expected to be incurred by the Company
through the Closing Date in connection with the negotiation of the terms and
conditions of this Agreement and the Closing of the transactions contemplated
hereby.


                2.25         Warranty Obligations; Maintenance
Contracts.


(a)           Schedule
2.25 sets forth (a) a list of all forms of written warranties, guarantees
and written warranty policies of the Company in respect of any of the Company’s
products and services, which are currently in effect (the “Warranty Obligations”), and the
duration of each such Warranty Obligation, (b) each of the Warranty Obligations
which is subject to any dispute or, to the knowledge of the Company, threatened
dispute and (c) a brief description of any claims during the last three (3)
years made under or with respect to warranties, guarantees and warranty
policies of or relating to the Company’s products and services.  True and correct copies of the Warranty
Obligations have been delivered to Parent prior to the execution of this
Agreement.  To Company’s knowledge, there
have not been any material deviations from the Warranty Obligations, and
salespersons, employees and agents of the Company are not authorized to
undertake obligations to any customer or other Person in excess of such
Warranty Obligations.  All products
manufactured, designed, licensed, leased, rented or sold by the Company (i)
were, when sold by the Company, free from material defects in construction and
design and (ii) satisfy any and all Contract or other specifications related
thereto to the extent stated in writing in such Contracts or specifications, in
each case, in all material respects, in each case other than as a result of
software “bugs” that are remediable in the ordinary course without material
cost to the Company.


(b)           The
Company has no prepaid maintenance contracts.


                2.26         Foreign Corrupt Practices Act.  Neither the Company, nor to the knowledge of
the Company, any agent, employee or other Person acting on behalf of the
Company has, directly or indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
made any unlawful payment to any government official or employee or to any
political party or campaign from corporate funds, violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate,
payoff, influence payment, kickback or other similar unlawful payment which
will would reasonably be expected to give rise to a Material Adverse Effect.



 22
 









                2.27         Financial Projections.  Any and all financial projections discussed
in presentations to investors, bankers and Parent, if any, made by the Company
with respect to the Company’s business were prepared for internal use
only.  The Company makes no
representation or warranty of any kind whatsoever regarding the accuracy of any
such projections or as to whether any such projections will be achieved, except
that the Company represents and warrants that any such projections were
prepared in good faith and were based on assumptions believed by it to be
reasonable at the time.


                2.28         Approvals.


(a)           No
Approvals of Governmental or Regulatory Authorities relating to the business
conducted by the Company are required to be given to or obtained by the Company
from any and all Governmental or Regulatory Authorities in connection with the
consummation of the transactions contemplated by this Agreement, except
(i) Approvals related to the filings contemplated by Section 1.2 or (ii) where
the failure to obtain such Approval would not constitute a Material Adverse
Effect.


(b)           Except
as set forth in Schedule 2.28(b), no non-Governmental or Regulatory
Authority Approvals are required to be given to or obtained by the Company from
any third parties in connection with the consummation of the transactions contemplated
by this Agreement, except where the failure to obtain such Approvals
would not constitute a Material Adverse Effect.


(c)           To
Company’s knowledge, the Company has obtained all Approvals from Governmental
or Regulatory Authorities necessary to conduct the business conducted by the
Company in the manner as it is currently being conducted, except where the
failure to obtain such Approvals would not constitute a Material Adverse
Effect, and, during the last three (3) years, there has been no written notice
received by the Company of any violation or non-compliance with any such
Approvals.  All Approvals from
Governmental or Regulatory Authorities necessary to conduct the business
conducted by the Company as it is currently being conducted are set forth in Schedule
2.28(c).


                2.29         Leases in Effect.  The Company has real property leases or
subleases as set forth in Schedule 2.29 relating to premises which
accommodate not less than 75 employees in a location within the Orlando metro
area.


                2.30         Disclosure.  No representation or warranty contained in
this Agreement or any related Schedule or in any certificate, list or other
writing furnished to Parent pursuant to any provision of this Agreement
(including the Company Financials and the notes thereto) contains any untrue
statement of a material fact or omits a material fact necessary in order to
make the statements herein or therein, in the light of the circumstances under
which they were made, not misleading.


 



 23















ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB


Parent
and Merger Sub hereby represent and warrant to the Company and the Company
Shareholders, subject to such exceptions as are disclosed in the corresponding
Schedules with respect to specific sections of this Article 3, and subject to
the right of the Parent and Merger Sub to update, revise, supplement and/or
correct such Schedules through the Closing Date, as follows:


                3.1           Organization, Standing and Power.  Parent and Merger Sub are each corporations
duly organized, validly existing and in good standing under the laws of the
State of Nevada.  Parent and Merger Sub
each have the corporate power to own their properties and to carry on their
business as now being conducted and as proposed to be conducted and are duly
qualified to do business and are in good standing in each jurisdiction in which
the ownership, use, licensing or leasing of their Assets and Properties, or the
conduct or nature of their business, makes such qualification, licensing or
admission necessary, except for such failures to be so duly qualified, licensed
or admitted and in good standing that could not reasonably be expected to have
a material adverse effect on the Business or Condition of Parent or Merger Sub.  Neither Parent nor Merger Sub is in violation
of any of the provisions of its Articles of Incorporation or Bylaws or any
similar governing instruments or agreements.


                3.2           Capital Structure of Parent and
Merger Sub.  The authorized capital
stock of Parent consists of 800,000,000 shares of Parent Common Stock and
20,000,000 shares of Parent Preferred Stock, all $0.001 par value per
share.  10,000,000 shares of Parent
Preferred Stock are designated Series A Preferred Stock.  21,495,000 shares of Parent Common Stock and
2,800,000 shares of Parent Series A Preferred Stock are currently outstanding
and 4,480,000 shares of Parent Common Stock are reserved for issuance in
respect of specific obligations of Parent. 
All outstanding shares of Parent Common Stock have been duly authorized,
validly issued, fully paid and are nonassessable and free of any liens or
encumbrances other than any liens or encumbrances created by or imposed upon
the holders thereof.  The shares of
Parent Common Stock to be issued pursuant to the transactions contemplated
herein will, upon issuance pursuant to the terms hereof, be duly authorized,
validly issued, fully paid, and non-assessable shares of Parent Common
Stock.  The authorized capital stock of
Merger Sub consists solely of 1,000 shares of Common Stock, $0.001 par value
per share, of which 1,000 shares are issued and outstanding and all of which
are owned by Parent.  All issued and
outstanding shares of capital stock of Merger Sub have been duly authorized and
validly issued and are fully paid and are nonassessable and free of any liens
or encumbrances.  Each of Parent and
Merger Sub has delivered a true, correct and complete copy of its Articles of
Incorporation, as set forth in Schedule 3.2(a), and its Bylaws, as set
forth in Schedule 3.2(b), and every other similar governing document or
agreement, as applicable, as amended to date, to Company.


                3.3           Authority.  Parent and Merger Sub each has full corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby.  This Agreement has been duly and
validly executed and delivered by Parent and Merger Sub, and, assuming the due
authorization, execution and delivery hereof by the Company and Certain Company
Shareholders, constitutes a legal, valid and binding obligation of Parent and
Merger Sub enforceable against Parent and Merger Sub in 



 24
 









accordance with its respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar Laws relating to the
enforcement of creditors’ rights generally and by general principles of
equity.  Merger Sub has been recently
formed for the purpose of effecting the Merger and has not conducted any
business except in connection with preparation for the Merger.  Parent owns all of the issued and outstanding
capital stock of Merger Sub.  The
execution, delivery and performance of each of this Agreement and any
agreements contemplated hereby to which it is a party have been duly authorized
by all necessary action on the part of each of Parent and Merger Sub, their
respective boards of directors, and the sole stockholder of Merger Sub.  A vote of Parent’s stockholders will be
required to approve the Merger and the related transactions contemplated
hereby.


                3.4           Financial Statements of Parent.


(a)           All financial
statements of Parent, as set forth in Schedule 3.4(a) and provided to
the Company and to the Company Shareholders (including, in each case, any notes
thereto), were prepared in accordance with GAAP on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto), are correct and complete in all material respects and each present
fairly, in all material respects, the financial position of Parent as at the
respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject, in the case of unaudited
statements, to normal and recurring immaterial year-end adjustments).  The Parent’s financial statements have been
filed with the U.S. Securities and Exchange Commission.  Since the date of the last financial
statements of Parent, there has been no change in any accounting policies,
principles, methods or practices, including any change with respect to reserves
(whether for bad debts, contingent liabilities or otherwise), of Parent.


(b)           Except as and to the
extent set forth or reserved against on the consolidated balance sheet of
Parent, none of Parent or any Subsidiary of Parent has any Liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on a balance sheet or in notes thereto,
except for Liabilities or obligations incurred in the ordinary course of
business consistent with past practice since January 1, 2007.


                3.5           No Conflicts.  The consummation by the Parent and Merger Sub
of the transactions contemplated hereby do not and will not:


(a)           conflict with or
result in a violation or breach of any terms, conditions or provisions of the
Articles of Incorporation or Bylaws, as amended, or equivalent documents of the
Parent and Merger Sub;


(b)           conflict with or
result in a violation or breach of any Law or Order applicable to the Parent
and Merger Sub or by which any of their Assets and Properties are bound or
affected; or


(c)           (i) conflict with or
result in a violation or breach of, (ii) constitute a default (or an event
that, with or without notice or lapse of time or both, would constitute a 



 25
 









default) under, (iii) require the Parent or Merger Sub to obtain any
consent, approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of (except for filings with the Nevada
Secretary of State and the Securities and Exchange Commission, as necessitated
by this transaction and described on Schedule 3.5(c)), (iv) result in or
give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments or performance under, (vi) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon the Parent
or Merger Sub or any of their Assets and Properties under or (vii) result in
the loss of a material benefit under, any of the terms, conditions or
provisions of any Contract or License to which the Parent or Merger Sub are a
party or by which the Parent or Merger Sub or their Assets and Properties are
bound or affected.


                3.6           Books and Records; Organizational
Documents.  The minute books,
including the share registers, and other similar records of the Parent and
Merger Sub have been provided or made available to Company or its counsel prior
to the execution of this Agreement, are complete and correct in all material
respects and have been maintained in accordance with sound business
practices.  Such minute books contain a
true and complete record of all material actions taken at all meetings and by
all written consents in lieu of meetings of the directors, shareholders and
committees of the Board of Directors of the Merger Sub through the date hereof.


