Document:

EXHIBIT
        10.1 ASSET PURCHASE AGREEMENT

      

      ASSET
        PURCHASE AGREEMENT

      

      This
        Asset Purchase Agreement (the "Agreement") dated
        this, 13th.
        Day of March 2007, between Hotel Movie Network, Inc., a Nevada corporation,
        a
        wholly-owned subsidiary of B2 Digital ("Buyer"); and Creative Domain Investments
        Ltd, a Canadian Company, ("Seller"); hereinafter referred to, collectively,
        as
        the “Parties.” 

      

      RECITALS

       

      Buyer
        is owned by a fully SEC reporting publicly company “B2 Digital”, trading under
        the symbol “BTOD.OB” organized in Delaware engaged in the business of
        videoconferencing, developing and providing video on demand systems and
        otherwise exploiting the internet and communication based data systems.

      

      Seller
        is a privately held Ltd under the laws of the Province of Albert, Canada,
        and is
        in the business of providing design technology with intellectual property
        rights
        for the Pay per View, Wireless Internet and Voice over IP services (“Services”)
        to the hospitality industry and other applications. 

      

      WITNESSETH:

       

      WHEREAS,
        Buyer desires to purchase from Seller and Seller desires to sell to Buyer,
        on
        the terms and subject to the conditions of this Agreement, the design
        technology, intellectual properties to include all software and source codes
        involved for all applications other than ad insertion.

      

      THEREFORE,
        in consideration of the mutual covenants, agreements, representations and
        warranties contained in this Agreement, the parties agree as follows:

      

      ARTICLE
        1. TRANSFER
        OF ASSETS

       

      Subject
        to the terms and conditions set forth in this Agreement, Seller agrees to
        sell,
        convey, transfer, assign and deliver to Buyer, and Buyer agrees to purchase
        from
        Seller at the Closing described in Article 3 hereof, all of the assets and
        technology of Seller relating to, the design technology, intellectual properties
        to include all software and source codes involved in all applications other
        than
        ad insertion, including the character and description, whether tangible,
        intangible, real, personal or mixed, and wherever located and on an ‘as is’
basis but excluding any assets specifically excluded in the following Sections
        of this Article 1), all of which are sometimes collectively referred to in
        this
        Agreement as the "Assets," including, but without limitation to, the following:
        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      	1.1  	
              Intellectual
                Properties. All
                of the design files, schematics, mechanical drawings, with pcb layout
                files, all related software with source codes, that are related to
                this
                agreement as listed in SCHEDULE 1.1 attached hereto (hereinafter
                referred
                to as the "Intellectual Properties").

            

      	 	 

      	1.2  	
              Books
                and records.
                All papers and records in Seller's care, custody or control relating
                to
                any or all of the above-described Assets and the operation thereof,
                including, but not limited to, all blueprints and specifications,
                control
                records, financial records, maintenance and production records; only
                in
                regards to the Intellectual Properties involved in this
                Agreement.

            

      

      ARTICLE
        2. PURCHASE
        PRICE

       

      	2.1  	
              Payment
                of Purchase Price.
                In consideration for the transfer and assignment by Seller of the
                whole
                assets, and in consideration of the representations, warranties and
                covenants of the Seller set forth herein, Buyer on the conditions
                set
                forth herein and subject to the provisions in Article 9 state
                that:

            

      

      (a)
        The Buyer shall pay to the Seller, on the closing date, the amount of US$200,000
        (two hundred thousand United States dollars) (the “Purchase Price”) by issuing
        an equivalent amount of shares of Buyer’s restricted common stock (hereafter
        referred to as the “Shares”) to the owner of Creative Domain Investments Ltd, in
        exchange for his ownership of property as listed in this agreement as of
        the
        date of this agreement.

      

      (b)
        Buyer shall issue a number of shares of restricted common stock (hereinafter
        referred to as the “Shares”) to be calculated in the following manner; 400,000
        (Four hundred thousand) shares restricted at a value of $.50 (Sixty cents),
        to
        be held subject to Rule 144 restrictions and the Investment Representation
        Letter and Lock -Up Agreement attached hereto as Exhibit “B”. Issue of said
        shares to take place within 30 days of the signing of said date. Seller will
        agree to inform the shareholders of restrictions and they are not to sell
        any
        such shares until the one-year holding period has expired. Seller agrees
        to
        provide a start and end date for the holding period on the closing date.
        

      

      (c)
        If, for any reason, the closing date is extended and the share price declines
        in
        this time, there will be no penalty assessed. In the case of an increase
        of the
        price in this time, no action will be taken. 

      

      (d)
        If, for any reason, the Buyer has not issued the shares within 90 days of
        the
        closing date, or offered any other compensation, then this agreement will
        be
        voided. 

      

      	2.2  	
              Payment
                in Immediately Available Funds.
                Buyer may, at his option, present a cashier’s check in lieu of restricted
                common shares if Funds are available at the time of
                closing.

            

      

        	2.3  	
                Sales
                  and Transfer Taxes.
                  Seller shall be responsible for the payment of any sales or transfer
                  taxes
                  associated with the transfer of the Acquired Assets to
                  Buyer.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        	2.4  	
                Buyer
                  shall assume and discharge, and shall indemnify Seller against,
                  liabilities and obligations of the Seller under the Intellectual
                  Properties or other agreements, if any as specified on SCHEDULE
                  1.1, but
                  only to the extent that such liabilities or obligations accrue
                  on or after
                  the Closing Date.

              

      

       

      
        Buyer
          grants to Seller, to secure payment and performance of the obligations
          of Seller
          under this Agreement, a security interest in the Intellectual Properties,
          equipment and inventory that is listed in SCHEDULES 1.1 and SCHEDULES
          1.2

      

       

      	2.5  	
              Piggy-Back
                Registration Subject
                to the provisions of the Agreement, if the Company proposes to file
                a
                registration statement under the Securities Act, with respect to
                an
                offering of any equity securities by the Company for its own account
                or
                for the account of any of its equity holders (other than a registration
                statement on Form S-4 or S-8 or any substitute form that may be adopted
                by
                the SEC or any registration statement filed in connection with an
                exchange
                offer or offering of securities solely to the Company’s existing security
                holders), then the Company shall give written notice of such proposed
                filing to the holder of the Shares as soon as practicable (but in
                no event
                less than 10 days before the anticipated initial filing date of such
                registration statement), and such notice shall offer such holder
                of the
                Shares the opportunity to registration such number of the Shares
                as the
                holder of the Shares may request (a “Piggyback Registration”). The Company
                shall include in each such Piggyback Registration all Shares requested
                to
                be included in the registration for such offering; provided, however,
                that
                the Company may at any time withdraw or cease proceeding with such
                registration. The holder of the Shares shall be permitted to withdraw
                all
                or part of its Shares from a Piggyback Registration at any time prior
                to
                the effective date thereof.

            

      

      ARTICLE
        3. THE
        CLOSING

       

      The
        closing of the purchase and sale of the assets by Seller to Buyer (the
"Closing") shall
        take place at the offices of B-2 Corporate office, which are located at 1030
        S.
        Mesa Drive, Mesa, Arizona, on or before 10:00 AM local time, on March 30,
        2007,
        or at such other place and/or time as the parties may agree in writing (the
        "Closing Date"). In the event that the conditions specified in this Agreement
        have not been fulfilled by such date, Buyer may extend the Closing Date for
        a
        period or periods not exceeding an aggregate of 30 days by giving written
        notice
        to the Seller. 

      

      Buyer
        shall perform its due diligence inspection of Sellers; equipment, properties,
        Intellectual Properties and all other items reasonably necessary to complete
        the
        inspection on or before the Closing Date of closing set forth above.

      

      	3.1  	
              Sellers
                Obligations at the Closing.
                At the Closing, Seller shall deliver or cause to be delivered to
                Buyer:
                

            

       

      
        
          	
                	(a)	
                  The
                    certificate of the President or Secretary of the Seller confirming
                    that
                    proper minutes and resolutions of the Seller's Board of Directors
                    and
                    Shareholders have been secured prior to the Closing whereby the
                    sale of
                    the assets has been approved.

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
              	(b)	
                And,
                  at time of fulfillment of the purchase price and its applicable
                  terms and
                  conditions; 

              

      

      

        
          	
                	1.	
                  A
                    Bill Of Sale certificate equal to all of the assets involved
                    in this
                    agreement;

                

        

      

       

      Simultaneously
        with the consummation of the purchase, Seller, through its officers, agents,
        and
        employees, shall put Buyer into full possession and enjoyment of all the
        Assets
        involved in this agreement.

      

      Seller,
        at any time before or after the closing Date, shall execute, acknowledge,
        and
        deliver any further assignments, conveyances and other assurances, documents
        and
        instruments of transfer, reasonably requested by Buyer and shall take any
        other
        action consistent with the terms of this Agreement that may reasonably be
        requested by Buyer for the purpose of assigning, transferring, granting,
        conveying and confirming to Buyer, or reducing to possession, any or all
        Intellectual Properties and assets to be conveyed and transferred by this
        Agreement. If requested by Buyer, Seller further agree to prosecute or otherwise
        enforce in their own names for the benefit of Buyer any claims, rights, or
        benefits that are transferred to Buyer by this Agreement and that require
        prosecution or enforcement in either of the Sellers name. Any prosecution
        or
        enforcement of claims, rights, or benefits under this Section shall be solely
        at
        Buyer's expense; unless Seller makes the prosecution or enforcement necessary
        by
        breach of this Agreement. 

      

      	3.2  	
              Buyer’s
                Obligations at Closing.
                Subject to the provision of Article 9, at the Closing, Buyer shall
                deliver
                to Seller the following instruments and documents against delivery
                of the
                items specified in Section 3.1:

            

      	 	 

      	a)  	
              Buyer
                Stock Certificates issued in the names of the shareholders of Creative
                Domain Investments Ltd, as defined in
                2.1(b);

            

      	 	 

      	b)  	
              The
                certificate of the President or Secretary of the Buyer confirming
                that
                proper minutes and resolutions of the Buyer's Board of Directors
                have been
                secured prior to the Closing whereby the purchase of the assets has
                been
                approved.

            

      

      ARTICLE
        4. ASSUPTION
        OF LIABILITIES

      

      Buyer
        is not assuming any debt, liability or obligation of Seller, at the closing
        date, whether known or unknown, fixed or contingent excepts as herein
        specifically otherwise provided. Seller agree to indemnify and hold Buyer
        harmless against all debts, claims, liabilities and obligations of Seller
        not
        expressly assumed by Buyer hereunder, and to pay any and all attorneys fees
        and
        legal costs incurred by Buyer, its successors and assigns in connection
        therewith. Buyer shall have the benefit of and shall perform all Intellectual
        Properties and commitments if any specifically disclosed in SCHEDULE 1.1,
        in
        accordance with the terms and conditions thereof, except to the extent
        modifications are specifically disclosed on such SCHEDULE 1.1. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        5. EXCISE
        AND PROPERTY TAXES

      

      Seller
        shall pay all sales, use and transfer taxes arising out of the transfer of
        the
        assets and shall pay its portion, prorated as of the Closing Date, of property
        taxes of the business. Buyer shall not be responsible for any business,
        occupation, withholding or similar tax, or for any taxes of any kind related
        to
        any period before the Closing Date. 

      

      ARTICLE
        6. REPRESENTATIONS
        AND WARRANTIES OF SELLER

      

      Seller
        hereby represents and warrants to Buyer that the following facts and
        circumstances are, and except as contemplated hereby, at all times up to
        the
        Closing Date will be true and correct, and hereby acknowledge that such facts
        and circumstances constitute the basis upon which Buyer is induced to enter
        into
        and perform this Agreement. Each warranty set forth in this Article 6 shall
        survive the Closing and any investigation made by or on behalf of
        Buyer.

      

      	6.1  	
              Organization.
                Good Standing and Qualification. Seller
                is a corporation duly organized, validly existing, and in good standing
                under the laws of the Province of Alberta, AB, has all necessary
                ownership
                powers to carry on its business as now owned and operated by it,
                and is
                duly qualified to transact business across Canada and is in good
                standing
                in all jurisdictions in which the nature of its business or of its
                properties makes such qualification
                necessary.

            

      	 	 

      	6.2  	
              Absence
                of
                Specified Changes,
                there has not been any:

            

      	 	 

      	(a)  	
              transaction
                by Seller except in the ordinary course of business as conducted
                on that
                date;

            

      	(b)  	
              destruction,
                damage to, or loss of any assets of Seller (whether or not covered
                by
                insurance) that materially and adversely affects the financial condition,
                business or prospects of Seller;

            

      	(c)  	
              revaluation
                by Seller of any of its assets;

            

      	(d)  	
              sale
                or transfer of any asset of Seller, except in the ordinary course
                of
                business;

            

      	(e)  	
              execution,
                creation, amendment or termination of any contract, agreement or
                license
                to which Seller is a party;

            

      	(f)  	
              mortgage,
                pledge or other encumbrance of any asset of
                Seller;

            

      	(g)  	
              agreement
                by Seller to do any of the things described in the preceding clauses
                (a)
                through (f) with regards to any asset as listed in Schedule 1.1 of
                Seller.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      	6.3  	
              Inventories.
                No
                items included in the Seller's inventories have been pledged as collateral
                or are held by the Seller on consignment from
                others.

            

      	 	 

      	6.4  	
              Other
                Tangible Personal Property. The
                Equipment described in Section 1.2 and SCHEDULE 1.2 of this Agreement
                constitutes all the items of tangible personal property owned by,
                in the
                possession of, or used by Seller in connection with the business
                sold
                pursuant to this Agreement. The Equipment listed in SCHEDULE 1.2
                constitutes all tangible personal property necessary for the conduct
                by
                Seller of the business as now conducted.

            

      

      No
        Equipment used by Seller in connection with its business to be sold pursuant
        to
        this agreement is held under any lease, security agreement, conditional sales
        contract, or other title retention or security arrangement. 

      

      	6.5  	
              Trade
                Names Trademarks and Copyrights.
                Except as set forth in SCHEDULE 6.8, Seller does not use any trademark,
                service mark, trade name or copyright in its business to be sold
                pursuant
                to this Agreement, or own any trademarks, trademark registrations
                or
                applications, trade names, service marks, copyrights, or copyright
                registrations or applications. No person (other than Seller) owns
                any
                trademark, trademark registration or application, service mark, trade
                name, copyright, or copyright registration or application, the use
                of
                which is necessary or contemplated in connection with the performance
                of
                any of the Intellectual Properties.

            

      	 	 

      	6.6  	
              Title
                to Assets.
                Seller has good and marketable title to all of the Assets and interests
                in
                Assets, whether personal, tangible, and intangible, which constitute
                all
                the Assets and interests in assets that are used in the business
                of Seller
                to be sold pursuant to this Agreement. All the Assets are free and
                clear
                of mortgages, liens, pledges, charges, encumbrances, equities, claims,
                easements, rights of way, covenants, conditions, or restrictions,
                (i) the
                lien of current taxes not yet due and payable; and (ii) possible
                minor
                matters that, in the aggregate, are not substantial in amount and
                do not
                materially detract from or interfere with the present or intended
                use of
                any of the Assets, nor materially impair business operations. All
                tangible
                personal property of Seller is in good operating condition and repair,
                ordinary wear and tear accepted. Except
                as set forth on the appropriate SCHEDULE listing such Assets, neither
                any
                officer, nor any director or employee of Seller, nor any spouse,
                child or
                other relative of any of these persons, owns, or has any interest,
                directly or indirectly, in any of the personal property owned by
                or leased
                to Seller or any copyrights, patents, trademarks, trade
                names or trade secrets licensed by Seller for use in the business
                to be
                sold pursuant to this Agreement. Seller does not occupy any real
                property
                in violation of any law, regulation or
                decree.

            

      	 	
            

      

        	6.7  	
                Customers
                  and Sales.
                  SCHEDULE 1.1 to this Agreement is a correct and current list of
                  all
                  customers of Seller for the business to be sold pursuant to this
                  Agreement.

              

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        	 	
                Seller
                  has no information and is not aware of any facts indicating that
                  any of
                  these customers intend to cease doing business with Seller or materially
                  alter the amount of the business that they are presently doing
                  with
                  Seller.

              

      

      

        	6.7  	
                Insurance
                  Policies.
                  SCHEDULE 6.11 to this Agreement is a description of all insurance
                  policies
                  held by Seller concerning the Assets. All these policies are in
                  the
                  respective principal amounts set forth in SCHEDULE 6.11, Seller
                  has
                  maintained and now maintains (i) insurance on all the Assets of
                  a type
                  customarily insured, covering property damage and loss of income
                  by fire
                  or other casualty, and (ii) adequate insurance protection against
                  all
                  liabilities, claims, and risks against which it is customary to
                  insure.

              

        	 	 

        	6.8  	
                Other
                  Intellectual Properties.
                  Except as set forth in SCHEDULE 1.2, the Assets are not bound by
                  any
                  distributor's or manufacturer's representative or agency agreement,
                  any
                  agreement not entered into in the ordinary course of business,
                  any
                  indenture, mortgage, deed of trust, lease or any agreement that
                  is unusual
                  in nature, duration or amount. The performance by Buyer of any
                  of the
                  agreements described on SCHEDULE 1.1 will not result in Buyer becoming
                  bound or liable under any distributor or manufacturer's representative
                  or
                  agency agreement. All Intellectual Properties, which will be assigned
                  to
                  or assumed by Buyer under this Agreement, are valid and binding
                  upon the
                  parties thereto. There is no default or event that with notice
                  or lapse of
                  time, or both, would constitute default by any party to any of
                  the
                  agreements listed in SCHEDULE 1.1. Seller has not received notice
                  that any
                  party to any of the agreements listed in SCHEDULE 1.1 intends to
                  cancel or
                  terminate any of these agreements or to exercise or not exercise
                  any
                  options under any of these agreements. Seller is not a party to,
                  nor is
                  Seller or the Assets bound by, any agreement that is materially
                  adverse to
                  the business, property, or financial condition of
                  Seller.

              

        	 	 

        	6.9  	
                Compliance
                  with Laws.
                  Seller has complied with, and is not in violation of, applicable
                  federal, state or local statutes, laws and regulations (including,
                  without
                  limitation, any applicable environmental, health, building, zoning
                  or
                  other law, ordinance or regulation) affecting the Assets or the
                  operation
                  of its business to be sold pursuant to this
                  Agreement.

              

      

      
         

        	6.10  	
                Compliance
                  with Laws.
                  Seller has complied with, and is not in violation of, applicable
                  federal, state or local statutes, laws and regulations (including,
                  without
                  limitation, any applicable environmental, health, building, zoning
                  or
                  other law, ordinance or regulation) affecting the Assets or the
                  operation
                  of its business to be sold pursuant to this
                  Agreement.

              

         

        
          	6.11  	
                  Litigation. Except
                    as set forth in SCHEDULE 6.14, there is no suit, action, arbitration
                    or
                    legal, administrative or other proceeding, or governmental investigation
                    pending, or to the best knowledge of Seller, threatened, against
                    or
                    affecting Seller, or any of its business, assets or financial
                    condition.
                    Seller is not in default with respect to any order, writ, injunction
                    or
                    decree of any federal, state, local or foreign court, department,
                    agency
                    or instrumentality. Except as set forth in Schedule 6.12, Seller
                    is not
                    presently engaged in any legal action to recover moneys due to
                    it or
                    damages sustained by it. 

                

          
             

            	6.12  	
                    Assets
                      Sufficient for Conduct of Business.
                      The Assets constitute all of the assets required for Buyer
                      to conduct the
                      business of Seller as it is presently conducted. 

                  

             

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
            	6.13  	
                    Agreement
                      will Not Cause Breach or Violation.
                      Neither the entry into this Agreement nor the consummation
                      of the
                      transactions contemplated hereby will result in or constitute
                      any of the
                      following: (i) a breach of any term or provision of this Agreement;
                      (ii) a
                      default or an event that, with notice or lapse of time, or
                      both, would be
                      a default, breach or violation of the Articles of Incorporation
                      or Bylaws
                      of Seller or any lease, license, promissory note, conditional
                      sales
                      contract, commitment, indenture, mortgage, deed of trust or
                      other
                      agreement, instrument or arrangement to which Seller is a party
                      or by
                      which Seller or the Assets are bound; (iii) an event that would
                      permit any
                      party to terminate any agreement or to accelerate the maturity
                      of any
                      indebtedness or other obligation of Seller; (iv) the creation
                      or
                      imposition of any lien, charge or encumbrance on any of the
                      Assets; or (v)
                      the violation of any law, regulation, ordinance, judgment,
                      order or decree
                      applicable to or affecting Seller or the Assets. 

                  

             

          

          
            	6.14  	
                    Authority
                      and Consents.
                      Seller has the right, power, legal capacity and authority to
                      enter into,
                      and perform its obligations under this Agreement, and no approvals
                      or
                      consents of any persons or entity other than Seller are necessary
                      in
                      connection with it. The execution and delivery of this Agreement
                      by Seller
                      have been duly authorized by all necessary corporate action
                      of Seller
                      (including any necessary action by Seller's security holders),
                      and this
                      Agreement constitutes a legal, valid and binding obligation
                      of Seller
                      enforceable in accordance with its terms. 

                  

             

          

          
            	6.15  	
                    Interest
                      in Customers. Suppliers and Competitors.
                      Neither the Seller, nor any officer, director or employee of
                      any of the
                      Seller, nor any spouse or child of any of them has any direct
                      or indirect
                      interest in any competitor, supplier or customer of Seller
                      or in any
                      person with whom Seller is doing business in the pay-per-view
                      and cable
                      services to hotel/lodging rooms business to be sold pursuant
                      to this
                      Agreement.

                  

             

          

          
            	6.16  	
                    Documents
                      Delivered.
                      Each copy or original of any agreement, contract or other instrument
                      which
                      is identified in any exhibit delivered by Seller or their counsel
                      to Buyer
                      (or its counsel or representatives), whether before or after
                      the execution
                      hereof, is in fact what it is purported to be by the Seller
                      and has not
                      been amended, canceled or otherwise modified. 

                  

             

          

          	6.17  	
                  Full
                    Disclosure.
                    None of the representations and warranties made by Seller or
                    made in any
                    letter, certificate or memorandum furnished or to be furnished
                    by Seller,
                    or on their behalf, contains or will contain any untrue statement
                    of a
                    material fact, or omits any material fact the omission of which
                    would make
                    the statements made misleading. There is no fact known to Seller,
                    which
                    materially adversely affects, or in the future may (so far as
                    Seller can
                    now reasonably foresee) materially adversely affect the condition,
                    Assets,
                    liabilities, business operations or prospects of Seller that
                    has not been
                    set forth herein or heretofore communicated to Buyer in writing
                    pursuant
                    hereto. 

                

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

      ARTICLE
        7. REPRESENTATIONS
        AND WARRANTIES OF PARENT AND BUYER.

      

      Buyer,
        represent and warrant to the Seller and the Shareholders as
        follows:

      

      	7.1  	
              Organizations
                and Qualification.
                Buyer is a corporation duly organized, validly existing and in good
                standing under the laws of the State of Delaware. All subsidiaries
                of
                Buyer are legal entities that are duly organized, validly existing
                and in
                good standing under the laws of their respective jurisdictions of
                incorporation. Buyer has all requisite power and authority to own
                or
                operate its properties and conduct its business as it is now being
                conducted. Buyer is duly qualified and in good standing as a foreign
                corporation or entity authorized to do business in each of the
                jurisdictions in which the character of the properties owned or held
                under
                lease by it or the nature of the business transacted by it makes
                such
                qualification necessary.

            

      	 	 

      	7.2  	
              Capitalization;
                Subsidiaries. The
                authorized capital stock of Buyer consists of 1,000,000,000 shares
                of
                Buyer's Common Stock. and 2,000,000 shares of preferred stock in
                classes
                to be designated by B2 Digital. As of the Closing Date, no other
                shares of
                preferred stock shall be issued by B2 Digital or shall be outstanding
                other than those 2,000,000 shares of Series A Preferred Stock currently
                issued and the shares to be issued contemplated by this Agreement.
                All
                issued and outstanding shares of capital stock of Buyer are validly
                issued, fully paid, non-assessable and free of preemptive
                rights.

            

      

      	7.3  	
              Authority
                Relative to this Agreement.
                Buyer has all requisite corporate power and authority to execute
                and
                deliver this Agreement and to consummate the transactions contemplated
                hereby. The execution and delivery of this Agreement and the consummation
                of the transactions contemplated hereby have been duly and validly
                authorized by the Board of Directors of Buyer, and no other corporate
                proceedings on the part of Buyer are necessary to authorize this
                Agreement
                or to consummate the transactions so contemplated. This Agreement
                has been
                duly and validly executed and delivered by Buyer and, assuming this
                Agreement constitutes a valid and binding obligation of the Seller,
                this
                Agreement constitutes a valid and binding agreement of Buyer, enforceable
                against Buyer in accordance with its
                terms.

            

      	 	 

      	7.4  	
              SEC
                Reports.
                Since September 1, 2002 to the best of its knowledge Buyer has filed
                all
                required forms, reports and documents ("Buyer SEC Reports") with
                the
                Securities and Exchange Commission (the "SEC") required to be filed
                by it
                pursuant to the federal securities laws and the SEC rules and regulations
                thereunder, all of which have complied in all material respects with
                all
                applicable requirements of the Securities Act of 1933 (the "Securities
                Act") and the Securities Exchange Act of 1934 (the "Exchange Act"),
                and
                the rules and interpretive releases promulgated thereunder. None
                of such Buyer SEC Reports, including without limitation any financial
                statements, notes, or schedules included therein, at the time filed,
                contained any untrue statement of a material fact, or omitted to
                state a
                material fact required to be stated therein or necessary in order
                to make
                the statements therein, in light of the circumstances under which
                they
                were made, not misleading.

            

      	 	
               

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Each
        of the consolidated balance sheets in or incorporated by reference into the
        Buyer SEC Reports fairly presents or will fairly present the financial position
        of the entity or entities to which it relates as of its date, and each of
        the
        related consolidated statements of operations and retained earnings and cash
        flows or equivalent statements in the Buyer SEC Reports (including any related
        notes and schedules) fairly presents or will fairly present the results of
        operations, retained earnings and cash flows, as the case may be, of the
        entity
        or entities to which it relates for the period set forth therein (subject
        in the
        case of unaudited interim statements, to normal yearend audit adjustments)
        in
        each case in accordance with generally-accepted accounting principles applicable
        to the particular entity consistently applied throughout the periods involved,
        except as may be noted therein; and independent certified public accountants
        for
        Buyer have rendered or will render an unqualified opinion with respect to
        each
        audited financial statement included in the Buyer SEC Reports. The consolidated
        financial statements included in the Buyer SEC Reports are hereinafter sometimes
        collectively referred to as the "Buyer Financial Statements." 

      

      	7.5  	
              Consents
                and Approvals: No Violation.
                Neither the execution and delivery of this Agreement by Buyer nor
                the
                consummation of the transactions contemplated hereby nor
                compliance by Buyer with any of the provisions hereof will conflict
                with
                or result in any breach of any provision of the Articles of Incorporation
                or by-laws of Buyer or any Subsidiary, require any consent, approval,
                authorization or permit of, or filing with or notification to, any
                Governmental Authority, except pursuant to the Securities Act and
                the
                Exchange Act, such filings and approvals as may be required under
                the
                "blue sky", takeover or securities laws of various states, or result
                in a
                default (with or without due notice or lapse of time or both) (or
                give
                rise to any right of termination, cancellation or acceleration) under
                any
                of the terms, conditions or provisions of any note, bond, mortgage,
                indenture, contract, license, agreement or other instrument or obligation
                to which Buyer is a party or by which Buyer, any of its Subsidiaries
                or
                any of their respective assets may be bound, result in the creation
                or
                imposition of any lien, charge or other encumbrance on the assets
                of Buyer
                or violate any order, writ, injunction, decree, statute, rule or
                regulation applicable to Buyer or any of its respective
                assets.

            

      	 	
            

      	7.6  	
              Litigation.
                Etc.
                Except as disclosed in the Buyer SEC Reports, there is no action,
                claim,
                or proceeding pending or, to the knowledge of Buyer, threatened,
                to which
                Buyer is or would be a party before any court or Governmental Authority
                acting in an adjudicative capacity or any arbitrator or arbitration
                tribunal with respect to which there is a reasonable likelihood of
                a
                determination having, or which, insofar as reasonably can be foreseen
                in
                the future would have, a material adverse effect on Buyer and since
                December 31, 1997, there have been no claims made or actions or
                proceedings brought against any officer or director of Buyer arising
                out
                of or pertaining to any action or omission within the scope of his
                employment or position with Buyer, which claim, action or proceeding
                would
                involve a material adverse effect on Buyer taken as a whole. All
                material
                litigation and other material administrative, judicial or quasi-judicial
                proceedings to which Buyer is a party or to which it has been threatened
                to be made a party, are described in the Buyer SEC Reports.

            

      	 	
               

            

      	  	 

      	 	
               

            

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        	 	 

        	7.7  	
                Compliance
                  with Law and Permits. Buyer
                  has owned and operated its properties and assets in substantial
                  compliance
                  with the provisions and requirements of all laws, orders, regulations,
                  rules and ordinances issued or promulgated by all Governmental
                  Authorities
                  having jurisdiction with respect thereto. All necessary governmental
                  certificates, consents, permits, licenses or other authorizations
                  with
                  regard to the ownership or operation by Buyer of their respective
                  properties and assets have been obtained and no violation exists
                  in
                  respect of such licenses, permits or authorizations.None of the
                  documents
                  and materials filed with or furnished to any Governmental Authority
                  with
                  respect to the properties, assets or businesses of Buyer contains
                  any
                  untrue statement of a material fact or fails to state a material
                  fact
                  necessary to make the
                  statements therein not misleading.

              

      

      	 	
               

            

      	7.8  	
              Buyer
                Common Stock.
                The shares to be issued by Buyer pursuant to this Agreement have
                been duly
                authorized and, when issued in accordance with the terms of this
                Agreement, will be validly authorized and issued and fully paid and
                nonassessable, and no shareholder of Buyer will have any preemptive
                rights
                or dissenter's right with respect
                thereto.

            

      

      ARTICLE
        8. SELLERS
        OBLIGATIONS BEFORE CLOSING.

      

      Seller
        covenants that, except as otherwise agreed in writing by Buyer, from the
        date of
        this Agreement until the Closing: 

       

      
        
          	8.1  	
                  Existing
                    Agreements.
                    Seller shall not modify, amend, cancel or terminate any of its
                    existing
                    Intellectual Properties or agreements, or agree to do any of
                    those
                    acts.

                

           

        

      

      	8.2  	
              Consent
                of Others.
                As soon as reasonably practical after the execution and delivery
                of this
                Agreement, and in any event on or before the Closing Date, Seller
                shall
                obtain the written consent of the persons described in SCHEDULE 8.8
                to
                this Agreement and will furnish to Buyer executed copies of these
                consents
                to the assignment of the Intellectual Properties. Further, Seller
                agrees
                to use its best efforts to obtain new Intellectual Properties between
                the
                Buyer and the customers described in SCHEDULE 1.1 to this
                Agreement.

            

      	 	 

      	8.3  	
              Representations
                and Warranties True at Closing.
                Seller shall use their best efforts to assure that all representations
                and
                warranties of Seller set forth in this Agreement and in any written
                statements delivered to Buyer by Seller under this Agreement will
                also be
                true and correct as of the Closing Date as if made on that date and
                that
                all conditions precedent to Closing shall have been
                met.

            

      	 	 

      	8.4  	
              Sales
                and Use Tax on Prior Sales. Seller
                agrees to furnish to Buyer a clearance certificate from the appropriate
                agencies and any related certificates that Buyer may reasonably request
                as
                evidence that all sales and use and other tax liabilities of Seller
                (other
                than income tax liabilities) accruing before the Closing Date have
                been
                fully satisfied or provided for.

            

      	 	 

      	8.5  	
              Statutory
                Fillings.
                Seller shall cooperate fully with Buyer in preparing and filing all
                information and documents deemed necessary or desirable by Buyer
                under any
                statutes or governmental rules or regulations pertaining to the
                transactions contemplated by this
                Agreement.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        9. CONDITIONS
        PRECEDENT TO BUYER'S PERFORMANCE 

      

      The
        obligations of Buyer to purchase the Assets under this Agreement are subject
        to
        the satisfaction, at or before the Closing, of all the conditions set out
        below
        in this Article 9. Buyer may waive any or all of these conditions in accordance
        with Section 14.2 hereof, provided however, that no such waiver of a condition
        shall constitute a waiver by Buyer of any of its other rights or remedies,
        at
        law or in equity, if Seller shall be in default of any of its representations,
        warranties or covenants under this Agreement. 

      

      	9.1  	
              Accuracy
                of Sellers Representations and Warranties.
                All representations and warranties by Seller in this Agreement or
                in any
                written statement that shall be delivered to Buyer by Seller under
                this
                Agreement shall be true on and as of the Closing Date as though made
                at
                that time.

            

      	 	 

      	9.2  	
              Seller
                Performance.
                Seller shall have performed, satisfied, and complied with all covenants,
                agreements, and conditions required by this Agreement to be performed
                or
                complied with by Seller on or before the Closing
                Date.

            

      	 	 

      	9.3  	
              Certification
                by Seller.
                Buyer shall have received a certificate, dated the Closing Date,
                signed
                and verified by Seller's president or vice president and its treasurer
                or
                assistant treasurer, certifying, in such detail as Buyer and its
                counsel
                may reasonably request, that the conditions specified in Sections
                9.1 and
                9.3 have been fulfilled.

            

      	 	 

      	9.4  	
              Absence
                of Litigation.
                No action, suit or proceeding before any court or any governmental
                body or
                authority, pertaining to the transaction contemplated by this Agreement
                or
                to its consummation, shall have been instituted or threatened on
                or before
                the Closing Date.

            

      	 	 

      	9.5  	
              Corporate
                Approval.
                The execution and delivery of this Agreement by Seller, and the
                performance of its covenants and obligations under it, shall have
                been
                duly authorized by all necessary corporate action, and Buyer shall
                have
                received copies of all resolutions pertaining to that authorization,
                certified by the secretary of Seller.

