Document:

Exhibit
10.3

      

      Contract
of Mortgage of Maximum Amount

       

      No.
Ec2000010070700005

      

      Mortgagee
(Party A): Bank of Nanjing Co., Ltd.

      Mortgagor
(Party B): Golden Way Nanjing Garment Co., Ltd

      

      In order
to ensure the performance of the Contract of Maximum Amount of Claim numbered
A04000010070700005, which was concluded between Party A and Golden Way Nanjing
Garment Co., Ltd. (hereinafter called the Debtor), and all specific business
contracts, agreements, and applications under this contract (hereinafter called
the Principal Contract), Party B is willing to provide the Debtor with a
guaranty of mortgage of maximum amount. In order to clarify their liabilities
and keep to their credibility, Party A and Party B have entered into the
Contract for common observance and joint performance, according to governing
laws, regulations and rules, and through negotiation and agreement.

      

      Article
1  Statement and Assurance of Party B

      

      1-1 Party
B is the absolute, effective and legal owner, or someone who has the right to
dispose of , the mortgaged property, and there is no dispute about the ownership
or the right of disposition of the mortgaged property.

      

      1-2 Party
B has a full knowledge of the usage of the debt of the debtor under the
Principal Contract, and Party B provides the Debtor a guaranty of mortgage
absolutely out of his own will.

      

      1-3 All
the declaration of intention by Party B under the Contract is true, and Party B
has made a sufficient and reasonable written explanation on the flaws of the
mortgaged property, and the explanation has been recognized and signed for by
Party A.

      

      1-4 The
mortgaged property under the Contract may be used to provide a guaranty of
mortgage in conformity with legal provisions, and has neither been subject to a
close-down, seizure, supervision or any other legal enforcement measures, nor
been publicly listed as within the scope of acquisition or removal and
rebuilding.

      

      1-5 Where
all or a part of the mortgaged property under the Contract is Party B assures to
notify the lessee of the mortgage arrangement, and notify Party A in writing of
the situation about the leasing, in which case a written document should have
been recognized and signed for by Party A.

      

      1-6 If
being a natural person, Party B confirms and assures that before the guaranty of
mortgage under the Contract was provided, he has made proper arrangement on the
bare necessities of life for himself and his family dependents, and the
disposition of the mortgaged property under the Contract by Party A in
satisfying his claim shall not have any impact on the normal lives of Party B
and his family members.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      Article
2  The Principal Claim

      

      2-1 The
Principal Claim secured under the Contract is the full value of the Principal
Claim, namely RMB50,000,000.00, said fifty million RMB Yuan, formed by a
specific granting of credit (including but not limited to a on-or-off balance
sheet business such as a loan, a commitment of loan, an acceptance, a discount,
a bond buy-back, a business financing, a factor, a letter of credit, a letter of
guarantee, an overdraft, an inter-bank lending, a guaranty, etc.) conducted by
Party A for the Debtor from July 6, 2010 to July 6, 2012, on the basis of the
Principal Contract.

      

      2-2 Party
B provides a guaranty of mortgage of maximum amount for the above-mentioned
Principal Claim, irrespective of the times and the amount of each time, or
whether the expiry date of the time limit for the debtor to perform a single
obligation overtop the foregoing time limit.

      

      Article
3  The Mortgaged Property

      

      The
particulars of the mortgaged property are seen in the attached List of Mortgaged
Property. Party B provides a guaranty of mortgage of maximum amount with the
property listed in the List of Mortgaged Property. It has been confirmed by both
Party A and Party B that the value assumption on the mortgaged property in the
List, neither is the basis on which the mortgaged property is evaluated when it
is disposed by Party A according to the stipulations of the Contract, nor makes
up a limit to any extent against Party A in enforcing the mortgage.

      

      Article
4  The Scope of the Guaranty of Mortgage

      

      The scope
of the guaranty of mortgage of maximum amount provided by Party B includes the
Principal Claim and the interest thereof (including compound interest and
default interest, and same in the following text), default fine, compensation
for damage and expenses for enforcing the claim (including but not limited to
legal cost, arbitration fee, property preservation charge, travel expense,
notarial fee, execution fee, attorney fee, eligibility fee, auctioneers fee,
etc., and same in the following text).

      Party B
confirms and accepts out of his will, that when the Debtor fails to perform his
liability as stipulated in the Principal Contract, Party A has the right to
directly demand Party B to undertake his guaranty liability within the scope of
his guaranty, whether or not the claim of Party A under the Principal Contract
is benefited with other guaranty (including but not limited to a guaranty with
real rights).

      

      Article
5  Conclusion and Alteration of the Principal Contract
Guaranteed

      

      Particulars
related to specific amount, term, interest, usage, etc. of the Principal Claim,
shall be stipulated by Party A and the Debtor in the Principal
Contract.

      Party B
confirms that, except for the increase of line of credit and the extension of
term of guaranty, the conclusion of the Principal Contract or the alteration of
the Principal Contract through agreement by Party A and the Debtor, are deemed
as being agreed in advance by Party B, and need not to be notified to Party B,
while the suretyship liability on the part of Party B shall not be
alleviated.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Where the
interest rates are altered in the light of stipulations of the Principal
Contract during the time when the mortgage right exists, such alteration shall
also be deemed as being agreed in advance by Party B, and needs not to be
notified to Party B, while Party B is still obliged to undertake the suretyship
liability.

      

      Article
6  Independent Effectiveness of the Contract

      

      The
effectiveness of the Contract is independent of the Principal Contract, complete
or incomplete invalidity of the Principal Contract or its likely revocation has
no impact on the Contract’s effectiveness. Where it is confirmed that the
Principal Contract was invalid or that it was revoked, Party B undertakes
further suretyship of joint and several liability for the Debtor’s debts coming
into being because he surrendered properties or compensated losses.

      Party B’s
suretyship liability under the Contract shall not change to any extent because
of merger, separation, changes of shareholdings, the lapse of capacity of civil
acts, disappearances, death or the declaration of disappearance or death of the
Debtor, or any other causes.

      

      Article
7  Possession of the Mortgaged Property and Its Document of
Title

      

      During
the period of the existence of the mortgage right, the mortgaged property is
possessed by Party B. Party B shall take good care of the mortgaged property and
take responsibilities to repair and maintain the mortgaged property to keep it
in good condition, and shall be ready to accept Party A’s inspection at any
moment.

      During
the period of existence of the mortgage right, if any situation occurred causing
any damage or loss to, or any decrease in the value of, the mortgaged property,
Party B shall notify Party A of which instantly, and either restore the original
value of the mortgaged property or provided further security recognized by Party
A within 10 days. All the expenses for the restoration of the original value of
the mortgaged property or the provision of the appended security are for the
account of Party B.

      During
the period of the existence of the mortgage right, other ownership certificates
of the mortgaged property are possessed by Party A.

      

      Article
8  Registration of Mortgaged Property

      

      The
mortgaged property under the Contract shall be registered, while Party B shall
actively cooperate with Party A to have the mortgaged property registered with
the government department responsible for the registration, supported by the
Contract and other relevant documents, within 3 days after the date of the
conclusion of the Contract.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Article
9  Insurance of the Mortgaged Property

      

      During
the period of the existence of the mortgage right, Party B shall effect a
property insurance for the mortgaged property according to laws and in
compliance with the type, insured amount, and coverage of insurance assigned by
Party A. The insurance period shall not fall short of the term of the credit
granted plus 6 months starting from the expiration date of this term, and the
insured amount shall not be lower than the principal claim. Party B shall not
revoke or cut short the insurance on any excuse during the insurance period. If
Party B fails to effect the insurance as assigned by Party A, and in case of an
interruption, revocation or expiration of the insurance, Party A has the right
to complete the insurance formalities instead, while all expenses occurred
wherefrom shall be for Party B’s account and be additionally included in the
Scope of the Guaranty of Mortgage. The original insurance policy is held by
Party A, and it shall be stated in the insurance policy that Party A is the
first beneficiary of the insurance of the mortgaged property, and Party A has
the right to satisfy his claim directly with the insurance indemnity or satisfy
all of his claims under the Principal Contract beforehand.

      

      Article
10  Third Party Damage

      

      If the
conduct of a third party causes a decrease in the value of the mortgaged
property, the indemnification of the loss shall be deposited in a bank account
assigned by Party A. Party B agrees that Party A has the right to select
whatever mode listed below to manage this indemnification of the loss, and Party
B shall cooperate with Party A with the formalities:

      
        	
                (1)

              	
                Discharge
      or discharge ahead of time all or a part of the debt under the Principal
      Contract.

              

      

      
        	
                (2)

              	
                Transfer
      it into a fixed deposit, and use the deposit receipt to provide a guaranty
      of pledge on the debt under the Principal Contract, while conclude a
      relevant pledge contract with Party
A.

              

      

      
        	
                (3)

              	
                Transfer
      it into a security to provide a guaranty of pledge on the debt under the
      Principal Contract, and conclude a relevant pledge contract with Party
      A.

              

      

      
        	
                (4)

              	
                Use
      it to renovate the mortgaged property by written agreement of Party A to
      restore the value of the mortgaged
property.

              

      

      
        	
                (5)

              	
                After
      providing further guaranty in conformity of the requirement of Party A,
      Party B may dispose the indemnification at his
  will.

              

      

      If the
conduct of a third party causes the value of the mortgaged property to become
insufficient to discharge all the debt under the Principal Contract, Party B
shall provide a further guaranty recognized by Party A, while the remaining
value of the mortgaged property is still used for the guaranty of the
claim.

      

      Article
11  The Disposal of the Mortgaged Property

      

      Without a
written consent of Party A, Party B shall not denote, transfer, swap, repeatedly
mortgage, move the mortgaged property under the Contract, or dispose of it in
any other manners, and any such disposal is invalid.

      Where
Party B disposes of the mortgaged property under the Contract with a written
consent of Party A, the proceeds obtained by the disposal shall be deposited in
an account assigned by Party A. Party B agrees that Party A has the right to
select whatever mode listed below to manage the proceeds, and Party B shall
cooperate with Party A with the formalities:

      
        	
                (1)

              	
                Discharge
      or discharge ahead of time all or a part of the debt under the Principal
      Contract.

              

      

      
        	
                (2)

              	
                Transfer
      it into a fixed deposit, and use the deposit receipt to provide a guaranty
      of pledge on the debt under the Principal Contract, while conclude a
      relevant pledge contract with Party
A.

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        	
                (3)

              	
                Transfer
      it into a security to provide a guaranty of pledge on the debt under the
      Principal Contract, and conclude a relevant pledge contract with Party
      A.

              

      

      
        	
                (4)

              	
                After
      providing further guaranty in conformity of the requirement of Party A,
      Party B may dispose the indemnification at his
  will.

              

      

      Under the
situations of requisition of removal and relocation, the proceeds obtained by
the disposal shall be managed according to foregoing terms.

      

      Article
12  Advanced Enforcement of the Right of Creditor

      

      Where
Party A proclaims an early maturity of the liability of the debtor under the
Principal Contract according to laws, regulations, rules etc. or the
stipulations of the Principal Contract, Party A has the right to dispose of the
mortgaged property according to laws, and has the priority to satisfy his claim
with the proceeds obtained from the disposal.

      

      Article
13  Rights and Obligations of Party B

      

      13-1
Where the mortgage right suffers or may suffer an infringement by a third party,
Party B is obliged to notify Party A and to take necessary measures to avoid
such infringement.

      

      13-2
Where the liability under the Principal Contract is in a foreign currency, Party
B shall undertake the suretyship liability in the currency agreed in the
Principal Contract. If Party B does it in any other exchangeable currency or
RMB, it shall secure the agreement of Party A, and perform the suretyship
liability by converting such currency into the one agreed in the Principal
Contract at the foreign exchange rate quoted at Bank of Nanjing Co., Ltd. on the
day when the suretyship liability is performed.

      

      13-3
Party B shall pay the fees or expenses under the Contract for evaluation,
notarization, insurance, registration, transference, appraisal, safekeeping,
lawsuit, arbitration, enforcement, auction, attorney service etc. in full amount
and in a timely manner.

      

      13-4
Where a decrease of value, a destruction or a loss happens to the mortgaged
property, or its physical form changes, or its ownership is disputed, Party B
shall notify Party A in writing within 3 days after the above-mentioned
occurrence or possible occurrence, and shall provide Party A further guaranty
recognized by Party A.

      

      13-5
Party B shall not refuse to fulfill the obligations under the Contract on the
excuse of any dispute with a third party.

      

      13-6
Party B enjoys the rights and takes the responsibilities in accordance with the
laws, regulations, rules, etc. and the terms and conditions of the
Contract.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Article
14  Rights ad Obligations of Party A

      

      14-1
Party A has the right to directly demand Party B to undertake the mortgage
guaranty liability under the Contract for the unsatisfied claim of Party
A.

      

      14-2 Upon
enforcement of Party A of his mortgage right, as required by Party B, Party A
may provide Party B the relevant evidence of Party B’s performance of his
guaranty liability, with the exception of Party B being the debtor
himself.

      

      14-3
Party A enjoys the rights and takes the responsibilities in accordance with the
laws, regulations, rules, etc. and the terms and conditions of the
Contract.

      

      Article
15  Default Liability

      

      In case
of Party B’s violation of any laws, regulations, rules, etc. or any stipulations
of the Contract, Party A has the right to demand Party B to rectify its
violation within a definite time, to further provide relevant guaranty, to
compensate for the loss, or whatever.

      

      Article
16  Applicable Laws and Settlement of Disputes

      

      16-1 The
Contract is concluded in accordance to the Laws of the People’s Republic of
China, which are applicable to the Contract.

      

      16-2
Where any dispute occurs in the course of the execution of the Contract, both
parties shall settle them through negotiations. In case no settlement is
reached, they shall choose Type 1 from the following settling
manners:

      (Type 1)
Bring a lawsuit to the local people’s court at the locality of Party
A.

      (Type 2)
Apply to the /
Arbitration Commission for arbitration (the locality is /
) with the arbitration rules active and effective at the time the application is
made. The arbitration decision is final and binding on both
parties.

      In the
course of lawsuit or arbitration, terms and conditions under the Contract, which
are not involved in the dispute, shall still be performed or
fulfilled.

      

      Article
17  Effectiveness, Alteration and Termination of the
Contract

      

      17-1
Party A and Party B negotiated and confirm by their own will that the Contract
enters into effect when satisfying the following conditions at the same
time:

      
        
          	
                  (1)

                	
                  Where
      Party B is a legal person or any organization, the Contract shall be
      signed by or sealed with the name stamp of the legal representative,
      principle, or accredited representative of Party A and sealed with the
      Corporate Seal or Special Contract Seal of Party A, and signed by or
      sealed with the name stamp of the legal representative or accredited
      representative of Party B and sealed with the Corporate Seal or Special
      Contract Seal of Party B; where Party B is a natural person, the Contract
      shall be signed by or sealed with the name stamp of the legal
      representative, principle, or accredited representative of Party A and
      sealed with the Corporate Seal or Special Contract Seal of Party A, and
      signed by Party B or his accredited
  representative.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        
          	
                  (2)

                	
                  The
      registration has been completed of the mortgaged property listed in the
      List of the Mortgaged
Property.

                

        

      

      

      17-2
After the Contract enters into effect, neither Party A nor Party B shall
arbitrarily alter or terminate it unless further stipulated by the Contract; in
the case of needy alteration or determination, a written agreement should be
reached by both parties through negotiation. All terms and conditions of the
Contract remain effective before such written agreement is reached.

      

      Article
18  Other Stipulations

      

      18-1
Party B has fully acknowledged the risk of exchange rate fluctuation, and if the
Principal Contract adopts floating interest rate, Party B undertakes, out of his
will, the guaranty liability increased because of such fluctuation.

      

      18-2
Failing to perform his obligation under the Contract, Party B is willing to be
subject to force implement.

      

      18-3 All
attachment to the Contract, and all legal documents related to the exercise of
the Contract are the component part of the Contract, and have equal legal force
as the Contract.

      

      18-4
(Void)

      

      Article
19  Supplementary Provisions

      

      19-1 The
Contract is made in three copies, one is held by Party B, one is held by Party
A, and one is held by the registration department of the mortgaged property,
while each copy has the equal legal force.

      

      19-2 Any
matters not covered by the Contract shall be handled in compliance with relevant
national laws, regulations and rules.

      

      Article
20  Declaration Provisions

      

      20-1 In
signing and exercising the Contract, both parties have been given the approval
of such authorities as competent decision-maker or supervision department, and
obtained the necessary, sufficient and legal authorization.

      

      20-2 In
signing the Contract, parties expressed their true intentions, the signatures
and seals were genuine, the signing representatives are authorized, and the
Contract has legally binding on both parties.

      

      20-3
Party B has the right to own its whole property, and all the documentation it
produced to Party A is true, legal and effective, and contains no mistake or
omission of facts disagreeing with the truth.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      20-4
Party B has read all the content of the Contract. On request by Party B, Party A
has made explanation on the terms and conditions of the Contract. Party B has
got a full knowledge and understanding of the significations and legal
consequences of the stipulations of the Contract.

      

      20-5
Party A is a legally established bank, and is qualified to operate the business
under the Contract.

      

      Attachment:
List of Mortgaged Property

      

      
        	
                Building
      Property Mortgage

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                2049.74m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字

                第J00032215号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第

                06840号

              
	
                Appraised
      Value

              	
                4,389,200
      RMB

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Land
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                6669.14m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字

                第J00032216号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第

                06840号

              
	
                Appraised
      Value

              	
                14,646,900RMB

              

      

      

      
        	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                2049.74m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字

                第J00032217号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第

                06840号

              
	
                Appraised
      Value

              	
                4,389,200
      RMB

              

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      
        	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Land
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                2474.12m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第J00032218号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                5,976,800RMB

              

      

      

      
        	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                6669.14m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第J00032219号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                14,646,900RMB

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Land
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                865.32m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第J00032220号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                1,900,400RMB

              

      

      

      
        	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged

                Area

              	
                2232.36m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第JN00036329号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                4,902,700RMB

              

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      
        	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged
      Area

              	
                2600.14m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第JN00036335号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                5,710,400RMB

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged
      Area

              	
                4865.2
      m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第JN00120702号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                12,554,000RMB

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Plot
      No.