                3.7           Absence of Changes.  Since the date of the most recent
Parent/Merger Sub financial statements provided to the Company, there has not
been any Material Adverse Change in the business or condition of the Parent or
Merger Sub or any occurrence or event, which, individually or in the aggregate
could be reasonably expected to have any Material Adverse Change on the
Business or Condition of Parent or Merger Sub. 
In addition, without limiting the foregoing, except as expressly
contemplated hereby, there has not occurred since such date:


(a)           the entering into of
any Contract, commitment or transaction or the incurrence of any Liabilities
directly related to the Agreement, outside of the ordinary course of business
consistent with past practice;


(b)           the entering into of
any Contract in connection with any transaction involving a Business
Combination other than this Agreement and the transactions related to the
Merger, and the acquisition of Information Intellect, Inc. on March 2, 2007;


(c)           the alteration, or
entering into of any Contract or other commitment to alter, Parent’s or Merger
Sub’s interests in any Person, in which the Parent or Merger Sub directly or
indirectly holds any interest on the date hereof;


(d)           the entering into of
any strategic alliance, joint development or joint marketing Contract, other
than joint marketing or development efforts in the ordinary course of business
consistent with past practice;


(e)           any amendment or
other modification (or agreement to do so), except in the ordinary course of
business consistent with past practice, or violation of the terms of, any of
the Contracts set forth or described herein;



 26
 









(f)            the entering into
of any transaction with any officer, director, shareholder, Affiliate or
Associate of the Parent or Merger Sub, other than pursuant to any Contract
disclosed to Company in connection with this Agreement (such as loans/advances
from related parties to the Parent for payment of various filing,
administrative and professional fees);


(g)           the entering into or
amendment of any Contract pursuant to which any other Person is granted
manufacturing, marketing, distribution, licensing or similar rights of any type
or scope with respect to any products of the Parent or Merger Sub other than as
contemplated by the Contracts or Licenses of the Parent or Merger Sub disclosed
in connection herewith or otherwise in the ordinary course of business
consistent with past practice;


(h)           the commencement of
any Action or Proceeding (other than any investigation of which the Parent and
Merger Sub are not aware);


(i)            any amendments to
the Parent or Merger Sub’s Articles of Incorporation or Bylaws, (except as
filed with the Nevada Secretary of State);


(j)            any disposition or
sale of, waiver of rights to, license or lease of, or incurrence of any Lien
on, any Assets and Properties of the Parent or Merger Sub, other than
dispositions of inventory, or Licenses of products to Persons in the ordinary
course of business of the Parent and Merger Sub consistent with past practice;


(k)           any purchase or
lease of any Assets and Properties of any Person or the making of any capital
expenditures, lease commitments or other capital commitments by the Parent or
Merger Sub, other than acquisitions of inventory, leasing of office space, or
Licenses of products, in the ordinary course of business of the Parent and
Merger Sub, consistent with past practice;


(l)            the making of any
capital expenditures or commitments by the Parent or Merger Sub for additions
to property, plant or equipment of the Parent or Merger Sub, constituting
capital assets individually or in the aggregate in an amount exceeding
twenty-five thousand dollars ($25,000);


(m)          the write-off or
write-down or making of any determination to write off or write-down, or
revalue, any of the Assets and Properties of the Parent or Merger Sub, or
change in any reserves or liabilities associated therewith;


(n)           the payment,
discharge or satisfaction of any claim or Liability, other than the payment,
discharge or satisfaction in the ordinary course of business of Liabilities
reflected or reserved against in the Parent or Merger Sub’s financial
statements or incurred in the ordinary course of business;


(o)           the failure to pay
or otherwise satisfy material Liabilities of the Parent or Merger Sub or any of
their Subsidiaries when due;


(p)           the making or
changing of any election in respect of Taxes, adoption or change in any
accounting method in respect of Taxes, the entering into of any Tax allocation
agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement,
settlement or 



 27
 









compromise of any claim or assessment in respect of Taxes, or consent
to any extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes with any Taxing Authority or otherwise;


(q)           The making of any
change in the accounting policies, principles, methods, practices or procedures
of the Parent or Merger Sub (including without limitation for bad debts,
contingent liabilities or otherwise, respecting capitalization or expense of
research and development expenditures, depreciation or amortization rates or
timing of recognition of income and expense);


(r)            the commencement or
termination of, or change in, any line of business, directly related to this
Agreement;


(s)           the cancellation,
amendment or failure to renew any insurance policy other than in the ordinary
course of business consistent with past practice, or failure to use
commercially reasonable efforts to give all notices and present all claims
under all such policies in a timely fashion;


(t)            any amendment,
failure to renew, or failure to use commercially reasonable efforts to
maintain, its existing Approvals or failure to observe any Law or Order
applicable to the conduct of the business of the Parent or Merger Sub or the
Assets and Properties of the Parent or Merger Sub, directly related to this
Agreement;


(u)           any physical damage,
destruction or other casualty loss (whether or not covered by insurance)
affecting any of the real or personal property or equipment of the Parent or
Merger Sub individually or in the aggregate in an amount exceeding fifteen
thousand dollars ($15,000);


(v)           any entering into
any agreement to do any of the foregoing.


                3.8           No Undisclosed Liabilities.  The Parent and Merger Sub have no obligations
or liabilities of any nature (matured or unmatured, fixed or contingent) other
than (i) those set forth or adequately provided for in their balance sheets,
(ii) those set forth in this Agreement.


                3.9           Restrictions on Business
Activities.  There is no agreement,
judgment, injunction, Order or decree binding upon the Parent or Merger Sub, or
any of their Assets and Properties which has had or could reasonably be
expected to have the effect of prohibiting or impairing any current or future
business practice of the Parent or Merger Sub, respectively, any acquisition of
property by the Parent or Merger Sub or the conduct of business by the Parent
or Merger Sub as currently conducted or as proposed to be conducted by the
Parent or Merger Sub, directly related to this Agreement.


                3.10         Taxes.


(a)           The
Parent and Merger Sub have, if required by statutes, properly filed and paid
any Taxes due in connection herewith. 
The Parent and Merger Sub are not required to, and do not expect to,
file and pay Taxes on their operations for the Tax year 2006, by the due date,
or the extension thereof.  The Parent and
Merger Sub have prepared and maintained 



 28
 









adequate records so as to facilitate the
prompt filing of Tax Returns when they become due, if required to be filed.


(b)           The
Parent and Merger Sub have not incurred any material liability for Taxes other
than as reflected on their financials.


(c)           The
Parent and Merger Sub do not have knowledge of any actions by any Taxing
Authority in connection with assessing additional Taxes against and in respect
of the Parent and Merger Sub for any past period.  There is no dispute or claim concerning any
Tax Liability of the Parent and Merger Sub (i) threatened, claimed or raised by
any Taxing Authority and (ii) of which the Parent and Merger Sub are
aware.  There are no Liens for Taxes upon
the Assets and Properties of the Parent and Merger Sub other than Liens for
Taxes not yet due.


(d)           There
are no outstanding agreements or waivers extending the statutory period of
limitation applicable to any Tax Returns required to be filed by, or which
include or are treated as including, the Parent or Merger Sub with respect to
any Tax assessment or deficiency affecting the Parent or Merger Sub.


(e)           The
Parent and Merger Sub have not received any written ruling related to Taxes or
entered into any agreement with a Taxing Authority relating to Taxes.


(f)            The
Parent and Merger Sub have no liability for the Taxes of any Person other than
the Parent and Merger Sub, respectively or (i) as a transferee or successor, or
(ii) by Contract or (iii) otherwise.


(g)           The
Parent and Merger Sub have not agreed to make and are not required to make any
adjustment under Section 481 or 263A of the Code or any comparable provision
under state laws by reason of a change in accounting method or as a result of
transactions or events prior to the date hereof.


(h)           The
Parent and Merger Sub are not a party to or bound by any obligations under any
Tax sharing, Tax allocation, Tax indemnity or similar agreement or arrangement.


(i)            The
Parent and Merger Sub are not involved in, subject to, or a party to any joint
venture, partnership, Contract or other arrangement that is treated as a
partnership for federal, state, local or foreign Income Tax purposes.


(j)            The
Parent and Merger Sub have not:


(i)                                     acquired
or had the use of any property from a Person with whom it was not dealing at
arm’s length other than at fair market value; or


(ii)                                  disposed
of anything to a Person with whom it was not dealing at arm’s length for
proceeds less than the market value thereof.



 29
 









(k)           The
Parent and Merger Sub are not nor have they ever been a United States real
property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of
the Code.


(l)            The
Parent and Merger Sub are not personal holding companies.


(m)          The
Parent and Merger Sub are in full compliance with all terms and conditions of
any Tax exemptions or other Tax-sharing agreement or Order of a foreign
government and the consummation of the transactions contemplated hereby will
not have any adverse effect on the continued validity and effectiveness of any
such Tax exemptions or other Tax-sharing agreement or Order.


                3.11         Legal Proceedings.  Except as set forth on Schedule 3.11:


(a)           at
the present and for the past three (3) years, there are not and have not been
any Actions or Proceedings brought or, to the knowledge of the Parent or Merger
Sub, pending or threatened against the Parent or Merger Sub or its Assets and
Properties;


(b)           there
are no facts or circumstances known to the Parent or Merger Sub that could
reasonably be expected to give rise to any Action or Proceeding against,
relating to or affecting the Parent and Merger Sub; and


(c)           the
Parent and Merger Sub have not received notice, and do not otherwise have
knowledge of any Orders outstanding against the Parent and Merger Sub,
respectively.


                3.12         Compliance With Laws and Orders.  The Parent and Merger Sub have not violated,
and are not currently in violation or default under, any Law or Order
applicable to the Parent and Merger Sub or any of their Assets and Properties.


                3.13         Benefit Plans.  Neither the Parent nor the Merger Sub has any
Benefit Plans.


                3.14         Title to Property.  Neither the Parent nor the Merger Sub has
title to any property except, with respect to Parent, the shares of its
Subsidiaries.


                3.15         Intellectual Property.  The Parent and the Merger Sub do not use any
Intellectual Property and do not own, license or otherwise possesses legally
enforceable rights to use, any Intellectual Property.  To the knowledge of Parent and Merger Sub, no
Person (including employees and former employees of Parent and/or Merger Sub)
is infringing, misappropriating or otherwise making any unauthorized use or
disclosure of any Third Party Intellectual Property Rights.  Neither Parent nor Merger Sub has entered
into any agreement to indemnify any other Person against any charge of
infringement of any Third Party Intellectual Property Rights, except as set
forth in Schedule 3.15.