            

      	 	 

      	9.6  	
              Consents.
                All
                necessary agreements and consents of any parties to the consummation
                of
                the transaction contemplated by this Agreement, or otherwise pertaining
                to
                the matters covered by it, shall have been obtained by Seller and
                delivered to Buyer.

            

      	 	 

      	9.7  	
              Approval
                of Documentation.
                The form and substance of all certificates, instruments and other
                documents delivered to Buyer under this Agreement shall be satisfactory
                in
                all reasonable respects to Buyer and its
                counsel.

            

      	 	 

      	9.8  	
              Condition
                of Assets.
                The Assets shall not have been materially or adversely affected in
                any way
                as a result of any fire, accident, storm, or other casualty or labor
                or
                civil disturbance or act of God or the public
                enemy.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      	9.9  	
              Resale
                Certificate. Buyer
                shall have received from Seller a sales tax resale certificate or
                other
                comparable document, as appropriate, reasonably satisfactory to Buyer,
                with respect to the Assets being purchased by Seller for
                resale.

            

      	 	 

      	9.10  	
              Valuation
                of Assets.
                Buyer shall have accepted the valuation of the Assets, as set forth
                on the
                schedules attached hereto (as adjusted as of the Closing Date) at
                the
                buyer’s option buyer may have an independently certified inventory and
                valuation at the buyers cost.

            

      	 	 

      	9.11  	
              Completion
                of Due Diligence.
                All due diligence reasonably required by the Buyer has been completed,
                and
                the results of such due diligence are satisfactory to the Buyer in
                its
                sole discretion and judgement with regard to all aspects of the
                transaction, including by not limited to matters relating to the
                Assets,
                or the intellectual property or financial prospects of the business
                to be
                sold pursuant to this Agreement.

            

      	 	 

      	9.12  	
              Compliance
                with Bulk Sales Laws. The
                parties have complied with all applicable Bulk Sales Laws or similar
                provisions.

            

       

      ARTICLE
        10. CONDITIONS
        PRECEDENT TO SELLER'S PERFORMANCE

      

      The
        obligations of Seller to sell and transfer the Assets under this Agreement
        are
        subject to the satisfaction, at or before the Closing, of all the following
        conditions: 

      

      	10.1  	
              Accuracy
                of Buyer's Representations and Warranties.
                All representations and warranties by Buyer contained in this Agreement
                or
                in any written statement delivered by Buyer under this Agreement
                shall be
                true on and as of the Closing as though such representations and
                warranties were made on and as of that
                date.

            

      	 	 

      	10.2  	
              Buyer’s
                Performance.
                Buyer shall have performed and complied with all covenants and agreements,
                and satisfied all conditions that it is required by this Agreement
                to
                perform, comply with, or satisfy, before or at the
                Closing.

            

      	 	 

      	10.3  	
              Buyer’s
                Corporate Approval.
                Buyer shall have received corporate authorization and approval for
                the
                execution and delivery of this Agreement and all corporate action
                necessary or proper to fulfill the obligations of Buyer to be performed
                under this Agreement on or before the Closing
                Date.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE.
        11 SELLERS
        OBLIGATIONS AFTER THE CLOSING

      

      	11.1  	
              Preservation
                of Goodwill.
                Following the Closing, Seller will restrict their activities so that
                Buyer's reasonable expectations with respect to the goodwill, business
                reputation, employee relations and prospects connected with the Assets
                will not be materially impaired. In furtherance, but not in limitation
                of,
                this
                general obligation, Seller agree that, for a period of the longer
                of (a)
                three (3) years following the Closing Date; (b) as long as any of
                the
                Warrants referred to in paragraph 2.1 are outstanding; or (c) as
                long as
                Buyer or its heirs, assigns or successors in interest carry on a
                like
                business in the countries or areas
                specified:

            

      	 	 

      	(a)  	
              Seller
                will not compete with the Buyer or engage in any activity which is
                substantially the same as, or represents an outgrowth of, any business
                or
                activity presently conducted by Seller, in the field of "pay per
                view" and
                "free to viewer” in room hotel services, if such business or activity
                extends to any Province of Territory of Canada in which Seller has
                heretofore engaged in business or otherwise established its goodwill,
                business reputation, or any customer relations. For the purposes
                of this
                Agreement, the term “compete”
                shall
                mean (i) calling on, soliciting or taking away, as a client or customer,
                or attempting to call on, solicit or take away as a client or customer
                any
                individual, partnership, corporation or association that was a client
                or
                customer of the Seller pay-per-view and cable services to hotel/lodging
                rooms; or (ii) entering into or attempting to enter into any business
                or
                substantially similar business to or competing in any way with the
                business of the Buyer in the pay-per-view and cable services to
                hotel/lodging rooms, either alone or with any individual, partnership,
                corporation or association; or (iii) acting as an agent, representative,
                consultant, officer, director, independent contractor, or employee
                of an
                entity or enterprise which is competing with the business of the
                Buyer; or
                (iv) participating in any such competing entity or enterprise as
                an owner,
                partner, limited partner, joint venture, creditor or
                stockholder.

            

      	 	 

      	 	
              The
                parties intend that the covenant contained in the preceding portion
                of
                this Section shall be construed as a series of separate covenants,
                one for
                each state county. Each separate covenant shall be deemed identical
                in
                terms to the covenant contained in this Section. If, in any judicial
                proceeding, a court shall refuse to enforce any of the separate covenants
                deemed included in this Section, then such unenforceable covenant
                shall be
                deemed eliminated from these provisions for the purpose of those
                proceedings to the extent necessary to permit the remaining separate
                covenants to be enforced.

            

      	 	 

      	(b)  	
              Seller
                will not disclose to any person or use for their own benefit any
                price
                lists, pricing data, customer lists, or similar matters possessed
                by them
                relating to the assets or the business transferred to Buyer unless
                they
                first clearly demonstrate to Buyer that such matters are at, the
                time of
                the proposed disclosure or use, of common knowledge within the
                trade.

            

        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
           

          	11.2   	
                  
                    Seller
                      Indemnities.
                      Seller shall indemnify, defend and hold harmless Buyer and
                      its officers,
                      directors, and agents against and in respect of any and all
                      claims,
                      demands, losses, costs, expenses, obligations, 
                      liabilities,
                        damages, recoveries and deficiencies, including interest,
                        penalties and
                        reasonable attorneys fees, that Buyer or the Buyer, or their
                        officers,
                        directors, or agents shall incur or suffer, which arise,
                        result from or
                        relate to any breach of, or failure by Seller to perform,
                        any of their
                        representations, warranties, covenants or agreements in this
                        Agreement or
                        in any schedule, certificate, exhibit or other instrument
                        furnished or to
                        be furnished by Seller under this Agreement. Notwithstanding
                        any other
                        provision of this Agreement, Seller shall not be liable to
                        Buyer, or the
                        Buyer, or their officers, directors, or agents on any warranty,
                        representation or covenant made by
                        Selling

                    

                  

                

           

        

      

      	 	
              Parties
                in this Agreement, regarding any single claim, loss, expense, obligation
                or other liability that does not exceed $10,000; provided, however,
                that
                when the aggregate amount of all such claims, losses, expenses,
                obligations and liabilities not exceeding $10,000 each reaches $10,000,
                Seller shall thereafter be liable in full for all such breaches and
                indemnities, and regarding all those claims, losses, expenses,
                obligations, and liabilities.

            

      	 	 

      	11.3  	
              Access
                to Records.
                From and after the Closing, Seller shall allow Buyer, and its counsel,
                and
                other representatives, such access to records which after the Closing
                are
                in the custody or control of Seller as Buyer reasonably requires
                in order
                to comply with its obligations under the law or under Intellectual
                Properties assumed by Buyer pursuant to this
                Agreement.

            

      

      ARTICLE
        12. COSTS

       

      	12.1  	
              Finder's
                or Broker's Fees.
                Each of the parties represents and warrants that it has dealt with
                no
                broker or finder in connection with any of the transactions contemplated
                by this Agreement, and, insofar as it knows, no broker or other person
                is
                entitled to any commission or finder's fee in connection with any
                of these
                transactions.

            

      	 	 

      	12.2  	
              Expenses.
                Buyer shall pay all costs and expenses incurred or to be incurred
                by it in
                negotiating and preparing this Agreement and in closing and carrying
                out
                the transactions contemplated by this
                Agreement.

            

      

      ARTICLE
        13. SECURITIES
        ASPECTS OF AGREEMENT

      

      	13.1  	
              All
                parties to this Agreement mutually understand, agree and covenant
                that any
                referenced sale or other disposition of any security under this Agreement
                shall be controlled and governed by this
                section.

            

       

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

      

      
        	 	
                Specifically
                  should there arise any conflict of application or interpretation
                  under
                  this section and any other provision or section of this Agreement;
                  this
                  section shall be given primary definition and control.  The
                  term "securities" for the purposes of this Agreement shall mean
                  and
                  include all shares of Buyer, and any warrants to acquire those
                  shares as
                  well as any other instrument or obligation customary or commonly
                  described as a security. Each of the following terms and conditions
                  of the
                  issuance and distribution of the securities shall be fully applicable
                  unless otherwise specifically waived or treated in the following
                  paragraphs.

              

         

      

      	13.2  	
              Each
                security issued pursuant to the terms of this Agreement shall be
                a
                "restricted" security unless otherwise specifically referenced as
                being
                issued pursuant to a registration or
                offering.

            

      	 	 

      	13.3  	
              Seller
                understands and agrees that a restricted security for the purposes
                of this
                Agreement is one, which is issued without meeting registration
                requirements under both federal and state law within the United States.
                Each party to this Agreement further agrees and acknowledges that
                the
                nature of restricted security is that it is not freely tradable.
                That is,
                the holder of such security cannot immediately market or further
                distribute such security in the open market, or through private
                transactions without the express written consent of the issuer, primarily
                Buyer under the terms of this Agreement.

            

      	 	 

      	13.4  	
              Seller
                fully acknowledges and understands that the resale of a restricted
                security will normally require substantial holding periods unless
                subsequently subject to an intervening registration under applicable
                federal and state securities laws. Seller acquiring restricted stock
                under
                this Agreement further acknowledges and agrees that the principal,
                though
                not exclusive, means by which restricted securities are resold under
                United States law and conforming state laws and regulations is Securities
                and Exchange Commission ("SEC") Rule 144, which essentially requires
                a
                holding period of one year before the stock can be resold or any
                interest
                therein further sold or assigned. In general terms, Rule 144 would
                require
                that there be current public information about the Company before
                the
                provisions of the Rule could be relied upon for subsequent resale,
                that
                the aforementioned holding period had been met, that the sales occurred
                through independent arms-length and unsolicited brokerage transactions,
                that certain volume limitations on the number of shares sold in each
                three
                month period be observed, and that a report of sales will be filed
                with
                the SEC. Seller understands that the foregoing constitutes only a
                general
                description of Rule 144 and that such person is or has the means
                to become
                familiar with all of the specific provisions and terms of Rule 144
                through
                his independent legal advisors. Sellers
                further acknowledges and agrees that while Rule 144 is not exclusive,
                that
                it is anticipated and intended that it would be the primary means
                by which
                securities acquired under this Agreement could be resold absent the
                specific registration provisions of this
                Agreement.

            

      	 	
            

      	13.5  	
              Seller
                further acknowledges and agrees that, except as specifically provided
                by
                the terms of this Agreement, none of the corporate parties will have
                any
                obligation to register securities issued, and have no present intention
                to
                register such securities other than is specifically provided for
                by this
                Agreement. Each person under this Agreement acquiring securities
                further
                understands and agrees that individual registration of securities,
                absent
                registration by the issuer, is usually not practical and should not
                be
                relied upon as a means for resale or other distributions of securities
                acquired under this Agreement.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      	13.6  	
              Any
                entity acquiring securities pursuant to this Agreement with the intent
                to
                divide such securities among its principal shareholders as part of
                the
                acquisition process, will be responsible for obtaining the knowledgeable
                consent and agreement of such actual shareholder to the terms of
                this
                Agreement, specifically referencing this
                paragraph.

            

      	 	 

      	13.7  	
              Seller
                fully understands and agrees that should such person be deemed to
                be in a
                “control” position as to Buyer incident to the completion of this
                Agreement, that such person must comply with the volume limitations
                of
                Rule 144 to complete sales of his or her securities acquired, except
                for
                securities which have been otherwise registered pursuant to this
                Agreement. A control person has been defined by the SEC, and by most
                state
                securities regulatory agencies, as a person who has the capacity
                to
                exercise control over the issuing company. While no precise mathematical
                formulation of a control person is applicable to all situations,
                the
                following are generally presumed to be control
                people:

            

      	 	 

      	(i)  	
              a
                person holding 10% or more of the shares of the issuing
                company;

            

      	 	 

      	(ii)  	
              any
                principal officer or any director of the issuing
                company.

            

      	 	 

      	13.8  	
              Seller
                represents that it is acquiring the Shares for its own account, for
                investment and not with a view to the distribution or resale thereof.
                The
                Seller further represent that their financial and other circumstances
                are
                such that they have adequate means of providing for their current
                and
                anticipated future needs without having to sell or otherwise dispose
                of
                the Shares, and that the Seller are able to bear the economic risks
                of
                this investment and consequently are able to hold the Shares for
                an
                indefinite period of time and to sustain the loss of their entire
                investment in the Shares, in the event such a loss should
                occur.

            

      	 	 

      	13.9  	
              Seller
                acknowledges and represents that, due to its knowledge and experience
                in
                financial and business matters, its investment experience generally
                and
                its experience with investments similar to the Shares in particular,
                Seller, either alone or together with its advisors, if any, is able
                to
                understand and merits of, and the risks involved in, its proposed
                investment in the Shares. Seller, either alone or together with its
                advisors, if any, has the capacity to protect its own interests in
                connection with this transaction.

            

      	 	 

      	13.10  	
              Seller
                acknowledges that the Buyer and Buyer have furnished or made available
                to
                Seller all financial and other data relating to Buyer, required by
                Seller
                to enable it to make an informed decision concerning its approval
                of this
                transaction and its resulting acquisition of the Shares. In particular,
                Seller acknowledges that it has received and reviewed the financial
                statements of Buyer for the past two years and complete copies of
                all of
                the Buyer SEC Reports for such period. Seller acknowledges that it
                has
                been informed that Buyer has not previously conducted business except
                as
                disclosed in the Buyer SEC Reports. Seller represents and acknowledges
                that it and its principals have been engaged in the business of providing
                pay-per-view and cable services in the hotel/lodging industry, which
                is
                intended
                area of business for which the Assets are being acquired by the Buyer.
                In
                this regard, Seller has been acquainted with the Chief Executive
                Officer
                of Buyer. Seller further represents and acknowledges that it has
                had full
                opportunity to obtain additional information from Buyer to verify
                the
                accuracy of the information supplied by it and to evaluate the merits
                of
                its investment decision, including, without limitation, full opportunity
                to ask questions of and receive satisfactory answers and other information
                from Buyer, its officers, directors and other persons acting on its
                behalf, and all such questions have been answered, and such other
                information supplied, to Seller's full satisfaction. Seller is aware
                of,
                and has thoroughly evaluated, to its own satisfaction, the high degree
                of
                risk associated with investing in Buyer, including but not limited
                to, the
                specific risks associated with Buyer's business and the risks associated
                with the ownership of common stock.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        

        	13.11  	
                Seller
                  hereby represents and warrants to Buyer that Seller is an "accredited
                  investor" as that term is defined in Rule 501(a) of Regulation
                  D. Seller
                  further represents and warrants that it is a corporation, and that
                  each of
                  the equity owners of Seller are "accredited investors" by reason
                  of the
                  fact that each of the equity owners meets one or both of the following
                  criteria: 

              

        
        

      

      	(i)  	
              The
                owner is a natural person whose individual net worth, or joint net
                worth
                with owner's spouse, at the time of this agreement, exceeds $1,000,000;
                or

            

      	 	 

      	(ii)  	
              The
                owner is a natural person who had an individual income in excess
                of
                $200,000 in each of the two most recent years, or joint income with
                owner's spouse in excess of $300,000 in each of those years, and
                has a
                reasonable expectation of reaching the same income level in the current
                year.

            

      

      ARTICLE
        14. FORM OF AGREEMENT

       

      	14.1  	
              Headings.
                The
                subject headings of the Articles and Sections of this Agreement are
                included for purposes of convenience only, and shall not affect the
                construction or interpretation of any of its
                provisions.

            

      
      

      
        
          	14.2  	Entire Agreement: Modification: Waiver.
                  This Agreement constitutes the entire agreement between the parties
                  pertaining to the subject matter contained in it and supersedes
                  all prior
                  and contemporaneous agreements, representations, and understandings
                  of the
                  parties. No supplement, modification or amendment of this Agreement
                  shall
                  be binding unless executed in writing by all the parties. No waiver
                  of any
                  of the provisions of this Agreement shall be deemed, or shall constitute,
                  a waiver of any other provision, whether or not similar, nor shall
                  any
                  waiver constitute a continuing waiver. No waiver shall be binding
                  unless
                  executed in writing by the party making the
                  waiver.

           

            	14.3  	
                    Counterparts.
                      This
                      Agreement may be executed simultaneously in one or more counterparts,
                      each
                      of, which shall be deemed an original, but all of which together
                      shall
                      constitute one and the same instrument.

                  

            
              
                 

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

              

            

          

        

      

      ARTICLE
        15. PARTIES

       

      
        	15.1 	
                Parties
                  in Interest.
                  Nothing in this Agreement, whether express or implied, is intended
                  to
                  confer any rights or remedies under or by reason of this Agreement
                  on any
                  persons other than the parties to it and their respective successors
                  and
                  assigns, nor is anything in this Agreement intended to relieve
                  or
                  discharge the obligation or liability of any third persons to any
                  party to
                  this Agreement, nor shall any provisions give any third persons
                  any right
                  of subrogation or action over against any party to this Agreement.
                  

              

        
          
            

          

        

      

      	15.2  	
              Assignment.
                This Agreement shall be binding on and shall inure to the benefit
                of the
                parties to it and their respective heirs, legal representatives,
                successors and assigns. Buyer agrees to obtain the written consent
                of
                Seller if Buyer sells, assigns or otherwise transfers all or any
                ownership
                interest in a material portion of the Assets prior to the time that
                the
                Buyer has completed the terms of payment above in Article 2. Seller
                agrees
                not to unduly withhold its consent to any sale, assignment or transfer
                of
                the assets after written notice is served upon it according to the
                terms
                of this Agreement. Seller shall give its written consent to the Buyer
                within 15 days of receipt of the Buyer's request for Seller's
                consent.

            

      

      ARTICLE
        16. REMEDIES

       

      	16.1  	
              Recovery
                of Litigation Costs. If
                any legal action or any arbitration or other proceeding so brought
                for the
                enforcement of this Agreement, or because of an alleged dispute,
                breach,
                default or misrepresentation in connection with any of the provisions
                of
                this Agreement, the successful or prevailing party or parties shall
                be
                entitled to recover reasonable attorneys' fees and other costs incurred
                in
                that action or proceeding, in addition to any other relief to which
                it or
                they may be entitled.

            

      	 	 

      	16.2  	
              Conditions
                Permitting Termination.
                Subject to the provisions of Article 3 relating to the postponement
                of the
                Closing Date, either party may on or prior to the Closing Date terminate
                this Agreement by written notice to the other, without liability
                to the
                other, if any bona fide action or proceeding shall be pending against
                either party on the Closing Date that could result in an unfavorable
                judgment, decree or order that would prevent or make unlawful the
                carrying
                out of this Agreement.

            

      	 	 

      	16.3  	
              Defaults
                Permitting Termination.
                If either Buyer or Seller materially defaults in the due and timely
                performance of any of its warranties, covenants, or agreements under
                this
                Agreement, the non- defaulting party or parties may on the Closing
                Date
                give notice of termination of this Agreement, in the manner provided
                in
                Article 17. The notice shall specify with particularity the default
                or
                defaults on which the notice is based. The termination shall be effective
                five days after the Closing Date, unless the specified default or
                defaults
                have been cured on or before this effective date for termination.
                Upon
                material default of the Buyer's payment obligations under this Agreement,
                the Seller may foreclose its security interest in the assets as referred
                to in paragraph 2(f) above.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        17. NATURE
        AND SURVIVAL OF REPRESENTIONS AND WARRANTIES 

      

      All
        representations, warranties, covenants and agreements of the parties contained
        in this Agreement, or in any instrument, certificate, opinion or other writing
        provided for in it, shall survive the Closing. 

      

      ARTICLE
        18. NOTICES

      All
        notices, requests, demands and other communications under this Agreement
        shall
        be in writing and shall be deemed to have been duly given on the date of
        service
        if served personally on the party to whom notice is to be given, or on the
        third
        day after mailing if mailed to the party to whom notice is to be given, by
        first
        class mail, registered or certified, postage prepaid, and properly addressed
        as
        follows: 

       

      
 

      
        	Buyer;	Hotel
                Movie Network Inc. 
                1030
                  S. Mesa Drive 

                Mesa,
                  AZ 85210 

                Attention:
                  Paul D.H. LaBarre

              
	 	 
	With copy to:	Johnson,
                Rasmussen, Robinson &
                Allen,
                  P.L.C. 

                48
                  N. Macdonald 

                Mesa,
                  AZ 85201 

                Attention:
                  Jay Allen 

              
	 	 
	Seller:	Creative
                Domain Investments Ltd
                43
                  Citadel Bay NW 

                Calgary
                  AB, Canada T3G 3Y4 

                Attn:
                  Martin Alcock

                Telephone:
                  (480) 422-4822 

              

      

       

      Any
        party may change its address for purposes of this Article by giving the other
        parties written notice of the new address in the manner set forth above.
        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        19. GOVERNING
        LAW

       

      This
        Agreement shall be construed in accordance with, and governed by the laws
        of the
        State of Arizona

      

      ARTICLE
        20. MISCELLANEOUS

       

      	20.1  	
              Announcements.
                None of Sellers will make any announcements to the public or to employees
                of Seller concerning this Agreement or the transactions contemplated
                hereby without the prior approval of Buyer, which will not be unreasonably
                withheld. Notwithstanding any failure of Buyer to approve it, Sellers
                may
                make an announcement of substantially the same information as theretofore
                announced to the public by Buyer or any announcement required by
                applicable law, but Seller shall in either case notify Buyer of the
                contents thereof reasonably promptly in advance of its
                issuance.

            

      	 	 

      	212  	
              References.
                Unless otherwise specified, references to Sections or Articles are
                to
                Sections or Articles in this Agreement.

            

      

      IN
        WITNESS WHEREOF, the parties to this Agreement have duly executed it as of
        the
        day and year first above written. 

       

      
        	BUYER
                Hotel Movie Network 	 	 	B2
                DIGITAL, INC. a Delaware corporation 
	 	 	 	 
	By:	/s/ Paul
                D.H.
                LaBarre	 	 	By	/s/ Robert
                Russell
	 	
                

                Paul
                  D.H. LaBarre

                Its:
                  President

              	 	 	 	
                
                  

                

                Robert Russell

                Its: President

              

        SELLER

         

        Creative
          Domain Investments, Ltd 
          An
            Alberta Ltd

           

          
            
              	 	 	 	 
	By:	/s/ Martin
                      C.
                      Alcock	 	 	 	 
	 	
                      

                      
                        Martin
                          C. Alcock

                      

                      Its:
                        Director

                    	 	 	 	
                       

                       

                    

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

        

      

      SCHEDULE
        1.1

      

        Intellectual
          Properties

      

       

      The
        following are to be included:

       

      	1.  	
              All
                design for wall-mounted modem, including firmware (C-source), schematics,
                mechanical drawings and pcb layout files.

            

      	2.  	
              All
                design files for the head end modem which talks with the wall mounted
                modems, to include firmware (C source), schematics, mechanical drawings
                and pcb layout files.

            

      	3.  	
              Source
                Code for manufacturing fixtures and programming
                utilities.

            

      	4.  	
              Specifications
                for Phillips, Zenith and Thompson Electronics smart TV
                sets.

            

      	5.  	
              Plans
                and specifications for cost reduction of the wall
                plate.

            

      	6.  	
              Plans,
                specifications and work in progress for smart TV-ATX
                interface.

            

      	7.  	
              SQL
                files for the movie database.

            

      	8.  	
              Front-End
                code for generating site license and inserting log data into the
                movie
                database.

            

      	9.  	
              Digital
                Video server source code (C,C++).

            

      	10.  	
              Source
                Code for ATX Head end modem interface and voice
                modem.

            

      	11.  	
              JAVA
                code for interface web site.

            

      	12.  	
              Database
                of transactions of February 2005, including all customer records,
                contract
                information, etc.

            

      	13.  	
              Any
                and all additional information needed for the production and manufacture
                of all above listed items.

            

      	14.  	
              A
                short term contract period to setup and install all of the software
                at the
                site of Buyers choice.

            

      	15.  	
              A
                Consultant available for the period of one year for additional support
                if
                necessary. A fee would be worked out for this consulting period on
                a
                base-by- base need.

            

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule
        1.2

      Creative
        Domain Investments Ltd. Inventory Valuation 03-30-2007

      

      To
        be supplied at a later date.AGREEMENT
      AND PLAN OF MERGER

     

    BY
      AND AMONG

     

    KEY
      HOSPITALITY ACQUISITION CORPORATION,

     

    KEY
      MERGER SUB, LLC,

     

    CAY
      CLUBS LLC

     

    AND

     

    THE
      MEMBERS OF CAY CLUBS LLC

     

    DATED
      AS OF MARCH 22, 2007

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AGREEMENT
      AND PLAN OF MERGER

     

    THIS
      AGREEMENT AND PLAN OF MERGER (this “Agreement”)
      is
      made and entered into as of March 22, 2007, by and among Key Hospitality
      Acquisition Corporation, a Delaware corporation (“Parent”),
      Key
      Merger Sub, LLC, a Florida limited liability company and a wholly-owned
      subsidiary of Parent (“Merger
      Sub”),
      Cay
      Clubs LLC, a Florida limited liability company (the “Company”),
      and
      each of the persons listed under the caption “Members” on the signature page
      hereof, such persons being all of the members of the Company (each a
“Member”
and,
      collectively, the “Members”).
      

     

     

    RECITALS

     

    WHEREAS,
      the Boards of Directors of Parent and Merger Sub and the Board of Directors
      of
      the Company have each declared it to be advisable and in the best interests
      of
      each company and their respective stockholders and owners that Parent and the
      Company combine in order to advance their long-term business interests;
      and

     

    WHEREAS,
      the Boards of Directors of Parent and Merger Sub and the Board of Directors
      of
      the Company have each approved this Agreement and the merger of Merger Sub
      with
      and into the Company (the “Merger”),
      in
      accordance with the Florida Limited Liability Company Act, Chapter 608 (the
      “Florida
      Act”)
      and
      the terms and conditions set forth herein, which Merger will result in, among
      other things, the Company becoming a wholly owned subsidiary of Parent and
      the
      Members becoming stockholders of Parent; and

     

    WHEREAS,
      for federal income tax purposes, it is intended the Members will not recognize
      any gain or loss as a result of the Merger based upon Section 351 of the
      Internal Revenue Code of 1986, as amended (the “Code”)
      and
      the regulations promulgated thereunder.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual representations,
      warranties, covenants and agreements herein contained, and other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereby agree as follows:

     

    ARTICLE
      I

    THE
      MERGER

     

    1.1  The
      Merger.
      At the
      Effective Time (as defined in Section 1.3), in accordance with the Florida
      Act and the terms and conditions of this Agreement, Merger Sub shall be merged
      with and into the Company. From and after the Effective Time, the separate
      corporate existence of Merger Sub shall cease and the Company, as the surviving
      entity in the Merger, shall continue its existence under the Florida Act as
      a
      wholly owned subsidiary of Parent. The Company as the surviving entity after
      the
      Merger is hereinafter sometimes referred to as the “Surviving
      Entity.”

     

    1.2  Closing.
      Unless
      this Agreement shall have been terminated and the transactions contemplated
      by
      this Agreement abandoned pursuant to the provisions of Article VIII, and subject
      to the satisfaction or waiver, as the case may be, of the conditions set forth
      in Article VI, the closing of the Merger and other transactions contemplated
      by
      this Agreement (the “Closing”)
      shall
      take place at 10:00 a.m. (Eastern Standard Time) on a date to be mutually agreed
      upon by the parties (the “Closing
      Date”),
      which
      date shall be no later than the second Business Day (as defined below) after
      all
      the conditions set forth in Article VI (excluding conditions that, by their
      nature, cannot be satisfied until the Closing) shall have been satisfied or
      waived in accordance with the terms of this Agreement, unless another time
      and/or date is agreed to in writing by the parties. The Closing shall take
      place
      at the offices of Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. in New York,
      New York. For purposes of this Agreement, “Business
      Day”
shall
      mean any day on which banks are permitted to be open in New York, New
      York.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.3  Effective
      Time.
      Subject
      to the provisions of this Agreement, on the Closing Date or as soon thereafter
      as is practicable the parties shall cause the Merger to become effective by
      executing and filing in accordance with the Florida Act a certificate of merger
      with the Secretary of State of the State of Florida in substantially the form
      of
Exhibit
      A
      attached
      hereto (the “Certificate
      of Merger”),
      the
      date and time of such filing, or such later date and time as may be agreed
      upon
      by the parties and specified therein, being hereinafter referred to as the
      “Effective
      Time.”

     

    1.4  Effect
      of the Merger.
      At the
      Effective Time, the Merger shall have the effects set forth in this Agreement
      and in the Florida Act. Without limiting the generality of the foregoing, and
      subject thereto, at the Effective Time all the assets, properties, rights,
      privileges, immunities, powers and franchises of the Company and Merger Sub
      shall vest in the Surviving Entity and all debts, liabilities and duties of
      the
      Company and Merger Sub shall become the debts, liabilities and duties of the
      Surviving Entity.

     

    1.5  Certificate
      of Formation and Limited Liability Company Agreement.
      From
      and after the Effective Time and without further action on the part of the
      parties, the Certificate of Formation of the Company immediately prior to the
      Effective Time shall be the Certificate of Formation of the Surviving Entity
      until amended in accordance with the terms thereof. From and after the Effective
      Time, the operating agreement set forth on Exhibit B attached hereto shall
      be
      the operating agreement of the Surviving Entity until amended in accordance
      with
      terms thereof.

     

    1.6  Merger
      Consideration.

     

    (a)  The
      aggregate consideration (the “Merger
      Consideration”)
      to be
      paid or reserved for issuance by Parent and Merger Sub in the Merger to the
      Members shall be (1) 50,000,000 fully paid and non-assessable shares of common
      stock of Parent, par value $0.001 per share (the “Parent
      Common Stock”),
      and
      (2) 24,666,666 shares of Parent Common Stock which shall be deposited in and
      subject to the Escrow created and established pursuant to Section 1.15 provided
      that all the transactions contemplated by the Optioned Property Provider
      Agreement (as defined in Section 2.3(a)) have been completed (in any event,
      such
      shares to be deposited in the Escrow shall sometimes be referred to as the
      “Escrow
      Shares”).
      At
      the Effective Time, each Company Membership Interest held by a Member
      immediately prior to the Effective Time shall, by virtue of the Merger, and
      without any action on the part of such Member, be converted automatically into
      and become the aggregate of the Merger Consideration and shall be allocated
      among the Members as set forth on Schedule
      1.6(a)
      (which
      Schedule shall be amended from time to time to reflect the addition of any
      new
      Members to the Company and which final Schedule shall be delivered at least
      one
      week prior to Closing). In the event that the transactions contemplated by
      the
      Optioned Property Provider Agreement have not closed prior to the Closing Date,
      the first 12,500,000 shares of Parent Common Stock that would have been Earned
      Shares will not be issued and the balance of 12,166,666 shares of Parent Common
      Stock will be issued and deposited in Escrow and constitute part of the Merger
      Consideration and be subject to return to Parent in accordance with the
      provisions of Section 1.19.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b)  From
      and
      after the Effective Time, all membership interests of the Company, (together,
      “Company
      Membership Interests”)
      (other
      than any Company Membership Interests to be canceled and retired pursuant to
      Section 1.7) shall be deemed canceled and shall cease to exist, and each
      holder of a Company Membership Interest shall cease to have any rights with
      respect thereto except as set forth herein or under applicable law. As soon
      as
      practicable after the Effective Time, Parent shall furnish one or more
      certificates representing the prescribed number of shares of Parent Common
      Stock
      to the Members in accordance with Section 1.14 hereof.

     

    1.7  Cancellation
      of Membership Interests.
      Immediately prior to the Effective Time, each Company Membership Interest owned
      by Parent or any direct or indirect wholly owned Subsidiary (as defined in
      Section 2.2(a)) of Parent or the Company, shall be canceled and
      extinguished without any conversion thereof or payment therefor.

     

    1.8  No
      Further Ownership Rights in Company Membership Interests.
      All
      shares of Parent Common Stock issued upon the surrender for exchange of Company
      Membership Interests in accordance with the terms of this Article I shall be
      deemed to have been issued in full satisfaction of all rights pertaining to
      such
      Company Membership Interests under this Article I. If, after the Effective
      Time,
      certificates representing Company Membership Interests are presented to Parent
      or Surviving Entity for any reason, they shall be canceled and exchanged as
      provided in this Article I.

     

    1.9  Membership
      Interests of Merger Sub.
      Parent’s ownership interest in Merger Sub (the “Merger
      Sub Membership Interest”)
      shall
      be converted automatically into a 100% membership interest in the Company.
      

     

    1.10  Adjustments
      to Merger Consideration.
      Notwithstanding any other provision of this Agreement, the Merger Consideration
      shall be adjusted, at any time and from time to time, to fully reflect the
      effect of any stock split, reverse split, stock dividend (including, without
      limitation, any dividend or distribution of securities convertible into Parent
      Common Stock), reorganization, recapitalization or other like change with
      respect to Parent Common Stock, occurring prior to the Closing.