              	
                21206143019

              	
                Mortgaged
      Area

              	
                9148.35m2

              	
                Ownership

                Certificate
      No.

              	
                江宁房权证东山字第JN00091775号

              
	
                Usage

              	 
      	
                In
      Set

                or
      Not

              	
                In
      Set

              	
                Land
      Use Right

                Certificate
      No.

              	
                宁江国用(2006)第06840号

              
	
                Appraised
      Value

              	
                20,091,700RMB

              
	
                Land
      Use Right Mortgage

              
	
                Location

              	
                509
      Chengxin Thoroughfare, Jiangning Development Zone, Nanjing,
      China

              
	
                Land
      No.

              	 
      	
                Map
      No.

              	 
      	
                Mortgaged

                Area

              	 
      
	
                Use
      Right Certificate No.

              	 
      	
                Use
      Right

                Type

              	 
      	
                Appraised

                Value

              	 
      
	
                Location

              	 
      
	
                Land
      No.

              	 
      	
                Map
      No.

              	 
      	
                Mortgaged

                Area

              	 
      
	
                Use
      Right Certificate No.

              	 
      	
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      Right

                Type

              	 
      	
                Appraised

                Value

              	 
      
	
                Others

              
	
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                Locative

              	 
      
	
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      or Area

              	 
      	
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      of Usage

              	 
      
	
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      Value

              	 
      	
                Ownership
      Certificate No.

              	 
      

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        
          	 
      	
                  Party
      B

                
	
                  Party A

                	
                  Legal
      Person or other Organization

                	
                  Natural
      Person

                  (Void)

                
	
                   

                  Bank
      of Nanjing Co., ltd.

                  (Seal)

                   

                  Legal
      Representative

                  (Principle)
      Name Seal:

                  (Or
      Authorized Agent):

                    Lin
      Fuzhi (name seal)

                  Address:

                  Post
      Code:

                  Contact
      No.:

                  Date
      of Signing: 2010/8/2

                	
                   

                  Golden
      Way

                  Nanjing
      Garment Co., Ltd.

                  (Seal)

                   

                  Legal
      Representative:

                  (Principle)
      Name Seal:

                  (Or
      Authorized Agent):

                    Sun
      Jiajun (name seal)

                  Address:

                  Post
      Code:

                  Contact
      No.:

                  Date
      of Signing: 2010/8/2

                   

                	
                   

                  Signature:

                  (Or
      Authorized Agent):

                   

                  Kind
      of Identity Document:

                  No.
      of Identity Document:

                   

                  Address:

                  Post
      Code:

                  Contact
      No.:

                  Date
      of Signing:Unassociated Document

    

    EXECUTION
VERSION

     

    AGREEMENT
AND PLAN OF MERGER

    

    This
Agreement and Plan of Merger (this "Agreement") is made
and entered into as of July 30, 2010 by and among CarePayment Technologies,
Inc., an Oregon corporation ("Parent"); CPYT
Acquisition Corp., a Delaware corporation ("Merger Sub"), and
wholly-owned subsidiary of Parent;  Vitality Financial, Inc., a
Delaware corporation (the "Company" or "VF"); each
stockholder of the Company set forth on attached Schedule I
(collectively, the "Stockholders)"; and
Aleem Choudhry as the representative of the Stockholders (the "Stockholders'
Representative"). Each of the foregoing is a "Party" and
collectively they are the "Parties."  Certain
capitalized terms used herein shall have the meanings ascribed thereto on Exhibit A
hereto.

    

    RECITALS

    

    A.          The
Boards of Directors of each of Parent, Merger Sub and the Company believe it is
advisable and in the best interests of each corporation and their respective
stockholders that Parent acquire the Company through the statutory merger of
Merger Sub with and into the Company (the "Merger"), with the
Company being the Surviving Corporation, upon the terms and conditions set forth
herein, and, in furtherance thereof, have approved this Agreement and the
Merger.

    

    B.           Pursuant
to the Merger, among other things, and subject to the terms and conditions of
this Agreement all of the issued and outstanding shares of Company Capital Stock
shall be converted into the right to receive shares of Parent's Series E
Convertible Preferred Stock, no par value per share ("Series E Preferred
Stock").

    

    C.           The
Company, the Stockholders, Parent and Merger Sub desire to make certain
representations, warranties, covenants and other agreements in connection with
the Merger.

    

    AGREEMENT

    

    The
parties to this Agreement, intending to be legally bound, agree as
follows:

    

    SECTION
1

    THE
MERGER

     

    1.1.        Effects of the
Merger.  The Merger shall be effected, as of the Effective
Time, upon the terms and subject to the conditions of this Agreement. The
separate corporate existence of the Company with all of its rights, privileges,
powers and franchises shall continue unaffected by the Merger. The Merger shall
have the effects specified in the Delaware General Corporation Law (the "DGCL"). From and
after the Effective Time, the Company is sometimes referred to herein as the
"Surviving
Corporation."

     

    1.2.        Certificate of
Merger.  The Merger shall be effected by, and shall be
effective upon, the filing of a certificate of merger (the "Certificate of
Merger") with the Secretary of State of the State of Delaware complying
with the requirements of the DGCL, and in form and substance satisfactory to
Parent and the Company (the point in time at which such certificate of merger is
filed being herein referred to as the "Effective Time" or
the "Closing").

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    1.3.        Certificate of Incorporation;
By-Laws.  At the Effective Time: (a) the Certificate of
Incorporation of the Surviving Corporation shall be amended and restated to be
identical to the Certificate of Incorporation of the Merger Sub as in effect
immediately prior to the Effective Time, except that the name of the Surviving
Corporation shall be Vitality Financial, Inc., as set forth in Exhibit A to the
Certificate of Merger; (b) the Bylaws of the Surviving Corporation shall be
the bylaws of the Company as in effect immediately prior to the Effective Time;
and (c) the directors and officers of the Surviving Corporation immediately
after the Effective Time shall be those individuals designated by Parent in its
sole discretion.

     

    1.4.        Effect of Merger on Company Capital
Stock.  For purposes of this Agreement, the "Merger Consideration"
shall be the consideration that a Stockholder is entitled to receive pursuant to
Section
1.5.

     

    (a)           Company Capital
Stock.  Upon the terms
and subject to the conditions of this Agreement, at the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Merger Sub,
the Company or any Stockholder, each outstanding share of Company Capital Stock
issued and outstanding immediately prior to the Effective Time, will be canceled
and extinguished and be converted automatically into the right to receive a
portion of the Merger Consideration as determined in accordance with the terms
of the Company Charter Documents as set forth on attached Schedule
I.

     

     

    (b)           Company Treasury
Stock.  On and after the Effective Time, each share of Company
Capital Stock issued and held in the Company's treasury at the Effective Time,
shall, by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, be canceled and be retired without payment of
any consideration therefor and cease to exist.

     

    (c)           Capital Stock of Merger
Sub.  At the Effective Time, each share of common stock, par
value $0.001 per share, of Merger Sub shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into one share of
common stock, par value $0.001 per share, of the Surviving
Corporation.

    

    1.5.        Merger Consideration; Exchange of
Certificates.

     

    (a)           The
consideration for the Merger consists of 97,500 shares of Series E Preferred
Stock (the "Merger
Consideration").

     

    (b)           Upon
surrender to Parent of any certificates or instruments evidencing the Company
Capital Stock (the "Certificates"),
together with duly executed stock or other powers, following the Effective Time
the holder thereof shall be entitled to receive from Parent, subject to the
escrow provisions of Section 8.4, that
portion of the Merger Consideration equal to the number of shares of Series E
Preferred Stock as set forth opposite such holder's name on attached Schedule
I.

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    (c)           Each
such Certificate so surrendered pursuant to the provisions of this Section 1.5 shall be
canceled.  If payment or delivery is to be made to a Person other than
the Person in whose name a Certificate so surrendered is registered, it shall be
a condition of payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer, that the signatures on the
certificate or any related stock power shall be properly guaranteed and that the
Person requesting such payment either pay any transfer or other Taxes required
by reason of the payment to a Person other than the registered holder of the
Certificate so surrendered or establish to the satisfaction of Parent that such
Tax has been paid or is not applicable. All Merger Consideration paid upon
surrender of the Certificates in accordance with this Section 1.5 shall be
deemed to have been paid in full satisfaction of all rights pertaining to the
shares of Company Capital Stock represented by such Certificates.

     

    (d)           After
the Effective Time, there shall be no transfers on the stock transfer books of
the Surviving Corporation of the shares of Company Capital Stock that were
outstanding immediately prior to the Effective Time.

    

    (e)           Neither
Parent nor the Surviving Corporation shall be liable to any holder or former
holder of Company Capital Stock or any other Person with respect to any Merger
Consideration delivered to any public official in good faith pursuant to any
applicable abandoned property law, escheat law or similar Legal
Requirement.

     

    1.6.        Further Action.  If,
at any time after the Effective Time, any further action is determined by Parent
to be necessary or desirable to carry out the purposes of this Agreement or to
vest the Surviving Corporation or Parent with full right, title and possession
of and to all rights and property of the Company, the officers and directors of
the Surviving Corporation and Parent shall be fully authorized (in the name of
Merger Sub and the Company) to take such action.

     

    SECTION
2

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

     

    The
Company makes the following representations and warranties to Parent, subject to
such exceptions as are set forth in the disclosure schedule delivered by the
Company to Parent on the date of this Agreement (the "Disclosure
Schedule").  The Disclosure Schedule shall be arranged in
sections corresponding to the lettered and numbered sections contained in this
Section
2.  If an item is disclosed in one section of the Disclosure
Schedule, it shall be deemed to have been disclosed in any other section of the
Disclosure Schedule only if the relevance of such disclosure to the other
section is reasonably apparent on its face.

    

    2.1.        Subsidiaries; Due Organization of the
Company.

     

    (a)           The
Company has no Subsidiaries.  The Company does not own, and has never
owned, any capital stock of, or any equity interest of any nature in, any other
Entity.  The Company has not agreed, is not obligated to make and is
not bound by any Contract under which it may become obligated to make, any
future investment in or capital contribution to any other Entity.  The
Company has not, at any time, been a general partner of, or has otherwise been
liable for any of the debts or other obligations of, any general partnership,
limited partnership or other Entity.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    (b)           The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.  The Company has all
necessary corporate power and authority:  (i) to conduct its business
in the manner in which its business is currently being conducted; (ii) to own
and use its assets in the manner in which its assets are currently owned and
used; and (iii) to perform its obligations under all Contracts by which it is
bound.

     

    (c)           The
Company is duly qualified, authorized or registered as a foreign corporation to
transact business under the laws of each jurisdiction where the character of its
activities or the location of the properties owned or leased by it requires such
qualification or registration, except where failure to qualify or be registered
would not have a Material Adverse Effect.  The Company is in good
standing as a foreign corporation in each of the jurisdictions where it is
qualified, authorized or registered as a foreign corporation.

     

    (d)           The
Company has not conducted any business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name, assumed name, trade name or other
name, other than the name "Vitality Financial, Inc."

     

    (e)           Section 2.1(e) of the
Disclosure Schedule accurately sets forth as of the date of this
Agreement:  (i) the names of the members of the Board of Directors of
the Company; and (ii) the names and titles of the officers of the
Company.

     

    2.2.        Capitalization,
Etc.

     

    (a)           The
authorized capital stock of the Company consists of 11,029,762 shares of Company
Common Stock, of which 4,500,000 shares have been issued and are outstanding as
of the date of this Agreement, and 3,970,238 shares of Company Preferred Stock,
all of which shares have been designated Series A Preferred Stock and 2,845,373
shares of which Series A Preferred Stock are outstanding as of the date of this
Agreement.  As of the date hereof, the Company Capital Stock is held
of record by the Persons in the amounts and with the domicile addresses set
forth in Schedule
I attached hereto.  The Company does not hold any shares of its
capital stock in its treasury.  All of the outstanding shares of
Company Capital Stock have been duly authorized and validly issued, and are
fully paid and nonassessable.  There are no declared or accrued but
unpaid dividends with respect to any shares of Company Capital
Stock.  Each share of outstanding Company Preferred Stock is
convertible into Company Common Stock on a one-for-one basis.  None of
the outstanding shares of Company Capital Stock is entitled or subject to any
preemptive right, right of participation, right of maintenance or any similar
right.  None of the outstanding shares of Company Capital Stock is
subject to any right of first refusal or similar right in favor of the Company
or any other Person.  There is no Contract relating to the voting or
registration of, or restricting any Person from purchasing, selling, pledging or
otherwise disposing of (or granting any option or similar right with respect
to), any shares of Company Capital Stock.  The Company is not under
any obligation, or is bound by any Contract pursuant to which it may become
obligated, to repurchase, redeem or otherwise acquire any outstanding shares of
Company Capital Stock or any other securities.

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    (b)           As
of the date of this Agreement, there are no Company Options issued or
outstanding and the Company Option Plan has been terminated. The Company has
previously provided Parent with evidence of the termination of all previously
issued or outstanding Company Options and of the Company Option Plan. There is
no: (i) outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of the Company, including stock appreciation, phantom stock or other
similar rights; (ii) outstanding security, instrument or obligation that is or
may become convertible into or exchangeable for any shares of the capital stock
or other securities of the Company; or (iii) Contract under which the Company is
obligated to sell or otherwise issue any shares of its capital stock or any
other securities.

     

    (c)           All
outstanding shares of Company Capital Stock have been issued and granted in
compliance in all material respects with (i) all applicable securities laws and
other applicable Legal Requirements; and (ii) all requirements set forth in
applicable Contracts.

     

    (d)           The
Company has never repurchased, redeemed or otherwise reacquired any shares of
Company Capital Stock, other than Company Options forfeited by Company Employees
in connection with the termination of a Company Employee's employment with the
Company.  All securities so reacquired by the Company were reacquired
in compliance in all material respects with (i) all applicable securities laws
and other applicable Legal Requirements; and (ii) all requirements set forth in
applicable Contracts.

     

    2.3.        Certificate of Incorporation and
Bylaws; Records.  The Company has delivered to Parent accurate
and complete copies of: (a) the Company Charter Documents; (b) all stock records
of the Company; and (c) all minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of the stockholders of the Company, the Board of Directors of the
Company and all committees of the Board of Directors of the
Company.  The foregoing are accurate and complete in all material
respects.

     

    2.4.       
Authority.   The
Company has all requisite corporate power and authority to enter into this
Agreement and any other agreement that is an exhibit to, or a certificate
delivered pursuant to, this Agreement or is entered into by the Company in
connection with this Agreement (collectively, the "Ancillary
Agreements") and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of the Company.  This Agreement and the Ancillary
Agreements have been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery thereof by the other parties thereto,
constitutes the valid and binding obligation of the Company, enforceable in
accordance with their respective terms.

     

    2.5.        Financial
Statements.

     

    (a)           Attached
hereto as Section
2.5(a) of the Disclosure Schedule are the unaudited balance sheets of the
Company as at December 31, 2008, December 31, 2009 and June 30, 2010 and the
related consolidated statements of income and cash flows for the corresponding
twelve- and six-month periods (collectively, the "Financial
Statements").  The unaudited balance sheet of the Company as at
June 30, 2010 is sometimes referred to in this Agreement as the "Balance
Sheet."  The Financial Statements (i) are derived from and in
accordance with the books and records of the Company; (ii) fairly present the
financial condition of the Company at the dates therein indicated and the
results of operations and cash flows of the Company for the periods therein
specified; and (iii) are true, complete and correct in all material
respects.

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    (b)           The
Company has in place systems and processes (including the maintenance of proper
books and records) that, to the Knowledge of the Company, are customary for
companies at the same stage of development as the Company designed to provide
reasonable assurances that (i) transactions are executed in accordance with
management's authorization; (ii) transactions are recorded as necessary to
permit preparation of the financial statements of the Company and to maintain
accountability for the assets of the Company; (iii) access to the assets of the
Company is permitted only in accordance with management's authorization; (iv)
the reporting of the assets of the Company is compared with existing assets at
regular intervals; and (v) accounts, notes and other receivables are recorded
accurately, and proper and adequate procedures are implemented to effect the
collection thereof on a current and timely basis (such systems and processes are
herein referred to as the "Controls").  The
Company has not identified or received any complaint, allegation, deficiency,
assertion or claim, whether written or oral, regarding the Controls or the
Financial Statements.  To the Knowledge of the Company, there have
been no instances of fraud, whether or not material, that occurred during any
period covered by the Financial Statements.

     

    2.6.        No Undisclosed
Liabilities.  The Company does not have any Liabilities, except
those (a) that have been disclosed, in reasonable detail, in the Financial
Statements or in the notes thereto; (b) incurred pursuant to or, in connection
with, this Agreement or the transactions hereunder; or (c) incurred since June
30, 2010 in the ordinary course of business of the Company consistent with past
practice (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement or violation of applicable laws); or (d) that have been disclosed
in the Disclosure Schedules.  This Section 2 (as
modified by the Disclosure Schedule) does not (i) contain any representation,
warranty or information that is false or misleading with respect to any material
fact, or (ii) omit to state any material fact necessary in order to make the
representations, warranties and information contained and to be contained in
this Section 2
(in the light of the circumstances under which such representations, warranties
and information were made or provided) not false or misleading in any material
respect.

     

    2.7.        No Changes.  Since
June 30, 2010:  (a) there has not been any Material Adverse Effect,
and no event has occurred or circumstance has arisen that, in combination with
any other events or circumstances, could reasonably be expected to have or
result in a Material Adverse Effect; (b) there has not been any loss, damage or
destruction to, or any interruption in the use of, any of the material assets of
the Company (whether or not covered by insurance); (c) the Company has not made
any capital expenditure which exceeds $20,000; (d) the Company has not written
off as uncollectible, or established any extraordinary reserve with respect to,
any account receivable or other indebtedness; (e) the Company has not entered
into any transaction or taken any other action outside the ordinary course of
business or inconsistent with past practices; and (f) the Company has not agreed
or committed to take any of the actions referred to in clauses "(c)" through
"(e)" of this sentence.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    2.8.        Tax and Other Returns and
Reports.