                3.16         Contracts.


(a)           Schedule
3.16 contains a true and complete list of each of the Contracts (true and
complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all amendments and supplements thereto and
all continuing waivers of any 



 30
 









material terms thereof, have been made
available to Company prior to the execution of this Agreement) to which Parent
or Merger Sub are a party and which are not terminable by Parent or Merger Sub
upon 30 days (or less) notice without penalty or obligation to make payments
based on such termination.


(b)           Each
Contract required to be disclosed pursuant to this Agreement, unless otherwise
stated herein, is in full force and effect and constitutes a legal, valid and
binding agreement, enforceable in accordance with its terms, and, to the
knowledge of the Parent or Merger Sub, no party to such Contract is, nor has
received notice that it is, in violation or breach of or default under any such
Contract (or with notice or lapse of time or both, would be in violation or
breach of or default under any such Contract).


(c)           Neither
Parent nor Merger Sub is a party to or bound by any Contract that (i) automatically
terminates or allows termination by the other party thereto upon consummation
of the transactions contemplated by this Agreement or (ii) contains any
covenant or other provision which limits the ability of the Parent or Merger
Sub to compete with any Person in any line of business or in any area or
territory.


                3.17         Insurance.  At the date hereof, neither the Parent nor
the Merger Sub has any current insurance policies.


                3.18         Affiliate Transactions.  Except as set forth on Schedule 3.18,
there are no Contracts or Liabilities, between the Parent or Merger Sub, on the
one hand, and (1) any current or former officer, director, shareholder, or to
the knowledge of the Parent or Merger Sub, any Affiliate or Associate of the
Parent or Merger Sub or (2) any Person who, to the knowledge of the Parent or
Merger Sub, is an Associate of any such officer, director, shareholder or
Affiliate, on the other hand, except for the accounts payable due related
parties as disclosed in the Parent’s financials filed with the Securities and
Exchange Commission, (ii) the Parent and Merger Sub do not provide or cause to
be provided any assets, services or facilities to any current or former
officer, director, shareholder, Affiliate or Associate of Parent or Merger Sub,
(iii) no current or former officer, director, shareholder, Affiliate or
Associate of Parent or Merger Sub provides or causes to be provided any assets,
services or facilities to the Parent and Merger Sub and (iv) the Parent and
Merger Sub do not beneficially own, directly or indirectly, any Investment
Assets of any current or former officer, director, shareholder, Affiliate or
Associate of Parent or Merger Sub.


                3.19         Employees; Labor Relations.  Parent and Merger Sub have no employees and
have never had any employees.  To the
knowledge of Parent, each Subsidiary of Parent or Merger Sub is in compliance
in all material respects with all currently applicable laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment, wages, hours and occupational safety and health and employment
practices, and is not engaged in any material respect in any unfair labor
practice except where non-compliance with any of the foregoing will not
constitute a Material Adverse Effect.  To
the knowledge of Parent and Merger Sub: 
(a) no Subsidiary of Parent or Merger Sub is liable for any payment to
any trust or other fund or to any governmental or administrative authority,
with respect to employment insurance, social security, workers compensation, health
or other benefits or obligations for employees (other than routine payments to
be made in the normal course of 



 31
 









business and consistent with past practice);  (b) there are no pending claims against any
Subsidiary of Parent or Merger Sub under any workers compensation plan or
policy or for long term disability which constitutes a Material Adverse
Effect;  (c) there are no controversies
pending or, to the knowledge of Parent or Merger Sub, threatened, between any Subsidiary
of Parent or Merger Sub and any of its employees, which controversies have or
could reasonably be expected to result in an action, suit, proceeding, claim,
arbitration or investigation before any agency, court or tribunal, foreign or
domestic, which, in any of the foregoing cases, constitutes a Material Adverse
Effect;  (d) no Subsidiary of Parent or
Merger Sub is a party to any collective bargaining agreement or other labor
union Contract nor does Parent or Merger Sub know of any activities or proceedings
of any labor union to organize any such employees;  (e) except as disclosed on Schedule 3.19,
during the last three (3) years, there have been no federal or state claims
based on employment equity, sex, sexual or other harassment, age, disability,
race or other discrimination or common law claims, including claims of wrongful
dismissal, severance pay, payment in lieu of notice or bad faith termination,
by any employees of a Subsidiary of Parent or Merger Sub or by any of the
employees performing work for any such Subsidiary but provided by an outside
employment agency, and there are no facts or circumstances known to the Parent
or Merger Sub that could reasonably be expected to give rise to such complaint
or claim.


                3.20         Environmental Matters.  To the knowledge of the Parent, the Parent
and Merger Sub do not now own any physical premises.  The Subsidiaries of Parent and Merger Sub (a)
are in compliance with all applicable environmental laws, except for instances
of noncompliance that, individually or in the aggregate, will not constitute a
Material Adverse Effect; and (b) are in possession of, and in compliance with,
all permits, certificates, licenses, approvals, tariffs and other
authorizations of or issued by Governmental or Regulatory Authorities required
by applicable environmental laws with respect to environmental matters relating
to the operations of such Subsidiaries, except for permits which are not
possessed or instances of noncompliance that, individually or in the aggregate,
will not constitute a Material Adverse Effect. 
There are no current environmental claims pending, or to any such
Subsidiary’s knowledge threatened, against any such Subsidiary.  Neither the Parent nor any of its
Subsidiaries has either expressly or, to the Parent’s knowledge by operation of
law, assumed or undertaken any liability or corrective, investigatory or
remedial obligation of any other Person relating to any environmental claims.


                3.21         Substantial Customers and Suppliers.  Neither Parent nor Merger Sub has any
customers or suppliers.


                3.22         Accounts Receivable.  Neither the Parent nor Merger Sub has any
accounts receivable.


                3.23         Inventory.  The Parent and Merger Sub do not maintain any
inventory.


                3.24         Other Negotiations; Brokers; Third
Party Expenses.  Neither the Parent
nor Merger Sub, to the knowledge of the Parent and Merger Sub, or any of their
Affiliates (nor any investment banker, financial advisor, attorney, accountant
or other Person retained by or acting for or on behalf of the Parent and Merger
Sub or any such Affiliate) (i) has entered into any Contract that conflicts
with any of the transactions contemplated by this Agreement or (ii) has entered
into any Contract or had any discussions with any Person regarding any
transaction involving the Parent and Merger Sub which could result in the Parent
or Merger Sub’s being 



 32
 









subject to any claim for liability to said Person as a
result of entering into this Agreement or consummating the transactions
contemplated hereby.  Without limiting
the foregoing, except as set forth in Schedule 3.24, no finder, broker,
agent, financial advisor, or other intermediary has acted on behalf of Parent
or Merger Sub in connection with the Merger or the negotiation or consummation
of this Agreement or any of the transactions contemplated hereby.


                3.25         Warranty Obligations.  Neither the Parent nor Merger Sub is subject
to any warranty obligations.


                3.26         Foreign Corrupt Practices Act.  Neither the Parent nor Merger Sub, nor to the
knowledge of the Parent and Merger Sub, any agent, employee or other Person
associated with or acting on behalf of the Parent and Merger Sub has, directly
or indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, made
any unlawful payment to any government official or employee or to any political
party or campaign from corporate funds, violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other similar unlawful payment.


                3.27         Financial Projections.  Any and all financial projections made by the
Parent and Merger Sub with respect to the Parent and Merger Sub’s businesses
were prepared for internal use only.  The
Parent and Merger Sub make no representation or warranty of any kind whatsoever
regarding the accuracy of any such projections or as to whether any such
projections will be achieved, except that the Parent and Merger Sub represent
and warrant that any such projections were prepared in good faith and were based
on assumptions believed by it to be reasonable at the time.


                3.28         Approvals.


(a)           No
Approvals of Governmental or Regulatory Authorities relating to the business
conducted by the Parent and Merger Sub are required to be given to or obtained
by the Parent and Merger Sub from any and all Governmental or Regulatory
Authorities in connection with the consummation of the transactions
contemplated by this Agreement, except for filings with the Nevada Secretary of
State and the National Association of Securities Dealers (NASD) as described on
Schedule 3.28(a).


(b)           No
non-Governmental or Regulatory Authority Approvals are required to be given to
or obtained by the Parent and Merger Sub from any third parties in connection
with the consummation of the transactions contemplated by this Agreement.


(c)           The
Parent and Merger Sub have obtained all Approvals from Governmental or
Regulatory Authorities necessary to conduct the business conducted by the
Parent and Merger Sub in the manner as it is currently being conducted and has
been conducted since the date of incorporation of the Parent and Merger Sub,
and there has been no written notice received by the Parent and Merger Sub of
any violation or non-compliance with any such Approvals.


                3.29         Leases in Effect.  The Parent and Merger Sub have no real
property leases or subleases.


                



 33
 









                3.30         Financing.  The Parent and Merger Sub have or shall
obtain funds sufficient to pay at Closing the amounts provided for under
Section 1.6(a)(ii).


                3.31         Disclosure.  No representation or warranty contained in
this Agreement or any related document, list or other writing furnished to
Company pursuant to any provision of this Agreement (including the Parent and
Merger Sub’s financial statements and the notes thereto) contains any untrue
statement of a material fact or omits a material fact necessary in order to
make the statements herein or therein, in the light of the circumstances under
which they were made, not misleading.


ARTICLE 4

CONDUCT PRIOR TO THE CLOSING


                4.1           Conduct of Business of the Company.  All parties mutually agree that during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to the provisions of Section 8.1 hereof
or the Closing, the Company, Parent and Merger Sub each shall (unless otherwise
required by this Agreement or Company has given its prior written consent to
Parent or Merger Sub or Parent has given its prior written consent to the
Company, as the case may be) carry on its business in the ordinary course
consistent with past practice, to pay its Liabilities and Taxes consistent with
its past practices, to pay or perform other obligations when due consistent
with its past practices, subject to any good faith disputes over such
Liabilities, Taxes and other obligations and, to the extent consistent with
such business, to use reasonable efforts and institute all policies to preserve
intact its present business organization, keep available the services of its
present officers and key employees, preserve its relationships with customers,
suppliers, distributors, licensors, licensees, independent contractors and
other Persons having business dealings with it and to cause its Subsidiaries to
do the same, all with the express purpose and intent of preserving unimpaired
its goodwill and ongoing businesses at the Closing.  Except as expressly contemplated by this
Agreement or disclosed in Schedules, neither (1) Company, on the one hand, nor
(2) Parent or Merger Sub on the other hand, will, without the prior written consent
of the other, voluntarily take or agree in writing or otherwise to take:


(a)           any
of the actions described in Section 2.7 or Section 3.7, as applicable;


(b)           any
other action that would make any of its representations or warranties contained
in this Agreement untrue or incorrect or prevent the applicable party (or
parties) from performing or cause the applicable party (or parties) not to
perform its agreements and covenants hereunder;


(c)           issue
additional shares of its or their, as applicable, capital stock or grant any
warrants, options or other rights to acquire shares of its or their, as
applicable, capital stock;


(d)           the
Company will not make any capital expenditures or commitments for additions to
property, plant or equipment of the Company constituting capital assets
individually in an amount exceeding twenty-five thousand dollars ($25,000)
unless Parent agrees otherwise.