     

    1.11  No
      Fractional Shares.
      No
      certificate or scrip representing fractional shares of Parent Common Stock
      shall
      be issued as part of the Merger Consideration, and such fractional share
      interests will not entitle the owner thereof to vote or to any other rights
      of a
      stockholder of Parent. Notwithstanding any other provision of this Agreement,
      each holder of Company Membership Interests who would otherwise be entitled
      to
      receive a fraction of a share of Parent Common Stock (after taking into account
      all Company Membership Interests) shall receive from Parent, in lieu thereof,
      the next highest number of whole shares of Parent Common Stock.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.12  No
      Liability.
      Notwithstanding any other provision of this Agreement, none of the Parent,
      Merger Sub or the Surviving Entity shall be liable to a Member for any shares
      of
      Parent Common Stock or any amount of cash properly paid to a public official
      pursuant to any applicable abandoned property, escheat or similar
      law.

     

    1.13  Taking
      of Necessary Action; Further Action.
      If, at
      any time and from time to time after the Effective Time, any further action
      is
      necessary or desirable to carry out the purposes of this Agreement and to vest
      in the Surviving Entity full right, title and possession of all assets,
      properties, rights, privileges, powers and franchises of the Company and Merger
      Sub, the officers and directors of the Surviving Entity shall be and are fully
      authorized and directed, in the name of and on behalf of the Company and Merger
      Sub, to take, or cause to be taken, all such lawful and necessary action as
      is
      not inconsistent with this Agreement. 

     

    1.14  Letter
      of Transmittal.
      As
      promptly as practicable before or after the Effective Time, Parent (or its
      designee or exchange agent) will send to each Member as set forth on
Schedule
      1.6(a)
      a letter
      of transmittal for use in enabling Parent to issue one or more certificates
      representing the prescribed number of shares of Parent Common Stock to which
      such Member may be entitled as determined in accordance with the provisions
      of
      this Agreement. Upon delivery of a duly executed letter of transmittal, such
      Member will be entitled to receive the portion of the Merger Consideration
      to
      which such Member may be entitled (as determined in accordance with the
      provisions of this Agreement). It is intended that such letter of transmittal
      will contain provisions requiring each executing Member thereof to (a)
      acknowledge and agree to be bound by Sections 1.6 (Merger Consideration) and
      1.19 (Earn-Out) of this Agreement, (b) make representations and warranties
      with
      respect to ownership of the Company Membership Interests owned or held by such
      Member at that time, and (c) waive all appraisal or dissenter’s rights, in each
      case, in a form reasonably satisfactory to Parent and as a condition precedent
      to Parent’s obligation to issue shares of Parent Common Stock to such Member. If
      any certificate representing shares of Parent Common Stock are to be issued
      in a
      name other than that as set forth in Schedule
      1.6(a),
      it
      shall be a condition that the person requesting such shall deliver to Parent
      (or
      its designee) all documents necessary to evidence and effect such transfer
      and
      pay to Parent (or its designee) any transfer or other taxes required by reason
      of such issuance or establish to the satisfaction of Parent (or its designee)
      that such tax has been paid or is not applicable.

     

    1.15  Escrow.
      (a) To
      provide for the indemnity obligations set forth in Article VII and to provide
      for the return of certain shares of Parent Common Stock in the event that
      certain performance criteria set forth in Section 1.19 are not met, the
      Escrow Shares shall be deposited in escrow (the “Escrow”). 
      The Escrow Shares shall be subject to the terms and conditions provided
      herein and the Escrow Agreement to be entered into at the Closing between
      Parent, F. Dave Clark Irrevocable Trust under Agreement dated August 31, 2004
      (the “Clark Trust”), David Schwarz and Continental Stock Transfer and Trust
      Company (“Continental”)
      (or
      another escrow agent acceptable to the parties), as Escrow Agent, in
      substantially the form annexed hereto as Exhibit
      C
      (the
“Escrow
      Agreement”). 
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b) Any
      Escrow Shares that become Forfeited Shares pursuant to the operation of Section
      1.19 (due to the failure to satisfy certain performance targets provided
      therein) shall be removed from the Escrow, shall cease to be Escrowed Shares
      and
      shall be returned to Parent, at such time such shares shall be retired by
      Parent. 

     

    (c) Except
      as
      provided in subsection (d) hereof (providing for certain Earned Shares to be
      set
      aside to cover the indemnification obligations of the Members as set forth
      in
      Article VII), any Escrow Shares that become Earned Shares pursuant to the
      operation of Section 1.19 (due to the satisfaction of certain performance
      targets provided therein) shall be released from the Escrow and the Escrow
      Agent
      shall deliver the Escrow Shares to the Clark Trust and David Schwarz, pro rata
      among them in accordance with the distribution of the Merger Consideration
      as
      set forth on Schedule 1.6(a). 

     

    (d) Until
      the
      date that is twelve (12) months subsequent to the Closing Date, the first
      10,000,000 Earned Shares shall be retained in the Escrow and treated as
      deposited into a separate account for the purpose of setting aside certain
      Earned Shares for the possible satisfaction of the indemnification obligations
      of the Clark Trust and David Schwarz pursuant to Article VII (such account
      shall
      be referred to herein as the “Earned
      Shares Indemnity Escrow Account”).
      On
      the date that is twelve (12) months and one day subsequent to the Closing Date,
      only 5,000,000 Earned Shares, shall be retained in the Earned Shares Indemnity
      Escrow Account and the excess Earned Shares shall be released from the Escrow
      and the Escrow Agent shall deliver such excess Escrow Shares to the Clark Trust
      and David Schwarz, pro rata among them in accordance with the distribution
      of
      the Merger Consideration as set forth on Schedule 1.6(a). On the date that
      is
      eighteen (18) months subsequent to the Closing Date, pursuant to Article VII,
      the indemnity obligation of the Clark Trust and David Schwarz shall terminate
      under this Agreement and any shares remaining in the Earned Shares Indemnity
      Escrow Account shall be released from the Escrow and the Escrow Agent shall
      deliver the Escrow Shares to the Clark Trust and David Schwarz, pro rata among
      them in accordance with the distribution of the Merger Consideration as set
      forth on Schedule 1.6(a). Any Earned Shares that are deposited in the Earned
      Shares Indemnity Escrow Account and are used to satisfy an indemnification
      obligation pursuant to Article VII shall be removed from the Escrow, shall
      cease
      to be Escrowed Shares and shall be returned to Parent, at such time such shares
      shall be retired by Parent. Notwithstanding anything set forth in this Section
      1.15(d), the indemnification provisions of Article VII, and specifically Section
      7.4, and the Escrow Agreement shall control any releases of Earned Shares from
      the Earned Shares Indemnity Escrow Account to satisfy the Article VII
      indemnification obligations and the general operation and maintenance of such
      Account. 

     

    (e) Escrow
      Shares shall be issued and outstanding on the balance sheet of Parent and it
      is
      the intention of the parties hereto that such shares be legally outstanding
      under Delaware law.  All dividends payable on the Escrow Shares shall be
      distributed to the Clark Trust and David Schwarz pro rata among them in
      accordance with the distribution of the Merger Consideration as set forth on
      Schedule 1.6(a). The Clark Trust and David Schwarz shall be entitled to vote
      the
      Escrow Shares. . 

     

    1.16  Rule
      145.
      All
      shares of Parent Common Stock issued pursuant to this Agreement to “affiliates”
of the Company listed on Schedule
      1.16
      will be
      subject to
      certain resale restrictions under Rule 145 promulgated under the Securities
      Act
      of 1933, as amended (the “Securities
      Act”)
      and
      all certificates representing such shares shall bear an appropriate restrictive
      legend. At the Closing, Parent and the Members shall execute and deliver a
      Registration Rights Agreement in the form annexed hereto as Exhibit
      D
      with
      respect to registration of the shares of Parent Common Stock under the
      Securities Act (the “Registration
      Rights Agreement”).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    1.17  Member
      Matters.  Each
      Member, for itself only, represents and warrants as follows: (i) all Parent
      Common Stock to be acquired by such Member pursuant to this Agreement will
      be
      acquired for his, her or its account and not with a view towards distribution
      thereof other than, with respect to Members that are entities, transfers to
      its
      stockholders, partners or members; (ii) it understands that he, she or it must
      bear the economic risk of the investment in the Parent Common Stock, which
      cannot be sold by he, she or it unless it is registered under the Securities
      Act, or an exemption therefrom is available thereunder; (iii) he, she or it
      has
      had both the opportunity to ask questions and receive answers from the officers
      and directors of Parent and all persons acting on Parent’s behalf concerning the
      business and operations of Parent and to obtain any additional information
      to
      the extent Parent possesses or may possess such information or can acquire
      it
      without unreasonable effort or expense necessary to verify the accuracy of
      such
      information; and (iv) he, she or it has had access to the Parent SEC Reports
      filed prior to the date of this Agreement. Each Member acknowledges, as to
      himself, herself or itself only, that (v) he, she or it is either (A) an
“accredited investor” as such term is defined in Rule 501(a) promulgated under
      the Securities Act, or (B) a person possessing sufficient knowledge and
      experience in financial and business matters to enable it to evaluate the merits
      and risks of an investment in Parent; and (vi) he, she or it understands that
      the certificates representing the Parent Common Stock to be received by he,
      she
      or it may bear legends to the effect that the Parent Common Stock may not be
      transferred except upon compliance with (C) the registration requirements of
      the
      Securities Act (or an exemption therefrom), and (D) the provisions of this
      Agreement. Each Member that is an entity, for itself, represents, warrants
      and
      acknowledges, with respect to each holder of its equity interests, to the same
      effect as the foregoing provisions of this Section 1.17(a).

     

    (b)  Each
      Member, for himself, herself or itself, represents and warrants that the
      execution and delivery of this Agreement by such Member does not, and the
      performance of his, her or its obligations hereunder will not, require any
      consent, approval, authorization or permit of, or filing with or notification
      to, any court, administrative agency, commission, governmental or regulatory
      authority, domestic or foreign (a “Governmental
      Entity”),
      except (i) for applicable requirements, if any, of the Securities Act, the
      Securities Exchange Act of 1934, as amended (“Exchange
      Act”),
      state
      securities laws (“Blue
      Sky Laws”),
      and
      the rules and regulations thereunder, and (ii) where
      the
      failure to obtain such consents, approvals, authorizations or permits, or to
      make such filings or notifications, would not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on such Member or
      the
      Company or, after the Closing, the Parent, or prevent consummation of the Merger
      or otherwise prevent the parties hereto from performing their obligations under
      this Agreement.

     

    1.18  Committee
      for Purposes of Agreement.
      Prior
      to the Closing, the Board of Directors of Parent shall appoint a committee
      consisting of one of its then members to act on behalf of Parent to take all
      necessary actions and make all decisions pursuant to the Escrow Agreement
      regarding Parent’s right to indemnification pursuant to Article VII hereof. In
      the event of a vacancy in such committee, the Board of Directors of Parent
      shall
      appoint as a successor a Person who was a director of Parent prior to the
      Closing Date or some other Person who would qualify as an “independent” director
      of Parent and who has not had any relationship with the Company prior to the
      Closing. Such committee is intended to be the “Committee”
      referred to in Article VII hereof and the Escrow Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    1.19  Return of
      Escrow Shares for Failure to Meet Performance Measures 

     

    (a)  As
      promptly as practicable after the end of the twelve (12) month period commencing
      on January 1, 2007 and ending on December 31, 2007 and the twelve (12) month
      period commencing on January 1, 2008 and ending on December 31, 2008 (each,
      a
“Performance
      Period”)
      but in
      no event later than 90 days thereafter, Parent will deliver or cause to be
      delivered to the Clark Trust and David Schwarz a statement for the
      applicable Performance Period (the “Net
      Income Statement”)
      setting forth the calculation of the net income (after taxes) of the Company
      for such Performance Period. The Net Income Statement shall
      be prepared using the audited financial statements of Parent and shall
      be final and binding on the parties. In order to facilitate the calculation
      of any Escrow Shares that shall be returned to the Company pursuant to
      this Section
      1.19 and retired by the Company ("Forfeited
      Shares"),
      Parent shall account for the Company and its Subsidiaries separately from other
      assets held and businesses conducted by Parent and its
      Affiliates during the applicable
      Performance Period. 

     

    (b)  Escrow
      Shares shall become Forfeited Shares, in which case such Forfeited Shares shall
      be taken from the Clark Trust and David Schwarz (pro rata among them in
      accordance with the distribution of the Merger Consideration as set forth on
      Schedule 1.6(a)) within fifteen (15) Business Days following the delivery
      of the applicable Net Income Statement, as provided in Schedule 1.19
      hereto.  For the 2007 Performance Period, the difference
      between 12,333,333 shares less the Forfeited Shares for the 2007 Performance
      Period shall become Earned Shares pursuant to this Section
      1.19.   For the 2008 Performance Period, difference
      between 12,333,333 shares less the Forfeited Shares for the 2008 Performance
      Period shall become Earned Shares pursuant to this Section
      1.19.

     

    (c)  The
      Net
      Income targets set forth on Schedule 1.19 shall be appropriately adjusted
      pro rata to reflect any stock issuances on a time-weighted basis (for example,
      an issuance of shares of Parent Common Stock (excluding the Escrow Shares
      and shares of Parent Common Stock issued upon exercise of options and warrants)
      on January 1, 2008 representing 5% of the issued and outstanding shares of
      capital stock of Parent on a fully-diluted basis shall increase targeted Net
      Income by 5% and an issuance of shares of Parent Common Stock (excluding
      the Escrow Shares and shares of Parent Common Stock issued upon exercise of
      options and warrants) on July 1, 2008 representing 5% of the issued and
      outstanding shares of capital stock of Parent on a fully-diluted basis shall
      increase targeted Net Income by 2.5%). Similarly, the number of Escrow
      Shares that become Forfeited Shares under this Section 1.19 and the
      target stock prices used above shall be appropriately adjusted for any stock
      splits, stock dividends, reorganizations and similar events.

     

    1.20  Outstanding
      Company Derivative Securities.
      The
      Company shall, and shall cause its Subsidiaries to, arrange that the holders
      of
      all outstanding options, warrants and other derivative securities of the Company
      or any Subsidiary exercise such securities prior to the Effective Time. Such
      exercise may be made contingent upon the occurrence of the Closing and no Person
      shall have any right to acquire any ownership or other equity interest in the
      Company or any Subsidiary (other than Parent at Closing). 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    ARTICLE
      II  

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    Except
      as
      set forth in the disclosure schedule provided by the Company to Parent on the
      date hereof, which (without limiting Parent’s rights under Section 6.3(f)
      hereof) may be supplemented from time to time after the date hereof should
      any
      fact or condition require a change thereto (the “Company
      Disclosure Schedule”),
      the
      Company represents and warrants to Parent that the statements contained in
      this
      Article II are true, complete and correct as of the date hereof and as of the
      Closing Date unless such representation or warranty is limited as to a specified
      date. Unless otherwise noted, all references to the Company and its Subsidiaries
      in this Article II shall mean the Company on an as reorganized basis as such
      reorganization is set forth on Schedule
      2.2(a)
      hereto.
      The Company Disclosure Schedule shall be arranged in paragraphs corresponding
      to
      the numbered and lettered paragraphs contained in this Article II. As used
      in
      this Agreement, a “Company
      Material Adverse Effect”
(or
      a
      Material Adverse Effect relating to the Company) means any change, event or
      effect that is materially adverse to the business, assets (including, without
      limitation, intangible assets), financial condition, results of operations
      of
      the Company or any of its Subsidiaries, taken as a whole. A “Project
      Material Adverse Effect”
shall
      mean any change, event or effect that is materially adverse to the business,
      assets (including without limitation intangible assets) financial condition
      or
      results of operations of any individual Material Project. Notwithstanding the
      foregoing, “Company
      Material Adverse Effect”
and
      “Project
      Material Adverse Effect”
shall
      not include events caused by general economic conditions (but shall include
      economic conditions applicable solely or principally to the hospitality or
      resort industries or to locations in which the Company and its Subsidiaries
      operate). The following projects shall constitute “Material
      Projects”:
      Orlando, Sandpiper, Bayshore, Crested Butte, Boca Chica, Clearwater, Marathon,
      Las Vegas, Sarasota, Tavernier and Islemorada. “Optioned
      Property Provider”
shall
      mean the entities set forth on Schedule
      2.15(c)
      attached
      hereto. The following projects shall constitute the “Optioned
      Property Projects”:
      (a)
      Bayshore, Clearwater, Orlando, Islemorada, Marathon, Sombrero, Sarasota and
      Tavernier and (b) if the Closing is consummated for an Optioned Property
      Provider, the owner of an Optioned Property Provider or any affiliate thereof
      to
      acquire any of the following properties then: Sandpiper and/or Crested Butte.
      If
      an exception is adequately disclosed in any one section of the Company
      Disclosure Schedules, it should be deemed disclosed for purposes of each other
      section of the Company Disclosure Schedules where it is reasonably apparent
      that
      such exception is applicable. 

     

    2.1  Organization
      and Qualification.
      (a) The
      Company is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the State of Florida, and is qualified to do
      business in Florida and all other jurisdictions where the character of the
      properties and other assets owned, leased or operated by it, or the nature
      of
      its activities, makes such qualification or licensing necessary, except where
      the failure to be so qualified, licensed or in good standing, individually
      or in
      the aggregate, has not had and would not be expected to have a Company Material
      Adverse Effect. The Company is in possession of all franchises, grants,
      authorizations, licenses, permits, easements, consents, certificates, approvals
      and orders (“Approvals”)
      necessary to own, lease and operate the properties it purports to own, operate
      or lease and to carry on its business as it is now being conducted, except
      where
      the failure to have such Approvals could not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on the Company. The
      Company has delivered to Parent true, complete and correct copies of its
      Certificate of Formation and operating agreement of the Company (the
“Operating
      Agreement”),
      each
      as amended to date. The Company is not in default under or in violation of
      any
      provision of its Certificate of Formation or Operating Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (b)  The
      minute books of the Company contain true, complete and accurate records of
      all
      meetings and consents in lieu of meetings of its Board of Directors or Managers,
      if applicable (and any committees thereof), similar governing bodies and Members
      (“Corporate
      Records”)
      since
      January 1, 2004. Copies of such Corporate Records of the Company have been
      heretofore made available to Parent or Parent’s counsel.

     

    (c)  The
      transfer and ownership records of the Company contain true, complete and
      accurate records of the securities ownership as of the date of such records
      and
      the transfers involving the Company Membership Interests and other securities
      of
      the Company since January 1, 2004. Copies of such records of the Company have
      been heretofore made available to Parent or Parent’s counsel.

     

    2.2  Subsidiaries.
      

     

    (a)  Schedule
      2.2(a)
      sets
      forth a complete and correct list of each Subsidiary of the Company and of
      all
      jurisdictions in which the Company or any such Subsidiary is qualified or
      licensed to do business. Attached to Schedule
      2.2(a)
      is an
      organizational chart of the Company and its Subsidiaries. For purposes of this
      Agreement, the term “Subsidiary”
means,
      with respect to any Person, any corporation or other organization, whether
      incorporated or unincorporated, of which: (i) such Person (or any other
      Subsidiary of such Person) is a general partner (excluding partnerships, the
      general partnerships of which held by such Person or Subsidiary of such Person
      do not have a majority of the voting interest of such partnership); or (ii)
      at
      least a majority of the securities or other equity interests having by their
      terms ordinary voting power to elect a majority of the Board of Directors or
      others performing similar functions with respect to such corporation or other
      organization, is directly or indirectly owned or controlled by such Person
      or by
      any one or more of its Subsidiaries, or by such Person and one or more of its
      Subsidiaries. Except for the Subsidiaries set forth on Schedule
      2.2(a),
      the
      Company does not own, directly or indirectly, any ownership, equity, profits
      or
      voting interest in any Person or have any agreement or commitment to purchase
      any such interest, and has not agreed and is not obligated to make nor is bound
      by any written, oral or other agreement, contract, subcontract, lease, binding
      understanding, instrument, note, option, warranty, purchase order, license,
      sublicense, insurance policy, benefit plan, commitment or undertaking of any
      nature, as of the date hereof or as may hereafter be in effect under which
      it
      may become obligated to make, any future investment in or capital contribution
      to any other entity.

     

    (b)  Each
      Subsidiary that is a corporation is duly incorporated, validly existing and
      in
      good standing under the laws of its state of incorporation
      (as listed on Schedule
      2.2(a))
      and has
      the requisite corporate power and authority to own, lease and operate its assets
      and properties and to carry on its business as it is now being or currently
      planned by the Company to be conducted. Each Subsidiary that is a limited
      liability company is duly organized or formed, validly existing and in good
      standing under the laws of its state of organization or formation (as listed
      on
Schedule
      2.2(a))
      and has
      the requisite power and authority to own, lease and operate its assets and
      properties and to carry on its business as it is now being conducted by the
      Company. Each Subsidiary is in possession of all Approvals necessary to own,
      lease and operate the properties it purports to own, operate or lease and to
      carry on its business as it is now being or currently planned by the Company
      to
      be conducted, except where the failure to have such Approvals could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on the Company or such Subsidiary. Complete and correct copies
      of
      the certificate of incorporation and by-laws (or other comparable governing
      instruments with different names) (collectively referred to herein as
“Charter
      Documents”)
      of
      each Subsidiary, as amended and currently in effect, have been heretofore
      delivered or made available to Parent or Parent’s counsel. No Subsidiary is in
      violation of any of the provisions of its Charter Documents.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (c)  Each
      Subsidiary is duly qualified or licensed to do business as a foreign corporation
      or foreign limited liability company and is in good standing in each
      jurisdiction where the character of the properties owned, leased or operated
      by
      it or the nature of its activities makes such qualification or licensing
      necessary, except for such failures to be so duly qualified or licensed and
      in
      good standing that could not, individually or in the aggregate, reasonably
      be
      expected to have a Material Adverse Effect on the Company or such Subsidiary.
      Each jurisdiction in which each Subsidiary is so qualified or licensed is listed
      in Schedule
      2.2(a).

     

    (d)  The
      minute books of each Subsidiary contain true, complete and accurate records
      of
      all meetings and consents in lieu of meetings of its Board of Directors (and
      any
      committees thereof), similar governing bodies and stockholders since January
      1,
      2004. Copies of the Corporate Records of each Subsidiary have been heretofore
      made available to Parent or Parent’s counsel.

     

    2.3  Capitalization.
      (a)
      All of
      the Company Membership Interests held by the Members of the Company are as
      reflected on Schedule
      1.6(a).

     

    (b)  As
      of the
      date hereof, there are no shares of voting or non-voting capital stock, equity
      interests, percentage interests or other securities of the Company authorized,
      issued, reserved for issuance or otherwise outstanding. Schedule
      1.6(a)
      sets
      forth a true, complete and correct list of all holders of Company Membership
      Interests indicating the percentage of Company Membership Interests held by
      each
      of them. The Company has entered into an agreement with an Optioned Property
      Provider (the “Optioned
      Property Agreement”).
      A
      true, correct and complete copy of the Optioned Property Agreement has been
      provided to Parent. The Company may amend the Optioned Property Agreement
      provided that the amended agreement preserves the economic substance of the
      original agreement prior to the amendment.

     

    (c)  Schedule
      1.6(a)
      also
      sets forth a true, complete and correct list of the holders of all Company
      Options and Company Warrants, including: (i) the number and class of Company
      Membership Interests subject to each such Company Option or Company Warrant;
      (ii) the date of grant; (iii) the exercise price; (iv) the date of grant, the
      vesting schedule, as applicable, and expiration date; and (v) any other material
      terms, including, without limitation, any terms regarding the acceleration
      of
      vesting. At Closing, no such derivative securities will be
      outstanding.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (d)  All
      outstanding Company Membership Interests are, and all membership interests
      which
      may be issued pursuant to the Company Options and Company Warrants, will be,
      when issued against payment therefore in accordance with the terms thereof,
      duly
      authorized, validly issued, fully paid and non-assessable, and not subject
      to,
      or issued in violation of, any kind of preemptive, subscription or of similar
      rights, and were or will be issued in compliance in all material respects with
      all applicable federal and state securities laws. 

     

    (e)  There
      are
      no outstanding obligations of the Company to repurchase, redeem or otherwise
      acquire any shares of capital stock (or options to acquire any such shares),
      membership interests, percentage interests or other security or equity interests
      of the Company or to cause the Company or its Subsidiaries to file a
      registration statement under the Securities Act, or which otherwise relate
      to
      the registration of any securities of the Company or its
      Subsidiaries.

     

    (f)  Except
      as
      disclosed in Schedule
      1.6(a),
      there
      are no bonds, debentures, notes or other indebtedness of the Company having
      the
      right to vote (or convertible into securities having the right to vote) on
      any
      matters on which the Company’s members may vote. Except as described in
      subsection (c) above, there are no outstanding securities, options, warrants,
      calls, rights, commitments, agreements, arrangements or undertakings of any
      kind
      (contingent or otherwise) to which the Company is a party or bound obligating
      the Company to issue, deliver or sell, or cause to be issued, delivered or
      sold,
      membership interests, percentage interests or other voting securities of the
      Company or obligating the Company to issue, grant, extend or enter into any
      agreement to issue, grant or extend any security, option, warrant, call, right,
      commitment, agreement, arrangement or undertaking. The Company is not subject
      to
      any obligation or requirement to provide funds for or to make any investment
      (in
      the form of a loan or capital contribution) to or in any Person.

     

    (g)  There
      are
      no voting trusts, proxies or other agreements, arrangements, commitments or
      understandings of any character to which the Company or its Subsidiaries or,
      to
      the Knowledge of the Company, any of the Company’s members, is a party or by
      which any of them is bound with respect to the issuance, holding, acquisition,
      voting or disposition of any shares of capital stock, membership interests,
      percentage interests or other security or equity interests of the
      Company.

     

    (h)  The
      authorized and outstanding capital stock or membership interests of each
      Subsidiary are set forth in Schedule
      2.2(a)
      hereto.
      Except as set forth on Schedule
      2.2(a),
      all of
      the outstanding shares or membership interests of the Company's wholly owned,
      direct or indirect, Subsidiaries (and all of the shares or membership interests
      of non-wholly owned Subsidiaries owned, directly or indirectly, by the Company)
      are owned, directly or indirectly, by the Company, free and clear of any Liens,
      charges, pledges, security interests, mortgages, claims, encumbrances, options
      or rights of first refusal. All of the outstanding shares of capital stock
      or
      membership interests of each of such Subsidiaries owned by the Company have
      been
      duly authorized and validly issued and are fully paid, non-assessable and free
      of preemptive or similar rights. Except as contemplated by the Merger, there
      are
      no warrants, options, agreements, call rights, conversion rights, exchange
      rights, preemptive rights or other rights or commitments or understandings
      relating to the issuance, sale, delivery, pledge, transfer, redemption or other
      disposition by the Company or its Subsidiaries (including any right of
      conversion or exchange under any outstanding security or other instrument)
      of
      the capital stock or membership interests of any of the Company's Subsidiaries.
      None of the Subsidiaries owns any stock or membership interests of the
      Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    2.4  Authority
      Relative to this Agreement.
      The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement and to perform its obligations hereunder and to consummate the
      transactions contemplated hereby (including the Merger). The execution and
      delivery of this Agreement and the consummation by the Company of the
      transactions contemplated hereby (including the Merger) have been duly and
      validly authorized by all necessary action on the part of the Company (including
      the approval by its Members, subject in all cases to the satisfaction of the
      terms and conditions of this Agreement, including the conditions set forth
      in
      Article VI), and no other corporate proceedings on the part of the Company
      are
      necessary to authorize this Agreement or to consummate the transactions
      contemplated hereby pursuant to the Florida Act and the terms and conditions
      of
      this Agreement. The Merger and the adoption of this Agreement have been approved
      by the affirmative vote of all of the holders of the Company Membership
      Interests in accordance with the Florida Act and the Operating Agreement (the
      “Requisite
      Member Approval”).
      This
      Agreement has been duly and validly executed and delivered by the Company and,
      assuming the due authorization, execution and delivery thereof by the other
      parties hereto, constitutes the legal and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, except as may
      be
      limited by bankruptcy, insolvency, reorganization or other similar laws
      affecting the enforcement of creditors’ rights generally and by general
      principles of equity.

     

    2.5  No
      Conflict; Required Filings and Consents.
      (a) The
      execution and delivery of this Agreement by the Company do not, and the
      performance of this Agreement by the Company shall not, (i) conflict with or
      violate the Company’s Certificate of Formation or Operating Agreement, (ii)
      conflict with or violate any Legal Requirements (as defined in Section 10.2(a)),
      (iii) result in any breach of, or constitute a default (or an event that with
      notice or lapse of time or both would become a default) under, or materially
      impair the Company’s rights or alter the rights or obligations of any third
      party under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, or result in the creation of a lien or
      encumbrance on any of the properties or assets of the Company pursuant to,
      any
      Material Company Contracts or (iv) result in the triggering, acceleration or
      increase of any payment to any Person pursuant to any Company Contract,
      including any “change in control” or similar provision of any Company Contract,
      except, with respect to clauses (ii), (iii) or (iv), for any such conflicts,
      violations, breaches, defaults, triggerings, accelerations, increases or other
      occurrences that would not, individually and in the aggregate, have a Material
      Adverse Effect on the Company.

     

    (b)  The
      execution and delivery of this Agreement by the Company does not, and the
      performance of its obligations hereunder will not, require any consent,
      approval, authorization or permit of, or filing with or notification to, any
      Governmental Entity, except: (i) for the filing of any notifications required
      under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
      (the
“HSR
      Act”)
      and
      the expiration of the required waiting period thereunder, and (ii) where the
      failure to obtain such consents, approvals, authorizations or permits, or to
      make such filings or notifications, would not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on the Company or,
      after the Closing, the Parent, or prevent consummation of the Merger or
      otherwise prevent the parties hereto from performing their obligations under
      this Agreement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    2.6  Compliance
      with Laws.
      To the
      Knowledge of the Company, the Company and its Subsidiaries are in compliance
      in
      all respects with all Legal Requirements, except for instances of possible
      noncompliance that individually or in the aggregate would not reasonably be
      expected to have a Company Material Adverse Effect or a Project Material Adverse
      Effect. No written notice, charge, claim, action or assertion has been received
      by the Company or any of its Subsidiaries (and the Company has no Knowledge
      of
      any such written notice delivered to any Person) and, to the Company's
      Knowledge, no written notice, charge, claim, action has been filed, commenced
      or
      threatened against the Company or any of its Subsidiaries or any portion of
      the
      Owned Real Property or any of the Optioned Property Projects alleging any
      violation of any Legal Requirements, except for instances of possible
      noncompliance that individually or in the aggregate would not reasonably be
      expected to have a Company Material Adverse Effect or a Project Material Adverse
      Effect. The parties hereto acknowledge that the Company is or may be in the
      process of renovating various Owned Real Property and Optioned Property Projects
      which will require compliance with respect to certain Legal Requirements and
      the
      Company and/or the applicable Subsidiary agree to use commercially reasonable
      best efforts from and after the date hereof to be in compliance with such Legal
      Requirements, it being agreed by Company and any such Subsidiary that any
      possible noncompliance with respect to such Legal Requirements as of the Closing
      shall not individually or in the aggregate be reasonably expected to have a
      Company Material Adverse Effect or a Project Material Adverse
      Effect.

     

    2.7  Material
      Permits.
      

     

    (a)  To
      the
      Knowledge of the Company, the Company and its Subsidiaries as the case may
      be,
      have all material
      federal, state, local and foreign governmental licenses, permits, franchises,
      approvals and authorizations (the “Material
      Permits”)
      necessary for the Company, or the Subsidiaries as the case may be, to operate
      its business as presently conducted as of the date of this Agreement and as
      presently planned to be conducted except for
      Material Permits that individually or in the aggregate would not reasonably
      be
      expected to have a Company Material Adverse Effect or a Project Material Adverse
      Effect.
      The
      parties hereto acknowledge that the Company is or may be in the process of
      renovating various Owned Real Property and Optioned Property Projects which
      will
      require obtaining and comply with certain Material Permits and the Company
      and/or the applicable Subsidiary agree to use commercially reasonable best
      efforts from and after the date hereof to obtain and complying with such
      Material Permits as and when required by such Legal Requirements, it being
      agreed by Company and any such Subsidiary that any failure to obtain any such
      Material Permits as of the Closing shall not individually or in the aggregate
      be
      reasonably expected to have a Company Material Adverse Effect or a Project
      Material Adverse Effect.

     

    (b)  To
      the
      Knowledge of the Company, neither the Company nor the Subsidiaries have received
      any written notice from any governmental agency that they are not in compliance
      in all material respects with the terms and conditions of the Material
      Permits.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c)  Each
      Material Permit is in full force and effect and neither the Company nor any
      Subsidiary have received written notification of any action, proceeding,
      revocation proceeding, amendment procedure, writ, injunction or claim that
      is
      pending or, to the Knowledge of the Company, threatened, which seeks to revoke
      or limit any Material Permit.

     

    (d)  To
      the
      Knowledge of the Company, the rights and benefits of each Material Permit will
      be available to the Company and the Subsidiaries immediately after the Closing
      on terms substantially identical to those enjoyed by the Company and the
      Subsidiaries immediately prior to the Closing.

     

    2.8  Financial
      Statements.
      (a) The
      Company has provided to Parent a correct and complete copy of the unaudited
      combined financial statements (including any related notes thereto) of the
      Company and its Subsidiaries for the fiscal year ended December 31, 2006 (the
      “Unaudited
      Financial Statements”)
      and
      audited consolidated financial statements (including any related notes thereto)
      of the Company and its Subsidiaries for the fiscal years ended December 31,
      2005 and December 31, 2004 (the “Audited
      Financial Statements”).
      The
      Audited Financial Statements are currently being restated and will be delivered
      to the Parent prior to April 1, 2007. Upon completion of the restatement, the
      Audited Financial Statements will have been prepared in accordance with
      generally accepted accounting principles of the United States (“U.S.
      GAAP”)
      applied on a consistent basis throughout the periods involved (except as may
      be
      indicated in the notes thereto), and each will fairly present in all material
      respects the financial position of the Company and its Subsidiaries at the
      respective dates thereof and the results of their respective operations and
      cash
      flows for the periods indicated. The Unaudited Financial Statements comply
      as to
      form in all material respects, and were prepared in accordance with, U.S. GAAP
      applied on a consistent basis throughout the periods involved (except as may
      be
      indicated in the notes thereto), and fairly present in all material respects
      the
      financial position of the Company and its Subsidiaries at the date thereof
      and
      the results of their respective operations and cash flows for the period
      indicated, except that such statements do not contain notes and are subject
      to
      normal adjustments that are not expected to have a Material Adverse Effect
      on
      the Company.