     

    (a)           The
Company has timely filed all Tax Returns relating to Taxes required to be filed
by it through the date of this Agreement. To the Knowledge of the Company, all
such Tax Returns are complete and correct in all respects.  The
Company is not the beneficiary of any extension of time within which to file any
Tax Return.  No claim has been made by a Governmental Body in a
jurisdiction where the Company does not file Tax Returns that the Company is or
may be subject to taxation in that jurisdiction or is obliged to act as
withholding agent under the laws of that jurisdiction.  The Company
has delivered or made available to Parent complete copies of all Tax Returns,
audit reports and statements of deficiencies assessed against or agreed to by
the Company for all taxable periods since inception of the
Company.  All Taxes due and owing by the Company (whether or not shown
on any Tax Returns) have been timely paid.

     

    (b)           With
respect to any period for which Tax Returns have not yet been filed, or with
respect to which Taxes are not yet due or owing (i) the unpaid Taxes do not, as
of the most recent month end, exceed the reserve for Tax set forth in the
Balance Sheet and (ii) shall not exceed that reserve as adjusted for operations
and transactions through the date of this Agreement in accordance with the past
custom and practice of the Company in filing its Tax Returns.  The
Company has not incurred any liability for Taxes except in the ordinary course
of business.

     

    (c)           (i)
To the Knowledge of the Company, no Tax Return of the Company is under audit or
examination by the IRS or any state or local Governmental Body; (ii) no audit or
other proceeding in any court or with any Governmental Body is pending with
respect to Taxes of the Company; and (iii) the Company has not received any
notification that such an audit or proceeding may be commenced.

     

    (d)           All
deficiencies and proposed adjustments with respect to Taxes for which the
Company is liable have been resolved, and there are no existing circumstances
which reasonably may be expected to result in assertions of other Tax
deficiencies or proposed adjustments.

     

    (e)           There
are no outstanding agreements, waivers or arrangements to extend the statutory
period of limitations applicable to any claim for Taxes due from or with respect
to the Company for any taxable period, nor has any such agreement, waiver or
arrangement been requested.

     

    (f)           No
closing agreements, private letter rulings, technical advice memoranda or
similar agreements or rulings have been entered into or issued by any
Governmental Body with respect to the Company.

     

    (g)           There
is not currently in effect any power of attorney granted by or on behalf of the
Company relating to Taxes.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    (h)           The
Company has (i) duly and timely withheld and paid over to the appropriate
Governmental Bodies all Taxes and other amounts required to be so withheld and
paid over for all periods under all applicable Legal Requirements in connection
with amounts paid or owing to any employee, independent contractor,
subcontractor, lender, shareholder or other third party and (ii) complied in all
material respects with all information reporting and withholding requirements
under applicable Legal Requirements, including maintenance of required records
with respect thereto.

     

    (i)           The
Company (i) has not agreed to or is required to make any adjustments pursuant to
Section 481(a) or Section 482 of the Code or any similar provision of state,
local or foreign law by reason of a change in accounting method initiated by the
Company or otherwise, and (ii) has not consummated or participated in any
transaction which was or is a "tax shelter" transaction as defined in Sections
6662, 6011, 6012 or 6111 of the Code or the Treasury Regulations promulgated
thereunder.

     

    (j)           The
Company will not be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Effective Time as a result of any: (i) change in
method of accounting for a taxable period ending on or prior to the Effective
Time, other than any change in method of accounting that occurs as a result of
or after the Effective Time; (ii) "closing agreement" as described in Section
7121 of the Code (or any corresponding or similar Legal Requirement) executed on
or prior to the Effective Time; (iii) intercompany transaction or excess loss
account described in the Treasury Regulations under Section 1502 of the Code (or
any corresponding or similar Legal Requirement) consummated on or prior to the
Effective Time; (iv) installment sale or open transaction disposition made on or
prior to the Effective Time; or (v) prepaid amount received on or prior to the
Effective Time.

     

    (k)           The
Company has not taken any action not in accordance with past practice that would
have the effect of deferring a Tax from a period (or portion thereof) ending on
or before the Effective Time to a period (or portion thereof) beginning after
the Effective Time. Except to the extent adequately reserved for on the
Financial Statements, the Company will not be required to include in any taxable
period (or portion thereof) beginning after the Effective Time an amount of
taxable income attributable to income that accrued for financial statement
purposes but was not recognized for Tax purposes in any taxable period (or
portion thereof) ending on or before the Effective Time, including but not
limited to any deferred income resulting from (i) any method of accounting
employed (including but not limited to the long-term contract method of
accounting); (ii) the use of the installment method pursuant to Section 453 of
the Code; (iii) the receipt of any prepaid amount on or before the Effective
Time; (iv) any intercompany transaction (as defined in Treasury Regulations
Section 1.1502-13); or (v) any excess loss account (as defined in Treasury
Regulations Section 1.1502-19) with respect to the stock of any Subsidiary of
the of the Company.

     

    (l)           The
Company has disclosed in its Company Returns any Tax reporting position taken in
any Company Return which could result in the imposition of penalties under
Section 6662 of the Code or any comparable Legal Requirement.

     

    (m)           The
Company neither (i) is a party to any joint venture, partnership or other
agreement or arrangement which is, or is required to be, treated as a
partnership for U.S. federal income Tax purposes; nor (ii) owns an interest in
any entity that is treated as a disregarded entity for U.S. federal income Tax
purposes.

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

     

    (n)           The
Company has never been a member of an affiliated group within the meaning of
Section 1504(a) of the Code (or any similar provision of state, local or foreign
law) that has filed or is required to file consolidated, combined, unitary or
similar Tax Returns in which such entity was required to be
included.  Neither the Company nor any of its subsidiaries is liable
for, or is required to make any contribution with respect to, Taxes of any other
person or entity by reason of contract, assumption, transferee or successor
liability, operation of law, Treasury Regulations Section 1.1502-6 (or any
similar provision of state, local or foreign law), or otherwise. The Company
neither is nor has been a party to any Tax sharing, allocation, indemnity or
similar agreement (whether formal or informal, written or
unwritten).

     

    (o)           The
Company neither owns nor has ever owned (directly or indirectly) an interest in
a (i) "passive foreign investment company"; (ii) "controlled foreign
corporation"; or (iii) "domestic international sales corporation," each within
the meaning of the Code.

     

    (p)           The
Company has no elections in effect for federal income tax purposes under
Sections 108 (cancellation of indebtedness), 168 (depreciation), 338
(acquisitions), or 441 (accounting) of the Code.

     

    2.9.       
Restrictions on Business
Activities.   There is no agreement (noncompete or
otherwise), commitment, judgment, injunction, order or decree to which the
Company or any of its employees is a party or otherwise binding upon the Company
or any of its employees that has or reasonably could be expected to have the
effect of materially prohibiting or impairing any business practice of the
Company, any acquisition of property (tangible or intangible) by the Company or
the conduct by the Company of its business.

    

    2.10.      Title of Properties; Absence of Liens
and Encumbrances; Condition of Equipment.  The Company owns,
and has good, valid and marketable title to, all assets purported to be owned by
it, including: (a) all assets reflected on the Balance Sheet; (b) all of the
Company's rights under the Contracts; and (c) all other assets reflected in the
books and records of the Company as being owned by the Company.  All
of such assets are owned by the Company free and clear of any
Encumbrances.  All items of equipment and other tangible assets owned
by or leased to the Company are in good condition and repair (ordinary wear and
tear excepted) and are adequate for the conduct of the business of the Company
in the manner in which such business is being conducted as of the date of this
Agreement.  The Company does not own any real property or any interest
in real property, except for the leaseholds created under the real property
leases identified in Section 2.10 of the
Disclosure Schedule

    

    2.11.      Intellectual
Property.

     

    (a)           None
of Company's Intellectual Property Rights have been registered with any
Governmental Body.

     

    (b)           The
Company has taken reasonable measures to protect its trade secrets and
confidential information.

    

    
      
        
           

        

        
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    (c)           The
Company is the registrant of the domain names listed in Section 2.11(c) of
the Disclosure Schedule, which registrations are in full force and effect and
will continue in full force and effect as provided in the Disclosure
Schedule.

     

    (d)           The
Company has the right to use all of the Intellectual Property that it currently
uses in its business.  Without limiting the generality of the
preceding, the Company either owns or has fully paid up, and valid licenses
for all the software and software-as-a-service that the Company uses in its
business and/or that is located on any Company hardware, server, computer,
mobile device or any other computing device.

     

    (e)           To
the Knowledge of the Company, the operation of the business of the Company has
not in the past, does not presently and will not in future (if conducted as
currently contemplated) infringe or misappropriate any Intellectual Property
Right of any third party or violate any third party's right to privacy or
publicity or constitute unfair competition or trade practices, except as could
not reasonably be expected to have a Material Adverse Effect.

     

    2.12.      Agreements, Contracts and
Commitments.

     

    (a)           Except
as disclosed in Section 2.12(a) of
the Disclosure Agreement, the Company is not a party to any of the following
(each, a "Material
Contract"):

     

     (i)           any
Contract (A) relating to the employment of, or the performance of services by,
any employee, consultant or independent contractor, (B) pursuant to which the
Company is or may become obligated to make any severance, termination or similar
payment to any current or former employee or director, or (C) pursuant to which
the Company is or may become obligated to make any bonus, success, retention,
change-of-control or similar payment (other than payments constituting base
salary) to any current or former employee or director;

     

     (ii)          any
Contract for the acquisition, sale, transfer, use or development of any
Intellectual Property or Intellectual Property Right;

     

     (iii)         any
Contract relating to the acquisition, sale, spinoff or outsourcing of any
business unit or operation or any product line of the Company or of a third
Person;

     

     (iv)         any
Contract that provides for indemnification of any officer, director, employee or
agent;

     

     (v)          any
Contract limiting the freedom of the Company to engage or participate, or
compete with any other Person, in any line of business, market or geographic
area.

     

     (vi)         any
Contract creating or involving any agency relationship (including sales
representative agreements), distribution or reseller arrangement or franchise
relationship;

    
 

    
      
        
           

        

        
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     (vii)        any
Contract with one or more Persons creating, relating to or concerning (A) any
partnership, joint venture, joint development or other similar arrangement or
(B) an arrangement for the sharing of revenues, profits, losses, costs or
liabilities or other similar arrangement;

     

     (viii)       any
Contract (other than Contracts evidencing Company Options) (A) relating to the
acquisition, issuance, voting, registration, sale or transfer of any securities,
(B) providing any Person with any preemptive right, right of participation,
right of maintenance or similar right with respect to any securities, or (C)
providing the Company with any right of first refusal with respect to, or right
to repurchase or redeem, any securities;

     

     (ix)         any
Contract relating to the creation of any Encumbrance other than Permitted
Encumbrances with respect to any asset of the Company;

     

     (x)          any
Contract incorporating or relating to any guaranty, any warranty, any pledge,
any performance or completion bond or any indemnity or similar obligation,
except for Contracts substantially the same as the standard forms of Customer
Contracts previously delivered by the Company to Parent;

     

     (xi)         any
Contract relating to any hedging, future, options or other derivatives (other
than Contracts for Company Options;

     

     (xii)        any
real estate lease;

     

     (xiii)       any
Contract constituting or relating to a Government Contract or Government
Bid;

     

     (xiv)       any
Contract (A) imposing any confidentiality obligation on the Company or on any
other Person (other than nondisclosure agreements entered into by the Company in
the ordinary course of business); (B) containing "standstill" or similar
provisions; or (C) providing any right of first negotiation, right of first
refusal or similar right to any Person;

     

     (xv)        any
Contract with any current or former stockholder, employee, officer or director
of the Company, or, to the Knowledge of the Company, any "affiliate" or
"associate" of such Persons (as such terms are defined in the rules and
regulations promulgated under the Securities Act) (any of the foregoing, a
"Related Party"), including any Contract providing for the furnishing of
services by, rental of real or Personal property from, or otherwise requiring
payments to, or from, any Related Party;

     

     (xvi)       any
other Contract that contemplates or involves the payment or delivery of cash or
other consideration in an amount or having a value in excess of $2,500 in the
aggregate by the Company, or that contemplates or involves the performance by
the Company of services having a cost to the Company in excess of $2,500 in the
aggregate;

    

    
      
        
           

        

        
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     (xvii)      any
Contract with any investment banker, broker, advisor or similar party, or any
accountant, legal counsel or other Person retained by the Company, in connection
with this Agreement and the Merger;

     

     (xviii)     any
settlement agreement under which the Company releases or is released from any
claims or liabilities;

     

     (xix)        any
other Contract that, to the Company's Knowledge, could reasonably be expected to
be material to the Company;

     

     (xx)         any
other Contract, if a breach of such Contract or the termination of such Contract
could reasonably be expected to have or result in a Material Adverse
Effect;

     

     (xxi)        any
Contract or plan, including any stock option plan, stock appreciation right plan
or stock purchase plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated by the occurrence of the
Merger, or the value of any of the benefits of which will be calculated on the
basis of the Merger; or

     

     (xxii)       any
fidelity or surety bond or completion bond.

     

    (b)           The
Company has not breached, violated or defaulted under, or received notice that
it has breached, violated or defaulted under, in any material respect any of the
terms or conditions of any Material Contract.  Each Material Contract
is in full force and effect and, to the Knowledge of the Company, is not subject
to any material default thereunder by any party obligated to the Company
pursuant thereto.  The Company has not released or waived any material
right under any Material Contract other than in the ordinary course of
business.  True copies of the written Material Contracts, including
all amendments and supplements thereto, have been made available to Parent,
together with full, complete and accurate descriptions of all oral Material
Contracts.

     

    (c)           Neither
the execution of the Agreement nor the consummation of the transactions
contemplated hereby shall constitute an event of default under, give rise to a
right of termination under, or require the consent of any party to, any Material
Contract.

     

    2.13.      Interested Party
Transactions.  No officer, director or shareholder of the
Company, has, directly or, to the Knowledge of the Company, indirectly, (i) an
interest in any Entity which furnished or sold, or furnishes or sells, services
or products related to hospital patient financing that the Company furnishes or
sells; (ii) an interest in any Entity that purchases from or sells or furnishes
to the Company any goods or services; or (iii) a beneficial interest in any
Material Contract; provided, that, ownership of no more than 2% of the
outstanding voting stock of a publicly traded corporation shall not be deemed an
"interest in any entity" for purposes of this Section
2.13.  Each transaction between the Company and any of the
foregoing interested parties is, to the Knowledge of the Company, on terms no
less favorable to the Company as would be obtained in similar transactions
between unaffiliated parties.

    

    
      
        
           

        

        
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    2.14.      Litigation.  There
is no action, suit, claim or proceeding of any nature pending, or to the
Knowledge of the Company, threatened against the Company.  To the
Knowledge of the Company, there is no investigation pending or threatened
against the Company, its properties or any of its officers or directors as such
by or before any Governmental Body.  None of the matters described on
Section 2.14 of
the Disclosure Schedule, if any, if adversely determined, would, individually or
in the aggregate, result in a Material Adverse Effect.

     

    2.15.      Customers and
Suppliers.  Section 2.15 of the
Disclosure Schedule lists the Company's combined top 10 customers and suppliers
on the basis of revenue for the first six months of 2010, for 2009 and
2008.  None of such customers or suppliers has canceled or terminated
or, to Knowledge of the Company, threatened to cancel or terminate, its
relationship with the Company.  To the Knowledge of the Company, none
of such customers or suppliers:  (a) intends to cease doing business
with the Company or (b) is insolvent or threatened with bankruptcy or
insolvency.

     

    2.16.      Brokers' and Finders'
Fees.  The Company has not incurred, nor will it incur,
directly or indirectly, any Liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.

     

    2.17.      Employee Benefit
Plans.

     

    (a)           Schedule.  Section 2.17(a) of
the Disclosure Schedule contains a list of each Company Employee Plan and
Company Employee Agreement in effect as of the date of this
Agreement.

     

    (b)           Documents.  The
Company has made available to Parent copies of each Company Employee Plan, and
all related trust documents and all amendments thereto, and each Company
Employee Agreement and all amendments thereto in effect as of the date of this
Agreement.  Except as disclosed on Section 2.17(a) of
the Disclosure Schedule, there is no Company Employee Plan or Company Employee
Agreement subject to ERISA.

     

    (c)           Company Employee Plan
Compliance.  The Company and its ERISA Affiliates have
performed in all material respects all obligations required to be performed by
them under each Company Employee Plan, and each Company Employee Plan has been
established and maintained in all respects in accordance with its terms and in
compliance with all applicable laws, statutes, orders, rules and regulations,
including ERISA or the Code.

     

    (d)           No Pension or Welfare
Plans.  None of the Company or any of its ERISA Affiliates has
ever maintained, established, sponsored, participated in, or contributed to, or
in the past has been required to contribute to, any (i) Company Pension Plan
which is subject to Title IV of ERISA or Section 412 of the Code, (ii)
Multiemployer Plan, (iii) "multiple employer plan" as defined in ERISA or the
Code, or (iv) a "funded welfare plan" within the meaning of Section 419 of the
Code.

     

    (e)           No Post Employment
Obligations.  No Company Employee Plan or Company Employee
Agreement provides, or reflects or represents any Liability to provide, life
insurance, medical or other employee welfare benefits to any Company Employee
upon his or her retirement or termination of employment for any reason, except
as may be required by COBRA or other applicable statute.

    

    
      
        
           

        

        
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    (f)           Effect of
Transaction.

     

    (i)           The
execution of this Agreement and the consummation of the transactions
contemplated hereby shall not constitute an event under any Company Employee
Plan, Company Employee Agreement, trust or loan that shall or may result in any
severance payment, forgiveness of indebtedness or vesting acceleration with
respect to any Company Employee.