                4.2           No Solicitation.  Until the earlier of the Closing or the date
of termination of this Agreement pursuant to the provisions of Section 8.1
hereof, neither Company nor Parent or 



 34
 









Merger Sub, nor any Certain Company Shareholders,
officers, directors, agents, investment bankers or other representatives of any
of them (collectively, the “Representatives”)
will, directly or indirectly, (i) solicit, engage in discussions or negotiate
with any Person (regardless of who initiates such discussions or negotiations),
or take any other action intended or designed to facilitate the efforts of any
Person, other than the parties hereto, relating to the possible acquisition of
the Company, Parent or Merger Sub (whether by way of purchase of capital stock,
purchase of assets or otherwise) or any significant portion of its capital
stock or assets by any Person other than the parties hereto (an “Alternative Acquisition”), (ii)
provide information with respect to the Company, Parent or Merger Sub to any
Person relating to a possible Alternative Acquisition by any Person, (iii)
enter into an agreement with any Person providing for a possible Alternative
Acquisition, or (iv) make or authorize any statement, recommendation or
solicitation in support of any possible Alternative Acquisition by any
Person.  The Company, Parent, or Merger
Sub, as the case may be, shall cause its Representatives to immediately cease
and cause to be terminated all existing discussions or negotiations with any
Person heretofore conducted with respect to any possible Alternative
Acquisition.


Each
of the Company, Certain Company Shareholders, Parent and Merger Sub acknowledge
that the terms of this Section 4.2 are a significant inducement for the
Company, Certain Company Shareholders, Parent and Merger Sub to enter into this
Agreement and the absence of such provision would have resulted in either (i) a
material change in the terms hereof or (ii) a failure to induce the parties
hereto to enter into this Agreement.


ARTICLE 5

ADDITIONAL AGREEMENTS


                5.1           Access to Information.  Between the date of this Agreement and the
earlier of the Closing or the termination of this Agreement, upon reasonable
advance notice given to the Company, the Company will (i) give Parent and its
respective officers, employees, accountants, counsel, financing sources and
other agents and representatives reasonable access to all buildings, offices,
and other facilities of the Company and to the extent permitted by law to all
Books and Records of the Company, regardless of where located; (ii) permit
Parent to make such inspections as it may require; (iii) cause its officers to
furnish Parent such financial, operating, technical and product data and other
information with respect to the business and Assets and Properties of the
Company as Parent from time to time may reasonably request to verify the
representations and warranties provided herein and for integration planning
purposes, including without limitation financial statements and schedules; (iv)
allow Parent the opportunity to interview non-clerical employees and other
personnel and Affiliates of the Company during normal business hours with the
Company’s prior written consent, which consent will not be unreasonably
withheld or delayed; and (v) assist and cooperate with Parent in the
development of integration plans for implementation by Parent and the Company
following the Closing; provided, however, that no investigation pursuant to
this Section 5.1 will affect or be deemed to modify any representation or
warranty made by the Company herein.


                5.2           Confidentiality.  Parent, Merger Sub and Company acknowledge
and agree that the terms and conditions described in this Agreement, including
its existence, as well as the non-public information and data furnished to them
or their respective Representatives from the first introduction of the parties
and throughout the negotiation and drafting of this Agreement is 



 35
 









confidential and will not be disclosed to any third
party, or used for any purpose not specifically contemplated herein, without
prior written consent of the other party, unless otherwise required by Law or
unless it ceases to be confidential through no breach of the receiving party.


                5.3           Expenses.  Whether or not the transactions contemplated
hereby are consummated, all fees and expenses incurred in connection with this
Agreement including all legal, accounting, financial advisory, consulting and
all other fees and expenses of third parties (“Third
Party Expenses”), as set forth in Schedule 5.3, incurred
by a party in connection with the negotiation and effectuation of the terms and
conditions of the transactions contemplated hereby, including this Agreement,
and the transactions contemplated hereby will be the obligation of the
respective party incurring such Third Party Expenses.  Notwithstanding the foregoing, the Parent
will pay all reasonable closing costs and Company Shareholders will be jointly
and severally responsible for the payment of any fees and expenses they incur
for advice given to them by their own advisors.


                5.4           Public Disclosure.  The parties agree that prior to making any
public announcement with respect to this Agreement or any other matter relating
to the transactions contemplated hereby, each will consult with the other and
will use reasonable efforts either to agree upon the text of a proposed joint
announcement or to obtain the other’s approval of the text of an announcement
to be made solely on behalf of such party, provided that any party may make
such disclosures or statements as it reasonably believes, after consulting with
counsel, may be required by Law, regulation or rule of any Governmental or
Regulatory Authority or any stock exchange, though the disclosing party will
provide advance notice to the other party of such required disclosure as far in
advance as is reasonably practicable.


                5.5           Approvals.  The Company and Parent will cooperate and use
commercially reasonable efforts to obtain the Approvals, if any, from
Governmental or Regulatory Authorities or under any of the Contracts or other
agreements as may be required in connection with the transactions contemplated
hereby as to preserve all rights of and benefits to the Company thereunder.  Parent will provide the Company with such
assistance and information as is reasonably required to obtain such Approvals.


                5.6           Notification of Certain Matters.  The Company will give prompt notice to Parent
and Merger Sub, and Parent and Merger Sub will give prompt notice to the
Company, of (i) the occurrence or non-occurrence of any event, the occurrence
or nonoccurrence of which is likely to cause any representation or warranty of
the Company, Certain Company Shareholders, or the Parent or Merger Sub,
respectively, contained in this Agreement to be untrue or inaccurate at or
prior to the Closing Date and (ii) any failure of the Company, Certain Company
Shareholders, or Parent or Merger Sub, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 5.6 will not limit or otherwise affect any remedies available to
the party receiving such notice.


                5.7           Additional Documents and Further
Assurances.  Each party hereto, at
the request of the other party hereto, will execute and deliver such other
instruments and documents per Schedule 5.7 and do and perform such other
acts and things (including, but not limited to, all action reasonably necessary
to seek and obtain any and all consents and approvals of any 



 36
 









Government or Regulatory Authority or Person, if any
are necessary hereunder; provided, however, that Parent will not be obligated
to consent to any divestitures or operational limitations or activities in
connection therewith and no party will be obligated to make a payment of money
as a condition to obtaining any such condition or approval) as may be necessary
or desirable for effecting completely the consummation of this Agreement and
the transactions contemplated hereby.


                5.8           Company’s Accountants.  The Company will use commercially reasonable
efforts to cause its management and its accountants to facilitate on a timely
basis (i) the preparation of interim financial statements prepared in
accordance with GAAP through the date of Closing, and reviewed by the Company’s
accountants, (ii) the review of any Company audit or review work papers for up
to the past two (2) complete fiscal years including the examination of selected
interim financial statements and data, and (iii) the delivery of such reports
from the Company’s independent accountants as may be reasonably requested by
Parent or its accountants.  In addition, for the purposes of the
requirements of Internal Revenue Service Revenue Ruling 59-60 and the
accounting requirements pursuant to the accounting for business combinations,
the Company shall deliver within thirty (30) days of the Closing a balance
sheet of the Company as of the Closing Date (the “Closing
Date Balance Sheet”) that has been reviewed and approved by its
independent accounting firm.  Within twenty (20) days after the delivery
of the Closing Date Balance Sheet, Parent will provide to the Company a
proposed allocation of the Merger Consideration which shall have been prepared
by an independent valuation accountant or consultant and which, if such
allocation adversely impacts the Tax consequences to the Company Shareholders
(as determined by the Certain Company Shareholders) such allocation shall be
approved by the Certain Company Shareholders.


                5.9           Conveyance Taxes.  Parent, Merger Sub, and the Company will
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any sales, use,
transfer, value added, and stock transfer, any transfer, recording,
registration and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed on or before the Closing.


                5.10         Commercially Reasonable Efforts.  Each party hereto will use its commercially
reasonable efforts to perform and fulfill all obligations to be performed and
fulfilled under this Agreement, and to cause all conditions precedent to the consummation
of the transactions to be timely satisfied, to the end that the transactions
contemplated by this Agreement will be consummated substantially in accordance
with its terms.


                5.11         Breach of Representations,
Warranties, Agreements and Covenants. 
Subject to its rights under Section 8.1, each party hereto will not
voluntarily take, or fail to take, any action which from the date hereof
through the Closing would cause or constitute a material breach of any of its
representations, warranties, agreements and covenants set forth in this
Agreement.  In the event of, and promptly
after becoming aware of, the actual, pending or threatened occurrence of any
event which would cause or constitute such a breach or inaccuracy, such party
will give detailed notice thereof to the other parties hereto and will use its
commercially reasonable efforts to prevent or promptly remedy such breach or
inaccuracy.


 



 37















                5.12         Agreement to Defend and Indemnify.


(a)           Parent will cause
all rights to indemnification by the Company in favor of National Business
Search, Inc. and each present and former officer or director of the Company
(hereinafter referred to as the “Company Indemnified
Parties”) as provided in the Company’s Articles of Incorporation
or Bylaws (or both) or similar constitutive documents or pursuant to other
instruments or agreements, including insurances, in effect on the date hereof,
to survive the Closing and to continue in full force and effect following the
Closing Date until the expiration of the applicable statute of limitations.