     

    (b)  Since
      January 1, 2004, the books of account, minute books, stock certificate books
      and
      stock transfer ledgers and other similar books and records
      of the Company and its Subsidiaries have been maintained in accordance with
      good
      business practice, are complete and correct in all material respects and there
      have been no material transactions that are required to be set forth therein
      and
      which are not so set forth. 

     

    (c)  Except
      as
      otherwise noted in the Audited Financial Statements or the Unaudited Financial
      Statements, the accounts and notes receivable of the Company and its
      Subsidiaries reflected on the balance sheets included in the Audited Financial
      Statements and the Unaudited Financial Statements (i) arose from bona fide
      transactions in the ordinary course of business and are payable on ordinary
      trade terms, (ii) are legal, valid and binding obligations of the respective
      debtors enforceable in accordance with their terms, except as such may be
      limited by bankruptcy, insolvency, reorganization, or other similar laws
      affecting creditors’ rights generally, and by general equitable principles,
      (iii) are not subject to any valid set-off or counterclaim except to the extent
      set forth in such balance sheet contained therein, and (iv) are not the subject
      of any actions or proceedings brought by or on behalf of the Company or its
      Subsidiaries.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    2.9  No
      Undisclosed Liabilities.
      To the
      Knowledge of the Company, neither the Company nor any of its Subsidiaries has
      any liabilities (absolute, accrued, contingent or otherwise) of a nature
      required to be disclosed on a balance sheet or in the related notes to the
      Unaudited Financial Statements which are, individually or in the aggregate,
      material to the business, results of operations or financial condition of the
      Company, except: (i) liabilities provided for in or otherwise disclosed in
      the
      balance sheet included in the Unaudited Financial Statements, and (ii) such
      liabilities arising in the ordinary course of business and consistent with
      past
      practice since December 31, 2006.

     

    2.10  Absence
      of Certain Changes or Events.
      Except
      as set forth on Schedule
      2.10 or
      otherwise set forth in this Agreement, since December 31, 2006, the Company
      and
      its Subsidiaries have conducted their respective businesses only in the ordinary
      course of business consistent with past practice, and there has not been: (i)
      any action, event or occurrence which has had, or to the Knowledge of the
      Company could reasonably be expected to result in, a Company Material Adverse
      Effect; or (ii) any action, event or occurrence which has had a loss or
      liability to the Company or any of its Subsidiaries in excess of $250,000 or
      where all such matters aggregate more than $1,000,000; or (iii) any other
      action, event or occurrence that would have required the consent of Parent
      pursuant to Section 4.1 had such action, event or occurrence taken place after
      the execution and delivery of this Agreement.

     

    2.11  Litigation.
      There
      are no claims, suits, actions or proceedings pending or, to the Knowledge of
      the
      Company, threatened against the Company or any of its Subsidiaries, before
      any
      court, governmental department, commission, agency, instrumentality or
      authority, or any arbitrator that seeks to restrain or enjoin the consummation
      of the transactions contemplated by this Agreement or which could reasonably
      be
      expected, either singularly or in the aggregate with all such claims, actions
      or
      proceedings, to have a Material Adverse Effect on the Company, have a Project
      Material Adverse Effect or have a Material Adverse Effect on the ability of
      the
      parties hereto to consummate the Merger.

     

    2.12  Employee
      Benefit Plans and Compensation.
      

     

    (a)  Definitions.
      With the exception of the definition of “Affiliate” set forth in this Section
      2.12(a) below (which definition shall apply only to this Section 2.12(a)),
      for
      purposes of this Agreement, the following terms shall have the following
      respective meanings:

     

    “Affiliate”
shall
      mean any other person or entity under common control with the Company within
      the
      meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations
      issued thereunder.

     

    “Company
      Employee Plan”
shall
      mean any plan, program, policy, practice, contract, agreement 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, funded or unfunded, including without limitation, each
      “employee benefit plan,” within the meaning of Section 3(3) of ERISA which is or
      has been maintained, contributed to, or required to be contributed to, by the
      Company or any Affiliate for the benefit of any Employee, or with respect to
      which the Company or any Affiliate has or may have any liability or obligation
      and any International Employee Plan.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

     

    “DOL”
shall
      mean the United States Department of Labor.

     

    “Employee”
shall
      mean any current, former or rehired employee, consultant, officer or director
      of
      the Company or any Affiliate.

     

    “Employee
      Agreement”
shall
      mean each employment, consulting or similar agreement, each agreement providing
      for severance, relocation, repatriation, expatriation or similar agreement
      (including, without limitation, any offer letter) between the Company or any
      Affiliate and any Employee. 

     

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

     

    “FMLA”
shall
      mean the Family Medical Leave Act of 1993, as amended.

     

    “HIPAA”
shall
      mean the Health Insurance Portability and Accountability Act of 1996, as
      amended.

     

    “International
      Employee Plan”
shall
      mean each Company Employee Plan or Employee Agreement that has been adopted
      or
      maintained by the Company or any Affiliate, whether formally or informally
      or
      with respect to which the Company or any Affiliate will or may have any
      liability with respect to Employees who perform services outside the United
      States.

     

    “IRS”
shall
      mean the United States Internal Revenue Service.

     

    “PBGC”
shall
      mean the United States Pension Benefit Guaranty Corporation.

     

    “Pension
      Plan”
shall
      mean each Company Employee Plan that is an “employee pension benefit plan,”
within the meaning of Section 3(2) of ERISA.

     

    (b)  Schedule
      2.12(b)
      of the
      Company Disclosure Schedules sets forth a complete and accurate list of each
      Company Employee Plan and Employee Agreement. The Company has not made any
      plan
      or commitment to establish any new Company Employee Plan or Employee Agreement,
      to modify any Company Employee Plan or Employee Agreement (except to the extent
      required by law or to conform any such Company Employee Plan or Employee
      Agreement to the requirements of any applicable law, or as required by this
      Agreement), or to enter into any Company Employee Plan or Employee Agreement,
      nor does it have any intention or commitment to do any of the foregoing. The
      Company has previously made available to Parent a true and complete table
      setting forth the name, position and salary of each employee of the
      Company.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (c)  Documents.
      The
      Company has provided to Parent: (i) correct and complete copies of all documents
      embodying each Company Employee Plan and each Employee Agreement including,
      without limitation, all amendments thereto and written interpretations thereof
      and all related trust documents; (ii) the three (3) most recent annual reports
      (Form Series 5500 and all schedules and financial statements attached thereto),
      if any, filed pursuant to ERISA or the Code in connection with each Company
      Employee Plan; (iii) if the Company Employee Plan is funded, the most recent
      annual and periodic accounting of Company Employee Plan assets; (iv) the most
      recent summary plan description together with the summary(ies) of material
      modifications thereto, if any, required under ERISA with respect to each Company
      Employee Plan; (v) all material written agreements and contracts relating to
      each Company Employee Plan, including, without limitation, administrative
      service agreements and group insurance contracts; (vi) all communications from
      the Company within the prior three (3) years material to any Employee or
      Employees relating to any Company Employee Plan and any proposed Company
      Employee Plan, in each case, relating to any amendments, terminations,
      establishments, increases or decreases in benefits, acceleration of payments
      or
      vesting schedules or other events which would result in any liability to the
      Company; (vii) all correspondence to or from any governmental agency relating
      to
      any Company Employee Plan within the prior three (3) years; (viii) all material
      COBRA forms and related notices; (ix) all policies pertaining to fiduciary
      liability insurance covering the fiduciaries for each Company Employee Plan;
      (x)
      all discrimination tests for each Company Employee Plan for the three (3) most
      recent plan years; and (xi) the most recent IRS determination or opinion letter
      issued with respect to each Company Employee Plan.

     

    (d)  Employee
      Plan Compliance.
      The
      Company has performed all obligations required to be performed by it under,
      is
      not in default or violation of, and has no Knowledge of any default or violation
      by any other party to, any Company Employee Plan, and each Company Employee
      Plan
      has been established and maintained in accordance with its material terms and
      in
      compliance, in all material respects, with all applicable laws, statutes,
      orders, rules and regulations, including but not limited to ERISA or the Code.
      Any Company Employee Plan intended to be qualified under Section 401(a) of
      the
      Code and any trust intended to qualify under Section 501(a) of the Code has
      obtained a favorable determination letter (or opinion letter, if applicable)
      as
      to its qualified status under the Code or is entitled to rely on a prototype
      plan sponsor’s determination letter pursuant to IRS pronouncements. No
“prohibited transaction,” within the meaning of Section 4975 of the Code or
      Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of
      ERISA, has occurred with respect to any Company Employee Plan. There are no
      actions, suits or claims pending which have been served on the Company or,
      to
      the Knowledge of the Company, otherwise pending or threatened or reasonably
      anticipated (other than routine claims for benefits) against any Company
      Employee Plan or against the assets of any Company Employee Plan. Each Company
      Employee Plan can be amended, terminated or otherwise discontinued after the
      Effective Time in accordance with its terms, without liability to Parent, the
      Company or any Affiliate (other than accrued benefits and ordinary
      administration expenses). There are no audits, inquiries or proceedings pending
      or, to the Knowledge of the Company or any Affiliates, threatened by the IRS,
      DOL, or any other Governmental Entity with respect to any Company Employee
      Plan.
      Neither the Company nor any Affiliate is subject to any penalty or tax with
      respect to any Company Employee Plan under Section 402(i) of ERISA or Sections
      4975 through 4980 of the Code. The Company has made all contributions and other
      payments required by and due under the terms of each Company Employee
      Plan.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (e)  No
      Pension Plan.
      Neither
      the Company nor any Affiliate has ever maintained, established, sponsored,
      participated in, or contributed to, any Pension Plan that is subject to Title
      IV
      of ERISA or Section 412 of the Code.

     

    (f)  No
      Self-Insured Plan.
      Neither
      the Company nor any Affiliate has ever maintained, established sponsored,
      participated in or contributed to any self-insured plan that provides
      healthcare, life, disability or other welfare benefits to employees (including,
      without limitation, any such plan pursuant to which a stop-loss policy or
      contract applies).

     

    (g)  Collectively
      Bargained, Multiemployer and Multiple-Employer Plan.
      At no
      time has the Company or any Affiliate contributed to or been obligated to
      contribute to any multiemployer plan, as defined in Section 414(f) of the Code
      and Section 3(37) of ERISA. Neither the Company nor any Affiliate has at any
      time ever maintained, established, sponsored, participated in or contributed
      to
      any multiple employer plan or to any plan described in Section 413 of the
      Code.

     

    (h)  No
      Post-Employment Obligations.
      No
      Company Employee Plan or Employment Arrangement provides, or reflects or
      represents any liability to provide, retiree life insurance, retiree health
      or
      other retiree employee welfare benefits to any person for any reason, except
      as
      may be required by COBRA or other applicable statute, and the Company has not
      represented, promised or contracted (whether in oral or written form) to any
      Employee (either individually or to Employees as a group) or any other person
      that such Employee(s) or other person would be provided with retiree life
      insurance, retiree health or other retiree employee welfare benefits, except
      to
      the extent required by statute.

     

    (i)  COBRA;
      FMLA; HIPAA.
      The
      Company and each Affiliate has, prior to the Effective Time, complied, in all
      material respects, with COBRA, FMLA, HIPAA, the Women’s Health and Cancer Rights
      Act of 1998, the Newborns’ and Mothers’ Health Protection Act of 1996, and any
      similar provisions of state law applicable to its Employees. The Company does
      not have unsatisfied obligations to any Employees or qualified beneficiaries
      pursuant to COBRA, HIPAA or any state law governing health care coverage or
      extension.

     

    (j)  Effect
      of Transaction.
      The
      execution of this Agreement and the consummation of the transactions
      contemplated hereby will not (either alone or upon the occurrence of any
      additional or subsequent events) constitute an event under any Company Employee
      Plan, Employee Agreement, trust or loan that will or may result in any payment
      (whether of severance pay or otherwise), acceleration, forgiveness of
      indebtedness, vesting, distribution, increase in benefits or obligation to
      fund
      benefits or be deemed a “parachute payment” under Section 280G of the Code with
      respect to any Employee. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (k)  Employment
      Matters.
      The
      Company: (i) to the Knowledge of the Company, it is in compliance, in all
      material respects, with all applicable foreign, federal, state and local laws,
      rules and regulations respecting employment, employment practices, terms and
      conditions of employment, termination of employment, employee safety and wages
      and hours, and in each case, with respect to Employees; (ii) has withheld and
      reported all amounts required by law or by agreement to be withheld and reported
      with respect to wages, salaries and other payments to Employees; (iii) to the
      Knowledge of the Company is not liable for any arrears of wages, severance
      pay
      or any taxes or any penalty for failure to comply with any of the foregoing;
      and
      (iv) to the Knowledge of the Company is not liable for any payment to any trust
      or other fund governed by or maintained by or on behalf of any governmental
      authority, with respect to unemployment compensation benefits, social security
      or other benefits or obligations for Employees (other than routine payments
      to
      be made in the normal course of business and consistent with past practice).
      There are no action, suits, claims or administrative matters pending which
      have
      been served on the Company, or to the Company’s Knowledge, otherwise pending or
      threatened or reasonably anticipated against the Company or any of its Employees
      relating to any Employee, Employee Agreement or Company Employee Plan. There
      are
      no pending, which have been served on the Company, or to the Company’s
      Knowledge, otherwise pending or threatened or reasonably anticipated claims
      or
      actions against Company, any Company trustee under any worker’s compensation
      policy. To the Company’s Knowledge, no employee of the Company has violated any
      employment contract, nondisclosure agreement, non-competition or
      non-solicitation agreement by which such employee is bound due to such employee
      being employed by the Company and disclosing to the Company or using trade
      secrets or proprietary information of any other person or entity. The services
      provided by each of the Company’s and its Affiliate’s Employees is terminable at
      the will of the Company and its Affiliates and any such termination would result
      in no liability to the Company or any Affiliate.  

     

    (l)  No
      Interference or Conflict.
      To the
      Knowledge of the Company, no officer, Employee or consultant of the Company
      is
      obligated under any contract or agreement, subject to any judgment, decree,
      or
      order of any court or administrative agency that would interfere with such
      person’s efforts to promote the interests of the Company or that would interfere
      with the Company’s business. Neither the execution nor delivery of this
      Agreement, nor the carrying on of the Company’s business as presently conducted
      or proposed to be conducted nor any activity of such officers, Employees or
      consultants in connection with the carrying on of the Company’s business as
      presently conducted or currently proposed to be conducted will, to the Knowledge
      of the Company, conflict with or result in a breach of the terms, conditions,
      or
      provisions of, or constitute a default under, any contract or agreement under
      which any of such officers, Employees, or consultants is now bound.

     

    (m)  International
      Employee Plan.
      Neither
      the Company nor any Affiliate currently or has it ever had the obligation to
      maintain, establish, sponsor, participate in, be bound by or contribute to
      any
      International Employee Plan.

     

    2.13  Labor
      Matters.
      Neither
      the Company nor any of its Subsidiaries is a party to any collective bargaining
      agreement or other labor union contract applicable to persons employed by the
      Company
      or any of its Subsidiaries nor does the Company have Knowledge of any activities
      or proceedings of any labor union to organize any such employees.

     

    2.14  Restrictions
      on Business Activities.
      To the
      Company’s Knowledge, there is no agreement, commitment, judgment, injunction,
      order or decree binding upon the Company or any of its Subsidiaries or their
      respective assets or to which the Company or any of its Subsidiaries is a party
      which has or could reasonably be expected to have the effect of prohibiting
      or
      materially impairing any business practice of the Company or any of its
      Subsidiaries, any acquisition of property by the Company or any of its
      Subsidiaries or the conduct of business by the Company or any of its
      Subsidiaries as currently conducted.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    2.15  Real
      Property.

     

    (a)  “Owned
      Real Property”
shall
      mean each piece of real property owned in fee simple (or with respect to real
      property located outside the United States, such other similar form of title
      as
      may be described in the title policy for such parcel) by the Company or any
      of
      its Subsidiaries (including all land, easements, development rights and other
      rights and interests appurtenant thereto including interests in buildings,
      structures, improvements and fixtures located thereon) which Owned Real Property
      is described on Schedule
      2.15(a)
      attached
      hereto and made a part hereof. The Owned Real Property constitutes all of the
      real property owned by the Company or any of its Subsidiaries in connection
      with
      the businesses of the Company and its Subsidiaries.

     

    (b)  “Leased
      Real Property”
shall
      mean each property leased, subleased, licensed, or otherwise occupied by the
      Company or any of its Subsidiaries pursuant to a lease, sublease, license,
      or
      other occupancy agreement and all amendments, modifications, and supplements
      thereto, excluding leases for individual condominium units at any Owned Real
      Property and leases of individual condominium units within the Optioned Property
      Projects, all of which condominium unit leases are with Persons not affiliated
      with the Company for fair market value on reasonable and customary terms, (each,
      a “Lease”)
      (including all rights included in any Lease for a Leased Real Property to use
      or
      occupy any land, buildings, including sales kiosks, and improvements thereon),
      which Leased Real Property is described on Schedule
      2.15(b)
      attached
      hereto and made a part hereof. A true, correct and complete copy of each Lease
      for each Leased Real Property, except for all bay bottom/submerged land leases
      entered into with the Board of Trustees of the Internal Improvement Fund under
      the Florida Administrative Code, is described on Schedule
      2.15(b)
      attached
      hereto and made a part hereof, a copy of each of which has been delivered to
      Parent or its representatives prior to the date hereof. The Leased Real Property
      constitutes all of the real property leased, subleased, licensed, or otherwise
      occupied by the Company and any of its Subsidiaries.

     

    (c)  Each
      agreement (an “Optioned
      Property Redevelopment Agreement”)
      pursuant to which the Company or a Subsidiary, as the case may be, has an option
      to purchase all or part of an Optioned Property Project, has a management
      agreement and/or ground lease for an Optioned Property Project, or is
      redeveloping an Optioned Property Project and each fee or other mortgage
      encumbering or other financing with respect to an Optioned Property Project
      (an
“Optioned
      Property Mortgage”)
      is
      listed on said Schedule
      2.15(c).
      There
      are no other agreements pursuant to which the Company or a Subsidiary has an
      option to purchase all or part of an Optioned Property Project or is managing,
      leasing or redeveloping an Optioned Property Project other than those listed
      on
      said Schedule
      2.15(c).
      To
      Company’s Knowledge, no party is in material default in respect of its
      respective obligations under any Optioned Property Redevelopment Agreement
      or
      under any Optioned Property Mortgage and no act or omission of a party, which,
      with the passage of time or the giving of notice or both, would comprise a
      default, except for such defaults as would not, individually or in the
      aggregate, reasonably be expected to have a Company Material Adverse Effect
      or a
      Project Material Adverse Effect. True, correct and complete copies of the
      Optioned Property Provider Agreement and each Optioned Property Redevelopment
      Agreement and Optioned Property Mortgage described on Schedule
      2.15(c)
      hereto
      have heretofore been delivered to Parent or its representatives prior to the
      date hereof.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (d)  Intentionally
      Left Blank

     

    (e)  “Real
      Property”
shall
      mean, collectively, the Owned Real Property, the Leased Real Property, and
      the
      Optioned Property Projects.

     

    (f)  Each
      Lease is binding, enforceable, in full force and effect and neither the Company
      nor any of its Subsidiaries have received written notice or otherwise have
      Knowledge that they are in default or in breach under such Lease except for
      such
      defaults as would not, individually or in the aggregate, reasonably be expected
      to have a Company Material Adverse Effect or a Project Material Adverse Effect.
      Neither Company nor any of its Subsidiaries have Knowledge of any event or
      omission, which, with the passage of time or the giving of notice or both,
      would
      comprise a default, except for such defaults as would not, individually or
      in
      the aggregate, reasonably be expected to have a Company Material Adverse Effect
      or a Project Material Adverse Effect. To Company’s Knowledge, no landlord,
      sublandlord, licensor or other Person that is a party to any Lease (other than
      Company or a Subsidiary) is in default in respect of its obligations under
      such
      Lease and no event or omission has occurred, which, with the passage of time
      or
      the giving of notice or both, would cause any such Person to be in default
      in a
      material respect of its obligations under such Lease. Neither the Company nor
      any of its Subsidiaries have received written notice of any claimed abatements,
      offsets, defenses or other bases for relief or adjustment under any of the
      Leases. The Merger does not require the consent of any Person or party to any
      Lease or any consent the absence of which would not cause a Company Material
      Adverse Effect), and will not result in a breach of or default under such Lease,
      or otherwise cause such Lease to cease to be legal, valid, binding, enforceable
      and in full force and effect following the Closing. No security deposit or
      portion thereof deposited with respect to any Lease has been applied in respect
      of a breach or default under which Lease which has not been redeposited in
      full
      by Company or any Subsidiary. Except as may be disclosed in a Lease, the Company
      and its Subsidiaries do not owe, nor will they owe in the future, any brokerage
      commissions or finder’s fees with respect to such Lease which is not paid. No
      party to any Lease (except where such party is the Company or a Subsidiary)
      has
      an economic interest in the Company or a Subsidiary. Neither the Company nor
      any
      Subsidiary has (i) assigned, subleased, licensed or otherwise granted any Person
      (except where such Person is the Company or a Subsidiary) the right to use
      or
      occupy such Leased Real Property or any portion thereof, or (ii) collaterally
      assigned or granted any other security interest in any Lease or any interest
      therein. 

     

    (g)  With
      respect to the Real Property, as applicable: (i) the Company, its Subsidiaries
      or the Optioned Property Provider, as the case may be, have good and marketable
      fee simple interest in the Real Property and a valid leasehold interest in
      the
      Leased Real Property, free and clear of any use or occupancy restrictions,
      Liens, encumbrances, and easements or title defects, except as set forth on
      any
      existing title insurance policy, deed, or survey, that have had or could have
      a
      Project Material Adverse Effect or a Material Adverse Effect on the Company’s,
      or any of its Subsidiaries’, as the case may be, use and occupancy of the Real
      Property or the Optioned Property Projects, as the case may be; and (ii) neither
      the Company nor any of its Subsidiaries have received written notice or
      otherwise have Knowledge (a) of any condemnation, eminent domain or similar
      proceeding affecting any portion of the Real Property or any access thereto
      or
      of any sale or other disposition of the Real Property or any part thereof in
      lieu of condemnation or of any possible widening of streets abutting all or
      any
      portion of the Real Property, and, to the Knowledge of the Company, no such
      proceedings are contemplated, (b) of the imposition of any special taxes or
      assessments by a governmental authority, or payments in lieu thereof, against
      all or any portion of the Real Property, or any pending improvement liens to
      be
      made by any governmental authority which may affect any Real Property, (c)
      from
      or on behalf of any existing insurance carriers indicating that the insurance
      rates for all or any portion of any of the Real Property will be substantially
      increased or that alterations of any Real Property are required, and (d) the
      curtailment of any utility service supplied to any Real Property.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (h)  Prior
      to
      the date hereof, the Company has furnished or made available to Parent or its
      representatives true and correct copies of all deeds, mortgages, surveys,
      licenses, leases, title insurance policies and permanent certificates of
      occupancy (or documents equivalent to certificates of occupancy in the
      jurisdiction where the Real Property is located) with respect to the Real
      Property that are in the possession of Company or its Subsidiaries.

     

    (i)  Neither
      the Company nor its Subsidiaries have received written notice of, and to the
      Knowledge of the Company and its Subsidiaries there are no, outstanding claims
      made by or against the Company or any applicable Subsidiary or Optioned Property
      Provider with respect to title or ownership of the Owned Real Property or the
      Optioned Property Projects.

     

    (j)  Neither
      the Company nor any of its Subsidiaries is obligated under or a party to, and
      none of the Owned Real Property or the Optioned Property Projects is subject
      to,
      any option, right of first refusal, right of first offer or other obligation
      to
      sell, transfer, dispose of, grant any interest in or lease any of the Owned
      Real
      Property or the Optioned Property Projects or any portion thereof or interest
      therein to any Person other than (x) the Company and its Subsidiaries or (y)
      such leases, subleases, licenses, concessions or other agreements entered into
      by the Company or its Subsidiaries in the ordinary course of business (the
      documents described in this clause (y), the “Owned
      Real Property Leases”),
      which
      Owned Real Property Leases are described on Schedule
      2.15(j)
      attached
      hereto and made a part hereof. The Owned Real Property Leases are in full force
      and effect and neither the Company nor any of its Subsidiaries have received
      written notice or otherwise have Knowledge that they are in default or in breach
      under any such Lease except for such defaults as would not, individually or
      in
      the aggregate, reasonably be expected to have a Company Material Adverse Effect.
      Neither Company not any Subsidiary has Knowledge of any event or omission under
      any Owned Real Property Lease, which, with the passage of time or the giving
      of
      notice or both, would cause a default except for such defaults as would not,
      individually or in the aggregate, reasonably be expected to have a Company
      Material Adverse Effect. Neither the Company nor any of its Subsidiaries have
      received written notice of, or have Knowledge of, any claimed abatements,
      offsets, defenses or other bases for relief or adjustment under any Owned Real
      Property Lease. 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (k)  All
      improvements upon or constituting a part of the Real Property (including, but
      not limited to, the buildings, structures, fixtures, roofs and structural
      elements thereof and the heating, ventilation, air conditioning, plumbing,
      electrical, elevator mechanical, sewer, waste water, storm water, paving and
      parking equipment, systems and facilities included therein) (the “Improvements”)
      are
      adequate for the purposes for which they are being or shall be put in the
      ordinary course of business, except for such Improvements that are in the
      process of being developed or constructed, which, upon substantial completion,
      shall be adequate for the purposes for which they are intended to be used in
      the
      ordinary course of business. To the Knowledge of the Company, there are no
      facts
      or conditions affecting any of the Improvements, except for such Improvements
      that are in the process of being developed or constructed (which, upon
      substantial completion, shall be adequate for the purposes for which they are
      intended to be used in the ordinary course of business), which would interfere
      in any material respect with the use or occupancy of the Improvements or any
      portion thereof in the operation of the business of the Company and its
      Subsidiaries or which would, individually or in the aggregate, reasonably be
      expected to have a Company Material Adverse Effect or a Project Material Adverse
      Effect. 

     

    (l)  There
      are
      no Construction Contracts with amounts payable as of December 31, 2006 that
      equal or exceed in the aggregate $1,000,000. As used herein, a “Construction
      Contract”
shall
      mean each development agreement, master architectural contract or general
      contractor agreement to which the Company or any of its Subsidiaries is a party
      with respect to any present or contemplated construction by the Company or
      any
      Subsidiary for which no certificate of occupancy has been obtained (each, a
      “Construction
      Project”).
      To
      the Company's Knowledge, it has not received written notice that it or any
      other
      party thereto, is presently in default and there are no facts or circumstances
      which, with or without the passage of time or both, would result in a breach
      of
      any of the terms thereof by it or any such other party, except for such defaults
      as would not, individually or in the aggregate reasonably be expected to have
      a
      Company Material Adverse Effect or a Project Material Adverse
      Effect.

     

    (m)  Each
      condominium declaration related to Real Property in which dwelling units have
      been or are being sold by the Company or any of its Subsidiaries that is
      required to be filed in the real estate records of the county or other local
      jurisdiction in which such Owned Real Property or such Optioned Property Project
      is located has been properly filed and recorded with the appropriate county
      or
      other local jurisdiction office in which the respective Owned Real Property
      or
      Optioned Property Project is located, except for any failures to be so filed
      or
      recorded which, individually or in the aggregate, would not reasonably be
      expected to have a Company Material Adverse Effect or a Project Material Adverse
      Effect. All such condominium projects comply with Legal Requirements and all
      filings and approvals required by Legal Requirements with respect to such
      condominium projects have been obtained and all sales of condominium units
      have
      been conducted in compliance with Legal Requirements.

     

    (n)  Neither
      the Company nor any of its Subsidiaries have any direct or indirect ownership
      in, or involvement with or liabilities of any type with respect to, the shopping
      center known as the Richland Mall and located in Columbia, South Carolina.
      

     

    (o)  With
      respect to the parcel of Owned Real Property described on Schedule
      2.15(a)
      hereto
      as Island Homes (also known as Vaca Cut Island) (“Island
      Homes”),
      the
      Company represents that prior to the Closing (i) the Company shall transfer
      ownership of Island Homes to the Clark Trust and/or David Schwarz or to an
      entity that Dave Clark and/or David Schwarz directly or indirectly control
      (any
      of the foregoing, the “Island
      Homes Owner”),
      (ii)
      any contract deposit posted or other expenses incurred by the Company or any
      Subsidiary with respect to Island Homes shall be reimbursed/returned by the
      Island Homes Owner to the Company or such Subsidiary in connection with such
      transfer of ownership, and (iii) the Company shall grant to Parent a right
      of
      first refusal to purchase or lease any portion of Island Homes that the Island
      Homes Owner intends to sell, lease or transfer directly or indirectly to any
      other Person and that the Island Homes Owner does not intend to retain ownership
      of in order to construct single family homes for Island Homes Owner and/or
      its
      immediate respective families, pursuant to a document containing mutually
      agreeable terms and provisions, in recordable form, to be executed by each
      of
      the Island Homes Owner and Parent (or to a Parent Affiliate designated by
      Parent) and recorded prior to the Closing.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    2.16  Taxes.
      

     

    Definition
      of Taxes.
      For the
      purposes of this Agreement, “Tax”
or
      “Taxes”
refers
      to any and all federal, state, local and foreign taxes, including, without
      limitation, gross receipts, income, profits, sales, use, occupation, value
      added, ad valorem, transfer, franchise, withholding, payroll, recapture,
      employment, excise and property taxes, assessments, governmental charges and
      duties together with all interest, penalties and additions imposed with respect
      to any such amounts and any obligations under any agreements or arrangements
      with any other person with respect to any such amounts and including any
      liability of a predecessor entity for any such amounts.

     

    (a)  Tax
      Returns and Audits.
      

     

    (i)  As
      of the
      Closing Date, the Company and each of its Subsidiaries has filed all federal,
      state, local and foreign returns, estimates, information statements and reports
      relating to Taxes (“Returns”)
      required to be filed by the Company and each of its Subsidiaries with any Tax
      authority prior to the date hereof. To the Company’s Knowledge, all such Returns
      are true, correct and complete in all material respects. As of the Closing
      Date,
      the Company and each of its Subsidiaries has paid all Taxes shown to be due
      on
      such Returns. The Company is not a “United States real property holding
      corporation,” as defined in section 897 of the Internal Revenue Code of 1986, as
      amended, and Section 1.897-2(b) of the regulations promulgated
      thereunder.

     

    (ii)  As
      of the
      Closing Date, all material Taxes that the Company or any of its Subsidiaries
      is
      required by law to withhold or collect have been duly withheld or collected,
      and
      have been paid over to the proper governmental authorities to the extent due
      and
      payable.

     

    (iii)  As
      of the
      Closing Date, none of the Company or any of its Subsidiaries will be delinquent
      in the payment of any material Tax nor is there any material Tax deficiency
      outstanding, assessed or, to the Knowledge of the Company, proposed against
      the
      Company or any of its Subsidiaries, nor will the Company or any of its
      Subsidiaries have executed any unexpired waiver of any
      statute of limitations extending or waiving the period for the assessment or
      collection of any Tax.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (iv)  To
      the
      Company’s Knowledge, no audit or other examination of any Return of the Company
      or any of its Subsidiaries by any Tax authority is presently in progress.
      Neither the Company nor any of its Subsidiaries has been notified in writing
      of
      any request for such an audit or other examination.

     

    (v)  No
      adjustment relating to any Returns filed by the Company or any of its
      Subsidiaries has been proposed in writing, formally or informally, by
any
      Tax
      authority to the Company or any of its Subsidiaries or any of the officers
      and
      directors thereof.

     

    (vi)  As
      of the
      Closing Date, neither the Company nor any of its Subsidiaries has any liability
      for any material unpaid Taxes which have not been accrued for or reserved on
      the
      Company’s balance sheets included in the Audited Financial Statements or the
      Unaudited Financial Statements, whether asserted or unasserted, contingent
      or
      otherwise, would constitute a Company Material Adverse Effect, other than any
      liability for unpaid Taxes that may have accrued since the end of the most
      recent fiscal year in connection with the operation of the business of the
      Company and its Subsidiaries in the ordinary course of business. 

     

    2.17  Environmental
      Matters.
      

     

    (a)  To
      the
      Company’s Knowledge, no facts or circumstances exist with respect to the Real
      Property which give rise to any liability based upon or related to the
      Company’s, any Subsidiary’s or any other Person’s actions or omissions in the
      processing, distribution, use, treatment, storage, disposal, transport or
      handling, or the emission, discharge or release into the environment of any
      Hazardous Substance, except where such liability would not have a Material
      Adverse Effect on the Company.

     

    (b)  As
      used
      in this Agreement, the term “Hazardous
      Substance”
means
      any substance that is: (i) listed, classified or regulated pursuant to any
      Environmental Law; (ii) any petroleum product or by-product, asbestos-containing
      material, lead-containing paint or plumbing, polychlorinated biphenyls or
      radioactive materials; or (iii) any other substance which is regulated under
      any
      Environmental Law.

     

    (c)  Except
      for such matters that, individually or in the aggregate are not reasonably
      likely to have a Material Adverse Effect or a Project Material Adverse Effect
      to
      the Company’s Knowledge: (i) the Company and each of its Subsidiaries has
      complied at all times and is currently in compliance with all Environmental
      Laws; (ii) there are no Hazardous Substances at, in, under or from the Real
      Property; and (iii) there has been no release or threatened release of Hazardous
      Substances at, in, under or from the Real Property.