     

    (ii)           Neither
the Company nor any member of its affiliated group, if any, within the meaning
of Section 280G, including but not limited to Q&A 46 of Treasury Regulation
Section 1.280G-1, has become obligated to make, or will as a result of any event
connected directly or indirectly with any transaction contemplated herein become
obligated to make, any "excess parachute payment" as defined in Section 280G of
the Code (without regard to Subsection (b)(4) thereof). The Disclosure Schedule
lists each "disqualified individual" (as defined in Code Section 280G and the
regulations thereunder) determined as of the date hereof. There is no written or
unwritten agreement, plan, arrangement or other Contract by which the Company or
any member of its affiliated group within the meaning of Section 280G is bound
to compensate any individual for excise taxes paid pursuant to Section 4999 of
the Code.

     

    (g)           Employment
Matters.  The Company is in compliance in all material respects
with all applicable Legal Requirements respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each case,
with respect to Company Employees.

     

    (h)           Labor.  No work
stoppage or labor strike against the Company or any ERISA Affiliate is pending,
or, to the Knowledge of the Company, is threatened.  The Company is
not involved in or, to the Knowledge of the Company, is threatened with, any
labor dispute, grievance, or litigation relating to labor, safety or
discrimination matters involving any Company Employee, including, charges of
unfair labor practices or discrimination complaints, which, if adversely
determined, would, individually or in the aggregate, result in a Material
Adverse Effect.  The Company has never engaged in any unfair labor
practices within the meaning of the National Labor Relations Act.  The
Company is not as of the date of this Agreement, nor has it been in the past, a
party to, bound by, or negotiating, any collective bargaining agreement or union
contract with respect to employees.

     

    (i)           Section 409A.  Section 2.17(i) of
the Disclosure Schedule lists each Company Employee Plan and Company Employee
Agreement that is a "nonqualified deferred compensation plan" (within the
meaning of Section 409A(d)(1) of the Code) subject to Section 409A of the
Code.  Each such nonqualified deferred compensation plan has at all
times been in documentary and operational compliance with Section 409A of the
Code and the guidance and regulations thereunder, including the final Treasury
Regulations issued thereunder ("Section 409A").

    

    
      
        
           

        

        
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    2.18.      Compliance with Legal
Requirements.

     

    (a)           The
Company has materially complied with, is not in material violation of, and has
not received any notices of violation with respect to, any applicable Legal
Requirement, other than any Legal Requirement the failure to comply with or any
violation of which, if adversely determined, would not, or could not reasonably
be expected to, individually or in the aggregate, result in a Material Adverse
Effect.  The Company has not received any written communication from
any Governmental Body that alleges that it is or was not in compliance with any
Legal Requirement.

     

    (b)           The
Company holds all permits, certificates, licenses, approvals, registrations and
authorizations ("Licenses") necessary
for the lawful conduct of its business pursuant to all applicable Legal
Requirements of all Governmental Bodies having jurisdiction over it or any part
of its operations, excepting, however, where such a failure would not and could
not have a Material Adverse Effect.  Such Licenses are valid and in
full force and effect up to and until consummation of the transactions
contemplated by this Agreement.  There are no material violations by
the Company of any such License.  Section 2.18(b) of
the Disclosure Schedules sets forth all Licenses held by the
Company.

     

    2.19.      Insurance.  The
Company has maintained such policies of property, casualty, workers'
compensation, general liability and other insurance, including group insurance
and any other life, health, disability or other insurance for the benefit of
Company Employees or their dependents or both (collectively, "Insurance Policies")
as are reasonably appropriate and customary for companies in similar lines of
business and of a similar size, or as required by any Legal
Requirement.  Section 2.19 of the
Disclosure Schedule contains a complete and correct list of the Insurance
Policies in effect as of the date hereof.  Complete and correct copies
of such Insurance Policies in the possession of the Company have been made
available to Parent.  All premiums and other payments due from the
Company with respect to such Insurance Policies have been paid, and there has
not been and does not exist any fact, act, or failure to act that has caused or
might cause any such insurance to be canceled or terminated.  To the
Knowledge of the Company, all claims for insurance arising prior to the
Effective Time have been presented by the Company to the appropriate insurer or
insurers.  The Company is not in material violation of any insurance
policy.

     

    2.20.      Recommendations of the Board of
Directors. The Board of Directors of the Company, by unanimous written
consent dated as of the date hereof, a copy of which has been provided to
Parent, approved this Agreement and the transactions contemplated hereby and by
the Ancillary Agreements, and has determined that this Agreement and the
transactions contemplated hereby and by the Ancillary Agreements, including the
Merger, taken together, are in the best interests of the shareholders of the
Company and (b) adopted resolutions to recommend that the holders of the shares
of the Company Capital Stock approve this Agreement and the transactions
contemplated herein, including the Merger.

    

    
      
        
           

        

        
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    2.21.      Bank Accounts; Accounts
Receivable.

     

    (a)           Section 2.21(a) of
the Disclosure Schedule provides accurate and complete information with respect
to each account maintained by or for the benefit of the Company at any bank or
other financial institution.

     

    (b)           All
accounts receivable of the Company shown on the Balance Sheet have arisen only
from bona fide transactions in the ordinary course of business, are valid
receivables subject to no setoffs or counterclaims.  To the Knowledge
of the Company, all such accounts receivable are current and collectible within
90 days after such account is due, subject to the reserve for bad debts as set
forth on the Balance Sheet.

     

    (c)           There
are no loans or advances made by the Company to any Company Employee, director,
consultant or independent contractor.

     

    2.22.      Certain
Payments.  To the Knowledge of the Company, the Company has
not, nor has any other Person or entity, directly or indirectly, on behalf of or
with respect to the Company's business: (a) made or received any payment which
was not legal to make or receive; (b) created or used any "off-book" bank or
cash account or "slush fund," (c) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
political activity; (d)  given or received any illegal discounts or
rebates or any other violation of the antitrust laws of the United States or any
similar foreign law; or (e) engaged in any conduct constituting a violation of
the U.S. Foreign Corrupt Practices Act of 1977 and the regulations promulgated
thereunder or any similar foreign law.  No investigation or proceeding
relating to any payment described in this Section 2.22(a)
through (e)
above which was made, or is alleged to have been made, by or on behalf of the
business of the Company is pending before any Governmental Entity, nor, to the
Knowledge of the Company, is any such proceeding threatened or reasonably
anticipated.

     

    SECTION
3

    REPRESENTATIONS
AND WARRANTIES OF STOCKHOLDERS SEVERALLY

     

    Each of
the Stockholders, severally and not jointly, represents and warrants to Parent
as follows:

    

    3.1.        Authority; No
Conflict.

     

    (a)           Such
Person has all requisite power and authority to enter into this Agreement and
any Ancillary Agreements to which he or she is a party and to consummate the
transactions contemplated hereby and thereby.  Each of this Agreement
and each Ancillary Agreement to which such person is a party has been duly
executed and delivered by such Person, and constitutes the valid binding
obligation, of such Person, enforceable in accordance with its
terms.   Such Person owns the Company Capital Stock as set forth
on attached Schedule
I, which shares are owned of record and beneficially by such Person free
and clear of any restrictions on transfer, Taxes, Encumbrances, options,
warrants, purchase rights, contracts, commitments, equities, claims, demands or
other encumbrances.  Such Person is not a party to any voting trust,
proxy or other agreement or understanding with respect to any such shares owned
by such Person.

    

    
      
        
           

        

        
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    (b)           The
execution and delivery of this Agreement by such Person does not, and, as of the
Effective Time, the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements shall not, conflict with, or result in
any conflict of any mortgage, indenture, lease, Contract or other agreement or
instrument, permit, concession, franchise, License, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to such Person or its
respective properties or assets, which, if adversely determined, would,
individually or in the aggregate, result in a material adverse effect to such
Person.

     

    3.2.        Investment
Experience.  Such Person has such knowledge and experience in
financial and business matters that he or she is capable of evaluating the
merits and risks of the sale of his or her shares in the Merger.

     

    3.3.        Accredited
Investor.  Such Person is an "accredited investor" as defined
in Rule 501 promulgated under the Securities Act of 1933, as amended (the
"Securities Act").

     

    3.4.        Merger
Consideration.

     

    (a)           Acquisition for
Investment.  The shares of Series E Preferred Stock comprising
the Merger Consideration shall be acquired for investment for such Person's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, or any securities into which the Merger
Consideration shares are convertible (the "Conversion Shares"),
and such Person has no present intention of selling, granting any participation
in or otherwise distributing the same.

     

    (b)           Reliance Upon Stockholders'
Representations.  Such Person understands that the Merger
Consideration shares and the Conversion Shares have not been registered under
the Securities Act on the grounds that the sale provided for in this Agreement
and the issuance of securities hereunder is exempt from registration under the
Securities Act pursuant to Section 4(2), including Regulation D thereunder, and
that Parent's reliance on such exemption is predicated on the representations
set forth herein.

     

    (c)           Risks and Special
Considerations.  Such Person understands the risks and special
considerations relating to an investment in Parent pursuant to the
Merger.

     

    (d)           Investment
Experience.  Such Person is experienced in evaluating and
investing in private placement transactions of securities of companies in a
similar stage of development and acknowledges that such Person can bear the
economic risk of its investment.  Such Person has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investment in the Merger Consideration
shares.

     

    (e)           Restricted
Shares.  Such Person understands that the Merger Consideration
shares and the Conversion Shares may not be sold, transferred or otherwise
disposed of without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration statement
covering the Merger Consideration shares and/or the Conversion Shares or an
available exemption from registration under the Securities Act, the Merger
Consideration shares and the Conversion Shares must be held
indefinitely.  In particular, such Person is aware that the Merger
Consideration shares and the Conversion Shares may not be sold pursuant to Rule
144 promulgated under the Securities Act unless all of the conditions of that
rule are met.  Among the conditions for use of Rule 144 may be the
availability of current information to the public about Parent.

    

    
      
        
           

        

        
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    (f)           Status of Parent's Securities Under
the Exchange Act.  Such Person represents and warrants to
Parent that such Person acknowledges and understands that:

     

     (i)           Parent's
Class A Common Stock trades on the "pink sheets" under the symbol
CPYT.PK.  Parent has no shares of its capital stock registered under
the Exchange Act including any shares of its Series E Preferred
Stock.

     

     (ii)          Parent
is not currently subject to the information requirements of the Exchange Act,
although Parent is currently voluntarily filing annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission (the "SEC").

     

     (iii)         On
April 30, 2010, Parent filed a Form 10 with the SEC to register its Class A
Common Stock under the Exchange Act.  The SEC has reviewed such Form
10.  The Company withdrew its filing of such Form 10 while it responds to
the SEC's comments.  The Company cannot predict when it will re-file
such Form 10 with the SEC or when such registration will be declared effective,
if ever, but the Company intends to continue voluntarily filing reports and
information under the Exchange Act until then.

     

     (iv)         All
information filed by Parent with the SEC may be inspected and copied at the
SEC's Public Reference Room in Washington, D.C. at 100 F Street, N.E.,
Washington, D.C. 20549, on official business days from 10:00 a.m. to
3:00 p.m. Such Person may obtain information on the operation of the
SEC's Public Reference Room by calling (800) SEC-0330.  Such Person
may also purchase copies of Parent's SEC filings by writing to the SEC, Public
Reference Section, 100 F Street, N.W., Washington, D.C.
20549.  Parent's SEC filings are also available on the SEC's website
at http://www.sec.gov.

     

    (g)           Legends.

     

     (i)           Such
Person acknowledges that the certificates evidencing the Merger Consideration
shares and the Conversion Shares may bear substantially the following
legends:

     

    "THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR
RULE 144A OF SUCH ACT."

    

     (ii)          Any
legend required by the laws of any other applicable jurisdiction.

    

    
      
        
           

        

        
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    3.5.        Due Organization,
Etc.  If such Person is an Entity: (a) such Person is duly
organized, validly existing and in good standing under the laws of the
jurisdiction under which it is organized; (b) the execution and delivery of the
Merger Agreement and the Ancillary Agreements by such Person have been duly
authorized by all necessary action on the part of the board of directors and/or
equity holders of such Stockholder or other Persons performing similar
functions; and (c) the execution and delivery of this Merger Agreement and the
Ancillary Agreements by such Stockholder does not and will not, and the
performance of the this Merger Agreement and the Ancillary Agreements by such
Stockholder will not, result in or constitute any breach of or default under the
partnership agreement, operating agreement or other organizational documents of
such Stockholder.

     

    SECTION
4

    REPRESENTATIONS
AND WARRANTIES OF PARENT

     

    Parent
represents and warrants to the Stockholders as follows:

    

    4.1.        Organization, Existence and
Power.  Parent is a corporation duly organized and validly
existing under the laws of the State of Oregon.  Parent has the
corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified to do business in its state of incorporation and
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on Parent.

     

    4.2.        Authority; No
Conflict.

     

    (a)           Parent
has all requisite corporate power and authority to enter into this Agreement and
any Ancillary Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.  The execution and
delivery of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Parent.  Each of this
Agreement and each Ancillary Agreement has been duly executed and delivered by
Parent, as applicable, and constitutes the valid binding obligation of Parent
enforceable in accordance with its terms.  Neither the execution nor
delivery of this Agreement nor the consummation of the transactions contemplated
hereby requires any vote, consent, approval or other action on the part of the
shareholders of Parent.

     

    (b)           The
execution and delivery of this Agreement by Parent does not, and, as of the
Effective Time, the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements shall not, conflict with, or result in
any Conflict pursuant to (i) any provision of Parent's Articles of Incorporation
or Bylaws in effect as of date hereof, or (ii) any mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or its respective properties or assets, which, if adversely
determined, would, individually or in the aggregate, result in a material
adverse effect to Parent.

     

    4.3.        SEC
Filings.  Materials filed by Parent with the SEC do not (i)
contain any representation, warranty or information that is false or misleading
with respect to any material fact, or (ii) omit to state any material fact
necessary in order to make the representations, warranties and information
contained and to be contained in this such materials (in
the light of the circumstances under which such representations, warranties and
information were made or provided) not false or misleading in any material
respect.

    

    
      
        
           

        

        
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    SECTION
5

    ADDITIONAL
AGREEMENTS

     

    5.1.        Confidentiality.  Each
of the Parties hereto hereby agrees to keep information or knowledge obtained in
any investigation made pursuant to the negotiation and execution of this
Agreement or the effectuation of the transactions contemplated hereby ("Confidential
Information") confidential in accordance with the terms contained in the
letter agreement dated on or about May 27, 2010 between the Company and
Parent.

    

    5.2.        Audit of Financial
Statements.   Promptly following the Effective Time, Parent
will retain an independent accounting firm to audit the Financial Statements of
the Company for the years ended December 31, 2009 and 2008 in order to comply
with SEC regulations for acquisitions of "significant subsidiaries," which audit
will be completed within 71 days after the Effective Time.  The fees
of a third party auditor chosen by Parent to conduct such audit is estimated to
be $30,000, which will be treated as a Company Transaction Expense pursuant to
Section
5.5.  Any expenses for such audit in excess of $30,000 will be
borne solely by Parent.

    

    5.3.        Public
Disclosure.  No Party to this Agreement, or any of its
Affiliates, shall issue a press release or otherwise make any public statements
with respect to this Agreement or the transactions contemplated by this
Agreement, whether prior to or following Closing, without the prior written
consent of Parent, which consent shall not be unreasonably withheld or delayed;
provided, that Parent may, without the consent of any other Party, make any
announcements or filings as are necessary or appropriate under the Legal
Requirements of any applicable securities laws, including the Exchange
Act.

    

    5.4.        Release.  Effective
as of the Effective Time, each of the Stockholders (personally and as an
officer, director and/or employee of the Company) shall be deemed to have, on
their own behalf and on behalf of their respective Affiliates and related
Persons, including derivatively, to the fullest extent legally possible, hereby
completely and forever release, waive and discharge, and shall be forever
precluded from asserting, any and all claims, obligations, suits, judgments,
damages, demands, debts, rights, causes of action and liabilities, of any kind
or nature, whether liquidated or unliquidated, fixed or contingent, matured or
unmatured, known or unknown, foreseen or unforeseen, then existing in law,
equity or otherwise, that the Stockholder and its respective Affiliates and
related Persons, including derivatively, to the fullest extent legally possible,
has, had or may have against the Company and the present or former directors,
officers, employees, management, predecessors, successors, members, attorneys,
accountants, underwriters, investment bankers, financial advisors, appraisers,
representatives and agents of the Company acting in such capacity, that are
based in whole or in part on any act, omission, transaction or other occurrence
taking place on or prior to the Effective Time; provided,  the
provisions of this Section 5.4 shall be
inapplicable to the right of the Stockholders to receive (a) the Merger
Consideration; (b) the other benefits of this Agreement and the Ancillary
Agreements to which the Stockholders are expressly entitled; and (c) rights to
indemnification under the DGCL or the Company Charter Documents to the extent
(X) such indemnification relates to a third-party claim by a Person not an
Affiliate or a Related Party of any Stockholder and (Y) the facts underlying
such claim would not give rise to a claim for indemnification against the
Stockholder under this Agreement.  In making this waiver, each
Stockholder acknowledges that it may hereafter discover facts in addition to or
different from those which such Stockholder now believes to be true with respect
to the subject matter released herein, but agrees that it has taken that
possibility into account in reaching this Agreement and as to which such
Stockholder expressly assumes the risk.

    

    
      
        
           

        

        
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    5.5.        Fees and Expenses; Cash at
Closing.

     

    (a)           Except
as otherwise provided in this Agreement: (a) all fees, costs and expenses
of Parent or Merger Sub incurred in connection with this Agreement and the
Merger, including fees and expenses of financial advisors, financial sponsors,
legal counsel and other advisors, shall be paid by Parent whether or not the
Merger is consummated; and (b) all fees, costs and expenses of the Company,
the Stockholders' Representative and the Stockholders incurred in connection
with this Agreement and the Merger, including fees and expenses of financial
advisors, financial sponsors, legal counsel and other advisors, (the "Transaction
Expenses"), shall be paid as provided in the following
sentence.  All fees, costs and expenses of the Company, the
Stockholders' Representative and the Stockholders identified in this Section 5.5 that
are incurred prior to the Effective Time shall be treated as Transaction
Expenses under this Agreement and shall be the sole responsibility of the
Company.  The Company covenants that the sum of all Transaction
Expenses shall not exceed $86,725.