(b)           Subject to the terms
set forth herein, Parent will, as an absolute and unconditional guarantor of
performance and payment, and will cause the Company to, indemnify and hold
harmless, to the fullest extent permitted under applicable Law (and will also
advance expenses as incurred by a Company Indemnified Party to the fullest
extent permitted under applicable Law), each Company Indemnified Party against
any costs or expenses (including reasonable legal fees and expenses) judgments,
fines, losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to any action, alleged action, omission or alleged omission by such Company
Indemnified Party on or prior to the Closing Date (including any claims,
action, suits, proceedings and investigations which arise out of or relate to
the transactions contemplated by this Agreement) until the expiration of the
applicable statute of limitations; provided that, in the event any claim,
action, suit, proceeding or investigation is asserted or made or otherwise
becomes known to Parent or the Company or is commenced prior to the expiration
of the applicable statute of limitations, all rights to indemnification in
respect of any such claim, action, suit, proceeding or investigation will continue
until the final disposition thereof.


(c)           The covenants
contained in this Section 5.12 will survive the Closing Date until fully
discharged and are intended to benefit the Company Shareholders and each of the
Company Indemnified Parties.


ARTICLE 6

CONDITIONS TO THE ACQUISITION


                6.1           Conditions to Obligations of Each
Party to Effect the Merger.  The
respective obligations of each party to this Agreement to effect the
transactions contemplated hereby will be subject to the satisfaction at or
prior to the Closing of the following conditions:


(a)           No
Injunctions or Regulatory Restraints; Illegality.  No temporary restraining order, preliminary
or permanent injunction or other Order issued by any court of competent
jurisdiction or Governmental or Regulatory Authority or other legal or
regulatory restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; nor shall there be any
action taken, or any Law or Order enacted, entered, enforced or deemed
applicable to the transactions contemplated hereby or the other transactions
contemplated by the terms of the Agreement that would prohibit the consummation
of the transactions 



 38
 









contemplated hereby or which would permit consummation of the
transactions contemplated hereby only if certain divestitures were made or if
Parent and Merger Sub were to agree to limitations on its business activities
or operations.


(b)           Existence of
Board Approval.  Each party
will provide to the other party certified copies of Board minutes or consents,
or certified extracts thereof, indicating Board approval has been granted on or
prior to the date hereof for the satisfaction of all obligations hereunder and
the consummation of the transaction.


                6.2           Additional Conditions to
Obligations of the Company and Certain Company Shareholders.  The obligations of the Company and Certain
Company Shareholders to effect the transactions contemplated hereby will be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
the Company and Certain Company Shareholders:


(a)           Representations
and Warranties.  Each of the
representations and warranties made by Parent and Merger Sub in this Agreement
shall be materially true and correct when made and on and as of the Closing
Date as though such representation or warranty was made on and as of the
Closing Date, except that any representation or warranty that expressly speaks
as of a specified date earlier than the Closing Date shall have been true and
correct on and as of such earlier date, and further provided that Parent and
Merger Sub shall be permitted to update, revise, supplement and/or correct the
Schedules through the Closing Date.


(b)           Performance.  Parent and Merger Sub shall have performed
and complied with each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by Parent and Merger Sub at or
before the Closing Date.


(c)           Officers’
Certificates.  Each of Parent
and Merger Sub will have delivered to the Company a certificate or
certificates, dated the Closing Date and executed by its respective President
and/or its Chief Executive Officer, certifying as to the resolutions delivered
pursuant to Section 6.1(b) and Parent’s and Merger Sub’s compliance with the
condition set forth in Section 6.2(a).


(d)           Third Party
Consents.  Parent and Merger
Sub will have been furnished with evidence satisfactory to them that the
Company has obtained the consents, approvals and waivers, if any, listed in Schedule
2.28(b).


(e)           Non-Competition
and Employment Agreements. 
Parent and/or the Company shall have executed and delivered to each
member of the Senior Management Team an employment and non-competition
agreement (each, a “Non Competition and Employment
Agreement”).


(f)            No Material Adverse Change. 
There will have occurred no Material Adverse Change in the Business or
Condition of Parent or Merger Sub since the date hereof.


(g)           Legal
Proceedings.  No Governmental
or Regulatory Authority will have notified any party to this Agreement that it
intends to commence proceedings to restrain or prohibit the transactions
contemplated hereby or force rescission, unless such Governmental or 



 39
 









Regulatory Authority will have withdrawn such notice and abandoned any
such proceedings prior to the time which otherwise would have been the Closing
Date.


(h)           Proceedings
and Documents.  All corporate
and other proceedings in connection with the transactions contemplated hereby
and all documents and instruments incident to such transactions will be in form
and substance reasonably satisfactory to the Company and its counsel, and the
Company will have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.


                6.3           Additional Conditions to the
Obligations of Parent and Merger Sub. 
The obligations of Parent and Merger Sub to effect the transactions
contemplated hereby will be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived,
in writing, exclusively by Parent and Merger Sub:


(a)           Representations
and Warranties.  Each of the
representations and warranties made by the Company and Certain Company
Shareholders in this Agreement shall be materially true and correct when made
and on and as of the Closing Date as though such representation or warranty was
made on and as of the Closing Date, except that any representation or warranty
that expressly speaks as of a specified date earlier than the Closing Date
shall have been true and correct on and as of such earlier date, and further
provided that Company and the Certain Company Shareholders shall be permitted
to update, revise, supplement and/or correct the Schedules through the Closing
Date.


(b)           Performance.  The Company shall have performed and complied
with each agreement, covenant and obligation required by this Agreement to be
so performed or complied with by the Company on or before the Closing Date.


(c)           Officers’
Certificates.  The Company and
Certain Company Shareholders shall have delivered to Parent and Merger Sub a
certificate or certificates, dated the Closing Date and executed by the
President and/or the Chief Executive Officer of the Company, certifying as to
the resolutions delivered pursuant to Section 6.1(b) and Company’s and the
Certain Company Shareholders’ compliance with the condition set forth in
Section 6.3(a).


(d)           Third Party
Consents.  Parent and Merger
Sub will have been furnished with evidence satisfactory to them that the Company
has obtained the consents, approvals and waivers, if any, listed in Schedule
2.28(b).


(e)           Non-Competition
and Employment Agreements. 
Each of the members of the Senior Management Team shall have executed
and delivered to Parent, Company, and/or Merger Sub a Non-Competition and
Employment Agreement.


(f)            No Material Adverse Change. 
There will have occurred no Material Adverse Change in the Business or
Condition of the Company since the date hereof.


(g)           Legal
Proceedings.  No Governmental
or Regulatory Authority will have notified any party to this Agreement that it
intends to commence proceedings to restrain or prohibit the transactions
contemplated hereby or force rescission, unless such Governmental or 



 40
 









Regulatory Authority will have withdrawn such notice and abandoned any
such proceedings prior to the time which otherwise would have been the Closing
Date.


(h)           Employees.  Not less than 95% of those employees listed
in Schedule 2.19(b), will be employed by the Company at the Closing (and
will have not given any notice or other indication that they will not continue
to be willing to be employed by the Company as a wholly-owned subsidiary of
Parent following the transactions contemplated hereby).  Each employee of the Company to be employed
by Company as a wholly-owned subsidiary of Parent following the Closing shall
have executed Parent’s standard form Proprietary Rights and Inventions
Assignment Agreement, substantially in the form set forth in Exhibit C
hereto.


(i)            Proceedings and Documents. 
All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions will be in form and substance reasonably satisfactory to Parent
and Merger Sub and their counsel, and Parent and Merger Sub will have received
all such counterpart originals or certified or other copies of such documents
as they may reasonably request.


(j)            Equity Equivalents. 
There will be no un-expired and unexercised Equity Equivalents of the
Company outstanding as of the Closing.


(k)           Financial Performance.  The Company’s fiscal year 2006 gross revenue,
EBITDA and recasted EBITDA will have been determined, to the reasonable
satisfaction of the Parent, to be within one percent (1%) of $7,500,000,
$860,000 and $1,300,000, respectively. 
As of the date hereof, Parent acknowledges that the Company has achieved
the foregoing numbers.  In addition, the
Company’s monthly revenue for each of January and February 2007 will have been
determined, to the reasonable satisfaction of the Parent, to be within one
percent (1%) of $1,000,000.


ARTICLE 7

SURVIVAL OF REPRESENTATIONS, WARRANTIES,

COVENANTS AND AGREEMENTS; INDEMNIFICATION


                7.1           Survival of Representations,
Warranties, Covenants and Agreements. 
The representations and warranties set forth in Articles 2 and 3 will
survive until the first anniversary of the Closing Date; provided, however that
the representations and warranties in (i) Sections 2.3, 2.15, 2.16, 2.21, 3.2,
3.16, 3.17, 3.22 and (ii) the representations and warranties contained in
Sections 2.11 will survive until the expiration of the statute of limitations
applicable to claims with respect to the matters covered thereby.  The one-year limitation in this Section 7.1
will not apply under circumstances involving direct personal participation in
fraud or willful misconduct by such party, in which case a limitation equal to
the statute of limitations will apply.


                7.2           Indemnification.


(a)           The Certain Company
Shareholders will jointly and severally indemnify and hold harmless Parent,
Merger Sub and their respective officers and directors (hereinafter referred to
individually as a “Parent Indemnified
Person” and collectively as “Parent Indemnified Persons”) from and against any and all
Losses arising out of any misrepresentation 



 41
 









or breach of the representations, warranties, covenants and agreements
given or made by the Company or any Certain Company Shareholder in this
Agreement, or any certificate, instrument or document delivered by the Company
or any Certain Company Shareholder pursuant to this Agreement; provided,
however, that no Certain Company Shareholder will be liable for indemnification
under this Section 7.2 for fraud or misrepresentation committed by any other
Certain Company Shareholder.


(b)           Parent shall indemnify
and hold harmless each of the Certain Company Shareholders (each, a “Certain Company Indemnified Person”
and, collectively, “Certain Company
Indemnified Persons”) from and against any and all Losses
arising out of any misrepresentation or breach of the representations,
warranties, covenants and agreements given or made by the Parent or Merger Sub
in this Agreement, or any certificate, instrument or document delivered by the
Parent or Merger Sub pursuant to this Agreement.