     

    (d)  Except
      for those items that individually or in the aggregate are not reasonably likely
      to cause a Company Material Adverse Effect or a Project Material Adverse Effect:
      (i) there are no pending or, to the Knowledge of the Company, threatened claims,
      demands, actions, administrative proceedings, lawsuits or inquiries relating
      to
      the Real Property under Environmental Law; (ii) neither the Company nor any
      of
      its Subsidiaries has received any notice, demand, letter, claim or request
      for
      information alleging that the Company or any of its Subsidiaries may be in
      violation of or liable under any Environmental Law; and (iii) neither the
      Company nor any of its Subsidiaries is subject to any agreements, orders,
      decrees, injunctions or other arrangements with any Governmental Entity or
      other
      Person relating to liability under any Environmental Law or relating to
      Hazardous Substances.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (e)  Except
      as
      disclosed in Schedule
      2.17(e)
      hereto
      and to the Knowledge of the Company, there are no underground storage tanks
      at
      any Real Property. 

     

    (f)  As
      used
      in this Agreement, the term “Environmental
      Law”
means
      any federal, state, local or foreign law, regulation, order, decree, permit,
      authorization, opinion, common law or agency requirement relating to: (A) the
      protection, investigation or restoration of the environment, health and safety,
      or natural resources; (B) the handling, use, presence, disposal, release or
      threatened release of any Hazardous Substance; or (C) noise, odor, wetlands,
      pollution, contamination or any injury or threat of injury to persons or
      property.

     

    (g)  The
      parties hereto acknowledge that the Company and its Subsidiaries may be in
      various stages of obtaining Material Permits, including, without limitation,
      any
      Material Permits related to any Environmental Law, as of the date of this
      Agreement and the Company and/or the applicable Subsidiary agree to use
      commercially reasonable best efforts from and after the date hereof to obtain
      and comply with such Material Permits, including, without limitation, any
      Material Permit relating to Environmental Laws as and when required by any
      Legal
      Requirements and Environmental Laws, it being agreed that any failure to obtain
      such Material Permits as of the Closing shall not individually or in the
      aggregate be reasonably expected to have a Company Material Adverse Effect
      or a
      Project Material Adverse Effect.

     

    (h)  Except
      for those items that have been delivered to the Parent, there are no
      environmental investigations, studies or audits with respect to the Real
      Property. 

     

    

    2.18  Brokers;
      Third Party Expenses.
      The
      Company has not incurred, nor will it incur, directly or indirectly, any
      liability for brokerage, finders’ fees, agent’s commissions or any similar
      charges in connection with this Agreement or any transactions contemplated
      hereby. Except pursuant to Sections 1.6 and 1.19, no shares of common stock,
      options, warrants or other securities of either Company or Parent are payable
      to
      any third party by Company as a result of the Merger.

     

    2.19  Intellectual
      Property.
      For the
      purposes of this Agreement, the following terms have the following
      definitions:

     

    “Intellectual
      Property”
shall
      mean any or all of the following and all worldwide common law and statutory
      rights in, arising out of, or associated therewith: (i) patents and applications
      therefor and all reissues, divisions, renewals, extensions, provisionals,
      continuations and continuations-in-part thereof (“Patents”);
      (ii)
      inventions (whether patentable or not), invention disclosures, improvements,
      trade secrets, proprietary information, know how, technology, technical data
      and
      customer lists, and all documentation relating to any of the foregoing; (iii)
      copyrights, copyrights registrations and applications therefor, and all other
      rights corresponding thereto throughout the world; (iv) software and software
      programs; (v) domain names, uniform resource locators and other names and
      locators associated with the Internet; (vi) industrial designs and any
      registrations and applications therefor; (vii) trade names, logos, common law
      trademarks and service marks, trademark and service mark registrations and
      applications therefor (collectively, “Trademarks”);
      (viii) all databases and data collections and all rights therein; (ix) all
      moral
      and economic rights of authors and inventors, however denominated, and (x)
      any
      similar or equivalent rights to any of the foregoing (as
      applicable).

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    “Company
      Intellectual Property”
shall
      mean any Intellectual Property that is owned by, or exclusively licensed to,
      Company or any of its Subsidiaries, including software and software
      programs developed by or exclusively licensed to the Company or any of its
      Subsidiaries (specifically excluding any off the shelf or shrink-wrap
      software).

     

    “Registered
      Intellectual Property”
means
      all Intellectual Property that is the subject of an application, certificate,
      filing, registration or other document
      issued, filed with, or recorded by any private, state, government or other
      legal
      authority.

     

    “Company
      Registered Intellectual Property”
means
      all of the Registered Intellectual Property owned by, or filed in the name
      of,
      Company or any of its Subsidiaries.

     

    (a)  No
      Company Intellectual Property is subject to any material proceeding or
      outstanding decree, order, judgment, contract, license, agreement or stipulation
      restricting in any manner the use, transfer or licensing thereof by the Company
      or any of its Subsidiaries, or which may affect the validity, use or
      enforceability of such Company Intellectual Property, which in any such case
      could reasonably be expected to have a Material Adverse Effect on the
      Company.

     

    (b)  The
      Company and each of its Subsidiaries, as the case may be:
      own
      and
      has good and exclusive title to, or in the case of exclusive licenses, has
      the
      right to use, each material item of Company Intellectual Property, owned by,
      or
      exclusively licensed to, either the Company or a Subsidiary, as the case may
      be,
      free and clear of any liens and encumbrances (excluding non-exclusive licenses
      and related restrictions granted by it in the ordinary course of business);
      and
      the Company or its Subsidiaries is the exclusive owner of all material
      registered Trademarks used in connection with the operation or conduct of its
      business as currently conducted including the sale of any products or the
      provision of any services by the Company or its Subsidiaries.

     

    2.20  Infringement
      on Intellectual Property.
      To the
      Company’s Knowledge, the operation of the business of the Company and its
      Subsidiaries as such business currently is conducted has not and does not
      infringe or misappropriate the Intellectual Property of any third party or
      constitute unfair competition or trade practices under the laws of any
      jurisdiction. No written notice, charge, claim, action or assertion of
      infringement, unfair competition, unfair trade practices or misappropriation
      has
      been received by the Company or any of its Subsidiaries and, to the Company’s
      Knowledge, no written notice, charge, claim, action has been filed, commenced
      or
      threatened against the Company or any of its Subsidiaries alleging any such
      violation that could be expected to have a Company Material Adverse
      Effect.

     

    2.21  Agreements,
      Contracts and Commitments.
      

     

    (a)  Except
      for any items that are included in another schedule attached hereto or excluded
      by virtue of another representation included in this Article II, Schedule
      2.21
      hereto
      sets forth a complete and accurate list of all
      Material Company Contracts (as hereinafter defined), specifying the parties
      thereto. For
      purposes of this Agreement the term “Company
      Contracts”
shall
      mean all contracts, agreements, leases, mortgages, indentures, notes, bonds,
      Optioned Property Redevelopment Agreements, licenses, permits, franchises,
      purchase orders, sales orders, and other understandings, commitments and
      obligations of any kind, whether written or oral, to which the Company or any
      of
      its Subsidiaries is a party or by or to which any of the properties or assets
      of
      the Company or any of its Subsidiaries may be bound, subject or affected
      (including without limitation notes or other instruments payable to the Company
      or its Subsidiaries). For purposes of this Agreement the term “Routine
      Operating Contracts”
shall
      mean contracts entered into by the Company or any of its Subsidiaries with
      a
      Person that is not an Affiliate in the ordinary course of business on terms
      and
      conditions and at rates that are reasonable and customary based on the then
      applicable market conditions including the following contracts (to the extent
      they meet the immediately foregoing condition): 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (i)  contracts
      related to the sale of individual residential condominium units to unaffiliated
      purchasers who, together with their affiliates, are not purchasing more than
      an
      aggregate of ten units in any individual project;

     

    (ii)  brokerage
      commission agreements; 

     

    (iii)  contracts
      pursuant to which the Company or a Subsidiary, as the case may be, has deposited
      funds which will be returned in full to the Company or such Subsidiary in the
      event the Company or such Subsidiary terminates such contract pursuant to a
      contingency or termination provision contained in such contract; and

     

    (iv)  any
      contract that by its terms can be terminated by the Company or any Subsidiary
      on
      not more than 30 days of notice with resulting liability that is less than
      $100,000. 

     

    (b)  For
      purposes of this Agreement the term “Material
      Company Contracts”
shall
      mean:

     

    (i)  
      each
      Company Contract that is not a Routine Operating Contract and (I) which provides
      for payments (present or future) to the Company or any of its Subsidiaries
      in
      excess of $500,000 in the aggregate or (II) under which or in respect of which
      the Company or any of its Subsidiaries presently has any liability or obligation
      of any nature whatsoever (absolute, contingent or otherwise) in excess of
      $1,500,000, 

     

    (ii)  each
      Company Contract that is not a Routine Operating Contract and that otherwise
      is
      or may be material to the businesses, operations, assets or condition (financial
      or otherwise) of the Company and its Subsidiaries and

     

    (iii)  without
      limitation of subclause (i) or subclause (ii), each of the following Company
      Contracts, the relevant terms of which remain executory:

     

    1)  any
      mortgage, indenture, note, installment obligation or other instrument, agreement
      or arrangement for or relating to any borrowing of money by or from the Company
      or any of its Subsidiaries, or any officer, director, stockholder or Member
      (“Insider”)
      of the
      Company or any of its Subsidiaries;

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    2)  any
      guaranty, direct or indirect, by the Company, any of its Subsidiaries or any
      Insider of any obligation for borrowings, or otherwise, excluding endorsements
      made for collection in the ordinary course of business and guarantees by
      Subsidiaries of Company obligations;

     

    3)  any
      Company Contract of employment;

     

    4)  any
      Company Contract made other than in the ordinary course of business or (x)
      providing for the grant of any preferential rights to
      purchase or lease any asset of the Company or any of its Subsidiaries or (y)
      providing for any right (exclusive or non-exclusive) to sell or distribute,
      or
      otherwise relating to the sale or distribution of, any product or service of
      the
      Company and its Subsidiaries;

     

    5)  any
      obligation to register any shares of the capital stock or other securities
      of
      the Company or any of its Subsidiaries with any Governmental
      Entity;

     

    6)  any
      obligation to make payments, contingent or otherwise, arising out of the prior
      acquisition of the business, assets or stock of
      other
      Persons;

     

    7)  any
      collective bargaining agreement with any labor union;

     

    8)  any
      lease
      or similar arrangement for the use by the Company or any of its Subsidiaries
      of
      personal property (other than leases of vehicles, office equipment or operating
      equipment where the annual lease payments are less than $100,000 in the
      aggregate); and

     

    9)  any
      Company Contract to which any Insider is a
      party.

     

    (c)  To
      the
      Knowledge of the Company, each Company Contract was entered into at arms’ length
      and in the ordinary course, is in full force and effect and is valid and binding
      upon and
      enforceable against each of the parties thereto. True, correct and complete
      copies of all Material Company Contracts (or written summaries in the case
      of
      oral Material Company Contracts) have been heretofore made available to Parent
      or Parent’s counsel.

     

    (d)  Neither
      the Company nor any of its Subsidiaries nor, to the best of Company’s Knowledge,
      any other party thereto, has received written notice that it is in breach of
      or
      in default under, and no event has occurred which with notice or lapse of time
      or both would become a breach of or default under, any Material Company
      Contract. No party to any Company Contract has given any written notice of
      any
      claim of any breach, default or event, which, individually or in the aggregate,
      are reasonably likely to have a Material Adverse Effect on the Company or any
      of
      its Subsidiaries or a Project Material Adverse Effect. Each Material Company
      Contract to which the Company or any of its Subsidiaries is a party or by which
      it is bound that has not expired by its terms is in full force and
      effect.

     

    2.22  Employees.
      

     

    (a)  Schedule 2.22(a)
      sets
      forth a true, complete and correct list of all directors and executive officers
      of the Company and its Subsidiaries along with their position and actual annual
      rate of compensation. To the Knowledge of the Company, no key employee or group
      of employees has threatened to terminate employment with the Company or any
      of
      its Subsidiaries or, to the Knowledge of the Company, has plans to terminate
      such employment.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (b)  Neither
      the Company nor any of its Subsidiaries is a party to or bound by any union
      or
      collective bargaining agreement, nor has any of them experienced any strikes,
      grievances, claims of unfair labor practices or other collective bargaining
      disputes. 

     

    (c)  Neither
      the Company nor any of its Subsidiaries is a party to any written or oral:
      (i)
      agreement with any current or former employee the benefits of which are
      contingent upon, or the terms of which will be materially altered by, the
      consummation of the transactions contemplated by this Agreement; (ii) agreement
      with any current or former employee of the Company or any of its Subsidiaries
      providing any term of employment or compensation guarantee extending for a
      period longer than one year from the date hereof or for the payment of
      compensation in excess of $100,000 per annum; or (iii) agreement or plan the
      benefits of which will be increased, or the vesting of the benefits of which
      will be accelerated, upon the consummation of the transactions contemplated
      by
      this Agreement.

     

    2.23  Insurance.
      Schedule
      2.23
      sets
      forth a list of all material insurance policies covering the properties and
      activities of the Company, its Subsidiaries and their respective businesses.
      All
      such policies are in full force and effect and shall be kept in full force
      and
      effect in the ordinary course of business. Neither the Company nor any
      Subsidiary of the Company have received any written notice of cancellation
      or
      non-renewal with respect to such policies. Neither the Company nor any
      Subsidiary of the Company have received written notice, nor does the Company
      have Knowledge that it is in default with respect to its obligations under
      such
      insurance policies. Except as set forth on Schedule
      2.23,
      neither
      the Company nor any Subsidiary of the Company has been refused any insurance
      coverage obtained for the purpose of protecting and insuring against any
      material loss or exposure, nor has any such coverage been limited or cancelled
      by any insurance carrier to which the Company or any such Subsidiary has applied
      for any such insurance or with which the Company or any such Subsidiary has
      carried insurance, nor has there been any significant increase in the premiums
      paid under any such policy during the past five (5) years. All such insurance
      policies provide adequate coverage for all normal risks incident to the business
      of the Company and its Subsidiaries and their respective properties and assets,
      including construction projects. Schedule
      2.23
      identifies those pending (or threatened) Actions with respect to which an
      insurance carrier has denied coverage or has advised the Company or the relevant
      Subsidiary that it is defending such claim under reservation of rights and
      which, if determined or resolved adversely to the Company or its Subsidiaries,
      could, individually or in the aggregate, reasonably be expected to have a
      Material Adverse Effect to the Company and its Subsidiaries or a Project
      Material Adverse Effect.

     

    2.24  Interested
      Party Transactions.
      As of
      the Closing Date, except for compensation and benefits arrangements in the
      ordinary course of business or any matter pursuant to this Agreement, and to
      the
      Company’s Knowledge, no holder of more than five percent (5%) of the Company
      Membership Interests, officer or director of the Company or any Subsidiary
      of
      the Company, or any affiliate of any of the foregoing (other than the Company
      and its Subsidiaries) (i) has borrowed or loaned money or other property to
      the
      Company or any Subsidiary of the Company in an amount exceeding $50,000, which
      has not been repaid or returned; (ii) has any direct or indirect material
      interest in any Person which is a customer of goods or services provided by
      or
      supplier of goods or services provided to the Company, any Subsidiary of the
      Company, which Person's purchases or sales of such goods and services in any
      of
      the past two (2) fiscal years exceeded or whose business in fiscal 2007 is
      expected to exceed $120,000 per year; or (iii) is party to any other agreement,
      transaction or business relationship with the Company (other than this
      Agreement) or any of its Subsidiaries.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    2.25  Board
      Approval; Required Vote.
      

     

    (a)  The
      Board
      of Directors of the Company has, as of the date of this Agreement, determined
      (i) that the Merger is fair to, and in the best interests of the Company and
      its
      Members, and (ii) to, subject to Section 5.16, recommend that the Members of
      the
      Company approve this Agreement.

     

    (b)  The
      Requisite Member Approval is the only vote of the holders of any class or series
      of the Company Membership Interests necessary to approve and adopt this
      Agreement or the other transactions contemplated hereby. 

     

    2.26  Proxy
      Statement.
      The
      information to be supplied by the Company for inclusion in Parent’s proxy
      statement (such proxy statement as amended or supplemented is referred to herein
      as the “Proxy
      Statement”)
      shall
      not at the time the Proxy Statement is filed with the SEC and at the time it
      becomes effective under the Securities Act, contain any untrue statement of
      a
      material fact or omit to state any material fact required to be stated therein
      or necessary in order to make the statements therein not misleading. The
      information to be supplied by the Company for inclusion in the proxy statement
      to be sent in connection with the meeting of Parent’s stockholders to consider
      the approval of this Agreement (the “Parent
      Stockholders’ Meeting”)
      shall
      not, on the date the Proxy Statement is first mailed to Parent’s stockholders,
      and at the time of the Parent Stockholders’ Meeting, contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they are made, not false or misleading; or omit
      to
      state any material fact necessary to correct any statement provided by the
      Company in any earlier communication with respect to the solicitation of proxies
      for the Parent Stockholders’ Meeting which has become false or misleading. If at
      any time prior to the Effective Time, any event relating to the Company or
      any
      of its affiliates, officers or directors should be discovered by the Company
      which should be set forth in a supplement to the Proxy Statement, the Company
      shall promptly inform Parent; provided, however, that if Parents fails to timely
      file such supplement or fails to adequately disclose such additional
      information, that the Company shall have no liability whatsoever to Parent,
      Merger Sub or any of Parent’s or Merger Sub’s shareholders, Members, directors
      or officers. Notwithstanding the foregoing, the Company makes no representation
      or warranty with respect to any information supplied by Parent or any Person
      other than the Company which is contained in any of the foregoing
      documents.

     

    2.27  Representations
      and Warranties Complete.
      The
      representations and warranties of the Company included in this Agreement, as
      modified by the Company Disclosure Schedule, are true and complete in all
      material respects and do not contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary to
      make
      the statements contained therein not misleading, under the circumstance under
      which they were made. Except for the representations and warranties made by
      the
      Company in this Agreement, neither the Company nor any other Person makes any
      representation or warranty with respect to the Company or its Subsidiaries
      or
      their respective business, operations, assets, liabilities, condition (financial
      or otherwise) or prospects, notwithstanding the delivery or disclosure to Parent
      or any of its Affiliates or representatives of any documentation, forecasts,
      projections or other information with respect to any one or more of the
      foregoing.

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    2.28  Survival
      of Representations and Warranties.
      The
      representations and warranties of the Company set forth in this Agreement shall
      survive the Closing for a period of 12 months from the Closing Date.

     

    ARTICLE
      III  

    REPRESENTATIONS
      AND WARRANTIES OF PARENT

     

    Parent,
      on behalf of itself and its Subsidiaries, represents and warrants to the Company
      that the statements contained in this Article III are true, complete and
      correct. As used in this Agreement, a “Parent
      Material Adverse Effect”
means
      any change, event or effect that is materially adverse to the business, assets
      (including, without limitation, intangible assets), financial condition, results
      of operations or reasonably foreseeable prospects of Parent and its
      Subsidiaries, taken as a whole.

     

    3.1  Organization
      and Qualification.
      

     

    (a)  Parent
      is
      a corporation duly incorporated, validly existing and in good standing under
      the
      laws of the State of Delaware and has the requisite corporate power and
      authority to own, lease and operate its assets and properties and to carry
      on
      its business as it is now being or currently planned by Parent to be conducted.
      Parent is in possession of all Approvals necessary to own, lease and operate
      the
      properties it purports to own, operate or lease and to carry on its business
      as
      it is now being or currently planned by Parent to be conducted, except where
      the
      failure to have such Approvals could not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on Parent. Parent
      is
      not in violation of any of the provisions of the Parent’s Charter
      Documents.

     

    (b)  Parent
      is
      duly qualified or licensed to do business as a foreign corporation and is in
      good standing, in each jurisdiction where the character of the properties owned,
      leased or operated by it or the nature of its activities makes such
      qualification or licensing necessary, except for such failures to be so duly
      qualified or licensed and in good standing that could not, individually or
      in
      the aggregate, reasonably be expected to have a Material Adverse Effect on
      Parent.

     

    (c)  Merger
      Sub is a limited liability company, duly formed, validly existing and in good
      standing under the laws of the State of Florida and has the requisite corporate
      power and authority to own, lease and operate its assets and properties and
      to
      carry on its business as it is now being or currently planned by Parent to
      be
      conducted. Merger Sub is not in violation of any of the provisions of the Merger
      Sub’s Charter Documents. 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    3.2  Subsidiaries.
      Except
      for Merger Sub, Parent has no Subsidiaries and does not own, directly or
      indirectly, any ownership, equity, profits or voting interest in any Person
      or
      has any agreement or commitment to purchase any such interest, and Parent has
      not agreed and is not obligated to make nor is bound by any written, oral or
      other agreement, contract, subcontract, lease, binding understanding,
      instrument, note, option, warranty, purchase order, license, sublicense,
insurance
      policy, benefit plan, commitment or undertaking of any nature, as of the date
      hereof or as may hereafter be in effect under which it may become obligated
      to
      make, any future investment in or capital contribution to any other
      entity.

     

    3.3  Capitalization.
      

     

    (a)  As
      of the
      date of this Agreement, the authorized capital stock of Parent consists of
      50,000,000 shares of common stock, par value $0.001 per share (“Parent Common
      Stock”) and 1,000,000 shares of preferred stock, par value $0.001 per share
      (“Parent Preferred Stock”), of which 7,949,995 shares of Parent Common Stock and
      no shares of Parent Preferred Stock are issued and outstanding, all of which
      are
      validly issued, fully paid and nonassessable. Except as set forth in
Schedule
      3.3(a),
      (i) no
      shares of Parent Common Stock or Parent Preferred Stock are reserved for
      issuance upon the exercise of outstanding options to purchase Parent Common
      Stock or Parent Preferred Stock granted to employees of Parent or other parties
      (“Parent Stock Options”) and there are no outstanding Parent Stock Options; (ii)
      no shares of Parent Common Stock or Parent Preferred Stock are reserved for
      issuance upon the exercise of outstanding warrants to purchase Parent Common
      Stock or Parent Preferred Stock (“Parent Warrants”) and there are no outstanding
      Parent Warrants; and (iii) no shares of Parent Common Stock or Parent Preferred
      Stock are reserved for issuance upon the conversion of the Parent Preferred
      Stock or any outstanding convertible notes, debentures or securities (“Parent
      Convertible Securities”). All shares of Parent Common Stock and Parent Preferred
      Stock subject to issuance as aforesaid, upon issuance on the terms and
      conditions specified in the instrument pursuant to which they are issuable,
      will
      be duly authorized, validly issued, fully paid and nonassessable. All
      outstanding shares of Parent Common Stock and all outstanding Parent Warrants
      have been issued and granted in compliance with (x) all applicable federal
      and
      state securities laws and (in all material respects) other applicable laws
      and
      regulations, and (y) all requirements set forth in any applicable Parent
      Contracts (as defined in Section 3.14(a)). Parent has heretofore delivered
      to
      the Company true, complete and accurate copies of the Parent Warrants, including
      any and all documents and agreements relating thereto.

     

    (b)  The
      shares of Parent Common Stock to be issued by Parent in connection with the
      Merger, upon issuance in accordance with the terms of this
      Agreement, will be duly authorized and validly issued and such shares of Parent
      Common Stock will be fully paid and nonassessable.

     

    (c)  Except
      as
      set forth in Schedule
      3.3(c)
      or as
      contemplated by this Agreement or the Parent SEC Reports (as defined in Section
      3.7), there are no registrations rights, and there is no voting trust,
proxy,
      rights plan, antitakeover plan or other agreements or understandings to which
      the Parent is a party or by which the Parent is bound with respect to any equity
      security of any class of the Parent.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    3.4  Authority
      Relative to this Agreement.
      Each of
      Parent and Merger Sub have full corporate power and authority to: (i) execute,
      deliver and perform this Agreement, and each ancillary document which Parent
      or
      Merger Sub have executed or delivered or is to execute or deliver pursuant
      to
      this Agreement, and (ii) carry out Parent’s and Merger Sub’s obligations
      hereunder and thereunder and, to consummate the transactions contemplated hereby
      (including the Merger). The execution and delivery of this Agreement and the
      consummation by Parent and Merger Sub of the transactions contemplated hereby
      (including the Merger) have been duly and validly authorized by all necessary
      corporate action on the part of Parent and Merger Sub (including the approval
      by
      its Board of Directors), and no other corporate proceedings on the part of
      Parent or Merger Sub are necessary to authorize this Agreement or to consummate
      the transactions contemplated hereby, other than the Parent Stockholder Approval
      (as defined in Section 5.1(a)). This Agreement has been duly and validly
      executed and delivered by Parent and Merger Sub and, assuming the due
      authorization, execution and delivery thereof by the other parties hereto,
      constitutes the legal and binding obligation of Parent and Merger Sub,
      enforceable against Parent and Merger Sub in accordance with its terms, except
      as may be limited by bankruptcy, insolvency, reorganization or other similar
      laws affecting the enforcement of creditors’ rights generally and by general
      principles of equity.

     

    3.5  No
      Conflict; Required Filings and Consents.
      (a) The
      execution and delivery of this Agreement by Parent and Merger Sub do not, and
      the performance of this Agreement by Parent and Merger Sub shall not: (i)
      conflict with or violate Parent’s or Merger Sub’s Charter Documents, (ii)
      conflict with or violate any Legal Requirements, or (iii) result in any breach
      of or constitute a default (or any event that with notice or lapse of time
      or
      both would become a default) under, or materially impair Parent’s rights or
      alter the rights or obligations of any third party under, or give to others
      any
      rights of termination, amendment, acceleration or cancellation of, or result
      in
      the creation of a lien or encumbrance on any of the properties or assets of
      Parent pursuant to, any Parent Contracts, except, with respect to clauses (ii)
      or (iii), for any such conflicts, violations, breaches, defaults or other
      occurrences that would not, individually and in the aggregate, have a Material
      Adverse Effect on Parent.

     

    (b)  The
      execution and delivery of this Agreement by Parent and Merger Sub do not, and
      the performance of their respective obligations hereunder will not, require
      any
      consent, approval, authorization or permit of, or filing with or notification
      to, any Governmental Entity, except (i) as set forth in this Agreement, (ii)
      for
      applicable requirements, if any, of the Securities Act, the Exchange Act, Blue
      Sky Laws, and the rules and regulations thereunder, and appropriate documents
      with the relevant authorities of other jurisdictions in which Parent is
      qualified to do business, (iii) for the filing of any notifications required
      under the HSR Act and the expiration of the required waiting period thereunder,
      (iv) the qualification of Parent as a foreign corporation in those jurisdictions
      in which the business of the Company makes such qualification necessary, and
      (v)
      where the failure to obtain such consents, approvals, authorizations or permits,
      or to make such filings or notifications, would not, individually or in the
      aggregate, reasonably be expected to have a Material Adverse Effect on Parent,
      or prevent consummation of the Merger or otherwise prevent the parties hereto
      from performing their obligations under this Agreement.

     

    3.6  Compliance.
      Parent
      has complied with, is not in violation of, any Legal Requirements with respect
      to the conduct of its business, or the ownership or operation
      of its business, except for failures to comply or violations which, individually
      or in the aggregate, have not had and are not reasonably likely to have a
      Material Adverse Effect on Parent. The business and activities of Parent have
      not been and are not being conducted in violation of any Legal Requirements.
      Parent is not in default or violation of any term, condition or provision of
      its
      Charter Documents. No written notice of non-compliance with any Legal
      Requirements has been received by Parent.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    3.7  SEC
      Filings; Financial Statements.
      

     

    (a)  Parent
      has made available to the Company and the Members a correct and complete copy
      of
      each report, registration statement and definitive proxy statement filed by
      Parent with the SEC (the “Parent
      SEC Reports”),
      which
      are all the forms, reports and documents required to be filed by Parent with
      the
      SEC prior to the date of this Agreement and which were filed on a timely basis.
      As of their respective dates the Parent SEC Reports: (i) were prepared in
      accordance and complied in all material respects with the requirements of the
      Securities Act or the Exchange Act, as the case may be, and the rules and
      regulations of the SEC thereunder applicable to such Parent SEC Reports, and
      (ii) did not at the time they were filed (and if amended or superseded by a
      filing prior to the date of this Agreement then on the date of such filing
      and
      as so amended or superseded) contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. Except to the extent set forth in the preceding
      sentence, Parent makes no representation or warranty whatsoever concerning
      the
      Parent SEC Reports as of any time other than the time they were
      filed.

     

    (b)  Each
      set
      of financial statements (including, in each case, any related notes thereto)
      contained in Parent SEC Reports, including each Parent SEC Report filed after
      the date hereof until the Closing, complied or will comply as to form in all
      material respects with the published rules and regulations of the SEC with
      respect thereto, was or will be prepared in accordance with U.S. GAAP applied
      on
      a consistent basis throughout the periods involved (except as may be indicated
      in the notes thereto or, in the case of unaudited statements, do not contain
      footnotes as permitted by Form 10-QSB of the Exchange Act) and each fairly
      presents or will fairly present in all material respects the financial position
      of Parent at the respective dates thereof and the results of its operations
      and
      cash flows for the periods indicated, except that the unaudited interim
      financial statements were, are or will be subject to normal adjustments which
      were not or are not expected to have a Material Adverse Effect on Parent taken
      as a whole.

     

    3.8  No
      Undisclosed Liabilities.
      Parent
      has no liabilities (absolute, accrued, contingent or otherwise) of a nature
      required to be disclosed on a balance sheet or in the related notes to the
      financial statements included in Parent SEC Reports which are, individually
      or
      in the aggregate, material to the business, results of operations or financial
      condition of Parent, except (i) liabilities provided for in or otherwise
      disclosed in Parent SEC Reports filed prior to the date hereof, and (ii)
      liabilities incurred since September 30, 2006 in the ordinary course of
      business, none of which would have a Material Adverse Effect on Parent. Merger
      Sub has no assets or properties of any kind, does not now conduct and has never
      conducted any business, and has and will have at the Closing no obligations
      or
      liabilities of any nature whatsoever except such obligations and liabilities
      as
      are imposed under this Agreement. 

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    3.9  Absence
      of Certain Changes or Events.
      Except
      as set forth in Parent SEC Reports filed prior to the date of this Agreement,
      and except as contemplated by this Agreement, since September 30, 2006, there
      has not been: (a) any Material Adverse Effect on Parent, (b) any declaration,
      setting aside or payment of any dividend on, or other distribution (whether
      in
      cash, stock or property) in respect of, any of Parent’s capital stock, or any
      purchase, redemption or other acquisition by Parent of any of Parent’s capital
      stock or any other securities of Parent or any options, warrants, calls or
      rights to acquire any such shares or other securities, (c) any split,
      combination or reclassification of any of Parent’s capital stock, (d) any
      granting by Parent of any increase in compensation or fringe benefits, except
      for normal increases of cash compensation in the ordinary course of business
      consistent with past practice, or any payment by Parent of any bonus, except
      for
      bonuses made in the ordinary course of business consistent with past practice,
      or any granting by Parent of any increase in severance or termination pay or
      any
      entry by Parent into any currently effective employment, severance, termination
      or indemnification agreement or any agreement the benefits of which are
      contingent or the terms of which are materially altered upon the occurrence
      of a
      transaction involving Parent of the nature contemplated hereby, (e) entry by
      Parent into any licensing or other agreement with regard to the acquisition
      or
      disposition of any Intellectual Property other than licenses in the ordinary
      course of business consistent with past practice or any amendment or consent
      with respect to any licensing agreement filed or required to be filed by Parent
      with respect to any Governmental Entity, (f) any material change by Parent
      in
      its accounting methods, principles or practices, except as required by
      concurrent changes in U.S. GAAP, (g) any change in the auditors of Parent,
      (h)
      any issuance of capital stock of Parent, or (i) any revaluation by Parent of
      any
      of its assets, including, without limitation, writing down the value of
      capitalized inventory or writing off notes or accounts receivable or any sale
      of
      assets of Parent other than in the ordinary course of business.

     

    3.10  Litigation.
      There
      are no claims, suits, actions or proceedings pending or to Parent’s Knowledge,
      threatened against Parent, before any court, governmental
      department, commission, agency, instrumentality or authority, or any arbitrator
      that seeks to restrain or enjoin the consummation of the transactions
      contemplated by this Agreement or which could reasonably be expected, either
      singularly or in the aggregate with all such claims, actions or proceedings,
      to
      have a Material Adverse Effect on Parent or have a Material Adverse Effect
      on
      the ability of the parties hereto to consummate the Merger. There
      has
      not been, and to the Knowledge of the Parent, there is not pending or
      contemplated, any investigation by the SEC or any state or other regulatory
      body
      involving the Parent or any current or former director or officer of the Parent.
      The SEC has not issued any stop order or other order suspending the
      effectiveness of any registration statement filed by the Parent under the
      Exchange Act or the Securities Act.

     

    3.11  Restrictions
      on Business Activities.
      Except
      as set forth in the Parent Charter Documents, there is no agreement, commitment,
      judgment, injunction, order or decree binding upon Parent or to which Parent
      is
      a party which has or could reasonably be expected to have the effect of
      prohibiting or materially impairing any business practice of Parent, any
      acquisition of property by Parent or the conduct of business by Parent as
      currently conducted other than such effects, individually or in the aggregate,
      which have not had and could not reasonably be expected to have, a Material
      Adverse Effect on Parent.

     

    3.12  Taxes.
      

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    (a)  Parent
      has timely filed all Returns required to be filed by Parent with any Tax
      authority prior to the date hereof, except such Returns which are not material
      to Parent. All such Returns are true, correct and complete in
      all
      material respects. All Taxes due and owing by the Parent (whether or not shown
      on any Return) have been paid. The Parent is not the beneficiary of any
      extension of time within which to file any Return. There are no Liens for Taxes
      (other than Taxes not yet due and payable) upon any of the assets of the Parent
      or any of its Subsidiaries.