     

    (b)           The
Company covenants that at Closing it will have cash in an amount not less than
$100,000 (the "Closing
Cash Amount").  The Closing Cash Amount will be retained by the
Company to pay the Transaction Expenses and any other liabilities of the Company
existing as of the Closing (collectively, the "Closing
Liabilities").  The difference between the Closing Cash Amount
and the Closing Liabilities (the "Excess Cash Amount")
shall be retained by the Company and used to pay any Damages incurred or
suffered by the Company in connection with the Brooks Lawsuit (the "Brooks Lawsuit
Damages").  If the Brooks Lawsuit is settled or otherwise
resolved on a final and non-appealable basis within 18 months after the Closing,
the Company will distribute to the holders of the Company's Series A Preferred
Stock, according to their percentage ownership of such stock immediately before
the Closing, the portion, if any, of the Excess Cash Amount not used to pay the
Brooks Lawsuit Damages, but only if such amount exceeds $10,000.

     

    5.6.        Transfer and Similar
Taxes.  Any sales, use, value added, goods and services,
transfer, gains, stamp, duties, recording and similar Taxes (collectively,
"Transfer
Taxes") incurred in Oregon as a result of the Merger shall be borne by
Parent.  All other Transfer Taxes incurred as a result of the Merger
shall be borne by the Stockholders.

    

    
      
        
           

        

        
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    5.7.        Non-Competition.

    

    (a)           During
the Non Compete Period, the Key Stockholders shall not, directly or indirectly,
own, manage, control, participate in, consult with, render services for, be a
director, an officer, employee or sales representative of or a lender of or
investor in, be a consultant to, be a joint venturer, or in any manner engage in
activity through or on behalf of, any Person (including without limitation in
their individual capacity as a sole proprietor) (a "Competitor") that
engages in the Restricted Territory in the business conducted by Parent, any of
its Subsidiaries or the Company in the Restricted Territory at the time such Key
Stockholder's employment terminates with Parent or any of its Subsidiaries) or
which Parent or any of its Subsidiaries is actively developing as of the time
such Key Stockholder's employment terminates with Parent or any of its
Subsidiaries.  As used in this Agreement, (i) "Restricted Territory"
means the United States, and (ii) "Non Compete Period"
means the period commencing on the Effective Time and ending on the third
anniversary of the Effective Time.  Nothing in this Agreement shall
prohibit either Key Stockholder from being a passive owner of not more than 2%
of the outstanding ownership interests of any Person which is publicly traded,
so long as such Key Stockholder has no active participation in the business of
such Person.

    

    (b)           During
the Non Compete Period, except as otherwise specifically permitted under this
Agreement, the Key Stockholders shall not directly or indirectly either
individually, or as a principal, partner, broker, sales representative, agent,
employee, employer, consultant, shareholder, joint venturer, or investor, or as
a director or officer of any corporation or association, or in any other manner
or capacity whatsoever (i) induce or attempt to induce, or cause any employee,
officer or director of Parent or any of its Subsidiaries to leave the employ of
Parent or any of its Subsidiaries, or in any way materially interfere with the
relationship between Parent or any of its Subsidiaries, on the one hand, and any
such employee, officer or director, on the other hand, or (ii) induce, or
attempt to induce, any customer, salesperson, distributor, supplier, vendor,
manufacturer, representative, agent, jobber, licensee or other Person
transacting business with Parent or any of its Subsidiaries to reduce or cease
doing business with Parent or any of its Subsidiaries, or in any way to
interfere with the relationship between any such customer, salesperson,
distributor, supplier, vendor, manufacturer, representative, agent, jobber,
licensee or business relation, on the one hand, and Parent or any of its
Subsidiaries, on the other hand.

    

    (c)           The
Parties intend that the covenants contained in Sections 5.7(a) and
(b) above shall
be construed as a series of separate covenants, one for each state of the United
States or country constituting the Restricted Territory (as defined
herein).  Except for geographic coverage, each such separate covenant
shall be deemed identical in terms to the covenants contained in Section 5.7(a) and
(b)
above.  If, in any proceedings, a court or arbitrator shall refuse to
enforce any of the separate covenants deemed included in Section 5.7(a) and
(b), then such
unenforceable covenant shall be deemed reduced in scope, geographical area or
period or, if necessary, eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced and the other covenants set forth in Sections 5.7(a) and
(b) shall
remain in effect as if the provision had been executed without the invalid
covenants.  The Key Stockholders acknowledge that money damages would
be an inadequate remedy for any breach of this Section
5.7.  Therefore, in the event of a breach or threatened breach
of this Section
5.7, Parent, any of its Subsidiaries or their successors or assigns may,
in addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce or prevent any violations of the provisions of this
Section 5.7
(without posting a bond or other security).

    

    
      
        
           

        

        
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    5.8.        Termination of Certain
Agreements.

     

    (a)           The
Company and the Stockholders party thereto agree that, effective as of
immediately before the Effective Time, the First Refusal and Co-Sale Agreement,
the Voting Agreement and the Investors' Rights Agreement, each dated May 5, 2008
and entered into among the Company and the Stockholders, are terminated and of
no further force or effect.

     

    (b)           The
Company and the Key Stockholders agree that, effective as of immediately before
the Effective Time, the Restricted Stock Agreements, dated May 5, 2008, between
the Company and the Key Stockholder party thereto, are terminated and of no
further force or effect.

     

    SECTION
6

    CLOSING
DELIVERIES AND TASKS

     

    6.1.        Company
Deliveries.  The Company hereby delivers to Parent the
following:

     

    (a)           Employment
Agreements.  Employment Agreements with CP Technologies, LLC
executed by the Key Stockholders; and terminations of all existing employment
agreements between the Key Stockholders and the Company.

     

    (b)           Resignations.  Resignations
of all directors and officers of the Company.

     

    (c)           Consents.  Consents,
in form and substance acceptable to Parent in its sole discretion, with respect
to all Contracts identified in Section 2.12(c) of
the Disclosure Schedule.

     

    (d)           Certificate of
Merger.  The Certificate of Merger duly signed by the
Company.

     

    (e)           Certificates.  Certificates,
along with appropriate duly signed stock powers, evidencing all of the issued
and outstanding shares of Company Capital Stock.

     

    (f)           Terminations of Advisory
Agreements.  Terminations, in form and substance acceptable to
Parent in its sole discretion, of each Advisory Agreement to which the Company
is a party, including the Advisory Agreements identified in Section 2.12(a)(i) of
the Disclosure Schedule.

     

    6.2.        Parent
Tasks.  Concurrently with the execution and delivery of this
Agreement, Parent shall:

     

    (a)           Certificate of
Merger.  Sign the Certificate of Merger and file it with the
Secretary of State of the State of Delaware.

     

    (b)           Certificate of Designation Regarding
Series E Preferred Stock.  Deliver evidence that the
Certificate of Designation regarding Parent's Series E Preferred Stock has been
filed with the Oregon Secretary of State in substantially the form attached
hereto as Exhibit
B, and is effective.

    

    
      
        
           

        

        
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    SECTION
7

    SURVIVAL
OF REPRESENTATIONS AND WARRANTIES

     

    The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement (each as modified by the Disclosure Schedules) shall
survive the Closing and continue until 5:00 p.m., Pacific Time, on the 18th
month anniversary of the Effective Time, except that the representations and
warranties contained in the following Sections of this Agreement shall survive
for the periods indicated (each, the "Survival
Date"):

    

    
      
        
          
            
              
                	
                        Section

                      	 	
                        Survival Date

                      
	
                        2.2   (Capitalization,
      Etc.)

                      	 	
                        30
      days after the expiration of any applicable

                      
	
                        2.4   (Authority)

                      	 	
                        statute
      of limitations.

                      
	
                        2.8   (Tax
      and Other Returns and Reports)

                      	 	 
      
	
                        2.9   (Restrictions
      on Business Activities)

                      	 	 
      
	
                        2.11
      (Intellectual Property)

                      	 	 
      
	
                        2.14
      (Litigation)

                      	 	 
      
	
                        2.17
      (Employee Benefit Plans)

                      	 	 
      
	
                        3.1   (Authority;
      No Conflict)

                      	 	 
      

              

            

          

        

      

    

    

    SECTION
8

    RECOURSE

     

    8.1.        Damages.

     

    (a)           Subject
to Section
8.1(g), the Stockholders, jointly and severally, shall indemnify Parent,
the Company and their respective directors, officers, employees, agents,
successors or assigns (individually, a "Loss Party" and
collectively, the "Loss Parties")
against, and hold the Loss Parties harmless from, any Damages incurred by, or
sought to be imposed upon, any of the Loss Parties, directly or indirectly as a
result of or arising out of:

     

     (i)           any
inaccuracy or breach of a representation or warranty of the Company made in this
Agreement or any Ancillary Agreement

     

     (ii)          the
breach of any covenant made by the Company in this Agreement or any Ancillary
Agreement;

     

     (iii)         any
matter identified on attached Exhibit C;
and/or

     

     (iv)         the
allocation of the Merger Consideration among
the  Stockholders.

     

    (b)           Subject to Section
8.1(g), each Stockholder, severally, and not jointly, shall indemnify
each of the Loss Parties against, and hold the Loss Parties harmless from, any
Damages incurred by, or sought to be imposed upon, any of the Loss Parties,
directly or indirectly as a result of or arising out of:

     

     (i)           any
inaccuracy or breach of a representation of warranty of such Stockholder made in
this Agreement or any Ancillary Agreement; and/or

    

    
      
        
           

        

        
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     (ii)          the
breach of any covenant made by such Stockholder in this Agreement or any
Ancillary Document.

     

    (c)           The
Stockholders shall have no obligation to indemnify or hold any Loss Party
harmless from and against any Damages, as finally determined pursuant to the
terms of this Agreement until the Loss Parties have suffered aggregate Damages
in excess of $25,000 (the "Deductible");
provided that the Deductible shall not apply with respect to any Damages arising
with respect to Section 2.8 (Taxes
and Other Returns and Reports); Section 9 (Tax
Matters); Section
2.17 (Employee Benefit Plans); and/or any item identified on Exhibit C (Special
Indemnity Items).

     

    (d)           The
Stockholders shall not have any liability for any breach of or inaccuracy in a
representation or warranty contained in this Agreement if a Loss Party had
knowledge of such breach or inaccuracy at the Effective Time.

    

    (e)           Claims
for indemnification, compensation and reimbursement brought in accordance with
and subject to this Section 8 shall be
the sole and exclusive remedy of any Loss Party for monetary damages from and
after the Closing with respect to breaches of any representations, warranties,
covenants and obligations of the Company or the Stockholders under this
Agreement.  Notwithstanding the foregoing, nothing contained in this
Agreement shall limit the rights of any Loss Party to seek or obtain injunctive
relief or any other equitable remedy to which such Loss Party is otherwise
entitled.  Without limiting the generality of the foregoing, nothing
contained in this Agreement shall limit the rights of the Stockholders'
Representative or any Stockholder to seek or obtain against Parent monetary
damages, injunctive relief or any other equitable remedy to which the
Stockholders' Representative or any Stockholder is otherwise
entitled.

     

    (f)   
       The parties acknowledge and agree
that, if the Surviving Corporation pays, sustains, suffers or incurs any Damages
as a result of or in connection with any indemnifiable matter described herein,
then (without limiting any of the rights of the Surviving Corporation as a Loss
Party) Parent shall also be deemed, by virtue of its ownership of the stock of
the Surviving Corporation, to have paid, sustained, suffered or incurred such
Damages (it being understood that any Damages paid, sustained, suffered or
incurred by the Surviving Corporation and/or Parent shall be recoverable under
this Section 8
by either Parent or the Surviving Corporation, but not both of
them).

     

    (g)

     (i)           All
claims for indemnification and monetary damages under Section 8.1(b) shall
be satisfied solely through surrender by the affected Stockholders of shares of
Series E Preferred Stock issued as Merger Consideration to such Stockholders as
set forth in Section
8.4 and any shares of the Class A Common Stock of Parent issued upon
conversion of such shares of Series E Preferred Stock (collectively, the "Merger
Stock").

     

     (ii)          All
other claims for indemnification and monetary damages against the Stockholders
under this Agreement shall be satisfied solely through surrender of shares of
Merger Stock as set forth in Section
8.4.

    

    
      
        
           

        

        
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    (h)           Without
prejudice to the indemnification rights of any Loss Party, if any Damages
sustained by a Loss Party are covered by an insurance policy or an
indemnification or reimbursement obligation of another Person (other than an
Affiliate of such Loss Party), the Loss Party shall use commercially reasonable
efforts (but specifically excluding instituting litigation) to collect such
insurance, indemnity or reimbursement payments.  If the Loss Party
receives such insurance or indemnity payments prior to being indemnified with
respect to such Damages, the amount of Damages shall be reduced by the net
amount of such insurance proceeds or indemnity payments to the extent related to
such Damages, less reasonable attorney’s fees and other third party expenses
incurred in connection with such recovery.  The amount of any and all
Damages shall be reduced (but not below zero) to take into account any actual
net reduction in Tax payable by the Loss Party or its Affiliates, to the extent
such reduction (i) results directly from the incurrence of such Damage, and (ii)
occurs during or prior to the Tax year (but not earlier than the Effective Time)
in which the indemnification payment is made.

    

    8.2.        Indemnification
Disputes.

    

    (a)           Indemnification
Claims.  Upon receipt by the Stockholders' Representative at
any time on or before the applicable Survival Date of a certificate signed by
any officer of Parent (an "Indemnity
Notice"):  (i) stating that any Loss Party has paid or properly
accrued, or reasonably expects to pay or properly accrue, Damages, and (ii)
specifying in reasonable detail the individual items of Damages included in the
amount so stated, the date each such item was paid or properly accrued or the
basis for any Liability reasonably expected to be incurred, and the nature of
the misrepresentation, breach of warranty or breach of covenant to which such
item is related and the number of shares of Series E Preferred Stock comprising
the Merger Consideration that shall be reduced pursuant to Section
8.4.

     

    (b)           Objections to Indemnity
Notice.  For a period of 30 days after such delivery, Parent
shall make no reduction to the number of shares of Series E Preferred Stock
comprising the Merger Consideration pursuant to Section 8.4, unless
Parent shall have received written authorization from the Stockholders'
Representative to make such transfer or has been ordered to make a reduction by
a court or arbitrators.  After the expiration of such 30-day period,
Parent shall reduce the number of shares of Series E Preferred Stock comprising
the Merger Consideration in accordance with Section 8.4; provided, however, that no
such reduction may be made, other than with respect to a reduction that it has
been ordered to make by a court or arbitrators, if the Stockholders'
Representative objects in a written statement to the claim made in the Indemnity
Notice, and such statement has been delivered to Parent prior to the expiration
of such 30-day period.

     

    (c)           Resolution of Conflicts Regarding
Indemnity Notice.

     

     (i)           In
case the Stockholders' Representative objects in writing to any claim or claims
made in any Indemnity Notice, the Stockholders' Representative and Parent shall
attempt in good faith to agree upon the rights of the respective Parties with
respect to each of such claims.  If the Stockholders' Representative
and Parent should so agree, a memorandum setting forth such agreement shall be
prepared and signed by such Parties.  Parent shall be entitled to rely
on any such memorandum and reduce the number of shares of Series E Preferred
Stock comprising the Merger Consideration in accordance with the terms
hereof.

    

    
      
        
           

        

        
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     (ii)          If
no such agreement can be reached after 30 days, either Parent or the
Stockholders may demand arbitration of the matter pursuant to Section 10.9 hereof
unless the amount of the damage or loss is at issue in pending litigation with a
third party, in which event arbitration shall not be commenced until such amount
is ascertained.  No shares of Series E Preferred Stock shall be
released from escrow or reduced pursuant to Section 8.4 until the
amount of the damage or loss at issue is finally determined in accordance with
the terms of this Agreement.

     

    8.3.        Third-Party
Claims.  Parent shall notify the Stockholders' Representative
within 10 days of becoming aware of a third-party claim which may result in a
demand for indemnification under this Agreement, provided that the failure to
give timely notice shall relieve the Stockholders of their indemnity obligations
only (x) if they no had prior knowledge of such third party claim and
(y)  to the extent that they have suffered prejudice by such
failure.  The Company shall have the right to conduct and control,
through counsel of its own choosing, the defense of any third-party claim,
action, or suit or compromise or settlement thereof.  The
Stockholders' Representative may, at its election, participate in the defense of
any such claim, action, or suit through counsel of its choosing, but the fees
and expenses of such counsel shall be at the expense of the Stockholders'
Representative.

     

    8.4.        Escrow of Merger Consideration;
Issuance of Series E Preferred Certificates.

     

    (a)           All
shares of Merger Stock shall be held in escrow by Parent until the 18th month
following the Effective Time (the "Escrow Release
Date").  Parent shall promptly after the Escrow Release Date
release to the Stockholders all shares of Merger Stock not subject to Sections 8.4(b), (c) or
(d).

     

    (b)           To
the extent Parent is entitled to reduce the number of shares of Merger Stock
issued to a particular Stockholder to satisfy an indemnity claim under Section 8.1(b),
Parent shall cancel the certificate representing a number of shares of Merger
Stock issued to such Stockholder at the Effective Time equal to the total amount
of Damages determined pursuant to this Section 8, divided by
the Share Value, and shall issue a new certificate representing the resulting
lesser number of shares of Merger Stock issued to such Stockholder.

     

    (c)          
To the extent Parent is entitled to reduce the number of shares of Merger Stock
issued to all Stockholders to satisfy any other indemnity claim under this
Agreement, Parent shall reduce the number of shares of Merger Stock issued to
each Stockholder pro rata based on the number of shares of Series E Preferred
Stock identified opposite such Stockholders' name on attached Schedule I, in an
aggregate amount with respect to all Stockholders equal to  the total
amount of Damages determined pursuant to this Section 8, divided by
the Share Value.  Thereafter, Parent shall cancel the certificates
representing the shares of Merger Stock issued to the Stockholders at the
Effective Time and shall issue new certificates representing the resulting
lesser number of shares of Merger Stock issued to the Stockholders.