                7.3           Third-Party Claims.  In the event a Parent Indemnified Person(s)
or Certain Company Indemnified Person(s) (each, an “Indemnified
Party” and, collectively, the “Indemnified
Parties”) becomes aware of a third-party claim based on any
misrepresentation or breach of or default in connection with any of the
representations, warranties, covenants and agreements given or made by the
other party in this Agreement (each, an “Indemnifying Party”),
which the Indemnified Party believes may result in a claim against it (a “Third Party Claim”), the
Indemnified Party will promptly notify the Indemnifying Party of such Third
Party Claim.  By written notice to the
Indemnified Party within twenty (20) days after delivery of notice of such a
claim, the Indemnifying Party’s representative (on behalf of the Indemnifying
Party) will be entitled, at the Indemnifying Party’s expense, to participate in
any defense of such claim by the Indemnified Party, which will direct the
defense and settlement of such claims. 
Notwithstanding the foregoing, however, the Indemnified Party may
consent to a settlement or compromise of, or the entry of any judgment arising
from, the Third Party Claim without the prior written consent of the
Indemnifying Party if, and only if, the proposed settlement, compromise, or
judgment: (a) does not contain an admission of guilt or wrongdoing on the part
of the Indemnifying Party; and (b) does not provide for any remedy or sanction
against the Indemnifying Party other than the payment of money which the
Indemnifying Party agrees and is able to pay. 
In the event that the Indemnifying Party has consented to any such
settlement amount, the Indemnifying Party will have no power or authority to
object under any provision of this Article 7 to any claim by the Indemnified
Party for indemnity with respect to such settlement amount.


                7.4           Recovery of Losses.


(a)           Subject to the
limitations in Section 7.6 below: (i) a Parent Indemnified Person will recover
any claim for indemnity under Sections 7.2 or 7.3 relating to breaches of
representations or warranties directly from any breaching Certain Company
Shareholder, who will be individually liable for such amounts; (ii) a Parent
Indemnified Person will recover all claims for indemnity under Sections 7.2 or
7.3, directly from the Certain Company Shareholders, who will be jointly and
severally liable for such amounts.


(b)           No claim by a Parent
Indemnified Person for indemnity under Sections 7.2 or 7.3 relating to breaches
of representations or warranties will be recoverable unless the 



 42
 









aggregate amount owing exceeds ten thousand dollars ($10,000) per
occurrence.  In no event will the
aggregate amount recoverable by all Parent Indemnified Persons for all claims
under Sections 7.2 or 7.3 exceed one hundred thousand dollars ($100,000).


                7.5           Contribution.  To the extent that a Certain Company
Shareholder, pursuant to the provisions of Section 7.4(b), is required to pay
more than his pro rata interest in the Merger Consideration issued to all
Company Shareholders pursuant to this Agreement, such Certain Company Shareholder
will be entitled to seek and obtain proportional contribution from the other
Certain Company Shareholders.


                7.6           Limitations on Claims.  Notwithstanding anything herein to the
contrary, the obligations of each Certain Company Shareholder arising under
this Article 7 will be limited to valid written claims received by the Certain
Company Shareholders within twelve (12) months of the Effective Time, and will
be deemed fully satisfied by surrender of that portion of Parent’s Shares
received by such Certain Company Shareholder in connection with the Merger,
valued at their then current fair market value, necessary to satisfy such
Certain Company Shareholder’s pro rata portion of such obligations but subject
to the following sentence. 
Notwithstanding anything herein to the contrary, in no event will the
total aggregate indemnification obligation for all claims cumulatively arising
under this Article 7 require the surrender of more than two percent (2%) of the
pro rata portion of Parent’s Shares received by such Certain Company
Shareholder pursuant to Section 1.6(a)(i), regardless of the then current fair
market value of such Parent’s Shares. 
The indemnification mechanism provided for by this Article 7 shall be
the sole remedy for breaches of representations or warranties under this
Agreement.


ARTICLE 8

TERMINATION, AMENDMENT AND WAIVER


                8.1           Termination.  Except as provided in Section 8.2 below, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing:


(a)           by mutual agreement
of the Company and the Certain Company Shareholders and Parent and Merger Sub;


(b)           by Parent and Merger
Sub or the Company (or with respect to the obligations of any particular
Certain Company Shareholder, such Certain Company Shareholder) if (i) the
Closing has not occurred before 10:00 am (Eastern Standard Time) on the date
which is 90 days after the date of this Agreement or on such later date as the
parties hereto may mutually agree (provided, however, that the right to terminate
this Agreement under this sub clause 8.1(b) (i) will not be available to any
party whose willful failure to fulfill any obligation hereunder has been the
cause of, or resulted in, the failure of the Closing to occur on or before such
date); (ii) there will be a final nonappealable order of United States federal
or state court in effect preventing consummation of the transactions
contemplated hereby; or (iii) there will be any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the transactions
contemplated hereby by any Governmental or Regulatory Authority that would make
consummation of the transactions contemplated hereby illegal;



 43
 









(c)           by Parent and Merger
Sub if there shall be any action taken, or any Law or Order enacted,
promulgated or issued or deemed applicable to the transactions contemplated
hereby, by any Governmental or Regulatory Authority, which would: (i) prohibit
Parent’s ownership or operation of all or any material portion of the business
of the Company or (ii) compel Parent or the Surviving Corporation to dispose of
or hold separate all or a substantial portion of the Assets and Properties of
the Company as a result of the transactions contemplated hereby;


(d)           by Parent and Merger
Sub if there has been a breach of any representation, warranty, covenant or
agreement contained in this Agreement on the part of the Company or Certain
Company Shareholders and (i) the Company or Certain Company Shareholders, as
the case may be, have not cured such breach within thirty (30) days following
receipt by the Company or Certain Company Shareholders, as the case may be, of
written notice of such breach or is not using its reasonable efforts to cure
such breach after written notice of such breach to the Company or Certain
Company Shareholders, as the case may be, (provided, however, that, no cure
period will be required for a breach which by its nature cannot be cured) and
(ii) as a result of such breach the conditions set forth in Section 6.3(a) or
6.3(b), as the case may be, would not then be satisfied;


(e)           by the Company if
there has been a breach of any representation, warranty, covenant or agreement
contained in this Agreement on the part of Parent or Merger Sub and (i) Parent
or Merger Sub have not cured such breach within thirty (30) days following
receipt by the Company of written notice of such breach or is not using its
reasonable efforts to cure such breach after written notice of such breach to
Parent or Merger Sub (provided, however, that no cure period will be required
for a breach which by its nature cannot be cured), and (ii) as a result of such
breach the conditions set forth in Section 6.2(a) or 6.2(b), as the case may
be, would not then be satisfied;


                8.2           Effect of Termination.  In the event of a valid termination of this
Agreement as provided in Section 8.1, this Agreement will forthwith become void
and there will be no liability or obligation on the part of Parent, Merger Sub,
Certain Company Shareholders, or the Company, or their respective officers,
directors or shareholders or Affiliates or Associates; provided, however, that
the provisions of Sections 5.2, 5.3, 5.4, 8.2, 9.6, 9.9, 9.10 and 9.11 of this
Agreement will remain in full force and effect and survive any termination of
this Agreement.


ARTICLE 9

MISCELLANEOUS PROVISIONS


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


	
   

  	
  If to Parent or Merger Sub
  to:

  	
   

  
	
   

  	
   Francis E. Wilde, Chairman & CEO

  	
   

  
	
   

  	
   Shea Development Corp.

  	
   

  




 44
 









 


	
  

  	
   1351 Dividend Drive, Suite G

  	
   

  
	
   

  	
   Marietta, GA 30067

  	
   

  
	
   

  	
   Telephone:

  	
  770-919-2209

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   Francis J. Mooney, Jr. / Robert T. Lincoln

  	
   

  
	
   

  	
   Dunnington, Bartholow & Miller LLP

  	
   

  
	
   

  	
   477 Madison Avenue, 12th Floor

  	
   

  
	
   

  	
   New York, NY 10022

  	
   

  
	
   

  	
   Telephone:

  	
  212-682-8811

  
	
   

  	
   Facsimile:

  	
  212-661-7769

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the
  Company or Certain Company Shareholders to:

  	
   

  
	
   

  	
   Philip Loeffel

  	
   

  
	
   

  	
   President

  	
   

  
	
   

  	
   3452 Lake Lynda Drive, #350

  	
   

  
	
   

  	
   Orlando, Florida 32817

  	
   

  
	
   

  	
   Telephone:

  	
  407-282-3545

  
	
   

  	
   Facsimile:

  	
  407-249-0089

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   Christopher A. Lause

  	
   

  
	
   

  	
   Bryan Cave LLP

  	
   

  
	
   

  	
   Two North Central Avenue

  	
   

  
	
   

  	
   Suite 2200

  	
   

  
	
   

  	
   Phoenix, Arizona 85004

  	
   

  
	
   

  	
   Telephone:

  	
  602-364-7466

  
	
   

  	
   Facsimile:

  	
  602-716-8466

  
					



 


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


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


                



 45
 









                9.4           Amendment.  This Agreement may be amended by the parties
hereto at any time before the Closing by execution of an instrument in writing
signed on behalf of each of the parties hereto and after the Closing by
execution of an instrument in writing signed on behalf of Parent, the Surviving
Corporation and each of the Certain Company Shareholders.


                9.5           Extension.  At any time prior to the Closing, Parent,
Merger Sub, Certain Company Shareholders and the Company may, to the extent
legally allowed, extend the time for the performance of any of the obligations
of the other party hereto.


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


                9.7           Third Party Beneficiaries.  The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights, upon any other Person other than any Person entitled to indemnity
as described in Article 7.


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


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


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


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



 46
 









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


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


                9.14         Specific Performance.  The parties hereto agree that irreparable
damage would occur in the event that Section 5.2 of this Agreement were not
performed in accordance with its specific terms or were otherwise
breached.  It is agreed that the parties
will be entitled to an injunction or injunctions to prevent breaches of Section
5.2 of this Agreement and to enforce specifically the terms and provisions
thereof in any court having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.


ARTICLE 10

DEFINITIONS


                10.1         Definitions.


(a)           As used in this
Agreement, the following defined terms will have the meanings indicated below:


“$” means United States Dollars
unless otherwise indicated.


“Actions or Proceedings” means any
action, suit, petition, investigation, proceeding, arbitration, litigation or
Governmental or Regulatory Authority investigation, audit or other proceeding,
whether civil or criminal, in law or in equity, or before any arbitrator or
Governmental or Regulatory Authority.


“Affiliate” means, as applied to any
Person, (a) any other Person directly or indirectly controlling, controlled by
or under common control with, that Person, (b) any other Person that owns or
controls 10% or more of any class of equity securities of that Person or any of
its Affiliates (including any equity securities issuable upon the exercise of
any option or convertible security) of that Person or any of its Affiliates, or
(c) any director, partner or officer of such Person.  For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlling”, “controlled by”,
and “under common control with”) as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
ownership of voting securities or by contract or otherwise.