     

    (b)  All
      Taxes
      that Parent is required by law to withhold or collect have been duly withheld
      or
      collected, and have been timely paid over to the proper
      governmental authorities to the extent due and payable.

     

    (c)  Parent
      has not been delinquent in the payment of any material Tax nor is there any
      material Tax deficiency outstanding, assessed, or proposed by any Tax authority
      based on personal contact by the Parent or any officers or directors of the
      Parent with any agent of any such Authority,
      nor has
      Parent executed any unexpired waiver of any statute of limitations extending
      or
      waiving the period for the assessment or collection of any Tax.

     

    (d)  No
      audit
      or other examination of any Return of Parent by any Tax authority is presently
      in progress, nor has Parent, including through notice to its officers and
      directors, been notified of any request
      or proposal for any such an audit or other examination.

     

    (e)  No
      claim
      dispute or adjustment relating to any Tax liability of Parent has been raised
      or
      proposed, formally or informally, by any Tax authority to Parent or any
director
      or officer of Parent.

     

    (f)  Parent
      has no liability for any material unpaid Taxes which have not been accrued
      for
      or reserved on Parent’s balance sheets included in the audited financial
      statements for the most recent fiscal year ended, whether asserted or
      unasserted, contingent or otherwise, which would constitute a Parent Material
      Adverse Effect, other than any liability for unpaid Taxes that may have accrued
      since the end of the most recent fiscal year in connection with the operation
      of
      the business of Parent in the ordinary course of business.

     

    (g)  Parent,
      the directors and officers of Parent, or any of its Affiliates do not have
      Knowledge of any fact and have not taken or agreed to take any action, failed
      to
      take any action or is aware of any fact or circumstance, that could prevent
      the
      transactions contemplated hereby from qualifying as a tax-free contribution
      governed by Section 351(a) of the Code.

     

    (h)  Parent
      is
      not a party or bound to any tax allocation or sharing agreement. Parent (i)
      has
      not been a member of an Affiliated Group filing a consolidated federal Income
      Tax Return (other than a group the common parent of which was the Parent),
      or
      (ii) has no liability for the Taxes of any Person (other than the Parent or
      any
      of its Subsidiaries) under Treas. Reg. 1.1502-6 (or any similar provision of
      local, state or foreign law), as a transferee or successor, by contract or
      otherwise.

     

    (i)  Parent
      has not distributed stock of another Person, or has had its stock distributed
      by
      another Person, in a transaction that was purported or intended to be governed
      in whole or in part by Sections 355 or 361 of the Code.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    3.13  Brokers.
      Except
      as set forth on Schedule
      3.13,
      Parent
      has not incurred, nor will it incur, directly or indirectly, any liability
      for
      brokerage or finders’ fees or agent’s commissions or
      any
      similar charges in connection with this Agreement or any transaction
      contemplated hereby.

     

    3.14  Agreements,
      Contracts and Commitments.
      

     

    (a)  Except
      as
      set forth in the Parent SEC Reports filed prior to the date of this Agreement,
      there are no contracts, agreements, leases, mortgages, indentures, notes, bonds,
      liens, licenses, permits, franchises, purchase orders, sales orders or other
      understandings, commitments or obligations (including without limitation
      outstanding offers or proposals) of any kind, whether written or oral, to which
      Parent is a party or by or to which any of the properties or assets of Parent
      may be bound, subject or affected, which either (i) creates or imposes a
      liability greater than $25,000, or (ii) may not be cancelled by Parent on less
      than 30 days’ or less prior notice (“Parent
      Contracts”).
      All
      Parent Contracts are set forth in Schedule
      3.14
      other
      than those that are exhibits to the Parent SEC Reports.

     

    (b)  Each
      Parent Contract was entered into at arms’ length and in the ordinary course, is
      in full force and effect and is valid and binding upon and
      enforceable against each of the parties thereto. True, correct and complete
      copies of all Parent Contracts (or written summaries in the case of oral Parent
      Contracts) and of all outstanding offers or proposals of Parent have been
      heretofore delivered to the Company.

     

    (c)  Neither
      Parent nor, to the Knowledge of Parent, any other party thereto is in breach
      of
      or in default under, and no event has occurred which with notice or lapse of
      time or both would become a breach of or default under, any Parent Contract,
      and
      no party to any Parent Contract has given any written notice of any claim of
      any
      such breach, default or event, which, individually or in the aggregate, are
      reasonably likely to have a Material Adverse Effect on Parent. Each agreement,
      contract or commitment to which Parent is a party or by which it is bound that
      has not expired by its terms is in full force
      and
      effect, except where such failure to be in full force and effect is not
      reasonably likely to have a Material Adverse Effect on Parent.

     

    3.15  Insurance.
      Except
      for directors’ and officers’ liability insurance, Parent does not maintain any
      insurance policies.

     

    3.16  Interested
      Party Transactions.
      Except
      as set forth in the Parent SEC Reports filed prior to the date of this
      Agreement, no employee, officer, director or stockholder of Parent or a member
      of his or her immediate family is indebted to Parent nor is Parent indebted
      (or
      committed to make loans or extend or guarantee credit) to any of them, other
      than reimbursement for reasonable expenses incurred on behalf of Parent. To
      Parent’s knowledge, none of such individuals has any direct or indirect
      ownership interest in any Person with whom Parent is affiliated or with whom
      Parent has a material contractual relationship, or any Person that competes
      with
      Parent, except that each employee, stockholder, officer or director of Parent
      and members of their respective immediate families may own less than 5% of
      the
      outstanding stock in publicly traded companies that may compete with Parent.
      To
      Parent’s knowledge, no officer, director or stockholder or any member of their
      immediate families is, directly or indirectly, interested in any material
      contract with Parent (other than such contracts as relate to any such individual
      ownership of capital stock or other securities of Parent).

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    3.17  Indebtedness.
      Parent
      has no indebtedness for borrowed money.

     

    3.18  Over-the-Counter
      Bulletin Board Quotation.
      Parent
      Common Stock is quoted on the Over-the-Counter Bulletin Board (“OTC
      BB”).
      There
      is no action or proceeding pending or, to Parent’s Knowledge, threatened against
      Parent by NASDAQ or NASD, Inc. (“NASD”)
      with
      respect to any intention by such entities to prohibit or terminate the quotation
      of Parent Common Stock on the OTC BB.

     

    3.19  Board
      Approval.
      The
      Board of Directors of Parent (including any required committee or subgroup
      of
      the Board of Directors of Parent) has, as of the date of this Agreement,
      unanimously (i) declared the advisability of the Merger and approved this
      Agreement and the transactions contemplated hereby, (ii) determined that the
      Merger is in the best interests of the stockholders of Parent, and (iii)
      determined that the fair market value of the Company is equal to at least 80%
      of
      Parent’s net assets.

     

    3.20  Trust
      Fund.
      As of
      the date hereof and at the Closing Date, Parent has and will have no less than
      $48,700,000 invested in United States Government securities or in money market
      funds meeting certain conditions under Rule 2a-7 promulgated under the
      Investment Company Act of 1940 in a trust account administered by Continental
      Stock Transfer and Trust Company (the “Trust
      Fund”),
      less
      such amounts, if any, as Parent is required to pay to stockholders who elect
      to
      have their shares converted to cash in accordance with the provisions of
      Parent’s Charter Documents.

     

    3.21  Governmental
      Filings.
      Except
      as set forth in Schedule
      3.21,
      Parent
      has been granted and holds, and has made, all filings necessary with
      Governmental Entities to
      the
      conduct by Parent of its business (as presently conducted) or used or held
      for
      use by Parent, and true, complete and correct copies of which have heretofore
      been delivered to the Company. Each such filing is in full force and effect
      and
      will not expire prior to December 31, 2007, and Parent is in compliance
      with all of its obligations with respect thereto. No event has occurred and
      is
      continuing which requires or permits, or after notice or lapse of time or both
      would require or permit, and consummation of the transactions contemplated
      by
      this Agreement or any ancillary documents will not require or permit (with
      or
      without notice or lapse of time, or both), any modification or termination
      of
      any such filings except such events which, either individually or in the
      aggregate, would not have a Material Adverse Effect upon Parent.

     

    3.22  Sarbanes-Oxley;
      Internal Accounting Controls.
      The
      Parent is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it as of the Closing Date. The
      Parent’s
      certifying officers have evaluated the effectiveness of the Parent’s
      disclosure controls and procedures as of the end of the period covered by the
      Parent’s
      most
      recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Parent
      presented
      in its most recently filed periodic report under the Exchange Act the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the Evaluation
      Date. 

     

    3.23  Private
      Placement. Assuming the accuracy of the Members’ representations and warranties
      set forth in Section 1.17, no registration under the Securities Act is required
      for the offer and sale of the Parent Common Stock by the Parent to the Members
      as contemplated hereby. The issuance and sale of the Parent Common Stock
      hereunder does not contravene the rules and regulations of the OTC
      BB.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    3.24  Investment
      Company. The Parent is not, and is not an Affiliate of, and immediately after
      receipt of payment for the Parent Common Stock, will not be or be an Affiliate
      of, an “investment company” within the meaning of the Investment Company Act of
      1940, as amended. 

     

    3.25  Listing
      and Maintenance Requirements. The Parent’s Common Stock is registered pursuant
      to Section 15(d) of the Exchange Act, and the Parent has taken no action
      designed to, or which is likely to have the effect of, terminating the
      registration of the Common Stock under the Exchange Act nor has the Parent
      received any notification that the SEC is contemplating terminating such
      registration. The Parent has not, in the 12 months preceding the date hereof,
      received notice from the OTC BB to the effect that the Parent is not in
      compliance with the listing or maintenance requirements of the OTC BB. The
      Parent is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with all such listing and maintenance
      requirements. 

     

    3.26  Application
      of Takeover Protections. The Parent and its Board of Directors have taken all
      necessary action, if any, in order to render inapplicable any control share
      acquisition, business combination, poison pill (including any distribution
      under
      a rights agreement) or other similar anti-takeover provision under the Parent’s
      Certificate of Incorporation (or similar charter documents) or the laws of
      its
      state of incorporation that is or could become applicable to the Members as
      a
      result of the Merger, including without limitation as a result of the Parent’s
      issuance of the Parent Common Stock and the Members’ ownership of the Parent
      Common Stock. 

     

    3.27  No
      Integrated Offering. Assuming the accuracy of the Members’ representations and
      warranties set forth in Section 1.17, neither the Parent, nor any of its
      affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would cause this offering of the
      Parent Common Stock to be integrated with prior offerings by the Parent for
      purposes of the Securities Act or any applicable shareholder approval provisions
      of the OTC BB on which any of the securities of the Parent are listed or
      designated.

     

    3.28  Manipulation
      of Price.  The Parent has not, and to its Knowledge no one acting on its
      behalf has, (i) taken, directly or indirectly, any action designed to cause
      or
      to result in the stabilization or manipulation of the price of any security
      of
      the Parent to facilitate the sale or resale of any of its Common Stock, (ii)
      sold, bid for, purchased, or paid any compensation for soliciting purchases
      of,
      any of the securities of the Parent, or (iii) paid or agreed to pay to any
      person any compensation for soliciting another to purchase any other securities
      of the Parent. 

     

    3.29  Representations
      and Warranties Complete.
      The
      representations and warranties of Parent included in this Agreement, as modified
      by the Parent Schedules, are true and complete in all material respects and
      do
      not contain any untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements contained
      therein not misleading, under the circumstance under which they were made.
      Except for the representations and warranties made by the Parent and the Merger
      Sub in this Agreement, neither the Parent nor any other Person makes any
      representation or warranty with respect to the Parent or the Merger Sub or
      their
      respective business, operations, assets, liabilities, condition (financial
      or
      otherwise) or prospects, notwithstanding the delivery or disclosure to the
      Company or any of its Affiliates or representatives of any documentation,
      forecasts, projections or other information with respect to any one or more
      of
      the foregoing.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    3.30  Survival
      of Representations and Warranties.
      The
      representations and warranties of Parent set forth in this Agreement shall
      not
      survive the Closing.

     

    ARTICLE
      IV  

    CONDUCT
      PRIOR TO THE EFFECTIVE TIME

     

    4.1  Conduct
      of Business by Company and Parent.
      During
      the period from the date of this Agreement and continuing until the earlier
      of
      the termination of this Agreement pursuant to its terms or the Closing, each
      of
      the Company (including its Subsidiaries), Parent and Merger Sub shall, except
      to
      the extent that the other party (either the Company or Parent, as applicable)
      shall otherwise consent in writing, which consent shall not be unreasonably
      withheld, carry on its business in the usual, regular and ordinary course
      consistent with past practices, in substantially the same manner as heretofore
      conducted and in compliance with all applicable laws and regulations (except
      where noncompliance would not have a Company Material Adverse Effect or a
      Project Material Adverse Effect), pay its debts and taxes when due subject
      to
      good faith disputes over such debts or taxes, pay or perform other material
      obligations when due, and use its commercially reasonable efforts consistent
      with past practices and policies to (A) preserve substantially intact its
      present business organization, (B) keep available the services of its present
      officers and employees and (C) preserve its relationships with customers,
      suppliers, distributors, licensors, licensees, and others with which it has
      significant business dealings. Unless otherwise noted, all references to the
      Company and its Subsidiaries in this Article IV shall mean the Company on an
      as
      reorganized basis as such reorganization is set forth on Schedule
      2.2(a)
      hereto.
      In addition, except as required or permitted by the terms of this Agreement
      or
      set forth in Schedule
      4.1
      hereto,
      without the prior written consent of the other party, which consent shall not
      be
      unreasonably withheld, during the period from the date of this Agreement and
      continuing until the earlier of the termination of this Agreement pursuant
      to
      its terms or the Closing, each of the Company, Parent and Merger Sub shall
      not
      do any of the following:

     

    (a)  Waive
      any
      stock repurchase or similar rights, accelerate, amend or (except as specifically
      provided for herein) change the period of exercisability of options
      or restricted stock, or reprice options granted under any employee, consultant,
      director or other stock (or similar) plans or authorize cash payments in
      exchange for any options granted under any of such plans;

     

    (b)  Grant
      any
      severance or termination pay to any officer or employee except pursuant to
      applicable law, written agreements outstanding, or policies
      existing on the date hereof and as previously or concurrently disclosed in
      writing or made available to the other party, or adopt any new severance plan,
      or amend or modify or alter in any manner any severance plan, agreement or
      arrangement existing on the date hereof; 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    (c)  Transfer
      or license to any person or otherwise extend, amend or modify any material
      rights to any Intellectual Property of the Company (or its Subsidiaries) or
      Parent,
      as applicable, or enter into grants to transfer or license to any person future
      patent rights, other than in the ordinary course of business consistent with
      past practices provided that in no event shall the Company or Parent license
      on
      an exclusive basis or sell any Intellectual Property of the Company (or
      its
      Subsidiaries),
      or
      Parent as applicable;

     

    (d)  Declare,
      set aside or pay any dividends on or make any other distributions (whether
      in
      cash, stock, equity securities or property) in respect of any capital stock
      or
      split, combine or reclassify any capital stock or issue or authorize the
      issuance of any other securities in respect of, in lieu of or in substitution
      for any capital stock except, after notice to Parent, for: (i) distributions
      made to the Members for payment of taxes with respect to income of the Company
      (or its Subsidiaries), which shall include reserves for the payment of taxes
      due
      after Closing with respect to income of the Company earned prior to Closing
      subject to post-Closing adjustments based on actual tax liability incurred;
      and
      (ii) distributions of $20,000,000 to pay back loans from Members; 

     

    (e)  Purchase,
      redeem or otherwise acquire, directly or indirectly, any shares of capital
      stock
      or membership interests, as applicable, of the Company (or its Subsidiaries)
      and
      Parent, as applicable, including repurchases
      of unvested shares or membership interests, as applicable, at cost in connection
      with the termination of the relationship with any employee or consultant
      pursuant to stock or purchase agreements in effect on the date
      hereof;

     

    (f)  Issue,
      deliver, sell, authorize, pledge or otherwise encumber, or agree to any of
      the
      foregoing with respect to, any shares of capital stock or
      membership interests, as applicable, or any securities convertible into or
      exchangeable for shares of capital stock or membership interests, as applicable,
      or subscriptions, rights, warrants or options to acquire any shares of capital
      stock or membership interests, as applicable, or any securities convertible
      into
      or exchangeable for shares of capital stock or membership interests, as
      applicable, or enter into other agreements or commitments of any character
      obligating it to issue any such shares or convertible or exchangeable
      securities. In the event that the Company issues any membership or similar
      ownership interests prior to Closing, the transferee will agree to be bound
      by
      the terms and conditions of this Agreement, such agreement to be in form and
      substance reasonably satisfactory to Parent;

     

    (g)  Amend
      its
      charter documents unless required to do so hereunder;

     

    (h)  Acquire
      or agree to acquire by merging or consolidating with, or by purchasing any
      equity interest in or a portion of the assets of, or by any other manner, any
      business or any corporation, partnership, association or other business
      organization or division thereof, or otherwise acquire or agree to acquire
      any
      assets which are material, individually or in the aggregate, to the business
      of
      Parent or the Company (or any of its Subsidiaries) as applicable, or enter
      into
      any joint ventures, strategic partnerships or alliances or other arrangements
      that provide for exclusivity of territory or otherwise restrict such party’s
      ability to compete or to offer or sell any products or services except as
      otherwise contemplated by this Agreement; 

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    (i)  Sell,
      lease, license, encumber or otherwise dispose of any properties or assets,
      except (A) sales of individual condominium units in the ordinary course of
      business consistent with past practice at fair market value to unaffiliated
      purchasers who, together with their affiliates, are not purchasing more than
      an
      aggregate of ten units in any individual project; and (B) and the sale, lease
      or
      disposition (other than through licensing) of property or assets that are not
      material, individually or in the aggregate, to the business of such
      party;

     

    (j)  Incur
      any
      indebtedness for borrowed money in excess of $1,000,000 in the aggregate (other
      than purchase money debt in connection with the acquisition by the Company
      of
      vehicles, office equipment and operating equipment not exceeding $1,000,000
      in
      the aggregate) or in connection with the purchase of real property (including
      any personal property directly or indirectly related to such real property)
      or
      guarantee any such indebtedness of another person, issue or sell any debt
      securities or options, warrants, calls or other rights to acquire any debt
      securities of Parent or the Company (or its Subsidiaries), as applicable, enter
      into any “keep well” or other agreement to maintain any financial statement
      condition or enter into any arrangement having the economic effect of any of
      the
      foregoing; provided that notwithstanding
      the foregoing, the Company may without Parent’s consent
      (i)
      obtain a line of credit of up to $100,000,000 with a commercial bank on
      customary terms, and (ii) enter into the Bridge Loan as described on
Schedule
      6.2(n)
      hereto;

     

    (k)  Adopt
      or
      amend any employee compensation or benefit plan, policy or arrangement, any
      employee stock or membership interest purchase or employee stock or membership
      interest option plan, or enter into any employment contract or collective
      bargaining agreement (other than offer letters and letter agreements entered
      into in the ordinary course of business consistent with past practice with
      employees who are terminable “at will”), grant or pay any special bonus or
      special remuneration to any director or employee, or increase the salaries
      or
      wage rates or fringe benefits (including rights to severance or indemnification)
      of its directors, officers, employees or consultants, except in the ordinary
      course of business consistent with past practices and as otherwise contemplated
      by this Agreement; 

     

    (l)  Except
      in
      the ordinary course of business consistent with past practices, pay, discharge,
      settle or satisfy any claims, liabilities or obligations (absolute, accrued,
      asserted or unasserted, contingent or otherwise), or litigation (whether or
      not
      commenced prior to the date of this Agreement) other than the payment,
      discharge, settlement or satisfaction, in the ordinary course of business
      consistent with past practices or in accordance with their terms, or liabilities
      recognized or disclosed in the Unaudited Financial Statements or in the most
      recent financial statements included in the Parent SEC Reports filed prior
      to
      the date of this Agreement, as applicable, or incurred since the date of such
      financial statements, or waive the benefits of, agree to modify in any manner,
      terminate, release any person from or knowingly fail to enforce any
      confidentiality or similar agreement to which the Company (or its Subsidiaries)
      is a party or of which the Company (or its Subsidiaries) is a beneficiary or
      to
      which Parent is a party or of which Parent is a beneficiary, as
      applicable;

     

    (m)  Except
      in
      the ordinary course of business consistent with past practices, modify, amend
      or
      terminate any Material Company Contract or Parent
      Contract, as applicable, or waive, delay the exercise of, release or assign
      any
      material rights or claims thereunder;

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    (n)  Except
      as
      required by U.S. GAAP, revalue any of its assets or make any change in
      accounting methods, principles or practices;

     

    (o)  Except
      in
      the ordinary course of business consistent with past practices or as set forth
      below in this Section 4.1(o), incur or enter into any agreement, contract or
      commitment requiring
      such party to pay in excess of $1,000,000 in any 12 month period, other than
      the
      Company under a Routine Operating Contract; provided, that, notwithstanding
      the
      foregoing the Company may (i) without Parent’s consent
      enter
      into any agreement, contract or commitment requiring
      such party to pay in excess of $2,000,000 in any 12 month period if such
      agreement provides for a refundable deposit in favor of the Company and the
      Company provides written notice to the Parent of the material terms and
      conditions of such agreement, contract or commitment within one week after
      such
      agreement, contract or commitment becomes effective, (ii) without Parent’s
      consent
      enter
      into any agreement, contract or commitment requiring
      such party to pay in excess of $2,000,000 in any 12 month period if such
      agreement provides for a refundable deposit in favor of the Company and the
      Company provides prior written notice to the Parent of the material terms and
      conditions of such agreement, contract or commitment, (iii) without Parent’s
      consent
      enter
      into any agreement, contract or commitment requiring
      such party to pay up to $1,000,000 in any 12 month period if such agreement
      provides for a non-refundable deposit payable by the Company and the Company
      provides written notice to Parent of the material terms and conditions of such
      agreement, contract or commitment within one week after such agreement, contract
      or commitment becomes effective, (iv) with prior written consent of Parent
      consent
      enter
      into any agreement, contract or commitment requiring
      such party to pay in excess of $1,000,000 in any 12 month period if such
      agreement provides for a non-refundable deposit payable by the Company, or
      (v)
      without Parent’s consent, enter into an agreement with an Optioned Property
      Provider that does not create any liability to the Company in excess of
      $1,000,000 provided that the Company notifies Parent of such agreement within
      five business days of the date of entering into such agreement. 

     

    (p)  Take
      any
      action that (without regard to any action taken, or agreed to be taken, by
      Parent or any of its Affiliates) could prevent the transactions contemplated
      by
      this Agreement from qualifying as a tax-free contribution within the meaning
      of
      Section 351(a) of the Code;

     

    (q)  Make
      or
      rescind any Tax elections that, individually or in the aggregate, could be
      reasonably likely to adversely affect in any material respect the Tax liability
      or Tax attributes of such party, settle or compromise any material income tax
      liability or, except as required by applicable law, materially change any method
      of accounting for Tax purposes or prepare or file any Return in a manner
      inconsistent with past practice;

     

    (r)  Form,
      establish or acquire any Subsidiary except as contemplated by this Agreement;
      

     

    (s)  Permit
      any Person to exercise any of its discretionary rights under any Plan to provide
      for the automatic acceleration of any outstanding options,
      the termination of any outstanding repurchase rights or the termination of
      any
      cancellation rights issued pursuant to such plans;

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    (t)  Make
      capital expenditures except in accordance with prudent business and operational
      practices consistent with prior practice;

     

    (u)  Take
      or
      omit to take any action, the taking or omission of which would be reasonably
      anticipated to have a Material Adverse Effect;

     

    (v)  Enter
      into any transaction with or distribute or advance any assets or property to
      any
      of its officers, directors, partners, stockholders or other affiliates (other
      than payment of salary and benefits in the ordinary course of business
      consistent with past practice); 

     

    (w)  Amend,
      modify, waive, terminate or otherwise change any of the terms or conditions
      of
      the Optioned Property Provider Agreement; or

     

    (x)  Agree
      in
      writing or otherwise agree, commit or resolve to take any of the actions
      described in Section 4.1 (a) through (w) above.

     

    In
      the
      event that Parent does not consent to any action proposed to be taken by the
      Company pursuant to this Section 4.1, nothing shall prevent the Members from
      taking such action by the way of another entity or individually.

    

    ARTICLE
      V  

    ADDITIONAL
      AGREEMENTS

     

    5.1  Proxy
      Statement; Parent Stockholders’ Meeting.
      (a) As
      soon as practicable after receipt by Parent from the Company of all financial
      and other information relating to the Company as Parent may reasonably request
      for its preparation, the execution of this Agreement, Parent shall prepare
      and
      file with the SEC under the Exchange Act, and with all other applicable
      regulatory bodies, proxy materials for the purpose of soliciting proxies from
      holders of Parent Common Stock to vote in favor of: (i) the adoption of this
      Agreement and the approval of the Merger (“Parent
      Stockholder Approval”);
      (ii)
      the change of the name of Parent to a name selected by the Company (the
“Name
      Change Amendment”);
      (iii)
      an increase in the number of authorized shares of Parent Common Stock to
      150,000,000 (the “Capitalization
      Amendment”);
      (iv)
      an amendment to remove the preamble and Sections A through D, inclusive, of
      Article Sixth from Parent’s Certificate of Incorporation from and after the
      Closing and to redesignate section E of Article Sixth as Article Sixth; and
      (vi)
      the adoption of a Stock Incentive Plan in a form reasonably acceptable to Parent
      and the Company (the “Parent
      Plan”),
      at a
      meeting of holders of Parent Common Stock to be called and held for such purpose
      (the “Parent
      Stockholders’ Meeting”).
      The
      Parent Plan shall provide that an aggregate of 3,000,000 shares of Parent Common
      Stock shall be reserved for issuance pursuant to the Parent Plan. Such proxy
      materials shall be in the form of the Proxy Statement to be used for the purpose
      of soliciting such proxies from holders of Parent Common Stock and the Proxy
      Statement shall comply in all material respects with all applicable requirements
      of law and the rules and regulations promulgated thereunder. The Company shall
      furnish to Parent all information concerning the Company as Parent may
      reasonably request in connection with the preparation of the Proxy Statement.
      Each of Parent and the Company will notify the other promptly upon the receipt
      of any comments from the SEC or its staff and of any request by the SEC or
      its
      staff or any other governmental officials for amendments or supplements to
      the
      Proxy Statement and it will supply the other with copies of all correspondence
      between the SEC or its staff or other governmental officials with respect to the
      Proxy Statement or the Merger. The Company and its counsel shall be given an
      opportunity to review and comment on the Proxy Statement prior to its filing
      with the SEC. Parent, with the assistance of the Company, shall promptly respond
      to any SEC comments on the Proxy Statement and shall otherwise use reasonable
      best efforts to cause the Proxy Statement to be approved for issuance by the
      SEC
      as promptly as practicable. Parent shall also take any and all such actions
      to
      satisfy the requirements of the Securities Act and the Exchange Act. Prior
      to
      the Closing Date, Parent shall use its reasonable best efforts to cause the
      shares of Parent Common Stock to be issued pursuant to the Merger to be
      registered or qualified under all applicable Blue Sky Laws of each of the states
      and territories of the United States in which it is believed, based on
      information furnished by the Company, holders of the Company membership
      interests reside and to take any other such actions that may be necessary to
      enable the Parent Common Stock Interests to be issued pursuant to the Merger
      in
      each such jurisdiction.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    (b)  As
      soon
      as practicable following its approval by the SEC, Parent shall distribute the
      Proxy Statement to the holders of Parent Common Stock and, pursuant thereto,
      shall call the Parent Stockholders’ Meeting in accordance with the Delaware
      General Corporation Law (“DGCL”) and, subject to the other provisions of this
      Agreement, solicit proxies from such holders to vote in favor of the adoption
      of
      this Agreement and the approval of the Merger and the other matters presented
      to
      the stockholders of Parent for approval or adoption at the Parent Stockholders’
Meeting, including, without limitation, the matters described in Section
      5.1(a).

     

    (c)  Parent
      shall comply with all applicable provisions of and rules under the Exchange
      Act
      and all applicable provisions of the DGCL in the preparation, filing and
      distribution of the Proxy Statement, the solicitation of proxies thereunder,
      and
      the calling and holding of the Parent Stockholders’ Meeting. Without limiting
      the foregoing, Parent shall ensure that the Proxy Statement does not, as of
      the
      date on which it is distributed to the holders of Parent Common Stock, and
      as of
      the date of the Parent Stockholders’ Meeting, contain any untrue statement of a
      material fact or omit to state a material fact necessary in order to make the
      statements made, in light of the circumstances under which they were made,
      not
      misleading (provided that Parent shall not be responsible for the accuracy
      or
      completeness of any information relating to the Company or any other information
      furnished by the Company for inclusion in the Proxy Statement). The Company
      represents and warrants that the information relating to the Company supplied
      by
      the Company for inclusion in the Proxy Statement will not as of the date of
      its
      distribution to the holders of Parent Common Stock (or any amendment or
      supplement thereto) or at the time of the Parent Stockholders’ Meeting contain
      any statement which, at such time and in light of the circumstances under which
      it is made, is false or misleading with respect to any material fact, or omits
      to state any material fact required to be stated therein or necessary in order
      to make the statement therein not false or misleading.

     

    (d)  Parent,
      acting through its board of directors, shall include in the Proxy Statement
      the
      recommendation of its board of directors that the holders
      of Parent Common Stock vote in favor of the adoption of this Agreement and
      the
      approval of the Merger, and shall otherwise use reasonable best efforts to
      obtain the Parent Stockholder Approval.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    5.2  Directors
      and Officers of Parent and the Surviving Entity.
      Parent
      and the Company shall take all necessary action so that the board of directors
      of the Parent shall consist of two members designated by Parent, two members
      designated by the Company and between one and five independent members
      designated by the Members, and that the persons listed on Schedule
      5.2
      are
      appointed to the positions of officers of Parent and the Surviving Entity,
      as
      set forth therein, to serve in such positions effective immediately after the
      Closing. The Members, on one hand, and Jeffrey Davidson and Udi Toledano of
      Parent, on the other hand, shall enter into a voting agreement pursuant to
      which
      (i) they agree to vote for the other’s designees to the board of directors of
      Parent through the annual meeting of the stockholders of Parent to be held
      in
      2010 and (ii) they agree to vote for one designee of Parent, to be determined
      by
      Jeffrey Davidson and Udi Toledano, to the board of directors of Parent through
      the annual meeting of the stockholders of Parent to be held in
      2012.

     

    5.3  HSR
      Act.
      If
      required pursuant to the HSR Act, as promptly as practicable after the date
      of
      this Agreement, Parent and the Company shall each prepare and file the
      notification required of it thereunder in connection with the transactions
      contemplated by this Agreement and shall promptly and in good faith respond
      to
      all information requested of it by the Federal Trade Commission and Department
      of Justice in connection with such notification and otherwise cooperate in
      good
      faith with each other and such Governmental Entities. Parent and the Company
      shall (a) promptly inform the other of any communication to or from the Federal
      Trade Commission, the Department of Justice or any other Governmental Entity
      regarding the transactions contemplated by this Agreement, (b) give the other
      prompt notice of the commencement of any action, suit, litigation, arbitration,
      proceeding or investigation by or before any Governmental Entity with respect
      to
      such transactions, and (c) keep the other reasonably informed as to the status
      of any such action, suit, litigation, arbitration, proceeding or investigation.
      Filing fees with respect to the notifications required under the HSR Act shall
      be shared equally by Parent and the Company.

     

    5.4  Other
      Actions.
      (a)
      Parent shall continue to file all reports required to be filed by the SEC in
      a
      timely manner which (i) will be prepared in accordance and comply in all
      material respects with the requirements of the Securities Act or the Exchange
      Act, as the case may be, and the rules and regulations of the SEC thereunder
      applicable to such Parent SEC Reports, and (ii) will not at the time they are
      filed (and if amended or superseded by a filing prior to the date of this
      Agreement then on the date of such filing or as so amended or superseded)
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. Except to the extent set forth in the preceding sentence, Parent
      makes no representation or warranty whatsoever concerning the Parent SEC Reports
      as of any time other than the time they were filed. At least five (5) days
      prior
      to Closing, Parent shall prepare a draft Form 8-K announcing the Closing,
      together with, or incorporating by reference, the financial statements prepared
      by the Company and its accountant, and such other information that may be
      required to be disclosed with respect to the Merger in any report or form to
      be
      filed with the SEC (“Merger
      Form 8-K”),
      which
      shall be in a form reasonably acceptable to the Company and in a format
      acceptable for EDGAR filing. Prior to Closing, Parent and the Company shall
      prepare the press release announcing the consummation of the Merger hereunder
      (“Press
      Release”).
      Simultaneously with the Closing, Parent shall file the Merger Form 8-K with
      the
      SEC and distribute the Press Release.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    (b) The
      Company and Parent shall further cooperate with each other and use their
      respective reasonable best efforts to take or cause to be taken all
      actions, and do or cause to be done all things, necessary, proper or advisable
      on its part under this Agreement and applicable laws to consummate the Merger
      and the other transactions contemplated hereby as soon as practicable, including
      preparing and filing as soon as practicable all documentation to effect all
      necessary notices, reports and other filings and to obtain as soon as
      practicable all consents, registrations, approvals, permits and authorizations
      necessary or advisable to be obtained from any third party (including the
      respective independent accountants of the Company and Parent) and/or any
      Governmental Entity in order to consummate the Merger or any of the other
      transactions contemplated hereby. This obligation shall include, on the part
      of
      Parent, sending a termination letter to Continental in substantially the form
      of
Exhibit
      A
      attached
      to the Investment Management Trust Agreement by and between Parent and
      Continental. Subject to applicable laws relating to the exchange of information
      and the preservation of any applicable attorney-client privilege, work-product
      doctrine, self-audit privilege or other similar privilege, each of the Company
      and Parent shall have the right to review and comment on in advance, and to
      the
      extent practicable each will consult the other on, all the information relating
      to such party that appears in any filing made with, or written materials
      submitted to, any third party and/or any Governmental Entity in connection
      with
      the Merger and the other transactions contemplated hereby. In exercising the
      foregoing right, each of the Company and Parent shall act reasonably and as
      promptly as practicable.