    

    
      
        
           

        

        
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    (d)           To
the extent that a claim for indemnity has been properly tendered to the
Stockholders' Representative and has not been resolved by the Escrow Release
Date, Parent shall retain shares of Merger Stock in escrow having a Share Value
as of the Escrow Release Date equal to the amount of such claim until the final
resolution of such claim.  Such retention shall be with respect to a
particular Stockholder only in the case of an indemnification claim under Section 8.1(b), and
shall be pro rata in the case of any other indemnification claim under this
Agreement.

     

    8.5.        Stockholders'
Representative.

     

    (a)           The
Stockholders (by virtue of their execution of this Agreement) hereby irrevocably
nominate, constitute and appoint Aleem Choudhry as the agent and true and lawful
attorney in fact of the Stockholders (the "Stockholders'
Representative"), with full power of substitution, to act in the name,
place and stead of the Stockholders for purposes of executing any documents and
taking any actions that the Stockholders' Representative may, in its sole
discretion, determine to be necessary, desirable or appropriate in all matters
relating to or arising out of this Agreement, including in connection with any
claim for indemnification.  Aleem Choudhry hereby accepts his
appointment as the Stockholders' Representative

     

    (b)           The
Stockholders (by virtue of the approval of the Merger and the adoption of this
Agreement and their execution of this Agreement) grant to the Stockholders'
Representative full authority to execute, deliver, acknowledge, certify and file
on behalf of the Stockholders (in the name of any or all of the Stockholders or
otherwise) any and all documents that the Stockholders' Representative may, in
its sole discretion, determine to be necessary, desirable or appropriate, in
such forms and containing such provisions as the Stockholders' Representative
may, in its sole discretion, determine to be appropriate, in performing its
duties as contemplated by Section 8.5(a).  Notwithstanding
anything to the contrary contained in this Agreement or in any other Ancillary
Agreement, each Loss Party shall be entitled to deal exclusively with the
Stockholders' Representative on all matters relating to Section 8, and shall
be entitled to rely conclusively (without further evidence of any kind
whatsoever) on any document executed or purported to be executed on behalf of
any Stockholder by the Stockholders' Representative, and on any other action
taken or purported to be taken on behalf of any Stockholder by the Stockholders'
Representative, as fully binding upon such Stockholder.

     

    (c)           The
power of attorney granted in Section 8.5(a):
(i) is coupled with an interest and is irrevocable; (ii) may be
delegated by the Stockholders' Representative; and (iii) shall survive the
dissolution, death or incapacity of each of the Stockholders.

     

    (d)           If
the Stockholders' Representative shall die, become disabled or otherwise be
unable to fulfill his responsibilities as agent of the Stockholders, then the
Stockholders representing a majority-in-interest of the Merger Consideration
shall, within 10 days after such death or disability, appoint a successor agent
for the Stockholders and, promptly thereafter, shall notify Parent of the
identity of such successor.  Any such successor shall become the
"Stockholders' Representative" for purposes of this Agreement.  If for
any reason there is no Stockholders' Representative at any time, all references
herein to the Stockholders' Representative shall be deemed to refer to the
Stockholders.

    

    
      
        
           

        

        
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    (e)           All
expenses incurred by the Stockholders' Representative in connection with the
performance of its duties as Stockholders' Representative shall be borne and
paid exclusively by the Stockholders.  All of the indemnities,
immunities and powers granted to the Stockholders' Representative under this
Agreement shall survive the termination of this Agreement.

     

    (f)           By
the execution and delivery hereof, including counterparts hereof, each
Stockholder hereby agrees that the Stockholders' Representative shall have the
right to take appropriate action under this Agreement as he may deem necessary
or appropriate in connection with any transaction contemplated hereunder,
including the power to:

     

    (i)           act
for each Stockholder with respect to all indemnification matters referred to
herein, including the right to compromise or settle any such claim on behalf of
any Stockholder;

     

    (ii)          act
for each Stockholder with respect to all adjustments referred to
herein;

     

    (iii)         amend
or waive any provision hereof (including any condition to Closing) in any manner
that does not differentiate among the Stockholders;

     

    (iv)         employ,
obtain and rely upon the advice of legal counsel, accountants and other
professional advisors as the Stockholders' Representative, in his sole
discretion, deems necessary or advisable in the performance of the duties of the
Stockholders' Representative;

     

    (v)          incur
any expenses, liquidate and withhold assets received on behalf of the
Stockholders prior to their distribution to the Stockholders to the extent of
any amount that the Stockholders' Representative deems necessary for payment of
or as a reserve against expenses, and pay such expenses or deposit the same in
an interest-bearing account established solely for such purpose, and to then
make distributions to Stockholders in accordance with their proportionate share
of the Merger Consideration;

     

    (vi)         receive
all notices, communications and deliveries hereunder on behalf of the
Stockholders; and

     

    (vii)        do
or refrain from doing any further act or deed on behalf of each Stockholder that
the Stockholders' Representative deems necessary or appropriate, in his sole
discretion, relating to the subject matter hereof as fully and completely as any
Stockholder could do if personally present and acting as though any reference to
any Stockholder herein was a reference to the Stockholders'
Representative.

     

    The
Stockholders' Representative shall act for each Stockholder on all matters set
forth herein in the manner the Stockholders' Representative believes to be in
the best interest of such Stockholder, but the Stockholders' Representative
shall not be responsible to any Stockholder for any Damages any Stockholder may
suffer by reason of the performance by the Stockholders' Representative of such
Stockholders' Representative's duties hereunder, other than loss or damage
arising from willful misconduct or gross negligence in the performance of such
Stockholders' Representative's duties hereunder.

    

    
      
        
           

        

        
          29

          
            

          

        

        
           

        

      

    

     

    SECTION
9

    TAX
MATTERS

     

    9.1.        Tax
Indemnification.  Subject to Section
8.1(g), each of the Stockholders shall jointly and severally indemnify
the Company and Parent and hold them harmless from and against (a) all Taxes (or
the non-payment thereof) of the Company for all taxable periods ending on or
before the Effective Time and the portion through the end of the Effective Time
for any taxable period that includes (but does not end on) the Effective Time
(the "Pre-Closing Tax
Period"), (b) any and all income Taxes of any member of an affiliated,
consolidated, combined or unitary group of which the Company (or any predecessor
of the Company) is or was a member on or prior to the Effective Time, including
pursuant to Treasury Regulation §1.1502-6 or any analogous or similar Legal
Requirement, and (c) any and all Taxes of any Person (other than the Company)
imposed on the Company or Parent as a transferee or successor, by contract or
pursuant to any law, rule or regulation, which Taxes relate to an event or
transaction occurring before the Closing.

     

    9.2.        Straddle Period.  In
the case of any taxable period that includes (but does not end on) the Effective
Time (a "Straddle
Period"), the amount of any Taxes for the Pre-Closing Tax Period shall be
determined based on an interim closing of the books as of the close of business
on the Effective Time; provided, that exceptions, allowances or deductions that
are calculated on an annual basis, such as the deduction for depreciation, shall
be apportioned between such two taxable years or periods on a daily
basis.

     

    9.3.        Responsibility for Filing Tax
Returns. The Surviving Corporation, at the expense of the Surviving
Corporation, shall prepare or cause to be prepared and file or cause to be filed
all Tax Returns for the Company that are filed after the Effective
Time.  Parent shall permit the Stockholders' Representative to review
and comment on each such Tax Return described in the preceding sentence that
relate to any period ending on or prior to the Effective Time prior to filing
and shall make such revisions to such Tax Returns as are reasonably requested by
the Stockholders' Representative.  Parent shall not amend any Tax
Return for the Company filed before the Effective Time without the written
consent of the Stockholders' Representative, provided that such consent may not
be unreasonably withheld, delayed or conditioned.

     

    9.4.        Refunds and Tax
Benefits.  Any Tax refunds that are received by the Company,
and any amounts credited against Tax to which the Company becomes entitled, that
relate to Tax periods or portions thereof ending on or before the Effective Time
shall be for the account of the Stockholders, and the Company shall pay over to
the Stockholders any such refund or the amount of any such credit within 15 days
after receipt thereof. In addition, to the extent that a claim for refund or a
proceeding results in a payment or credit against Tax by a Governmental Body to
the Company of any amount accrued on the Company's balance sheet as of the
Effective Time (the "Effective Time Balance
Sheet"), the Company shall pay such amount to the Stockholders within 15
days after receipt thereof.  This Section 9.4 shall
not, however, apply to any Tax refunds included in the Effective Time Balance
Sheet or that result from the carryback of a net operating loss or other tax
attribute arising in a taxable period or portion thereof beginning after the
Effective Time.

    

    
      
        
           

        

        
          30

          
            

          

        

        
           

        

      

    

     

    9.5.        Cooperation on Tax
Matters.

     

    (a)           Parent,
the Company and the Stockholders shall cooperate fully, as and to the extent
reasonably requested by any other Party, in connection with the filing of Tax
Returns pursuant to this Section 9 and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon another Party's request) the provision of
records and information that are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.  The Company shall: (i) retain all books
and records with respect to Tax matters pertinent to the Company relating to any
taxable period beginning before the Effective Time until the expiration of the
statute of limitations (and, to the extent notified by Parent or the
Stockholders, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any Governmental
Body, and (ii) give the Stockholders 30 days written notice before transferring,
destroying or discarding any such books and records and, if the Stockholders so
requests, the Company shall allow the Stockholders to take possession of such
books and records.

     

    (b)           Parent
and the Stockholders shall, upon request, use commercially reasonable best
efforts to obtain any certificate or other document from any governmental
authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including with respect to the
transactions contemplated hereby).

     

    9.6.        Tax-Sharing Agreements. All
tax-sharing agreements or similar agreements with respect to or involving the
Company shall be terminated as of the Effective Time and, after the Effective
Time, the Company shall not be bound thereby or have any liability
thereunder.

     

    SECTION
10

    GENERAL
PROVISIONS

    

    10.1.      Notices.  All
notices and other communications hereunder shall be in writing, shall be
effective when received, and shall in any event be deemed to have been received
(a) when delivered, if delivered personally or by commercial delivery service;
(b) three (3) Business Days after deposit with U.S. Mail, if mailed by
registered or certified mail (return receipt requested); or (c) one Business Day
after the Business Day of deposit with Federal Express or similar overnight
courier for next day delivery (or two Business Days after such deposit if
deposited for second Business Day delivery), if delivered by such means to the
Parties at the following addresses (or at such other address for a Party as
shall be specified by like notice):

     

    (a)          if
to Parent, to:

     

    CarePayment
Technologies, Inc.

    5300
Meadows Road, Suite 400

    Lake
Oswego, OR 97035

    Attention:
James T. Quist

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    with a
copy to:

    Tonkon
Torp LLP

    1600
Pioneer Tower

    888 SW
Fifth Avenue

    Portland,
OR 97204

    Attention:  Kurt
W. Ruttum

    

    (b)          if
to the Company or the Stockholders to:

     

    Aleem
Choudhry, Stockholders' Representative

    640 Davis
Street, #17

    San
Francisco, CA 94111

    

    with a
copy to:

    McGuire
Woods LLP

    77 West
Wacker Drive, Suite 4100

    Chicago,
IL 60601

    Attention:  Benjamin
D. Kern

      

    10.2.      Construction.

     

    (a)          
For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.

       

    (b)           As
used in this Agreement and Exhibit A and
the Schedules to this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."  The
words "will" and "shall" have the same meaning.  The term "and/or"
means one or more, up to and including all, of the items listed with such
term.

     

    (c)           Except
as otherwise indicated, all references in this Agreement to "Sections,"
"Exhibits" and "Schedules" are intended to refer to Sections of this
Agreement and Exhibits and Schedules to this Agreement.

     

    10.3.      Counterparts.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the Parties and delivered to the
other Party, it being understood that all Parties need not sign the same
counterpart.  Facsimile or pdf transmission of any signed original
document, and retransmission of any facsimile or pdf transmission, shall be the
same as delivery of any original document.  At the request of any
Party, the other Parties shall confirm facsimile or pdf transmitted signatures
by signing an original document.

    

    
      
        
           

        

        
          32

          
            

          

        

        
           

        

      

    

     

    10.4.      Entire Agreement;
Assignment.  This Agreement, the schedules and exhibits hereto,
and the Ancillary Agreements: (a) constitute the entire agreement among the
Parties with respect to the subject matter of this Agreement and supersede any
and all prior agreements and understandings, both written and oral, among the
Parties with respect to the subject matter of this Agreement; (b) are not
intended to confer upon any other Person (including, those Persons listed on any
exhibits hereto) any rights or remedies hereunder; and (c) shall not be assigned
by operation of law or otherwise except as otherwise specifically provided,
except that Parent may assign its rights and delegate its obligations hereunder
to its affiliates prior to the Effective Time and any other Party
thereafter.

     

    10.5.      Severability.  In
the event that any provision of this Agreement or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement shall continue in full force
and effect and the application of such provision to other Persons or
circumstances shall be interpreted so as reasonably to effect the intent of the
Parties hereto.  The Parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that shall achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

     

    10.6.      Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Oregon regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

     

    10.7.      Rules of
Construction.  The Parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document shall
be construed against the Party drafting such agreement or document.

     

    10.8.      Attorney Fees. If any suit or
action (including, without limitation, any bankruptcy proceeding) is instituted
to enforce or interpret any provision of this Agreement, the prevailing Party
shall be entitled to recover from the Party not prevailing, in addition to other
relief that may be provided by law, an amount determined reasonable as attorney
fees at trial and on any appeal of such suit or action.

     

    10.9.      Dispute
Resolution.

     

    (a)           Other
than as provided in Section 10.9(c)(i),
any dispute between the Parties arising from or relating to this Agreement,
including without limitation any dispute concerning the breach, interpretation,
termination, or invalidity of this Agreement or any of its terms, shall be
resolved through binding arbitration as set forth in this
provision.  Notwithstanding the foregoing, the Parties agree to
attempt in good faith to resolve any dispute by mediation administered by the
Arbitration Service of Portland, Inc. ("ASP") under its Commercial Mediation
Rules then in effect before resorting to arbitration.  In the event
any dispute is not resolved through mediation, any Party may submit such dispute
to binding arbitration administered by the ASP under its Commercial Arbitration
Rules then in effect as modified by the provisions of Section 10.9(b)
below.  The venue for such arbitration shall be Portland, Oregon or
such other location to which all the Parties may otherwise expressly agree in
writing (the "Designated
Location").  Any such arbitration proceedings and decisions
shall be private and confidential, and all Parties agree not to disclose any
aspect thereof, including without limitation the existence of the dispute or the
proceedings, without the prior written consent of all other
parties.  Any Party may bring an action at law or in equity to enforce
any such arbitration decision or award, including, without limitation, obtaining
injunctive relief.

    

    
      
        
           

        

        
          33

          
            

          

        

        
           

        

      

    

     

    (b)           Arbitration
proceedings shall take place before a single arbitrator who shall be a
lawyer.  If the Parties cannot agree upon the choice of the arbitrator
within 20 Business Days of the date the matter is submitted for arbitration, the
Parties shall request, and accept, assignment of an arbitrator by the
ASP.  All arbitration proceedings shall be
confidential.  Except in the course of judicial, regulatory, or
arbitration proceedings, or as may be required by government authority, no Party
shall disclose any information about the evidence produced by any other Party in
the arbitration proceedings without the prior written consent of the producing
Party.  Before making any disclosure permitted by the preceding
sentence, the disclosing Party shall give the producing Party reasonable advance
written notice of the intended disclosure.  To the fullest extent
practicable, the arbitrator shall apply the Federal Rules of Civil Procedure
("FRCP") as if the arbitrator were a United States District Court Judge sitting
in the state encompassing the Designated Location, except the provisions of FRCP
26(a)(1) shall not apply and the scope of discovery shall be limited to evidence
directly related to the Parties' claims and defenses.  The arbitrator
shall apply the Federal Rules of Evidence.  Each Party shall bear the
burdens of production, persuasion, and proof on any claim or defense as
determined by the FRCP and the applicable substantive law governing such claim
or defense.  The arbitrator shall have authority to award any remedy
or relief that a federal court sitting in the State of Oregon could grant in
conformity to applicable law, except that the arbitrator shall have no authority
to award attorneys' fees, expert fees, punitive damages, or any remedy or relief
expressly excluded, waived or limited by any other provision of this
Agreement.  Any arbitration award shall be accompanied by a written
statement containing a summary of the issues in controversy, a description of
the award, and an explanation of the reasons for the award.  The
arbitrator's award shall be final, and judgment may be entered upon such award
by any court of competent jurisdiction.

     

    (c)           The
dispute resolution provisions of this Agreement shall not prevent (i) any Party
from seeking or obtaining preliminary injunctive or other provisional relief
from a court of competent jurisdiction for the purpose of preventing irreparable
injury, loss or damage pending a final resolution of the dispute according to
such dispute resolution provisions, or (ii) any suit for fraud.

     

    10.10.    No Third-Party
Beneficiaries.  This Agreement shall not confer any rights or
remedies upon or any Person other than the Parties hereto, the Loss Parties and
their respective successors and permitted assigns.

     

    10.11.    Further
Assurances.  Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing the
Merger.

    

    
      
        
           

        

        
          34

          
            

          

        

        
           

        

      

    

     

    10.12.    Time of the
Essence.  Time is of the essence of this
Agreement.

     

    10.13.    Headings.  The
headings contained in this Agreement are for convenience of reference only,
shall not be deemed to be a part of this Agreement and shall not be referred to
in connection with the construction or interpretation of this
Agreement.

     

    10.14.    Successors and Assigns. 
This Agreement shall be binding upon: the Company and its successors and assigns
(if any); the Stockholders and their respective personal representatives,
executors, administrators, estates, heirs, successors and assigns (if any);
Parent and its successors and assigns (if any); Merger Sub and its successors
and assigns (if any); and the Stockholders' Representative and his personal
representatives, executors, administrators, estates, heirs, successors and
assigns (if any).  This Agreement shall inure to the benefit of: the
Company; Parent; Merger Sub; the Surviving Corporation; the other Loss Parties
(subject to Section
8); the Stockholders; the Stockholders' Representative; and the
respective successors and assigns (if any) of the foregoing.  Parent
may freely assign any or all of its rights under this Agreement (including its
indemnification rights under Section 8), in whole
or in part, to any other Person without obtaining the consent or approval of any
other party hereto or of any other Person.