“Agreement” means this Agreement and
Plan of Merger, the Schedules the Exhibits, and the certificates and
instruments delivered in connection herewith, or incorporated by reference, 



 47
 









as the same may be
amended or supplemented from time to time in accordance with the terms hereof.


“Alternative Acquisition” has the
meaning ascribed to it in Section 4.2.


“Approval” means any approval,
authorization, consent, permit, qualification or registration, or any waiver of
any of the foregoing, required to be obtained from or made with, or any notice,
statement or other communication required to be filed with or delivered to, any
Governmental or Regulatory Authority or any other Person.


“Assets and Properties” of any
Person means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intangible,
whether absolute, accrued, contingent, fixed or otherwise and wherever
situated), including the goodwill related thereto, operated, owned, licensed or
leased by such Person, including cash, cash equivalents, Investment Assets,
accounts and notes receivable, chattel paper, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and Intellectual
Property.


“Associate” means, with respect to
any Person, any corporation or other business organization of which such Person
is an officer or partner or is the beneficial owner, directly or indirectly, of
10% or more of any class of equity securities, any trust or estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as a trustee or in a similar capacity and any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person.


“Benefit Plan” means an employee
benefit plan maintained by any of Company, Parent or Merger Sub.


“Books and Records” means all files,
documents, instruments, papers, books and records relating to the Business or
Condition of the Company, including financial statements, internal reports, Tax
Returns and related work papers and letters from accountants, budgets, pricing
guidelines, ledgers, journals, deeds, title policies, minute books, stock
certificates and books, stock transfer ledgers, Contracts, Licenses, customer
lists, computer files and programs (including data processing files and
records), retrieval programs, operating data and plans and environmental
studies and plans.


“Business Combination” means, with
respect to any Person, (i) any amalgamation, consolidation or other business
combination to which such Person is a party, (ii) any sale or other disposition
of any capital stock or other equity interests of such Person, (iii) any tender
offer (including a self tender), exchange offer, recapitalization,
restructuring, liquidation, dissolution or similar or extraordinary transaction,
(iv) any sale, dividend or other disposition of all or a material portion of
the Assets and Properties of such Person or (v) the entering into of any
agreement or understanding, the granting of any rights or options, or the
acquiescence of the Person, with respect to any of the foregoing.


“Business Day” means a day other
than Saturday, Sunday or any day on which banks located in the State of New
York are authorized or obligated to close.


 



 48















“Business or Condition of Parent or Merger Sub”
means the business, condition (financial or otherwise), results of operations,
prospects or Assets and Properties of Parent or Merger Sub and each of its
Subsidiaries, taken as a whole.


“Business or Condition of the Company”
means the business, condition (financial or otherwise), results of operations,
prospects or Assets and Properties of the Company, taken as a whole.


“Certain Company Indemnified Person(s)”
has the meaning ascribed to it in Section 7.2(b).


“Certain Company Shareholders” is
defined as Philip Loeffel and Barry Clinger, who combined, own the majority of
the Company’s Common Shares.


“Certificates” has the meaning
ascribed to it in Section 1.7.


“Closing” has the meaning ascribed
to it in Section 1.2.


“Closing Date” has the meaning
ascribed to it in Section 1.2.


“Code” means the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder.


“Company” has the meaning ascribed
to it in the forepart of this Agreement.


“Company Common Stock” has the
meaning ascribed to it in the Recitals to this Agreement.


“Company Director” has the meaning
ascribed to it in Section 1.15.


“Company Financials” means the
audited financial statements (balance sheet and statements of operations and
cash flow, including schedules and notes thereto) of the Company as of and for
the periods ended December 31, 2005 and December 31, 2006.


“Company Indemnified Parties” has
the meaning ascribed to it in Section 5.12(a).


“Company Intellectual Property”
means any Intellectual Property of commercial value that is (i) owned by; (ii)
licensed to; or (iii) was developed or created by or for the Company.


“Company Option(s)” has the meaning
ascribed to it in Section 2.3.


“Company Option Holders” has the
meaning ascribed to it in Section 2.3.


“Company Shareholders” has the
meaning ascribed to it in the forepart of this Agreement.


“Confidential Information” has the
meaning ascribed to it in Section 2.15(h).


“Contract” means any material
contract, including without limitation:



 49
 









(i)                                     any
distributor, sales, advertising, agency or manufacturer’s representative
contract;


(ii)                                  any
continuing contract for the purchase of materials, supplies, equipment or
services involving in the case of any such contract more than $5,000 over the
life of the contract;


(iii)                               any
contract that expires or may be renewed at the option of any person other than
the Company so as to expire more than one year after the date of this
Agreement;


(iv)                              any
trust indenture, mortgage, promissory note, loan agreement or other contract
for the borrowing of money, any currency exchange, commodities or other hedging
arrangement or any leasing transaction of the type required to be capitalized
in accordance with generally accepted accounting principles;


(v)                                 any
contract for capital expenditures in excess of $5,000 in the aggregate;


(vi)                              any
contract limiting the freedom of the Company to engage in any line of business
or to compete with any other Person;


(vii)                           any
contract pursuant to which the Company is a lessor of any machinery, equipment,
motor vehicles, office furniture, fixtures or other personal property having an
original cost of more than $25,000;


(viii)                        any
contract with any person with whom the Company does not deal at arm’s length;
or


(ix)                                any
agreement of guarantee, support, indemnification, assumption or endorsement of,
or any similar commitment with respect to, the obligations, liabilities
(whether accrued, absolute, contingent or otherwise) or indebtedness of any
other Person.


“Corporate Flow Downs” means all
expenses incurred by the Parent before or after the Closing Date that are (i)
unrelated to the operation of the Company (including but not limited to stock
compensation expenses associated with the issuance of stock options) and (ii)
are either assigned to the Company by the Parent or paid by the Company on
behalf of the Parent.


“Earn-Out Payments” has the meaning
ascribed to it in Section 1.12(b).


“EBITDA” means, for any specified
period, the earnings before interest, taxes, depreciation and amortization of
the Company as calculated in accordance with GAAP consistently applied;
provided, however, that solely for purposes of calculating EBITDA of the
Company under this Agreement, (i) the Company’s pre-Closing integration costs,
(ii) the 



 50
 









Surviving Corporation’s post-Closing integration
costs, and (iii) any Corporate Flow Downs shall be disregarded and have no
effect on the amount so calculated.


“Effective Date” has the meaning
ascribed to it in Section 1.2.


“Effective Time” has the meaning ascribed
to it in Section 1.2.


“Eligible Option” has the meaning
ascribed to it in Section 1.6(b).


“Equity Equivalents” means
securities (including Options) which, by their terms, are or may be
exercisable, convertible or exchangeable for or into common shares, preferred
shares, or other securities of the Company at the election of the holder
thereof.


“Financial Statement Date” means
December 31, 2006.


“GAAP” means accounting principles
generally accepted in the United States, as in effect from time to time.


“Governmental or Regulatory Authority”
means any court, tribunal, arbitrator, authority, agency, bureau, board,
commission, department, official or other instrumentality of the United States,
any foreign country or any domestic or foreign state, county, city or other
political subdivision.


“Income Tax” means (i) any income,
alternative or add-on minimum tax, gross income, gross receipts, franchise,
profits, including estimated taxes relating to any of the foregoing, or other
similar tax or other like assessment or charge of similar kind whatsoever,
excluding any Other Tax, together with any interest and any penalty, addition
to tax or additional amount imposed by any Taxing Authority responsible for the
imposition of any such Tax (domestic or foreign); or (ii) any liability of a
Person for the payment of any taxes, interest, penalty, addition to tax or like
additional amount resulting from the application of Treas. Reg. § 1,1502-6.


“Indebtedness” of any Person means
all obligations of such Person (a) for borrowed money, (b) evidenced by notes,
bonds, debentures or similar instruments, (c) for the deferred purchase price
of goods or services (other than trade payables or accruals incurred in the
ordinary course of business), (d) under capital leases and (e) in the nature of
guarantees of the obligations described in clauses (a) through (d) above of any
other Person.


“Indemnified Party(ies)” has the
meaning ascribed to it in Section 7.3.


“Intellectual Property” means all
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, patents
and patent rights, utility models and utility model rights, copyrights, mask
work rights, brand names, trade dress, product designs, product packaging,
business and product names, logos, slogans, rights of publicity, trade secrets,
inventions (whether patentable or not), invention disclosures, improvements,
processes, formulae, industrial models, processes, designs, specifications,
technology, methodologies, computer software (including all source code and
object code), firmware, development tools, flow charts, annotations, all Web
addresses, sites and domain names, all data bases and data collections and all
rights therein, any other confidential 



 51
 









and proprietary right or information, whether or not
subject to statutory registration, and all related technical information, the
information set forth in manufacturing, engineering and technical drawings,
know-how and all pending applications for and registrations of patents, utility
models, trademarks, service marks and copyrights, and the right to sue for past
infringement, if any, in connection with any of the foregoing.


“Investment Assets” means all
debentures, notes and other evidences of Indebtedness, stocks, securities
(including rights to purchase and securities convertible into or exchangeable
for other securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio assets owned of
record or beneficially by the Company.


“ISO Plans” has the meaning ascribed
to it in Section 1.14.


 “knowledge”
or “known to” or any similar phrase means,
when used with respect to: (i) any Person who is an individual, the actual
knowledge of such Person; (ii) the Company, the actual knowledge of Philip
Loeffel, Barry Clinger, Barry Rubel or Kent Banks; and (iii) the Parent or
Merger Sub, the actual knowledge of Francis E. Wilde, Tom Wheeler, E. Joseph
Vitetta, Jr.


“Law” or “Laws”
means any law, statute, order, decree, consent decree, judgment, rule,
regulation, ordinance or other pronouncement having the effect of law whether
in the United States, any foreign country, or any domestic or foreign state,
province, county, city or other political subdivision or of any Governmental or
Regulatory Authority.


“Liabilities” means all
Indebtedness, obligations and other liabilities of a Person, whether absolute,
accrued, contingent (or based upon any contingency), known or unknown, fixed or
otherwise, or whether due or to become due.


“License” means any Contract that
grants a Person the right to use or otherwise enjoy the benefits of any
Intellectual Property (including without limitation any covenants not to sue
with respect to any Intellectual Property).


“Lien” or “Liens”
means any mortgage, pledge, assessment, security interest, lease, lien,
easement, charge or adverse claim or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing, except for any restrictions on transfer generally arising
under any applicable federal, provincial or state securities law.