     

    5.5  Required
      Information.
      In
      connection with the preparation of the Merger Form 8-K and Press Release, and
      for such other reasonable purposes, the Company and
      Parent each shall, upon request by the other, furnish the other with all
      information concerning themselves, their respective directors, officers
      and stockholders
      (including the directors of Parent and the Company to be elected effective
      as of
      the Closing pursuant to Section 5.2 hereof) and such other matters as may be
      reasonably necessary or advisable in connection with the Merger, or any other
      statement, filing, notice or application made by or on behalf of the Company
      and
      Parent to any third party and/or any Governmental Entity in connection with
      the
      Merger and the other transactions contemplated hereby. Each party warrants
      and
      represents to the other party that all such information shall be true and
      correct in all material respects and will not contain any untrue statement
      of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary to make the statements contained therein, in light of the
      circumstances under which they were made, not misleading.

     

    5.6  Confidentiality;
      Access to Information.
      

     

    (a)  Confidentiality.
      Any
      confidentiality agreement previously executed by the parties shall be superseded
      in its entirety by the provisions of this Agreement. Each party agrees to
      maintain in confidence any non-public information received from the other party,
      and to use such non-public information only for purposes of consummating the
      transactions contemplated by this Agreement. Such confidentiality obligations
      will not apply to (i) information which was known to the one party or their
      respective agents prior to receipt from the other party; (ii) information which
      is or becomes generally known; (iii) information acquired by a party or their
      respective agents from a third party who was not bound to an obligation of
      confidentiality; and (iv) disclosure required by law. In the event this
      Agreement is terminated as provided in Article VIII hereof, each party (x)
      will
      return or cause to be returned to the other all documents and other material
      obtained from the other in connection with the Merger contemplated hereby,
      and
      (y) will use its reasonable best efforts to delete from its computer systems
      all
      documents and other material obtained from the other in connection with the
      Merger contemplated hereby.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    (b)  Access
      to Information.
      (i)
      Company will afford Parent and its financial advisors, accountants, counsel
      and
      other representatives reasonable access during normal business hours, upon
      reasonable notice, to the properties, books, records and personnel of the
      Company during the period
      prior to the Closing to obtain all information concerning the business,
      including the status of product development efforts, properties, results of
      operations and personnel of the Company, as Parent may reasonably request.
      No
      information or knowledge obtained by Parent in any investigation pursuant to
      this Section 5.6 will affect or be deemed to modify any representation or
      warranty contained herein or the conditions to the obligations of the parties
      to
      consummate the Merger.

     

    (ii)  Parent
      will afford the Company and its financial advisors, underwriters, accountants,
      counsel and other representatives reasonable access during normal business
      hours, upon reasonable notice, to the properties, books, records and personnel
      of Parent during the period prior to the Closing to obtain all information
      concerning the business, including the status of product development efforts,
      properties, results of operations and personnel of Parent, as the Company may
      reasonably request.
      No
      information or knowledge obtained by Parent in any investigation pursuant to
      this Section 5.6 will affect or be deemed to modify any representation or
      warranty contained herein or the conditions to the obligations of the parties
      to
      consummate the Merger.

     

    (iii)  Notwithstanding
      anything to the contrary contained herein, each party (“Subject
      Party”)
      hereby
      agrees that by proceeding with the Closing,
      it shall be conclusively deemed to have waived for all purposes hereunder any
      inaccuracy of representation or breach of warranty by another party which is
      actually known by the Subject Party prior to the Closing.

     

    5.7  Charter
      Protections; Directors’ and Officers’ Liability Insurance.
      

     

    (a)  All
      rights to indemnification for acts or omissions occurring through the Closing
      Date now existing in favor of the current directors and officers
      of Parent as provided in the Charter Documents of Parent or in any
      indemnification agreements shall survive the Merger and shall continue in full
      force and effect in accordance with their terms.

     

    (b)  For
      a
      period of six (6) years after the Closing Date, Parent shall cause to be
      maintained in effect the current policies of directors’ and officers’
      liability insurance maintained by Parent (or policies of at least the same
      coverage and amounts containing terms and conditions which are no less
      advantageous) with respect to claims arising from facts and events that occurred
      prior to the Closing Date.

     

    (c)  If
      Parent
      or any of its successors or assigns (i) consolidates with or merges into any
      other Person and shall not be the continuing or surviving
      entity of such consolidation or merger, or (ii) transfers or conveys all or
      substantially all of its properties and assets to any Person, then, in each
      such
      case, to the extent necessary, proper provisions shall be made so that the
      successors and assigns of Parent assume the obligations set forth in this
      Section 5.7.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    (d)  The
      provisions of this Section 5.7 are intended to be for the benefit of, and shall
      be enforceable by, each Person who will have been a director
      or officer of Parent for all periods ending on or before the Closing Date and
      may not be changed without the consent of Committee referred to in Section
      1.18.

     

    5.8  Public
      Disclosure.
      From
      the date of this Agreement until Closing or termination, the parties shall
      cooperate in good faith to jointly prepare all press
      releases and public announcements pertaining to this Agreement and the
      transactions governed by it, and no party shall issue or otherwise make any
      public announcement or communication pertaining to this Agreement or the
      transaction without the prior consent of Parent
      (in the case of the Company and the Members) or the Company (in the case of
      Parent), except as required by any legal requirement or by the rules and
      regulations of, or pursuant to any agreement of a stock exchange or trading
      system. Each party will not unreasonably withhold approval from the others
      with
      respect to any press release or public announcement. If any party determines
      with the advice of counsel that it is required to make this Agreement and the
      terms of the transaction public or otherwise issue a press release or make
      public disclosure with respect thereto, it shall, at a reasonable time before
      making any public disclosure, consult with the other party regarding such
      disclosure, seek such confidential treatment for such terms or portions of
      this
      Agreement or the transaction as may be reasonably requested by the other party
      and disclose only such information as is legally compelled to be disclosed.
      This
      provision will not apply to communications by any party to its counsel,
      accountants and other professional advisors. Notwithstanding the foregoing,
      the
      parties hereto agree that promptly as practicable after the execution of this
      Agreement, Parent will file with the SEC a Current Report on Form 8-K pursuant
      to the Exchange Act to report the execution of this Agreement, with respect to
      which Parent shall consult with the Company. Parent shall provide to Company
      for
      review and comment a draft of the Current Report on Form 8-K prior to filing
      with the SEC; provided that unless objected to by the Company by written notice
      given to Parent within two (2) days after delivery to the Company specifying
      the
      language to which reasonable objection is taken, any language included in such
      Current Report shall be deemed to have been approved by the Company and may
      be
      filed with the SEC and used in other filings made by Parent with the
      SEC.

     

    5.9  Reasonable
      Efforts.
      Upon
      the terms and subject to the conditions set forth in this Agreement, each of
      the
      parties agrees to use its commercially reasonable
      efforts to take, or cause to be taken, all actions, and to do, or cause to
      be
      done, and to assist and cooperate with the other parties in doing, all things
      necessary, proper or advisable to consummate and make effective, in the most
      expeditious manner practicable, the Merger and the other transactions
      contemplated by this Agreement, including using commercially reasonable efforts
      to accomplish the following: (i) the taking of all reasonable acts necessary
      to
      cause the conditions precedent set forth in Article VI to be satisfied, (ii)
      the
      obtaining of all necessary actions, waivers, consents, approvals, orders and
      authorizations from Governmental Entities and the making of all necessary
      registrations, declarations and filings (including registrations, declarations
      and filings with Governmental Entities, if any) and the taking of all reasonable
      steps as may be necessary to avoid any suit, claim, action, investigation or
      proceeding by any Governmental Entity, (iii) the obtaining of all consents,
      approvals or waivers from third parties required as a result of the transactions
      contemplated in this Agreement, (iv) the defending of any suits, claims,
      actions, investigations or proceedings, whether judicial or administrative,
      challenging this Agreement or the consummation of the transactions contemplated
      hereby, including seeking to have any stay or temporary restraining order
      entered by any court or other Governmental Entity vacated or reversed and (v)
      the execution or delivery of any additional instruments reasonably necessary
      to
      consummate the transactions contemplated by, and to fully carry out the purposes
      of, this Agreement. In connection with and without limiting the foregoing,
      Parent and its board of directors and the Company and its board of directors
      shall, if any state takeover statute or similar statute or regulation is or
      becomes applicable to the Merger, this Agreement or any of the transactions
      contemplated by this Agreement, use its commercially reasonable efforts to
      enable the Merger and the other transactions contemplated by this Agreement
      to
      be consummated as promptly as practicable on the terms contemplated by this
      Agreement. Notwithstanding anything herein to the contrary, nothing in this
      Agreement shall be deemed to require Parent or the Company to agree to any
      divestiture by itself or any of its affiliates of shares of capital stock or
      of
      any business, assets or property, or the imposition of any material limitation
      on the ability of any of them to conduct their business or to own or exercise
      control of such assets, properties and stock.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    5.10  Treatment
      as a Reorganization.
      

     

    (a)  The
      Company shall not take, and shall use its best efforts not to permit any
      Affiliate of the Company to take, any actions that could impact the Members
      to
      fail to qualify for nonrecognition of gain or loss under Section 351(a) of
      the
      Code.

     

    (b)  Parent
      shall not take, and shall use its best efforts not to permit any Affiliate,
      including any employee, officer or director of Parent to take, any actions
      that
      could impact the Members to fail to qualify for nonrecognition of gain or loss
      under Section 351(a) of the Code.

     

    (c)  Parent
      shall use its best efforts, and shall cause its Affiliates to use their best
      efforts, to cause the Members to qualify for nonrecognition of gain or loss
      with
      respect to the transactions contemplated by this Agreement pursuant to Section
      351(a) of the Code.

     

    (d)  The
      Company shall use its best efforts, and shall cause its Affiliates to use their
      best efforts, to cause the Members to qualify for nonrecognition of gain or
      loss
      with respect to the transactions contemplated by this Agreement pursuant to
      Section 351(a) of the Code.

     

    5.11  No
      Parent Common Stock Transactions.
      Each of
      (a) Udi Toledano, Jeffrey Davidson, the Clark Trust and David Schwarz (and
      their
      affiliates) shall agree that he, she or it shall not, prior to January 1, 2009,
      and (b) all other Members of the Company (and their affiliates) shall agree
      that
      he, she or it shall not, prior to the day that is six (6) months after the
      Closing, sell, transfer or otherwise dispose of an interest in any of the shares
      of Parent Common Stock he, she or it receives as a result of the Merger other
      than as permitted pursuant to the Lock-Up Agreement in substantially the form
      of
Exhibit
      F
      hereto
      executed by such Person prior to the Closing Date. Notwithstanding the
      foregoing, Dave Clark (and the Clark Trust) and David Schwarz may pledge (or
      engage in any hedging, straddling or other strategies with respect to) up to
      a
      maximum of 15,000,000 shares of Parent Common Stock to a financial institution
      as collateral for personal loans and such exception to restrictions on transfer
      will be set forth in their individual Lock-Up Agreements.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    5.12  Certain
      Claims.
      As
      additional consideration for the issuance of Parent Common Stock pursuant to
      this Agreement, each of the Members hereby releases and forever discharges,
      effective as of the Closing Date, the Company and its directors, officers,
      employees and agents, from any and all rights, claims, demands, judgments,
      obligations, liabilities and damages, whether accrued or unaccrued, asserted
      or
      unasserted, and whether known or unknown arising out of or resulting from such
      Member’s (i) status as a holder of an equity interest in the Company; and (ii)
      employment, service, consulting or other similar agreement entered into with
      the
      Company prior to Closing, to the extent that the bases for claims under any
      such
      agreement that survives the Closing arise prior to the Closing, provided,
      however, the foregoing shall not release any obligations of Parent set forth
      in
      this Agreement or the Escrow Agreement.

     

    5.13  No
      Securities Transactions.
      Neither
      the Company nor any Member or any of their affiliates, directly or indirectly,
      shall engage in any transactions involving the securities of Parent prior to
      the
      time of the making of a public announcement of the transactions contemplated
      by
      this Agreement. The Company shall use its best efforts to require each of its
      officers, directors, employees, agents and representatives to comply with the
      foregoing requirement. Neither the Parent nor its officers or directors, nor
      any
      of their respective affiliates, directly or indirectly, shall take any action
      described in Section 3.28 prior to the Closing Date.

     

    5.14  No
      Claim Against Trust Fund.
      The
      Company and the Members acknowledge that, if the transactions contemplated
      by
      this Agreement are not consummated by Parent by October 20, 2007, Parent will
      be
      obligated to return to its stockholders the amounts being held in the Trust
      Fund. Accordingly, the Company and the Members hereby waive all rights against
      Parent to collect from the Trust Fund any monies that may be owed to them by
      Parent for any reason whatsoever, including but not limited to a breach of
      this
      Agreement by Parent or any negotiations, agreements or understandings with
      Parent (other than as a result of the Merger, pursuant to which the Company
      would have the right to collect the monies in the Trust Fund), and will not
      seek
      recourse against the Trust Fund for any reason whatsoever.

     

    5.15  Disclosure
      of Certain Matters.
      Each of
      Parent and the Company will provide the other with prompt written notice of
      any
      event, development or condition that (a) would cause any of such party’s
      representations and warranties to become untrue or misleading or which may
      affect its ability to consummate the transactions contemplated by this
      Agreement, (b) had it existed or been known on the date hereof would have been
      required to be disclosed under this Agreement, (c) gives such party any reason
      to believe that any of the conditions set forth in Article VI will not be
      satisfied, (d) is of a nature that is or may be materially adverse to the
      operations, prospects or condition (financial or otherwise) of Parent or the
      Company, or (e) would require any amendment or supplement to the Proxy
      Statement. The parties shall have the obligation to supplement or amend the
      Company Schedules and Parent Schedules (the “Disclosure
      Schedules”)
      being
      delivered concurrently with the execution of this Agreement and annexed hereto
      with respect to any matter hereafter arising or discovered after delivery hereof
      which, if existing or known at the date of this Agreement, would have been
      required to be set forth or described in the Disclosure Schedules. The
      obligations of the parties to amend or supplement the Disclosure Schedules
      being
      delivered herewith shall terminate on the Closing Date. Notwithstanding any
      such
      amendment or supplementation, for purposes of Sections 6.2(a), 6.3(a),
      7.1(a)(i), 8.1(d) and 8.1(e), the representations and warranties of the parties
      shall be made with reference to the Disclosure Schedules as they exist at the
      time of execution of this Agreement, subject to such anticipated changes as
      are
      set forth in Schedule
      4.1
      or
      otherwise expressly contemplated by this Agreement or which are set forth in
      the
      Disclosure Schedules as they exist on the date of this Agreement.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    5.16  No
      Solicitation.

     

    (a)  Until
      this Agreement is terminated pursuant to Section 8.1, the Company will not,
      and
      will cause its Affiliates, employees, agents and representatives not to,
      directly or indirectly, solicit or enter into discussions or transactions with,
      or encourage, or provide any information to, any corporation, partnership or
      other entity or group (other than Parent and its designees) concerning any
      merger, sale of ownership interests and/or assets of the Company,
      recapitalization or similar transaction. 

     

    (b)  Parent
      will not, and will cause its employees, agents and representatives not to,
      directly or indirectly, solicit or enter into discussions or transactions with,
      or encourage, or provide any information to, any corporation, partnership or
      other entity or group (other than the Company and its designees) concerning
      any
      merger, purchase of ownership interests and/or assets, recapitalization or
      similar transaction.

     

    (c)  The
      Company shall promptly advise Parent of the nature of any written offer,
      proposal or indication of interest that is submitted to the Company and the
      identity of the Person making such written offer, proposal or indication of
      interest.

     

    5.17  Company
      Actions.
      

     

    (a)  The
      Company shall use its best efforts to take such actions as are necessary to
      fulfill its obligations under this Agreement and to enable
      Parent and Merger Sub to fulfill its obligations hereunder.

     

    (b)  The
      Parent and the Merger Sub shall use their best efforts to take such actions
      as
      are necessary to fulfill their obligations under this Agreement and to
enable
      the Company to fulfill its obligations hereunder.

     

    5.18  Short
      Sales.
      The
      Parent covenants that it will not, nor will it instruct any officer or director
      to, execute any Short Sales during the period commencing at the execution of
      this Agreement and ending at the Closing Date. Each of Udi Toledano and Jeffrey
      Davidson shall agree to execute a commitment not to execute any Short Sale
      as
      provided in this Section 5.18. “Short Sales” shall include all “short sales” as
      defined in Rule 200 of Regulation SHO under the Exchange Act. 

     

    5.19  Integration.
      The Parent shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Parent Common Stock
      as contemplated pursuant to this Agreement in a manner that would require the
      registration under the Securities Act of the sale of the Parent Common Stock
      to
      the Members as contemplated by this Agreement or that would be integrated with
      the offer or sale of the Parent Common Stock.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI 

    CONDITIONS
      TO THE MERGER

     

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

     

    (a)  HSR
      Act; No Order.
      All
      specified waiting periods under the HSR Act shall have expired and no
      Governmental Entity shall have enacted, issued, promulgated, enforced or entered
      any statute, rule, regulation, executive order,
      decree, injunction or other order (whether temporary, preliminary or permanent)
      which is in effect and which has the effect of making the Merger illegal or
      otherwise prohibiting consummation of the Merger, substantially on the terms
      contemplated by this Agreement.

     

    (b)  Stockholder
      Approval.
      The
      Parent Stockholder Approval shall have been duly approved and adopted by the
      stockholders of Parent by the requisite vote under the laws of the State of
      Delaware and the Parent Charter Documents and an executed copy of an amendment
      to Parent’s Certificate of Incorporation shall have been filed with the
      Secretary of State of the State of Delaware to be effective as of the
      Closing.

     

    (c)  Parent
      Common Stock.
      Holders
      of twenty percent (20%) or more of the shares of Parent Common Stock issued
      in
      Parent’s initial public offering
      of securities and outstanding immediately before the Closing shall not have
      exercised their rights to convert their shares into a pro rata share of the
      Trust Fund in accordance with Parent’s Charter Documents.

     

    (d)  Escrow
      Agreement.
      Parent,
      the Company, the Escrow Agent and the Members shall have executed and delivered
      the Escrow Agreement.

     

    6.2  Additional
      Conditions to Obligations of Company.
      The
      obligations of the Company to consummate and effect the Merger shall be subject
      to the satisfaction at or prior to the Closing Date of each of the following
      conditions, any of which may be waived, in writing, exclusively by the
      Company:

     

    (a)  Representations
      and Warranties.
      Each
      representation and warranty of Parent contained in this Agreement that is
      qualified as to materiality shall
      have been true and correct (i) as of the date of this Agreement, and (ii) on
      and
      as of the Closing Date with the same force and effect as if made on the Closing
      Date. Each representation and warranty of Parent contained in this Agreement
      that is not qualified as to materiality shall have been true and correct (x)
      in
      all material respects as of the date of this Agreement and (y) in all material
      respects on and as of the Closing Date with the same force and effect as if
      made
      on the Closing Date. The Company shall have received a certificate with respect
      to the foregoing signed on behalf of Parent by an authorized officer of Parent
      (“Parent
      Closing Certificate”).

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    (b)  Agreements
      and Covenants.
      Parent
      shall have performed or complied in all material respects with all agreements
      and covenants required by this Agreement
      to be performed or complied with by it on or prior to the Closing Date, except
      to the extent that any failure to perform or comply (other than a willful
      failure to perform or comply or failure to perform or comply with an agreement
      or covenant reasonably within the control of Parent) does not, or will not,
      constitute a Material Adverse Effect with respect to Parent, and the Parent
      Closing Certificate shall include a provision to such effect.

     

    (c)  No
      Litigation.
      No
      action, suit or proceeding shall be pending or threatened before any
      Governmental Entity which is reasonably likely to (i) prevent
      consummation of any of the transactions contemplated by this Agreement, (ii)
      cause any of the transactions contemplated by this Agreement to be rescinded
      following consummation or (iii) affect materially and adversely or otherwise
      encumber the title of the shares of Parent Common Stock to be issued by Parent
      in connection with the Merger
      and no order, judgment, decree, stipulation or injunction to any such effect
      shall be in effect.

     

    (d)  Consents.
      Parent
      shall have obtained all consents, waivers and approvals required to be obtained
      by Parent in connection with the consummation
      of the transactions contemplated hereby, other than consents, waivers and
      approvals the absence of which, either alone or in the aggregate, could not
      reasonably be expected to have a Material Adverse Effect on Parent and the
      Parent Closing Certificate shall include a provision to such
      effect.

     

    (e)  Material
      Adverse Effect.
      No
      Material Adverse Effect with respect to Parent shall have occurred since the
      date of this Agreement.

     

    (f)  Opinion
      of Counsel.
      The
      Company shall have received from Mintz Levin Cohn Ferris Glovsky and Popeo,
      P.C.
      counsel to Parent, an opinion of counsel reasonably acceptable to the
      Company.

     

    (g)  Other
      Deliveries.
      At or
      prior to Closing, Parent shall have delivered to the Company (i) copies of
      resolutions and actions taken by Parent’s board of directors in connection with
      the approval of this Agreement and the transactions contemplated hereunder,
      and
      (ii) such other documents or certificates as shall reasonably be required by
      the
      Company and its counsel in order to consummate the transactions contemplated
      hereunder.

     

    (h)  Press
      Release.
      Parent
      shall have delivered the Press Release to the Company, in a form reasonably
      acceptable to the Company.

     

    (i)  Resignations.
      The
      persons listed on Schedule
      6.2(i)
      shall
      have resigned from all of their positions and offices with Parent.

     

    (j)  Trust
      Fund.
      Parent
      shall have made appropriate arrangements with Continental to have the Trust
      Fund
      disbursed to
      Parent
      immediately upon the Closing.

     

    (k)  Registration
      Rights Agreement.
      The
      Registration Rights Agreement among Parent and the Members, in substantially
      the
      form of Exhibit
      D,
      shall
      be in full force and effect.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    (l)  Warrant
      Lock-Up Agreements.
      Those
      Persons set forth on Schedule
      6.2(l)
      shall
      have entered into lock-up agreements with Parent with respect to their warrants
      and shares of Parent Common Stock underlying such warrants, in form and
      substance reasonably satisfactory to the Company.

     

    (m)  Short
      Sales.
      Those
      Persons discussed in Section 5.18 above shall have delivered a commitment not
      to
      engage in Short Sales.

     

    (n)  Assumption
      of Bridge Loan.
      Parent
      shall have assumed the Company’s obligations under that certain bridge loan
      described on Schedule
      6.2(n)
      attached
      hereto (the “Bridge
      Loan”).

     

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

     

    (a)  Representations
      and Warranties.
      Each
      representation and warranty of the Company contained in this Agreement that
      is
      qualified as to materiality shall have been true and correct (i) as of the
      date
      of this Agreement and (ii) on and as of the Closing Date with the same force
      and
      effect as if made on the Closing Date. Each representation and warranty of
      the
      Company contained in this Agreement that is not qualified as to materiality
      shall have been true and correct (x) in all material respects as of the date
      of
      this Agreement and (y) in all material respects on and as of the Closing Date
      with the same force and effect as if made on the Closing Date. Parent shall
      have
      received a certificate with respect to the foregoing signed on behalf of the
      Company by an authorized officer of the Company (“Company
      Closing Certificate”).

     

    (b)  Agreements
      and Covenants.
      The
      Company and the Members shall have performed or complied in all material
      respects with all agreements and covenants required by this Agreement to be
      performed or complied with by them at or prior to the Closing Date except to
      the
      extent that any failure to perform or comply (other than a willful failure
      to
      perform or comply or failure to perform or comply with an agreement or covenant
      reasonably within the control of Company) does not, or will not, constitute
      a
      Material Adverse Effect on the Company, and the Company Closing Certificate
      shall include a provision to such effect.

     

    (c)  No
      Litigation.
      No
      action, suit or proceeding shall be pending or threatened before any
      Governmental Entity which is reasonably likely to (i) prevent
      consummation of any of the transactions contemplated by this Agreement, (ii)
      cause any of the transactions contemplated by this Agreement
      to be rescinded following consummation or (iii) affect materially and adversely
      the right of Parent to own, operate or control any of the assets and operations
      of the Surviving Entity following the Merger and no order, judgment, decree,
      stipulation or injunction to any such effect shall be in effect.

     

    (d)  Consents.
      The
      Company shall have obtained all consents, waivers, permits and approvals
      required to be obtained by the Company in connection with
      the
      consummation of the transactions contemplated hereby, other than consents,
      waivers and approvals the absence of which, either alone or in the aggregate,
      could not reasonably be expected to have a Material Adverse Effect on the
      Company and the Company Closing Certificate shall include a provision to such
      effect. 

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    (e)  Reorganization.
      The
      reorganization of the Company and its Subsidiaries as set forth on Schedule
      2.2(a)
      hereto
      has been completed.

     

    (f)  Material
      Adverse Effect.
      No
      Material Adverse Effect with respect to the Company shall have occurred since
      the date of this Agreement.

     

    (g)  Employment
      Agreements.
      Employment Agreements (including non-competition covenants) between the Company
      and each of Dave Clark and David Schwarz, substantially in the forms of
Exhibit
      E,
      shall
      be in full force and effect.

     

    (h)  Opinion
      of Counsel.
      Parent
      shall have received from Greenberg Traurig, P.A., counsel to the Company, an
      opinion of counsel reasonably acceptable to Parent.

     

    (i)  Comfort
      Letters.
      Parent
      shall have received “comfort” letters in the customary form from Moore,
      Stephens, Lovelace, P.A., dated the date of distribution
      of the Proxy Statement and the Closing Date (or such other date or dates
      reasonably acceptable to Parent) with respect to certain financial statements
      and other financial information included in the Proxy Statement.

     

    (j)  Lock-Up
      Agreements.
      Lock-Up
      Agreements between Parent and each of the Persons identified in Section 5.11,
      substantially in the form of Exhibit
      F,
      shall
      be in full force and effect. 

     

    (k)  Other
      Deliveries.
      At or
      prior to Closing, the Company shall have delivered to Parent: (i) copies of
      resolutions and actions taken by the Company’s
      board of directors and stockholders in connection with the approval of this
      Agreement and the transactions contemplated hereunder, and (ii) such other
      documents or certificates as shall reasonably be required by Parent and its
      counsel in order to consummate the transactions contemplated
      hereunder.

     

    (l)  Derivative
      Securities.
      There
      shall be outstanding no options, warrants or other derivative securities
      entitling the holders thereof to acquire shares of Company membership interests
      or other securities of the Company or any of its Subsidiaries.

     

    (m)  Interested
      Party Transactions.
      All
      interested party transactions, as described in Section 2.24, including any
      loans
      or other advances to or between the Company and any Subsidiary and any Member,
      officer or director (or any affiliate of any of the foregoing) shall have been
      terminated or repaid in full as applicable. 

     

    (n)  Right
      of First Refusal.
      The
      Company (or appropriate Subsidiary) shall have been granted a right of first
      refusal with respect to the commercial development of the Island Homes property
      and to purchase a portion of such property commercially developed at cost (all
      costs, including development costs, carrying costs and transfer costs) which
      right of first refusal will be in form and substance reasonably satisfactory
      to
      Parent.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII

    INDEMNIFICATION

     

    7.1  Indemnification
      of Parent and Company.
      (a)
      Subject to the terms and conditions of this Article VII (including without
      limitation the limitations set forth in Section 7.4), Parent and the Company
      and
      their respective representatives, successors and permitted assigns (the
“Parent
      Indemnitees”)
      shall
      be indemnified, defended and held harmless, severally by the Clark Trust and
      David Schwarz pro rata in accordance with the distribution of the Merger
      Consideration issued to them, from and against all Losses asserted against,
      resulting to, imposed upon, or incurred by any Parent Indemnitee by reason
      of,
      arising out of or resulting from:

     

    (i)  the
      inaccuracy or breach of any representation or warranty of the Company contained
      in this Agreement, or
      any
      certificate delivered by the Company to Parent pursuant to this Agreement with
      respect hereto or thereto in connection with the Closing; and

     

    (ii)  the
      non-fulfillment or breach of any covenant or agreement of the Company contained
      in this Agreement.

     

    (b)  As
      used
      in this Article VII, the term “Losses”
shall
      include all losses, liabilities, damages, judgments, awards, orders, penalties,
      settlements, costs and expenses (including, without limitation, interest,
      penalties, court costs and reasonable legal fees and expenses) including those
      arising from any demands, claims, suits, actions, costs of investigation,
      notices of violation or noncompliance, causes of action, proceedings and
      assessments whether or not made by third parties or whether or not ultimately
      determined to be valid. Solely for the purpose of determining the amount of
      any
      Losses (and not for determining any breach) for which any party may be entitled
      to indemnification pursuant to Article VII, any representation or warranty
      contained in this Agreement that is qualified by a term or terms such as
“material,” “materially,” or “Material Adverse Effect” shall be deemed made or
      given without such qualification and without giving effect to such
      words.

     

    7.2  Indemnification
      of Third Party Claims.
      The
      indemnification obligations and liabilities under this Article VII with respect
      to actions, proceedings, lawsuits, investigations, demands or other claims
      brought against Parent by a Person other than the Company (a “Third
      Party Claim”)
      shall
      be subject to the following terms and conditions:

     

    (a)  Notice
      of Claim.
      Parent,
      acting through the Committee, will give the Members prompt written notice after
      receiving written notice of any Third Party Claim or discovering the liability,
      obligation or facts giving rise to such Third Party Claim (a “Notice
      of Claim”)
      which
      Notice of Third Party Claim shall set forth (i) a brief description of the
      nature of the Third Party Claim, (ii) the total amount of the actual
      out-of-pocket Loss or the anticipated potential Loss (including any costs or
      expenses which have been or may be reasonably incurred in connection therewith),
      and (iii) whether such Loss may be covered (in whole or in part) under any
      insurance and the estimated amount of such Loss which may be covered under
      such
      insurance, and the Representative shall be entitled to participate in the
      defense of Third Party Claim at its expense.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    (b)  Defense.
      The
      Members shall have the right, at their option (subject to the limitations set
      forth in subsection 7.2(c) below) at their own expense, by written
      notice to Parent, to assume the entire control of, subject to the right of
      Parent to participate (at its expense and with counsel of its choice) in, the
      defense, compromise or settlement of the Third Party Claim as to which such
      Notice of Claim has been given, and shall be entitled to appoint a recognized
      and reputable counsel reasonably acceptable to Parent to be the lead counsel
      in
      connection with such defense. If the Members are permitted and elect to assume
      the defense of a Third Party Claim:

     

    (i)  the
      Members shall diligently and in good faith defend such Third Party Claim and
      shall keep Parent reasonably informed of the status of such defense; provided,
      however, that in the case of any settlement providing for remedies other than
      monetary damages for which indemnification is provided, Parent shall have the
      right to approve the settlement, which approval will not be unreasonably
      withheld; and

     

    (ii)  Parent
      shall cooperate fully in all respects with the Members in any such defense,
      compromise or settlement thereof, including, without limitation, the selection
      of counsel, and Parent shall make available to the Members all pertinent
      information and
      documents under its control.

     

    (c)  Limitations
      of Right to Assume Defense.
      The
      Members shall not be entitled to assume control of such defense if (i) the
      Third
      Party Claim relates to or arises in connection with any criminal proceeding,
      action, indictment, allegation or investigation; (ii) the Third Party Claim
      seeks an injunction or equitable relief against Parent; or (iii) there is a
      reasonable probability that a Third Party Claim may materially and adversely
      affect Parent other than as a result of money damages or other money
      payments.

     

    (d)  Other
      Limitations.
      Failure
      to give prompt Notice of Claim or to provide copies of relevant available
      documents or to furnish relevant available data shall not affect the
Members’
      duty or
      obligations under this Article VII, except to the extent (and only to the extent
      that) such failure shall have adversely affected the ability of the Members
      to
      defend
      against or reduce the Members’ liability or caused or increased such liability
      or otherwise caused the damages for which the Members are obligated to be
      greater than such damages would have been had Parent given the Members
      prompt
      notice hereunder. So long as the Members
      are
      defending any such action actively and in good faith, Parent shall not settle
      such action. Parent shall make available to the Members
      all
      relevant records and other relevant materials required by them and in the
      possession or under the control of Parent, for the use of the Members
      in
      defending any such action, and shall in other respects give reasonable
      cooperation in such defense.

     

    (e)  Failure
      to Defend.
      If the
      Members, promptly after receiving a Notice of Claim, fail to defend such Third
      Party Claim actively and in good faith, Parent will (upon further written
      notice) have the right to undertake the defense, compromise or settlement of
      such Third Party Claim as it may determine in its reasonable discretion,
      provided that the Members
      shall
      have the right to approve any settlement, which approval will not be
      unreasonably withheld or delayed.

     

    (f)  Parent’s
      Rights.
      Anything in this Section 7.2 to the contrary notwithstanding, the Members shall
      not, without the written consent of Parent, settle or compromise any action
      or
      consent to the entry of any judgment which does not include as an unconditional
      term thereof the giving by the claimant or the plaintiff to Parent of a full
      and
      unconditional release from all liability and obligation in respect of such
      action without any payment by Parent.

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    (g)  Members
      Consent.
      Unless
      the Members have consented to a settlement of a Third Party Claim, the amount
      of
      the settlement shall not be a binding determination of the amount of the Loss
      and, if applicable, such amount shall be determined in accordance with the
      provisions of the Escrow Agreement.