     

    10.15.    Remedies Cumulative; Specific
Performance.  The rights and remedies of the parties hereto shall be
cumulative (and not alternative).  The parties to this Agreement agree
that, in the event of any breach or threatened breach by any party to this
Agreement of any covenant, obligation or other provision set forth in this
Agreement for the benefit of any other party to this Agreement, such other party
shall be entitled (in addition to any other remedy that may be available to it)
to seek (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened
breach.  The parties agree that neither Parent nor any other
Indemnitee shall be required to provide any bond or other security in connection
with any such decree, order or injunction or in connection with any related
Legal Proceeding.

     

    10.16.    Waiver.

     

    (a)          
No failure on the part of any Person to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.

     

    (b)           No
Person shall be deemed to have waived any claim arising out of this Agreement,
or any power, right, privilege or remedy under this Agreement, unless the waiver
of such claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of such Person; and any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.

    

    
      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

     

    10.17.    Amendments.  This
Agreement may not be amended, modified, altered or supplemented other than by
means of a written instrument duly executed and delivered on behalf of Parent,
Merger Sub, the Company and the Stockholders' Representative.

    

    [Signatures
on following page]

    

    
      
        
           

        

        
          36

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first set forth above.

    

    
      
        
          
            
              	
                      PARENT:

                    	 
      	
                      MERGER
      SUB:

                    
	 
      	 
      	 
      
	
                      CAREPAYMENT
      TECHNOLOGIES, INC.

                    	 
      	
                      CPYT
      ACQUISITION CORP.

                    
	 
      	 
      	 
      
	
                      By:

                    	/s/
      James T. Quist  	 
      	
                      By:

                    	/s/
      James T. Quist  
	
                      Print
      Name:  James T. Quist

                    	 
      	
                      Print
      Name:  James T. Quist

                    
	
                      Print
      Title: President & CEO

                    	 
      	
                      Print
      Title: President &
CEO

                    

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              THE
      COMPANY:

                            	 
      	
                              STOCKHOLDERS'
      REPRESENTATIVE

                            
	 
      	 
      	 
      
	
                              VITALITY
      FINANCIAL, INC.

                            	 
      	 
      
	 
      	 
      	 
      
	
                              By:

                            	/s/
      Christopher Chen  	 
      	/s/
      Aleem Choudhry  
	Print
      Name:  Christopher
      Chen  	 
      	
                              Aleem
      Choudhry

                            
	Print
      Title: CFO 
      	 
      	 
      

                    

                  

                

              

            

          

        

      

    

     

    
      Signature
Page to Vitality Financial, Inc.

      Agreement
and Plan of Merger

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first set forth above.

    
 

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	 
      	
                                              STOCKHOLDER:

                                            
	 
      	 
      	 
      
	 
      	
                                              By:

                                            	
                                              /s/  George
      Joseph Siedel  

                                            
	 
      	
                                              Name:

                                            	
                                              George
      Joseph Siedel  

                                            
	 
      	
                                              Title:

                                            	 
      
	 
      	 
      	 
      
	 
      	
                                              STOCKHOLDER:

                                            
	 
      	 
      	 
      
	 
      	
                                              By:

                                            	
                                              /s/  Christopher
      Chen  

                                            
	 
      	
                                              Name:

                                            	
                                              Christopher
      Chen 

                                            
	 
      	
                                              Title:

                                            	
                                              CFO 
      

                                            
	 
      	 
      	 
      
	 
      	
                                              STOCKHOLDER:

                                            
	 
      	 
      	 
      
	 
      	
                                              By:

                                            	
                                              /s/  William N.
      Themdike, Jr.

                                            
	 
      	
                                              Name:

                                            	
                                              Housatonic
      Principals Fund, LLC  

                                            
	 
      	
                                              Title:

                                            	
                                              Managing
      Director  

                                            
	 
      	 
      	 
      
	 
      	
                                              STOCKHOLDER:

                                            
	 
      	 
      	 
      
	 
      	
                                              By:

                                            	
                                              /s/  Markus A.
      Kritzler

                                            
	 
      	
                                              Name:

                                            	
                                              Zishan
      Investments LLP

                                            
	 
      	
                                              Title:

                                            	
                                              Director

                                            
	 
      	 
      	 
      
	 
      	
                                              STOCKHOLDER:

                                            
	 
      	 
      	 
      
	 
      	
                                              By:

                                            	
                                              /s/  Bradford
      Stroh

                                            
	 
      	
                                              Name:

                                            	
                                              Bradford
      Stroh

                                            
	 
      	
                                              Title:

                                            	 
      
	 	 	 

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Rene
      Lajous

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Cambria
      Ventures, LLC

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                Vice
      President  

                                              
	 
      	 
      	 
      
	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Jose
      Stella

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  QMC
      Partners – D, LLC

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                
                                                  Managing
      Director

                                                

                                              

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

    

    
      Signature
Page to Vitality Financial, Inc.

      Agreement
and Plan of Merger

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Michael
      deAnda

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Central
      Illinois Anesthesia Services Ltd. Profit Sharing
  Plan

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                Trustee

                                              
	 
      	 
      	 
      
	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Andrew
      Housser

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Andrew
      Housser

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                 

                                              
	 
      	 
      	 
      
	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Joseph
      Yang

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Joseph
      Yang and Kathleen Hsu Revocable Trust

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                
                                                  Trustee

                                                

                                              
	 
      	 
      	 
      
	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Steven C.
      Wheelwright

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Silverado
      Kids, LLC

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                
                                                  Managing
      Partner

                                                

                                              
	 
      	 
      	 
      
	 
      	
                                                STOCKHOLDER:

                                              
	 
      	 
      	 
      
	 
      	
                                                By:

                                              	
                                                
                                                  /s/  Steven C.
      Wheelwright

                                                

                                              
	 
      	
                                                Name:

                                              	
                                                
                                                  Weber
      River Assets, LLC

                                                

                                              
	 
      	
                                                Title:

                                              	
                                                Managing
      Partner

                                              

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	 	 
	 
      	
                                                  STOCKHOLDER:

                                                
	 
      	 
      	 
      
	 
      	
                                                  By:

                                                	
                                                  
                                                    
                                                      /s/  Steven C.
      Wheelwright

                                                    

                                                  

                                                
	 
      	
                                                  Name:

                                                	
                                                  
                                                    
                                                      Brombies,
      LLC

                                                    

                                                  

                                                
	 
      	
                                                  Title:

                                                	
                                                  
                                                    Managing
      Partner

                                                  

                                                
	 
      	 
      	 
      
	 
      	
                                                  STOCKHOLDER:

                                                
	 
      	 
      	 
      
	 
      	
                                                  By:

                                                	
                                                  
                                                    
                                                      /s/  Vikram A.
      Kashyap

                                                    

                                                  

                                                
	 
      	
                                                  Name:

                                                	
                                                  
                                                    
                                                      Vikram
      A. Kashyap

                                                    

                                                  

                                                
	 
      	
                                                  Title:

                                                	
                                                  
                                                     

                                                  

                                                
	 	 	 
	 	
                                                  STOCKHOLDER:

                                                
	 	 	 
	 	By: 	 /s/  Vince
      Monical
	 	Name: 	
                                                  Vince
      Monical 

                                                
	 	Title: 	 

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                               

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

               

            

          

        

      

      
        Signature
Page to Vitality Financial, Inc.

        Agreement
and Plan of Merger

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      
         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            	 
      	
                                                    STOCKHOLDER:

                                                  
	 
      	 
      	 
      
	 
      	
                                                    By:

                                                  	
                                                    
                                                      
                                                        /s/  Rohit R.
      Shah

                                                      

                                                    

                                                  
	 
      	
                                                    Name:

                                                  	
                                                    
                                                      
                                                        Rohit
      R. Shah

                                                      

                                                    

                                                  
	 
      	
                                                    Title:

                                                  	
                                                     

                                                  
	 
      	 
      	 
      
	 
      	
                                                    STOCKHOLDER:

                                                  
	 
      	 
      	 
      
	 
      	
                                                    By:

                                                  	
                                                    
                                                      
                                                        /s/  Jeffrey G.
      Fluhr

                                                      

                                                    

                                                  
	 
      	
                                                    Name:

                                                  	
                                                    
                                                      
                                                        The
      Jeffrey G. Fluhr Trust Dated 11/8/05

                                                      

                                                    

                                                  
	 
      	
                                                    Title:

                                                  	
                                                    
                                                      Trustee

                                                    

                                                  
	 
      	 
      	 
      
	 
      	
                                                    STOCKHOLDER:

                                                  
	 
      	 
      	 
      
	 
      	
                                                    By:

                                                  	
                                                    
                                                      
                                                        /s/  Aleem
      Choudhry

                                                      

                                                    

                                                  
	 
      	
                                                    Name:

                                                  	
                                                    
                                                      
                                                        Aleem
      Choudhry

                                                      

                                                    

                                                  
	 
      	
                                                    Title:

                                                  	
                                                    
                                                       
      

                                                    

                                                  
	 
      	 
      	 
      
	 
      	
                                                    STOCKHOLDER:

                                                  
	 
      	 
      	 
      
	 
      	
                                                    By:

                                                  	
                                                    
                                                      
                                                        /s/  Helen L.
      Siedel

                                                      

                                                    

                                                  
	 
      	
                                                    Name:

                                                  	
                                                    
                                                      
                                                        Helen
      L. Siedel

                                                      

                                                    

                                                  
	 
      	
                                                    Title:

                                                  	
                                                    
                                                        
      

                                                    

                                                  
	 
      	 
      	 
      
	 
      	
                                                    STOCKHOLDER:

                                                  
	 
      	 
      	 
      
	 
      	
                                                    By:

                                                  	
                                                    
                                                      
                                                        /s/  Ben
      Tarbell

                                                      

                                                    

                                                  
	 
      	
                                                    Name:

                                                  	
                                                    
                                                      
                                                        Ben
      Tarbell

                                                      

                                                    

                                                  
	 
      	
                                                    Title:

                                                  	
                                                      
      

                                                  

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 	 
	 
      	
                                                      STOCKHOLDER:

                                                    
	 
      	 
      	 
      
	 
      	
                                                      By:

                                                    	
                                                      
                                                        
                                                          
                                                            /s/  Aaron
      Zagha

                                                          

                                                        

                                                      

                                                    
	 
      	
                                                      Name:

                                                    	
                                                      
                                                        
                                                          
                                                            Aaron
      Zagha

                                                          

                                                        

                                                      

                                                    
	 
      	
                                                      Title:

                                                    	
                                                      
                                                         
      

                                                      

                                                    
	 
      	 
      	 
      
	 
      	
                                                      STOCKHOLDER:

                                                    
	 
      	 
      	 
      
	 
      	
                                                      By:

                                                    	
                                                      
                                                        
                                                          
                                                            /s/  Abraham
      Romanowsky

                                                          

                                                        

                                                      

                                                    
	 
      	
                                                      Name:

                                                    	
                                                      
                                                        
                                                          
                                                            Abraham
      Romanowsky

                                                          

                                                        

                                                      

                                                    
	 
      	
                                                      Title:

                                                    	
                                                      
                                                         
      

                                                      

                                                    

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                   

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                   

                

              

            

          

          
            Signature
Page to Vitality Financial, Inc.

            Agreement
and Plan of Merger

          

          

          
            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

          
            
               

              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 
      	
                                                          STOCKHOLDER:

                                                        
	 
      	 
      	 
      
	 
      	
                                                          By:

                                                        	
                                                          
                                                            
                                                              
                                                                /s/  Jonathan
      Romanowsky

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Name:

                                                        	
                                                          
                                                            
                                                              
                                                                Jonathan
      Romanowsky

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Title:

                                                        	
                                                            
      

                                                        
	 
      	 
      	 
      
	 
      	
                                                          STOCKHOLDER:

                                                        
	 
      	 
      	 
      
	 
      	
                                                          By:

                                                        	
                                                          
                                                            
                                                              
                                                                /s/  David
      Meister

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Name:

                                                        	
                                                          
                                                            
                                                              
                                                                DLM
      Capital Advisory LLC

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Title:

                                                        	
                                                          
                                                            
                                                              President

                                                            

                                                          

                                                        
	 
      	 
      	 
      
	 
      	
                                                          STOCKHOLDER:

                                                        
	 
      	 
      	 
      
	 
      	
                                                          By:

                                                        	
                                                          
                                                            
                                                              
                                                                /s/  Allen
      Benello

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Name:

                                                        	
                                                          
                                                            
                                                              
                                                                Allen
      Benello

                                                              

                                                            

                                                          

                                                        
	 
      	
                                                          Title:

                                                        	
                                                          
                                                             
      

                                                          

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                         

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                         

                      

                    

                  

                

                
                  Signature
Page to Vitality Financial, Inc.

                  Agreement
and Plan of Merger

                

                

                
                  
                    
                       

                    

                    
                       

                      
                        

                      

                    

                    
                       

                    

                  

                

                 

              

            

          

        

      

    

    SCHEDULE
I

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      	
                                                                              Stockholder

                                                                            	 
      	
                                                                              Class of

                                                                              Stock

                                                                              (C =

                                                                              Common)

                                                                              (P = Series

                                                                              A

                                                                              Preferred)

                                                                            	 
      	
                                                                              No. of Shares

                                                                            	 
      	
                                                                              Cert.

                                                                              No.(s)

                                                                            	 
      	
                                                                              Domicile

                                                                              Address

                                                                            	 
      	
                                                                              Shares of

                                                                              Series E

                                                                              Preferred

                                                                              Received

                                                                            
	
                                                                              George
      Joseph Siedel

                                                                            	 
      	
                                                                              C

                                                                            	 
      	
                                                                              2,250,000

                                                                            	 
      	
                                                                              001

                                                                            	 
      	
                                                                              100
      Duncan Way, Oakland, CA

                                                                              94611

                                                                            	 
      	
                                                                              0

                                                                            
	
                                                                              Christopher
      Chen

                                                                            	 
      	
                                                                              C

                                                                            	 
      	
                                                                              2,250,000

                                                                            	
                                                                               
      

                                                                            	
                                                                              002

                                                                            	 
      	
                                                                              1450
      Vallejo Street, Apt. 203,

                                                                              San
      Francisco, CA  94105

                                                                            	 
      	
                                                                              0

                                                                            
	
                                                                              Housatonic
      Principals Fund, LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              661,725

                                                                            	 
      	
                                                                              A-001

                                                                            	 
      	
                                                                              44
      Montgomery Street, Suite 4010,

                                                                              San
      Francisco, CA  94104

                                                                            	 
      	
                                                                              22,675

                                                                            
	
                                                                              Zishan
      Investments LLP

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              529,340

                                                                            	 
      	
                                                                              A-002

                                                                            	 
      	
                                                                              Reforma
      2570-117, Lomas

                                                                              Chapultepec,
      11000 C.P.,

                                                                              Mexico,
      D.F., Mexico

                                                                            	 
      	
                                                                              18,139

                                                                            
	
                                                                              Bradford
      Stroh

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              264,690

                                                                            	 
      	
                                                                              A-003

                                                                            	 
      	
                                                                              25
      Saddleback, Portola Valley,

                                                                              CA  94028

                                                                            	 
      	
                                                                              9,070

                                                                            
	
                                                                              Cambria
      Ventures, LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              264,690

                                                                            	 
      	
                                                                              A-004

                                                                            	 
      	
                                                                              2055
      Woodside Road, Suite

                                                                              195,
      Redwood City, CA  94061

                                                                            	 
      	
                                                                              9,070

                                                                            
	
                                                                              QMC
      Partners – D, LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              132,345

                                                                            	 
      	
                                                                              A-005

                                                                            	 
      	
                                                                              1450
      Ashford Avenue – PH,

                                                                              San
      Juan, Puerto Rico, 00907

                                                                            	 
      	
                                                                              4,535

                                                                            
	
                                                                              Central
      Illinois Anesthesia Services Ltd. Profit Sharing Plan

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              132,345

                                                                            	 
      	
                                                                              A-006

                                                                            	 
      	
                                                                              1308
      Sanchez Avenue,

                                                                              Burlingame,
      CA  94010

                                                                            	 
      	
                                                                              4,535

                                                                            
	
                                                                              Andrew
      Housser

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              132,345

                                                                            	 
      	
                                                                              A-007

                                                                            	 
      	
                                                                              285
      Ridgeway Road,

                                                                              Woodside,
      CA  94062

                                                                            	 
      	
                                                                              4,535

                                                                            
	
                                                                              Joseph
      Yang and Kathleen Hsu Revocable Trust

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              66,172

                                                                            	 
      	
                                                                              A-008

                                                                            	 
      	
                                                                              45
      Sunnycrest Avenue, Mill

                                                                              Valley,
      CA  94941

                                                                            	 
      	
                                                                              2,267

                                                                            
	
                                                                              Silverado
      Kids, LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              66,172

                                                                            	 
      	
                                                                              A-009

                                                                            	 
      	
                                                                              55-220
      Kulani Street, #1971,

                                                                              Laie,
      HI  96762

                                                                            	 
      	
                                                                              2,267

                                                                            
	
                                                                              Weber
      River Assets, LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              66,172

                                                                            	
                                                                               
      

                                                                            	
                                                                              A-010

                                                                            	 
      	
                                                                              55-220
      Kulani Street, #1971,

                                                                              Laie,
      HI  96762

                                                                            	 
      	
                                                                              2,267

                                                                            
	
                                                                              Brombies,
      LLC

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              66,172

                                                                            	 
      	
                                                                              A-011

                                                                            	 
      	
                                                                              55-220
      Kulani Street, #1971,

                                                                              Laie,
      HI  96762

                                                                            	 
      	
                                                                              2,267

                                                                            
	
                                                                              Vikram
      A. Kashyap

                                                                            	 
      	
                                                                              P

                                                                            	 
      	
                                                                              66,172

                                                                            	 
      	
                                                                              A-012

                                                                            	 
      	