“Loss(es)” means any and all
damages, fines, fees, Taxes, penalties, deficiencies, losses and expenses,
including interest, reasonable expenses of investigation, court costs,
reasonable fees and expenses of attorneys, accountants and other experts or
other expenses of litigation or other proceedings or of any claim, default or
assessment (such fees and expenses to include all fees and expenses, including
fees and expenses of attorneys, incurred in connection with (i) the
investigation or defense of any Third Party Claims or (ii) asserting or
disputing any rights under this Agreement against any party hereto or
otherwise).


“Material Adverse Change” means,
when used with respect to:



 52
 









(a)           the Company, any change in the
financial condition and operation of the Company that would either individually
or, if aggregated with other effects on the financial condition of the Company,
result in a deterioration of the balance sheet of the Company by an amount
equal or greater than $500,000.00; or


(b)           the Parent, Merger Sub or any of
their respective Subsidiaries, any change in the financial condition and
operation of the Parent, Merger Sub or any of their respective Subsidiaries
that would either individually or, if aggregated with other effects on the
financial condition of the Parent, Merger Sub or any of their respective
Subsidiaries, result in a deterioration of the consolidated balance sheet of the
Parent by an amount equal or greater than $500,000.00;


provided,
however, that none of the following shall be taken into account in determining
whether there has been or would be a “Material Adverse Effect”: (i) any
adverse change resulting from conditions affecting any nation’s economy
generally, (ii) any adverse change resulting from or relating to
financial, banking or securities markets (including any disruption thereof and
any decline in the price of any security or any market index), (iii) any
adverse change in applicable Laws or the interpretation thereof, (iv) any
adverse change arising primarily out of, or resulting primarily from, actions
taken by any party in connection with (but not in breach of) this Agreement and
the transactions contemplated hereunder, or which is primarily attributable to
the announcement of this Agreement and the Merger (including any litigation,
employee attrition or any loss or postponement of business resulting from
termination or modification of any vendor, customer or other business
relationships, delay of customer order or otherwise and any corresponding
change in the margins, profitability or financial condition of a party), and
(v) any adverse change in any Company business that is cured (including by
the payment of money), to the extent curable, by Company before the earlier of
(a) the Closing Date, or (b) the date on which this Agreement is
terminated pursuant to Article 8 hereof.


“Material Adverse Effect” means any
event or condition of any character which results in, has resulted in, or could
reasonably be expected to result in, a Material Adverse Change on the condition
(financial or otherwise), results of operations, assets, liabilities,
properties, or business of a Person and its Subsidiaries, taken as a whole, or
would prevent or unreasonably delay consummation of the transactions
contemplated hereby.


“Merger” has the meaning ascribed to
it in the Recitals to this Agreement.


“Merger Consideration” has the
meaning ascribed to it in Section 1.6.


“Merger Sub” has the meaning
ascribed to it in the forepart of this Agreement.


“Non-Competition and Employment Agreement”
has the meaning ascribed to it in Section 6.2(e).


“Note(s)” has the meaning ascribed
to it in Section 1.6(a)(iii).


“Officer’s Certificate” has the
meaning ascribed to it in Sections 6.2 and 6.3 hereof.



 53
 









“Option” with respect to any Person
means any security, right, subscription, warrant, option, “phantom” stock right
or other Contract that gives the right to (i) purchase or otherwise receive or
be issued any shares of capital stock or other equity interests of such Person
or any security of any kind convertible into or exchangeable or exercisable for
any shares of capital stock or other equity interests of such Person or (ii)
receive any benefits or rights similar to any rights enjoyed by or accruing to
the holder of shares of capital stock or other equity interests of such Person,
including any rights to participate in the equity, income or election of
directors or officers of such Person.


“Option Cancellation Agreement” has
the meaning ascribed to it in Section 1.6(b).


“Option Plans” has the meaning
ascribed to it in Section 1.6(b).


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


“Other Tax” means any sales, use, ad
valorem, business license, withholding, payroll, employment, excise, stamp,
transfer, recording, occupation, premium, property, value added, custom duty,
severance, windfall profit or license tax, governmental fee or other similar
assessment or charge, together with any interest and any penalty, addition to
tax or additional by any Taxing Authority responsible for the imposition of any
such tax (domestic or foreign).


“Outstanding Company Shares” means
all issued and outstanding shares of Company Common Stock immediately prior to
the Effective Time plus all shares of Company Common Stock deemed to be
issued upon exercise of all Eligible Options.


“Parent” has the meaning ascribed to
it in the forepart of this Agreement.


“Parent Common Stock” has the
meaning ascribed to it in the Recitals to this Agreement.


“Parent Indemnified Person(s)” has
the meaning ascribed to it in Section 7.2(a).


“Parent Preferred Stock” means the
Preferred Stock, par value $.001 per share, of Parent.


“Parent’s Shares” has the meaning
ascribed to it in Section 1.6(a)(i).


“Participating Company Shares” shall
mean any Outstanding Company Shares other than shares of Company Common Stock,
if any, cancelled pursuant to Section 1.6(d).


“Person” means any natural person,
corporation, general partnership, limited partnership, limited liability
company or partnership, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority.


“Registered Intellectual Property”
will mean all United States, international and foreign: (i) patents, patent
applications (including provisional applications); (ii) registered trademarks
and service marks, applications to register trademarks, intent-to-use
applications, 



 54
 









other registrations or applications to trademarks or
service marks, or trademarks or service marks in which common law rights are
owned or otherwise controlled; (iii) registered copyrights and applications for
copyright registration; (iv) any mask work registrations and applications to
register mask works; and (v) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued by, filed with, or recorded by, any state, government or other public
legal authority.


“Representatives” has the meaning
ascribed to it in Section 4.2.


“Retention Bonus” has the meaning
ascribed to it in Section 1.17.


“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.


“Senior Management Team” means those
persons listed in Schedule 1.13(i).


“Shrink Wrap License Agreements”
means the granting conditions and terms of use that are presumed to be
acknowledged and agreed to by breaking a thermoplastic seal.


“Subsidiary” of any specified Person
shall mean any corporation fifty percent (50%) or more of the outstanding
voting power of which, or any partnership, joint venture, limited liability
company or other entity fifty percent (50%) or more of the total equity
interest of which, is directly or indirectly owned by such specified Person.


“Surviving Corporation” has the
meaning ascribed to it in Section 1.1.


“Tax” or “Taxes”
means all present and future taxes, surtaxes, duties, levies, imposts, rates,
fees, assessments, withholdings, dues and other charges of any nature imposed
by any Governmental or Regulatory Authority (including income, capital
(including large corporations), withholding, consumption, sales, use, transfer,
goods and services or other value-added, excise, customs, anti-dumping,
stumpage, countervail, net worth, stamp, registration, franchise, payroll,
employment, health, education, business, school, property, local improvement,
development, education development and occupation taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings, dues and charges)
together with all fines, interest, penalties on or in respect of, or in lieu of
or for non-collection of, those taxes, surtaxes, duties, levies, imposts, rates,
fees, assessments, withholdings, dues and other charges.


“Tax Liability” has the meaning ascribed to it in Section
1.16.


“Tax Returns” means any return,
report, information return, schedule, certificate, statement or other document
(including any related or supporting information) filed or required to be filed
with, or, where none is required to be filed with a Taxing Authority, the
statement or other document issued by, a Taxing Authority in connection with
any Tax.


“Taxing Authority” means any
governmental agency, board, bureau, body, department or authority of any United
States federal, state or local jurisdiction or any foreign jurisdiction, having
or purporting to exercise jurisdiction with respect to any Tax.



 55
 









“Third Party Claim” has the meaning
ascribed to it in Section 7.3.


“Third Party Expenses” has the
meaning ascribed to it in Section 5.3.


“Third Party Intellectual Property Rights”
has the meaning ascribed to it in Section 2.15(c).


“Transmittal Letter” has the meaning
ascribed to it in Section 1.7.


“Warranty Obligations” has the
meaning ascribed to it in Section 2.25.


“Year 1 Earn-Out Period” has the
meaning ascribed to it in Section 1.12(a).


“Year 1 Earn-Out Payment” has the
meaning ascribed to it in Section 1.12(a).


“Year 2 Earn-Out Period” has the
meaning ascribed to it in Section 1.12(b).


“Year 1 Earn-Out Payment” has the
meaning ascribed to it in Section 1.12(b).


(b)           Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender, (ii)
words using the singular or plural number also include the plural or singular
number, respectively, (iii) the terms “hereof,” “herein,” “hereby” and
derivative or similar words refer to this entire Agreement as a whole and not
to any particular Article, Section or other subdivision, (iv) the terms “Article”
or “Section” or other subdivision refer to the specified Article, Section or
other subdivision of the body of this Agreement, (v) the phrases “ordinary
course of business” and “ordinary course of business consistent with past
practice” refer to the business and practice of the Company, (vi) the words “include,”
“includes” and “including” will be deemed to be followed by the phrase “without
limitation,” and (vii) when a reference is made in this Agreement to Schedules
or Exhibits, such reference will be to a Schedule or an Exhibit, respectively,
to this Agreement unless otherwise indicated. 
The term “party” or “parties” when used herein refer to Parent and
Merger Sub, on the one hand, and the Company and Certain Company Shareholders,
on the other.


[Signatures
on Following Page]



 56
 









IN
WITNESS WHEREOF, Parent, Merger Sub, Certain Company Shareholders and the
Company have caused this Agreement to be signed by their duly authorized
representatives, all as of the date first written above.




	
  RIPTIDE SOFTWARE, INC.

  	
  SHEA DEVELOPMENT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ PHILIP LOEFFEL

  	
   

  	
  By: 

  	
  /s/ FRANCIS E. WILDE

  	
   

  
	
   

  	
  Philip Loeffel

  	
   

  	
  Francis E. Wilde

  
	
   

  	
  President and
  CEO

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SHEA DEVELOPMENT ACQUISITION NO. 2 CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ E. JOSEPH E. VITETTA

  	
   

  	
   

  
	
   

  	
  E. Joseph
  Vitetta, Jr.

  	
   

  
	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CERTAIN
  COMPANY SHAREHOLDERS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ PHILIP
  LOEFFEL

  	
   

  	
   

  
	
   

  	
  Philip Loeffel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ BARRY
  CLINGER

  	
   

  	
   

  
	
   

  	
  Barry Clinger

  	
   

  
								






 



 57