     

    7.3  Insurance
      Effect.
      To the
      extent that any Losses that are subject to indemnification pursuant to this
      Article VII are covered by insurance, Parent shall
      use
      commercially reasonable efforts to obtain the maximum recovery under such
      insurance; provided that Parent shall nevertheless be entitled to bring a claim
      for indemnification under this Article VII in respect of such Losses and the
      time limitations set forth in Section 7.4 hereof for bringing a claim of
      indemnification under this Agreement shall be tolled during the pendency of
      such
      insurance claim. The existence of a claim by Parent for monies from an insurer
      or against a third party in respect of any Loss shall not, however, delay any
      payment pursuant to the indemnification provisions contained herein and
      otherwise determined to be due and owing. If Parent has received the payment
      required by this Agreement from the Members in respect of any Loss and later
      receives proceeds from insurance or other amounts in respect of such Loss,
      then
      it shall hold such proceeds or other amounts in trust for the benefit of the
      Members and shall pay to the Members, as promptly as practicable after receipt,
      a sum equal to the amount of such proceeds or other amount received, up to
      the
      aggregate amount of any payments received hereunder or from the Escrow Account,
      as applicable, pursuant to this Agreement in respect of such Loss.
      Notwithstanding any other provisions of this Agreement, it is the intention
      of
      the parties that no insurer or any other third party shall be (i) entitled
      to a
      benefit it would not be entitled to receive in the absence of the foregoing
      indemnification provisions, or (ii) relieved of the responsibility to pay any
      claims for which it is obligated.

     

    7.4  Limitations
      on Indemnification.

     

    (a)  Survival:
      Time Limitation.
      The
      representations, warranties, covenants and agreements in this Agreement or
      in
      any writing delivered by the Company to Parent in connection with this Agreement
      (including the certificate
      required to be delivered by the Company pursuant to Section 6.3(a)) shall
      survive the Closing until 18 months after the Closing Date (the “Survival
      Period”).
      The
      indemnification and other obligations under this Article VII shall survive
      for
      the same Survival Period and shall terminate with the expiration of such
      Survival Period, except that: (i) any claims for breach of representation or
      warranty made by a party hereunder by filing a demand for arbitration under
      Section 10.12 shall be preserved until final resolution thereof despite the
      subsequent expiration of the Survival Period and (ii) any claims set forth
      in a
      Notice of Claim sent prior to the expiration of such Survival Period shall
      survive until final resolution thereof. Except as set forth in clause (ii)
      above, no claim for indemnification under this Article VII shall be brought
      after the end of the applicable Survival Period.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

    (b)  Deductible.
      No
      amount shall be payable under Article VII unless and until the aggregate amount
      of all indemnifiable Losses otherwise payable exceeds $500,000 in the aggregate
      (the “Deductible”),
      and
      no
      claim shall be made pursuant to this Article VII until such time as the
      aggregate of such Losses exceeds $500,000.
      For the
      avoidance of doubt, Losses in the amount of $500,000
      shall
      function as a “deductible,” and only those amounts in excess of $500,000
      shall
      be
      recoverable pursuant to this Article VII. Notwithstanding
      anything contained herein to the contrary, the Deductible will not be applicable
      to claims arising from fraud, willful misrepresentation or willful misconduct.
      

     

    (c) Aggregate
      Amount Limitation.
      

     

    (i) The
      aggregate liability for Losses pursuant to Section 7.1 during the first 12
      months from the Closing Date (the “First
      Indemnity Period”),
      shall
      not in any event exceed the greater of (A) $10,000,000 in cash if 10,000,0000
      shares of Parent Common Stock (the “Tranche
      One Escrow Shares”)
      are
      not deposited by the Escrow Agent in the Earned Shares Indemnity Escrow Account
      pursuant to the provisions of Section 1.15 hereof, or, (B) if applicable, the
      Tranche One Escrow Shares. If at any time during the First Indemnity Period,
      the
      number of Tranche One Escrow Shares in the Earned Shares Indemnity Escrow
      Account is equal to 10,000,000 shares, then the $10,000,000 cash indemnity
      obligation of the
      Clark
      Trust and David W. Schwarz (the
      “Indemnifying
      Parties”)
      shall
      terminate and the sole liability for indemnification shall be against the
      Tranche One Escrow Shares.

     

    (ii) The
      aggregate liability for Losses pursuant to Section 7.1 during the period
      beginning 12 months and one day from the Closing Date until 18 months from
      the
      Closing Date (the “Second
      Indemnity Period”),
      shall
      not in any event exceed the greater of (A) $10,000,000 in cash if less than
      5,000,0000 shares of Parent Common Stock (the “Tranche
      Two Escrow Shares”)
      are in
      the Earned Shares Indemnity Escrow Account pursuant to the provisions of Section
      1.15 hereof at the beginning of the Second Indemnity Period (to the extent
      not
      exhausted or terminated during the First Indemnity Period), or, (B) if
      applicable, the Tranche Two Escrow Shares. If at any time during the Second
      Indemnity Period, the number of Tranche Two Escrow Shares in the Earned Shares
      Indemnity Escrow Account is equal to 5,000,000 shares, then the $10,000,000
      cash
      indemnity obligation of the Indemnifying Parties, if not already exhausted,
      shall terminate and the sole liability for indemnification shall be against
      the
      Tranche Two Escrow Shares.

     

    (iii) Notwithstanding
      the terms of Section 7.4(c), in no event shall the cash portion of any liability
      for Losses during the First Indemnity Period and the Second Indemnity Period,
      collectively, exceed a total aggregate amount equal to $10,000,000 and in no
      event shall the total aggregate liability of the Indemnified Parties ever exceed
      a total value of $75,000,000.

     

    (iv) Notwithstanding
      the foregoing, the Aggregate Amount Limitation shall not apply in the case
      of
      claims arising from fraud, willful misrepresentation or willful misconduct
      but
      in no event shall the total liability for Losses to any Indemnifying Party
      exceed the Merger Consideration received by the Clark Trust and David W. Schwarz
      less any taxes paid by them. 

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

    (v) To
      the
      extent that there is an indemnifiable Claim, the Claim shall be satisfied in
      the
      following order of priority: (A) during the First Indemnity Period, first,
      from
      the Tranche One Escrow Shares until such time as the Earned Shares Indemnity
      Escrow Account is reduced to zero and second, if less than 10,000,000 shares
      of
      Parent Common Stock were in the Earned Shares Indemnity Escrow Account, from
      the
      $10,000,000 by the Indemnifying Members and (B) during the Second Indemnity
      Period, first, from the Tranche Two Escrow Shares until such time as the Earned
      Shares Indemnity Escrow Account is reduced to zero and second, if less than
      5,000,000 shares of Parent Common Stock were in the Earned Shares Indemnity
      Escrow Account, from the $10,000,000 by the Indemnifying Members. 

     

    (vi) For
      purposes of this Article VII, each share of Parent Common Stock included as
      Tranche One Escrow Shares and Tranche
      Two Escrow Shares shall at all times have a value equal to $7.50 notwithstanding
      the market price for the Parent Common Stock as reported on the OTC BB or any
      other applicable exchange or automated quotation system at the time any Claim
      is
      made hereunder. 

     

    (vii) 
      If
      additional shares are required to be deposited in the Earned
      Shares Indemnity Escrow Account in accordance with Section 1.15 during either
      the First Indemnity Period or the Second Indemnity Period, and any amount of
      the
      Uncovered Claim continues to be unsatisfied, then the first shares of Parent
      Common Stock scheduled to be placed in the Earned Shares Indemnity Escrow
      Account shall be applied to the unsatisfied portion of the Uncovered Claim
      and
      the remaining shares to be
      deposited in the Earned
      Shares Indemnity Escrow Account shall be reduced by the quotient of: (1) the
      amount of cash paid by the Indemnifying Parties in connection with the Uncovered
      Claim divided by (2) $7.50. For the purposes of this Agreement, “Uncovered
      Claim” shall mean a Claim where the total value of such Claim exceeds the value
      of the Parent Common Stock then contained in the Earned Shares Indemnity Escrow
      Account during the relevant indemnity period.

    

    For
      example:

    

    During
      the First Indemnity Period, if there are 3,000,000 shares of Parent Common
      Stock
      in the Earned Shares Indemnity Escrow Account and an Uncovered Claim for an
      amount equal to $40,000,000 is made, then, those 3,000,000 shares are applied
      to
      that Uncovered Claim on a $7.50 valuation. The Indemnifying Parties still have
      a
      $10 million cash obligation because there are less than the total Tranche One
      Escrow Shares in the Earned Shares Indemnity Escrow Account. Thus, because
      the
      shares in the Earned Shares Indemnity Escrow Account are worth only $22,500,000
      (3,000,000 x $7.50), then the Indemnifying Parties would have to pay up to
      $10
      million in cash during the First Indemnity Period for a total indemnification
      payment of $32,500,000. If 5,000,000 shares of Parent Common Stock are
      subsequently scheduled to be placed in the Earned Shares Indemnity Escrow
      Account, then the first shares of Parent Common Stock scheduled to be placed
      in
      the Earned Shares Indemnity Escrow Account shall be applied to the remaining
      $7,500,000 of outstanding liability from the Uncovered Claim and the remaining
      shares to be
      deposited in the Earned
      Shares Indemnity Escrow Account shall be reduced by 1,333,000 shares of Parent
      Common Stock ($10,000,000 divided by $7.50).

    

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    7.5  Exclusive
      Remedy.
      Parent
      hereby acknowledges and agrees that, from and after the Closing, its sole and
      exclusive remedy with respect to any and all claims, whether direct, third
      party
      or otherwise, for money damages
      arising out of or relating to this Agreement shall be pursuant and subject
      to
      the requirements of the indemnification provisions set forth in this Article
      VII. Notwithstanding any of the foregoing, nothing contained in this Article
      VII
      shall in any way impair, modify or otherwise limit Parent’s or Company’s right
      to bring any claim, demand or suit against the other party based upon such
      other
      party’s actual fraud or intentional or willful misrepresentation or omission, it
      being understood that a mere breach of a representation and warranty, without
      intentional or willful misrepresentation or omission, does not constitute
      fraud.

     

    7.6  Damages;
      No Adjustment to Merger Consideration.
      Amounts
      paid for indemnification under Article VII shall constitute damages paid by
      the
      Members for breach of contract and not as an adjustment to the value of the
      shares of Parent Common Stock issued by Parent as a result of the Merger.

     

    7.7  Application
      of Escrow Shares.
      The
      parties acknowledge that all actions to be taken by Parent pursuant to this
      Article VII shall be taken on its behalf by the Committee in accordance with
      the
      provisions of the Escrow Agreement. The Escrow Agent, pursuant to the Escrow
      Agreement after the Closing, may apply all or a portion of the Escrow Shares
      to
      satisfy any claim for indemnification pursuant to this Article VII. The Escrow
      Agent will hold the remaining portion of the Escrow Shares until final
      resolution of all claims for indemnification or disputes relating
      thereto.

     

    ARTICLE
      VIII

    TERMINATION

     

    8.1  Termination.
      This
      Agreement may be terminated at any time prior to the Closing:

     

    (a)  by
      mutual
      written agreement of Parent and the Company at any time;

     

    (b)  by
      either
      Parent or the Company if the Proxy Statement shall not have been mailed to
      the
      record owners of Parent Common Stock on or before October
      1, 2007; 

     

    (c)  by
      either
      Parent or the Company if a Governmental Entity shall have issued an order,
      decree or ruling or taken any other action, in any case
      having the effect of permanently restraining, enjoining or otherwise prohibiting
      the Merger, which order, decree, ruling or other action is final and
      nonappealable;

     

    (d)  by
      the
      Company, upon a material breach of any representation, warranty, covenant or
      agreement on the part of Parent set forth in this Agreement,
      or if any representation or warranty of Parent shall have become untrue, in
      either case such that the conditions set forth in Article VI would not be
      satisfied as of the time of such breach or as of the time such representation or
      warranty shall have become untrue, provided, that if such breach by Parent
      is
      curable by Parent prior to the Closing Date, then the Company may not terminate
      this Agreement under this Section 8.1(d) for thirty (30) days after delivery
      of
      written notice from the Company to Parent of such breach, provided Parent
      continues to exercise commercially reasonable efforts to cure such breach (it
      being understood that the Company may not terminate this Agreement pursuant
      to
      this Section 8.1(d) if it shall have materially breached this Agreement or
      if
      such breach by Parent is cured during such thirty (30)-day period);

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

    (e)  by
      Parent, upon a material breach of any representation, warranty, covenant or
      agreement on the part of the Company set forth in this Agreement,
      or if any representation or warranty of the Company shall have become untrue,
      in
      either case such that the conditions set forth in Article VI would not be
      satisfied as of the time of such breach or as of the time such representation
      or
      warranty shall have become untrue, provided, that if such breach is curable
      by
      the Company prior to the Closing Date, then Parent may not terminate this
      Agreement under this Section 8.1(e) for thirty (30) days after delivery of
      written notice from Parent to the Company of such breach, provided the Company
      continues to exercise commercially reasonable efforts to cure such breach (it
      being understood that Parent may not terminate this Agreement pursuant to this
      Section 8.1(e) if it shall have materially breached this Agreement or if such
      breach by the Company is cured during such thirty (30)-day period);

     

    (f)  by
      either
      Parent or the Company, if, at the Parent Stockholders’ Meeting (including any
      adjournments thereof), this Agreement and the transactions contemplated
      thereby shall fail to be approved and adopted by the affirmative vote of the
      holders of Parent Common Stock required under Parent’s certificate of
      incorporation, or the holders of 20% or more of the number of shares of Parent
      Common Stock issued in Parent’s initial public offering and outstanding as of
      the date of the record date of the Parent Stockholders’ Meeting exercise their
      rights to convert the shares of Parent Common Stock held by them into cash
      in
      accordance with Parent’s certificate of incorporation;

     

    (g)  by
      either
      Parent or the Company if the Closing Date shall not have occurred by October
      20,
      2007.

     

    8.2  Notice
      of Termination; Effect of Termination.
      Any
      termination of this Agreement under Section 8.1 above will be effective
      immediately upon (or, if the termination is pursuant to Section 8.1(d) or
      Section 8.1(e) and the proviso therein is applicable, thirty (30) days after)
      the delivery of written notice of the terminating party to the other parties
      hereto. In the event of the termination of this Agreement as provided in Section
      8.1, this Agreement shall be of no further force or effect and the Merger shall
      be abandoned, except for and subject to the following: (i) Sections 5.6, 5.14,
      8.2 and 8.3 and Article X (General Provisions) shall survive the termination
      of
      this Agreement. The sole remedy of any party hereto for breach of this Agreement
      occurring prior to Closing by any other party hereto shall be limited to
      termination of this Agreement, and no party shall have any claim against the
      other for damages of equitable relief for breach of this Agreement occurring
      prior to the Closing. 

     

    8.3  Fees
      and Expenses.
      Whether
      or not the Merger is consummated and except as otherwise provided herein, all
      fees and expenses incurred in connection with the Merger including, without
      limitation, all legal, accounting, financial advisory, consulting and all other
      fees and expenses of third parties incurred by a party in connection with the
      negotiation and effectuation of the terms and conditions of this Agreement
      and
      the transactions contemplated hereby shall be the obligation of the respective
      party incurring such fees and expenses.
      

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX

    DEFINED
      TERMS

     

    Terms
      defined in this Agreement are organized alphabetically as follows, together
      with
      the Section and, where applicable, paragraph, number in which definition
      of each such term is located:

     

    “Affiliate”
      Section 10.2(e) 

     

    “Agreement”
      Heading

     

    “Approvals”
      Section 2.1(a)

     

    “Audited
      Financial Statements” Section 2.8 (a)

     

    “Blue
      Sky
      Laws” Section 1.17(b)

     

    “Bridge
      Loan” Section 6.2(n)

     

    “Business
      Day” Section 1.2

     

    “Capitalization
      Amendment” Section 5.1(a)

     

    “Certificate
      of Merger” Section 1.3

     

    “Charter
      Documents” Section 2.2(b)

     

    “Closing”
      Section 1.2

     

    “Closing
      Date” Section 1.2

     

    “COBRA”
      Section 2.12(a)

     

    “Code”
      Recital C

     

    “Committee”
      Section 1.18

     

    “Company”
      Heading

     

    “Company
      Closing Certificate” Section 6.3(a)

     

    “Company
      Contracts” Section 2.21(a)

     

    “Company
      Employee Plan” Section 2.12(a)

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    “Company
      Intellectual Property” Section 2.19

     

    “Company
      Registered Intellectual Property” Section 2.19

     

    “Company
      Disclosure Schedule” Article II Preamble

     

    “Company
      Material Adverse Effect” Article
      II Preamble

     

    “Company
      Membership Interests” Section 1.6(b)

     

    “Construction
      Contracts” Section 2.15(l)

     

    “Construction
      Project” Section 2.15(l)

     

    “Corporate
      Records” Section 2.1(b)

     

    “Continental”
      Section 1.15

     

    “Deductible”
      Section 7.4(b)

     

    “Disclosure
      Schedules” Section 5.15

     

    “Florida
      Act” Recital B

     

    “DOL”
      Section 2.12(a)

     

    “Earn-Out
      Period” Section 1.19(a)

     

    “Effective
      Time” Section 1.3

     

    “Employee”
      Section 2.12(a)

     

    “Employee
      Agreement” Section 2.12(a)

     

    “Environmental
      Law” Section 2.17(f)

     

    “ERISA”
      Section 2.12(a)

     

    “Escrow
      Agreement” Section 1.15

     

    “Escrow
      Shares” Section 1.15

     

    “Evaluation
      Date” Section 3.22

     

    “Exchange
      Act” Section 1.17(b)

     

    “Florida
      Act” Recital B

     

    “FMLA”
      Section 2.12(a)

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

    “Governmental
      Entity” Section 1.17(b)

     

    “Hazardous
      Substance” Section 2.17(b)

     

    “HIPAA”
      Section 2.12(a)

     

    “HSR
      Act”
Section 2.5(b)

     

    “Insider”
      Section 2.21 (b)(iiii)(1)

     

    “Intellectual
      Property” Section 2.19

     

    “International
      Employee Plan” Section 2.12(a)

     

    “IRS”
      Section 2.12(a)

     

    “Island
      Homes” Section 2.15(o)

     

    “Island
      Homes Owner” Section 2.15(o)

     

    “Knowledge”
      Section 10.2(c)

     

    “Lease”
      Section 2.15(b)

     

    “Leased
      Real Property” Section 2.15(b)

     

    “Legal
      Requirements” Section 10.2(a)

     

    “Lien”
      Section 10.2(d)

     

    “Losses”
      Section 7.1(b)

     

    “Material
      Company Contracts” Section 2.21(b)

     

    “Material
      Permits” Section 2.7(a)

     

    “Material
      Projects” Article II Preamble

     

    “Member/Members”
      Heading

     

    “Merger”
      Recital B

     

    “Merger
      Consideration” Section 1.6(a)

     

    “Merger
      Form 8-K Section 5.4(a)

     

    “Merger
      Sub” Heading

     

    “Merger
      Sub Membership Interest” Section 1.9

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

    “Name
      Change Amendment” Section 5.1(a)

     

    “NASD”
      Section 3.18

     

    “Net
      Income Statement” Section 1.19(a)

     

    “Notice
      of Claim” Section 7.2(a)

     

    “Operating
      Agreement” Section 2.1(a)

     

    “Optioned
      Property Agreement” Section 2.3(b)

     

    “Optioned
      Property Redevelopment Agreement” Section 2.15(c)

     

    “Optioned
      Property Mortgage” Section 2.15(c)

     

    “Optioned
      Property Projects” Article II Preamble

     

    “Optioned
      Property Provider” Article II Preamble

     

    “OTC
      BB”
Section 3.18

     

    “Owned
      Real Property” Section 2.15(a)

     

    “Owned
      Real Property Leases” Section 2.15 (j)

     

    “PBGC”
      Section 2.12(a)

     

    “Parent”
      Heading

     

    “Parent
      Closing Certificate” Section 6.2(a)

     

    “Parent
      Common Stock” Section 1.6(a)

     

    “Parent
      Contracts” Section 3.14(b)

     

    “Parent
      Convertible Securities” Section 3.3(a)

     

    “Parent
      Indemnitees” Section 7.1(a)

     

    “Parent
      Material Adverse Effect” Article III Preamble

     

    “Parent
      Plan” Section 5.1(a)

     

    “Parent
      Preferred Stock” Section 3.3(a)

     

    “Parent
      SEC Reports” Section 3.7(a)

     

    “Parent
      Stockholder Approval” Section 5.1(a)

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    “Parent
      Stockholders’ Meeting” Section 2.26

     

    “Parent
      Stock Options” Section 3.3(a)

     

    “Parent
      Warrants” Section 3.3(a)

     

    “Patents”
      Section 2.19

     

    “Pension
      Plan” Section 2.12(a)

     

    “Person”
      Section 10.2(b)

     

    “Press
      Release” Section 5.4(a)

     

    “Project
      Material Adverse Effect” Article II Preamble

     

    “Proxy
      Statement” Section 2.26

     

    “Real
      Property” Section 2.15(e)

     

    “Registered
      Intellectual Property” Section 2.19

     

    “Registration
      Rights Agreement” Section 1.16

     

    “Requisite
      Member Approval” Section 2.4

     

    “Returns”
      Section 2.16(a)(i)

     

    “Routine
      Operating Contracts” Section 2.21(a)

     

    “Securities
      Act” Section 1.16

     

    “Short
      Sales” Section 5.18

     

    “Subject
      Party” Section 5.6(b)(iii)

     

    “Subsidiary/Subsidiaries”
      Section 2.2(a)

     

    “Survival
      Period” Section 7.4(a)

     

    “Surviving
      Entity” Section 1.1

     

    “Tax/Taxes”
      Section 2.16

     

    “Third
      Party Claim” Section 7.2

     

    “Trademarks”
      Section 2.19

     

    “Trust
      Fund” Section 3.20

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    “U.S.
      GAAP” Section 2.8(a)

     

    “Unaudited
      Financial Statements” Section 2.8(a)

     

    ARTICLE
      X

    GENERAL
      PROVISIONS

     

    10.1  Notices.
      All
      notices, requests and other communications hereunder shall be in writing and
      shall be deemed given if delivered personally or by commercial delivery
      service, or sent via telecopy (receipt confirmed) to the parties at the
      following addresses or telecopy numbers (or at such other address or telecopy
      numbers for a party as shall be specified by like notice):

     

    if
      to
      Parent, to:

     

    Key
      Hospitality Acquisition Corporation

    4
      Becker
      Farm Road

    Roseland,
      New Jersey 07068

    Attention:
      Udi Toledano

    Telephone:
      973-992-3200

    Facsimile:
      973-992-6336

     

    with
      a
      copy to:

     

    Kenneth
      R. Koch, Esq.

    Mintz
      Levin Cohn Ferris Glovsky and Popeo, P.C.

    666
      Third
      Avenue

    New
      York,
      New York 10017

    Telephone:
      212-935-3000

    Facsimile:
      212-983-3115

     

    if
      to the
      Company or Members, to:

     

    Cay
      Clubs
      LLC

    12800
      University Drive, Suite 260

    Fort
      Myers, Florida 33957

    Attention:
      Charles PT Phoenix, Esq. 

    Telephone:
      239-461-0101

    Facsimile:
      239-333-2244

     

    with
      a
      copy to:

     

    Frank
      S.
      Ioppolo

    Greenberg
      Traurig, P.A.

    450
      S.
      Orange Avenue, Suite 650

    Orlando,
      Florida 32801 

    Telephone:
      407-420-1000 

    Facsimile:
      407-420-5909

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

    10.2  Interpretation.
      When a
      reference is made in this Agreement to an Exhibit or Schedule, such reference
      shall be to an Exhibit or Schedule to this Agreement
      unless otherwise indicated. When a reference is made in this Agreement to
      Sections or subsections, such reference shall be to a Section or subsection
      of
      this Agreement. Unless otherwise indicated the words “include,” “includes” and
“including” when used herein shall be deemed in each case to be followed by the
      words “without limitation.” The table of contents and headings contained in this
      Agreement are for reference purposes only and shall not affect in any way the
      meaning or interpretation of this Agreement. When reference is made herein
      to
“the business of” an entity, such reference shall be deemed to include the
      business of all direct and indirect Subsidiaries of such entity. Reference
      to
      the Subsidiaries of an entity shall be deemed to include all direct and indirect
      Subsidiaries of such entity. For purposes of this Agreement:

     

    (a)  the
      term
“Legal
      Requirements”
means
      any federal, state, local, municipal, foreign or other law, statute,
      constitution, principle of common law,
      resolution, ordinance, code, edict, decree, rule, regulation, ruling or
      requirement issued, enacted, adopted, promulgated, implemented or otherwise
      put
      into effect by or under the authority of any Governmental Entity and all
      requirements set forth in applicable Company Contracts or Parent
      Contracts;

     

    (b)  the
      term
“Person”
shall
      mean any individual, 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, entity or Governmental
      Entity;

     

    (c)  the
      term
“Knowledge”
means
      (i) with respect to the Company and any of its Subsidiaries, actual knowledge,
      of Dave Clark, David Schwarz, Michael Matte, Gary Schwarz, Barry Graham, Derek
      Taylor, Dennis Zecca, Craig Holt and William Lee, (ii) with respect to the
      Company and any of its Subsidiaries, actual knowledge, as to any matter
      described in Sections 2.6, 2.7, 2.17 or 2.21(c), of any written notice actually
      received, as evidenced by written proof of delivery, by any member of the
      Company’s Legal Department, and (iii) with respect to the Parent and Merger Sub,
actual
      knowledge, without any duty to investigate, of
      Udi
      Toledano or Jeffrey Davidson.

     

    (d)  the
      term
“Lien”
means
      any mortgage, pledge, security interest, lien, charge or encumbrance of any
      kind
      (including, without limitation,
      any conditional sale or other title retention agreement or lease in the nature
      thereof, any sale with recourse against the seller or any Affiliate of the
      seller, or any agreement to give any security interest);

     

    (e)  the
      term
“Affiliate”
means,
      as applied to any Person, any other Person directly or indirectly controlling,
      controlled by or under direct or indirect
      common control with, such Person. For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as applied to any Person, means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of such Person, whether through the
      ownership of voting securities, by contract or otherwise; and

     

    (f)  all
      monetary amounts set forth herein are referenced in United States dollars,
      unless otherwise noted.

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    10.3  Counterparts;
      Facsimile Signatures.
      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 parties, it being understood that all parties need not sign the same
      counterpart. Delivery by facsimile or by email delivery of a “.pdf” format data
      file to counsel for the other party of a counterpart executed by a party shall
      be deemed to meet the requirements of the previous sentence.

     

    10.4  Entire
      Agreement; Third Party Beneficiaries.
      This
      Agreement and the documents and instruments and other agreements among the
      parties hereto as contemplated by or referred to herein, including the Exhibits
      and Schedules hereto (a) constitute the entire agreement among the parties
      with
      respect to the subject matter hereof and supersede all prior agreements and
      understandings, both written and oral, among the parties with respect to the
      subject matter hereof, it being understood that the proposed summary of terms
      between Parent and the Company dated February 23, 2007 is hereby terminated
      in
      its entirety and shall be of no further force and effect; and (b) are not
      intended to confer upon any other Person any rights or remedies hereunder
      (except as specifically provided in this Agreement). The representations and
      warranties contained in this Agreement and made by the parties hereto were
      made
      to and solely for the benefit of each other. 

    

    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 will continue in full force
      and
      effect and the application of such provision to other Persons or circumstances
      will 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 will achieve, to
      the
      extent possible, the economic, business and other purposes of such void or
      unenforceable provision.

     

    10.6  Other
      Remedies; Specific Performance.
      Except
      as otherwise provided herein, any and all remedies herein expressly conferred
      upon a party will be deemed
      cumulative with and not exclusive of any other remedy conferred hereby, or
      by
      law or equity upon such party, and the exercise by a party of any one remedy
      will not preclude the exercise of any other remedy. The parties hereto agree
      that irreparable damage would occur in the event that any of the provisions
      of
      this Agreement were not performed in accordance with their specific terms or
      were otherwise breached. It is accordingly agreed that the parties shall be
      entitled to seek an injunction or injunctions to prevent breaches of this
      Agreement and to enforce specifically the terms and provisions hereof in any
      court of the United States or any state having jurisdiction, this being in
      addition to any other remedy to which they are entitled at law or in
      equity.

     

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

     

    10.8  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 will be construed against
      the
      party drafting such agreement or document.

     

    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

    10.9  Assignment.
      No
      party may assign either this Agreement or any of its rights, interests, or
      obligations hereunder without the prior written approval of
      the
      other parties. Subject to the first sentence of this Section 10.9, this
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their respective successors and permitted assigns.

     

    10.10  Amendment.
      This
      Agreement may be amended by the parties hereto at any time by execution of
      an
      instrument in writing signed on behalf of each of the parties.

     

    10.11  Extension;
      Waiver.
      At any
      time prior to the Closing, any party hereto may, to the extent legally allowed,
      (i) extend the time for the performance of any
      of
      the obligations or other acts of the other parties hereto, (ii) waive any
      inaccuracies in the representations and warranties made to such party contained
      herein or in any document delivered pursuant hereto and (iii) waive compliance
      with any of the agreements or conditions for the benefit of such party contained
      herein. Any agreement on the part of a party hereto to any such extension or
      waiver shall be valid only if set forth in an instrument in writing signed
      on
      behalf of such party. Delay in exercising any right under this Agreement shall
      not constitute a waiver of such right.

     

    10.12  Jurisdiction
      and Venue.
      Any
      civil action or legal proceeding arising out of or relating to this Agreement
      shall be brought in the federal and state courts located in the State of
      Delaware. Each party consents to the jurisdiction of such Delaware court in
      any
      such civil action or legal proceeding and waives any objection to the laying
      of
      venue of any such civil action or legal proceeding in such Delaware court.
      Service of any court paper may be effected on such party by mail, as provided
      in
      this Agreement, or in such other manner as may be provided under applicable
      laws, rules of procedure or local rules.

     

    10.13  JURY
      WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR
      IN
      EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND
      ALL
      TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT,
      OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT,
      TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT
      JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
      IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART
      OR A
      COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF
      THE
      PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER
      PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY
      REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND
      UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES
      THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION
      GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS
      SECTION. 

     

    
      
        
        

      

      
        73

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	KEY HOSPITALITY ACQUISITION
              CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/
              Jeffrey Davidson
	 	
              

            

    

    
      
        	 	 	 
	 	Key Merger Sub, LLC
	 
 	 
 	 
 
	 	By:  	/s/
                Jeffrey Davidson
	 	
                

              

      

    

    
      	 	 	 
	 	Cay Clubs LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Dave
              Clark
	 	
              

            

    

     

    
      
        	 	 	 
	 	MEMBERS:
	 
 	 
 	 
 
	 	By:  	/s/
                David Schwarz
	 	
                
David
                Schwarz

      

    

     

    
      
        
          	 	 	 
	 	F. Dave Clark Irrevocable Trust
                  under Agreement
                  dated August 31, 2004
	 
 	 
 	 
 
	 	By:  	/s/
                  Dave
                  Clark
	 	
                  
F.
                  Dave Clark, as
                  Trustee

        

      

    

    

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

     

    INDEX
      OF EXHIBITS AND SCHEDULES

    

     

    EXHIBITS

     

    
      	
              EXHIBIT
                A

            	
              —

            	
              
                CERTIFICATE
                  OF MERGER

              

            

    

     

    
      	
              EXHIBIT
                B

            	
              —

            	
              OPERATING
                AGREEMENT OF COMPANY POST-CLOSING

            

    

     

    
      	
              EXHIBIT
                C

            	
              —

            	
              FORM
                OF ESCROW AGREEMENT

            

    

     

    
      	
              EXHIBIT
                D

            	
              —

            	
              FORM
                OF REGISTRATION RIGHTS AGREEMENT

            

    

     

    
      	
              EXHIBIT
                E

            	
              —

            	
              FORM
                OF EMPLOYMENT AGREEMENTS

            

    

     

    
      	
              EXHIBIT
                F

            	
              —

            	
              FORM
                OF LOCK-UP AGREEMENT

            

    

     

    SCHEDULES

     

    
      	SCHEDULE 1.19	—	CALCULATION OF FORFEITED SHARES
	 	 	 
	PARENT
              SCHEDULES
	 	 	 
	SCHEDULE 3.3	—	CAPITALIZATION
	 	 	 
	SCHEDULE 3.13	—	BROKERS
	 	 	 
	SCHEDULE 3.21	—	GOVERNMENTAL FILINGS
	 	 	 
	SCHEDULE 5.2	—	OFFICERS OF PARENT AND SURVIVING
              ENTITY
	 	 	 
	SCHEDULE 6.2(j)	—	RESIGNATIONS FROM PARENT
	 	 	 
	SCHEDULE 6.2(l)	—	LOCK-UP AGREEMENTS WITH PARENT
	 	 	 
	SCHEDULE 6.2(n)	—	BRIDGE LOAN DESCRIPTION
	 	 	 
	COMPANY
              SCHEDULES
	 	 	 
	SCHEDULE 1.6(a)	—	MEMBERSHIP INTERESTS AND
              CAPITALIZATION
	 	 	 
	SCHEDULE 2.2(a)	—	SUBSIDIARIES AND ORGANIZATIONAL
              CHART
	 	 	 
	SCHEDULE 2.10	—	ABSENCE OF CERTAIN CHANGES OR
              EVENTS
	 	 	 
	SCHEDULE 2.12(b)	—	EMPLOYEE BENEFIT PLANS AND
              COMPENSATION
	 	 	 
	SCHEDULE 2.15(a)	—	REAL
              PROPERTY

    

     

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	SCHEDULE 2.15(b)	—	REAL PROPERTY LEASES
	 	 	 
	SCHEDULE 2.15(c)	—	OPTION AND LEASE AGREEMENTS
	 	 	 
	SCHEDULE 2.15(j)	—	OWNED REAL PROPERTY LEASES
	 	 	 
	SCHEDULE 2.17(c)	—	UNDERGROUND STORAGE TANKS /
              ENVIRONMENTAL
	 	 	 
	SCHEDULE 2.21	—	MATERIAL CONTRACTS
	 	 	 
	SCHEDULE 2.22(a)	—	DIRECTORS
	 	 	 
	SCHEDULE 2.23	—	INSURANCE COVERAGE
	 	 	 
	SCHEDULE 4.1	—	PROPERTIES OF
              INTEREST

    

     

     

    
      
        
        

      

      
        76

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]