                                                                              30347
      Rhone Drive,  Rancho

                                                                              Palos
      Verdes, CA  90275

                                                                            	 
      	
                                                                              2,267

                                                                            

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Schedule
I – Page 1 of 2

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Vince
      Monical

                                	 
      	
                                  P

                                	 
      	
                                  66,172

                                	 
      	
                                  A-013

                                	 
      	
                                  380
      Hampton Road, Piedmont,

                                  CA  94611

                                	 
      	
                                  2,267

                                
	
                                  Rohit
      R. Shah

                                	 
      	
                                  P

                                	 
      	
                                  52,938

                                	 
      	
                                  A-014

                                	 
      	
                                  c/o
      Ospraie Management

                                  320
      Park Ave, 27th Floor

                                  New
      York, NY 10010

                                	 
      	
                                  1,814

                                
	
                                  The
      Jeffrey G. Fluhr Trust Dated 11/8/05

                                	 
      	
                                  P

                                	 
      	
                                  39,703

                                	 
      	
                                  A-015

                                	 
      	
                                  200
      Locust Street

                                  San
      Francisco, CA  94118

                                	 
      	
                                  1,361

                                
	
                                  Aleem
      Choudhry

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-016

                                	 
      	
                                  640
      Davis Street, #17, San

                                  Francisco,
      CA  94111

                                	 
      	
                                  907

                                
	
                                  Helen
      L. Siedel

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-017

                                	 
      	
                                  2103
      Devonshire Rd., Ann

                                  Arbor,
      MI  48104

                                	 
      	
                                  907

                                
	
                                  Ben
      Tarbell

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-018

                                	 
      	
                                  595
      E. Meadow Drive, Palo

                                  Alto,
      CA  94306

                                	 
      	
                                  907

                                
	
                                  Aaron
      Zagha

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-019

                                	 
      	
                                  313
      W. 14th
      Street, Apt. 4F,

                                  New
      York, NY 10014

                                	 
      	
                                  907

                                
	
                                  Abraham
      Romanowsky

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-020

                                	 
      	
                                  8994
      January Place, San Diego,

                                  CA  92122

                                	 
      	
                                  907

                                
	
                                  Jonathan
      Romanowsky

                                	 
      	
                                  P

                                	 
      	
                                  26,469

                                	 
      	
                                  A-021

                                	 
      	
                                  927
      Elm Street, San Carlos,

                                  CA  94070

                                	 
      	
                                  907

                                
	
                                  DLM
      Capital Advisory LLC

                                	 
      	
                                  P

                                	 
      	
                                  13,234

                                	 
      	
                                  A-022

                                	 
      	
                                  201
      E. 80th
      Street, #16F,  New

                                  York,
      NY  10075

                                	 
      	
                                  454

                                
	
                                  Allen
      Benello

                                	 
      	
                                  P

                                	 
      	
                                  66,172

                                	 
      	
                                  A-023

                                	 
      	
                                  2288
      Union Street, San

                                  Francisco,
      CA  94123

                                	 
      	
                                  2,268

                                
	 	 	 	 	 	 	 	 	 	 	 
	
                                  Totals

                                	
                                    

                                	 
      	
                                    

                                	
                                  7,345,373

                                	
                                    

                                	 
      	
                                    

                                	 
      	
                                    

                                	
                                  97,500

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Schedule
I – Page 2 of 2

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

    

    Additional
Definitions

    

    For
purposes of the Agreement (including this Exhibit A and
the Disclosure Schedule):

    

    Affiliate.  "Affiliate"
shall mean any Person under common control with a party within the meaning of
Sections 414(b), (c), (m) and (o) of the Code, and the regulations issued
thereunder.

    

    Brooks
Lawsuit.  "Brooks Lawsuit" means that certain lawsuit captioned
Jonathan Brooks vs. Vitality Financial, Inc. et al, Case No. 30-2010-00387650,
pending in the Superior Court of California for the County of Orange, and any
appeal therefrom, together with any other litigation, arbitration or other suit
or action arising out of the same or related facts that formed the basis for
such lawsuit.

    

    Business
Day.  "Business Day" means any day except Saturday, Sunday or
any day on which banks are generally not open for business in San Francisco,
California or Portland, Oregon.

    

    COBRA.  "COBRA"
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

    

    Code.  "Code" shall
mean the Internal Revenue Code of 1986, as amended.

    

    Class A Common
Stock.  "Class A Common Stock" shall mean the Class A Common
Stock, no par value, of Parent.

    

    Company
Affiliate.  "Company Affiliate" shall mean any Person under
common control with the Company within the meaning of Sections 414(b), (c),
(m) and (o) of the Code, and the regulations issued thereunder.

    

    Company Capital
Stock.  "Company Capital Stock" shall mean the Company Common
Stock and the Company Series A Preferred Stock.

    

    Company Charter
Documents.  "Company Charter Documents" shall mean the
Company's Certificate of Incorporation and Bylaws, each as amended as of the
date of this Agreement.

    

    Company Common
Stock.  "Company Common Stock" shall mean the Company's common
stock, par value $0.001 per share

    

    Company
Contract.  "Company Contract" shall mean any Contract to
which the Company is a party.

    

    Company
Employee.  "Company Employee" shall mean any current or former
employee, consultant, independent contractor or director of the Company or a
Company Affiliate.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Company Employee
Agreement.  "Company Employee Agreement" shall mean any
management, employment, severance, change in control, transaction bonus,
consulting, relocation, repatriation or expatriation agreement or other Contract
between the Company or a Company Affiliate and any Company Employee, other than
any such Contract that is terminable "at will" and without any obligation on the
part of the Company or any Company Affiliate to make any payments or provide any
benefits in connection with termination of such Contract.

    

    Company Employee
Plan.  "Company Employee Plan" shall mean any plan, program,
policy, practice, Contract or other arrangement providing for compensation,
severance, termination pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether written, unwritten or otherwise, and whether funded or
unfunded, including each "employee benefit plan," within the meaning of
Section 3(3) of ERISA (whether or not ERISA is applicable to such plan),
that is or has been maintained, contributed to or required to be contributed to
by the Company or any Company Affiliate for the benefit of any Company Employee,
or with respect to which the Company or any Company Affiliate has or may have
any liability or obligation; provided, however, than a Company Employee
Agreement shall not be considered an "Company Employee Plan."

    

    Company
Option.  "Company Option" shall mean an option to acquire
shares of Company Common Stock from the Company, whether vested or
unvested.

    

    Company Option
Plan.  "Company Option Plan" shall mean the Company's 2008
Stock Ownership Incentive Plan.

    

    Company Pension
Plan.  "Company Pension Plan" shall mean any (a) Company
Employee Plan that is an "employee pension benefit plan," within the meaning of
Section 3(2) of ERISA, or (b) other occupational pension plan,
including any final salary or money purchase plan.

    

    Company Series A Preferred
Stock.  "Company Series A Preferred Stock" shall mean the
Company's Series A Preferred Stock, par value $0.001 per share.

    

    Consent.  "Consent"
shall mean any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).

    

    Contract.  "Contract"
shall mean any written, oral or other agreement, contract, subcontract, lease,
understanding, instrument, note, certificate, warranty, proxy, insurance policy,
benefit plan or legally binding commitment, arrangement or undertaking of any
nature.

    

    Customer
Contract.  "Customer Contract" means an agreement for the
provision of any product or services to a customer in the ordinary course of the
Company's business and on a non-exclusive basis.

    

    Damages.  "Damages"
shall include any loss, Liability, damage (including, but not limited to,
consequential, indirect and special damages), injury, diminution in value, lost
profits, claim, demand, interest, settlement, judgment, award, fine, penalty,
Tax, fee (including reasonable attorneys' and consultants' fees and expenses),
charge, cost (including costs of investigation, defense against or settlement of
any of the foregoing) or expense of any nature; provided, however, that
"Damages" shall not include punitive damages, except to the extent owed to third
parties.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Encumbrance.  "Encumbrance"
shall mean any lien, pledge, hypothecation, charge, mortgage, or security
interest of any nature whatsoever.

    

    Entity.  "Entity"
shall mean any corporation (including any non profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization or
entity.

    

    Environmental
Law.  "Environmental Law" shall mean any applicable federal,
state, local or foreign Legal Requirement relating to pollution or protection of
human health or the environment (including ambient air, surface water, ground
water, land surface or subsurface strata), including any applicable Legal
Requirement relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.

    

    ERISA.  "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as
amended.

    

    EVWAP. "EVWAP" has the meaning
given in Parent's Articles of Incorporation.

    

    Exchange
Act.  "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

    

    GAAP.  "GAAP" shall
mean generally accepted accounting principles in the United States.

    

    Governmental
Authorization.  "Governmental Authorization" shall mean
any:  (a) permit, license, certificate, franchise, permission,
clearance, registration, qualification or authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement; or (b) right under any Contract with
any Governmental Body.

    

    Governmental
Body.  "Governmental Body" shall mean any: (a) nation,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi governmental
authority of any nature (including any governmental division, department,
agency, commission, instrumentality, official, organization, unit, body or
Entity and any court or other tribunal).

    

    Government
Bid.  "Government Bid" shall mean any quotation, bid or
proposal submitted to any Governmental Body or any proposed prime contractor or
higher-tier subcontractor of any Governmental Body.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Government
Contract.  "Government Contract" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order executed or
submitted to or on behalf of any Governmental Body or any prime contractor or
higher-tier subcontractor, or under which any Governmental Body or any such
prime contractor or subcontractor otherwise has or may acquire any right or
interest.

    

    Indebtedness.  "Indebtedness"
shall mean of any Person shall mean, as of any specified date, the amount equal
to the sum (without any double-counting) of the following obligations (whether
or not then due and payable), to the extent they are of such Person or its
Subsidiary or guaranteed by such Person or its Subsidiary, including through the
grant of a security interest upon any assets of such Person: (i) all
outstanding indebtedness for borrowed money owed to third parties,
(ii) accrued interest payable with respect to indebtedness referred to in
clause (i), (iii) all obligations for the deferred purchase price of
property or services (including any potential future earn-out, purchase price
adjustment, releases of "holdbacks" or similar payments, but excluding any such
obligations to the extent there is cash being held in escrow exclusively for
purposes of satisfying such obligations) ("Deferred Purchase
Price"), (iv) all obligations evidenced by notes, bonds, debentures
or other similar instruments (whether or not convertible) or arising under
indentures, (v) all obligations arising out of any financial hedging, swap
or similar arrangements, (vi) all obligations as lessee that would be
required to be capitalized in accordance with GAAP, (vii) all obligations
in connection with any letter of credit, banker's acceptance, guarantee, surety,
performance or appeal bond, or similar credit transaction and (viii) the
aggregate amount of all prepayment premiums, penalties, breakage costs, "make
whole amounts," costs, expenses and other payment obligations of such Person
that would arise (whether or not then due and payable) if all such items under
clauses (i) through (viii) were prepaid, extinguished, unwound and settled
in full as of such specified date.  For purposes of determining the
Deferred Purchase Price obligations as of a specified date, such obligations
shall be deemed to be the maximum amount of Deferred Purchase Price owing as of
such specified date (whether or not then due and payable) or potentially owing
at a future date.

    

    Indemnitees.  "Indemnitees"
shall mean the following Persons:  (a) Parent; (b) Parent's
current and future affiliates (including the Surviving Corporation);
(c) the respective Representatives of the Persons referred to in clauses
"(a)" and "(b)" above; and (d) the respective successors and assigns of the
Persons referred to in clauses "(a)", "(b)" and "(c)" above; provided, however,
that the stockholders of the Company shall not be deemed to be
"Indemnitees."

    

    Intellectual
Property.  "Intellectual Property" shall mean any of the
following and any tangible embodiments thereof: algorithms, APIs, apparatus,
databases, data collections, development tools, diagrams, formulae, inventions
(whether or not patentable), know-how, logos, marks (including brand names,
product names, logos, and slogans), methods, network configurations and
architectures, processes, proprietary information, protocols, schematics,
specifications, software, software code (in any form, including source code and
executable or object code), subroutines, techniques, user interfaces, web sites,
works of authorship (such as instruction manuals, laboratory notebooks,
prototypes, samples, studies and summaries) and other forms of
technology.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Intellectual Property
Rights.  "Intellectual Property Rights" shall mean all rights
of the following types, which exist under the laws of any jurisdiction:
(a) rights associated with works of authorship, including exclusive
exploitation rights, copyrights, moral rights and mask works; (b) trademark
and trade name rights and similar rights; (c) trade secret rights;
(d) patent and industrial property rights; (e) rights in domain names; (f)
other intellectual property rights in Intellectual Property; and (g) rights in
or relating to registrations, renewals, extensions, combinations, divisions, and
reissues of, and applications for, any of the rights referred to in clauses
"(a)" through "(f)" above.

    

    IRS.  "IRS" shall
mean the United States Internal Revenue Service.

    

    Key
Stockholders.  "Key Stockholders" means Chris Chen and George
Joseph Siedel.

    

    Knowledge.  An
individual shall be deemed to have "Knowledge" of a particular fact or other
matter if (a) such individual is actually aware of such fact or other matter; or
(b) reasonable inquiry of Company Employees would have made such individual
actually aware of such fact or other matter.  The Company shall be deemed
to have "Knowledge" of a particular fact or other matter if any Key Stockholder
has Knowledge of such fact or other matter.  An Entity shall be deemed
to have "Knowledge" of a particular fact or other matter if any director,
officer, partner or other Representative of such Entity has Knowledge of such
fact or other matter.

    

    Legal
Proceeding.  "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.

    

    Legal
Requirement.  "Legal Requirement" shall mean any federal,
state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code, edict, decree, rule, regulation,
order, award, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Body, including any Environmental Law.

    

    Liability or Liabilities. "Liability" or
"Liabilities" 
shall mean, with respect to any Person, all liabilities of any kind (whether
known or unknown, contingent, accrued, due or to become due, secured or
unsecured, matured or otherwise), including but not limited to accounts payable,
royalties payable, and other reserves, accrued bonuses, accrued vacation,
employee expense obligations, deferred revenue and all other liabilities of such
Person or any of its subsidiaries, regardless of whether such liabilities are
required to be reflected on a balance sheet in accordance with GAAP, including,
with respect to the Company, Indebtedness.

    

    Material Adverse
Effect.  "Material Adverse Effect" shall mean any change,
event, effect, claim, circumstance or matter that (considered together with all
other changes, events, effects, claims, circumstances or matters) is, or could
reasonably be expected to be or to become, materially adverse to the business,
condition, assets, capitalization, liabilities, results of operations, financial
performance, prospects or contractual relationships of the Company.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Order.  "Order"
shall mean any order, writ, injunction, judgment or decree.

    

    Permitted
Encumbrances.  "Permitted Encumbrances"
means:  (a) liens for Taxes not yet due and payable;
(b) liens of carriers, warehousemen, mechanics, materialmen and repairmen
incurred in the ordinary course of business consistent with past practice and
not yet delinquent; and (c) purchase money liens and liens to secure
obligations to landlords, lessors or renters under leases or rental agreements
not yet delinquent.

    

    Person.  "Person"
shall mean any individual, Entity or Governmental Body.

    

    Pre-Closing Tax
Period.  "Pre-Closing Tax Period" shall mean any taxable period
or portion thereof ending on or prior to the Effective Time.

    

    Representatives.  "Representatives"
shall mean officers, directors, employees, partners, agents, attorneys,
accountants, advisors and representatives.

    

    SEC.  "SEC" shall
mean the United States Securities and Exchange Commission.

    

    Share Value.  "Share
Value" shall mean:

    

    (a)           for
the first 18 months following the Effective Time, $10.00 per share of Series E
Preferred Stock; and

     

    (b)           thereafter,
an amount determined by multiplying (i) the number of shares of Class A Common
Stock into which the Series E Preferred Stock is then convertible, or has been
converted, if applicable, by (ii) the then applicable "EVWAP" determined with
respect to the Class A Common Stock pursuant to the Parent's Articles of
Incorporation.

     

    Stockholders.  "Stockholders"
shall mean the holders of Company Capital Stock.

    

    Subsidiary.  An
Entity shall be deemed to be a "Subsidiary" of another Person if such Person
directly or indirectly owns or purports to own, beneficially or of record,
(a) an amount of voting securities of other interests in such Entity that
is sufficient to enable such Person to elect at least a majority of the members
of such Entity's board of directors or other governing body, or (b) at
least 50% of the outstanding equity or financial interests of such
Entity.

    

    Tax or Taxes.  "Tax" or,
collectively, "Taxes" shall mean (i) any and all U.S. federal, state, local
and non-U.S. taxes, assessments and other governmental charges, duties,
impositions and liabilities, including taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
escheat, excise and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts, (ii) any liability for the
payment of any amounts of the type described in clause (i) of this
definition as a result of being a member of an affiliated, consolidated,
combined, unitary or similar group for any period (including any arrangement for
group or consortium relief or similar arrangement), and (iii) any liability
for the payment of any amounts of the type described in clauses (i) or
(ii) of this definition as a result of any express or implied obligation to
indemnify any other Person or as a result of any obligations under any
agreements or arrangements with any other Person with respect to such amounts
and including any liability for taxes of a predecessor or transferor or
otherwise by operation of law.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Tax Return.  "Tax
Return" shall mean any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information, and any amendment to any
of the foregoing, filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

     

    
      Exhibit
A

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    

    Form
of Certificate of Designation

    (Series
D and E Preferred Stock)

     

    
      Exhibit
B

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

    

    Special
Indemnity Items

    

    
      
        	
              	
                1.

              	
                Any
      Damages incurred by any Loss Party with respect to any claim against the
      Company by Accretive Health or its affiliates due to the actions or
      inactions of Chris Chen.

              

      

    

    

    
      	
               
      

            	
              2.

            	
              Any
      Damages exceeding the Excess Cash Amount incurred by any Loss Party with
      respect to the Brooks Lawsuit, it being understood that certain cash
      remaining in the Company at Closing will be used initially to pay such
      Damages pursuant to Section 5.5(b),
      and thereafter shares of Series E Preferred Stock will be used to satisfy
      any indemnity claims pursuant to Section
      8.

            

    

     

    
      Exhibit
C

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