Document:

ASSET
      PURCHASE AGREEMENT

    

    AMONG

    

    CRIVELLO
      GROUP, LLC,

    

    RENEWAL
      FUELS, INC.

    

    AND

    

    BIODIESEL
      SOLUTIONS, INC.

    

    Dated
      as
      of March 9, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF
      CONTENTS

    

    
      	 	 	 	
              Page

            
	
              Section

            	 	 
	 	 	
               

            
	
              ARTICLE
                I SALE AND PURCHASE OF ASSETS

            	 	
              1

            
	
              1.1

            	
              Sale
                of Assets.

            	 	
              1

            
	
              1.2

            	
              Excluded
                Assets.

            	 	
              2

            
	
              1.3

            	
              Assumed
                Liabilities; Excluded Liabilities; Employees.

            	 	
              2

            
	
              1.4

            	
              Purchase
                Price; Adjustment; Payment.

            	 	
              3

            
	
              1.5

            	
              Purchase
                Price Allocation.

            	 	
              4

            
	
              1.6

            	
              Records
                and Contracts.

            	 	
              4

            
	
              1.7

            	
              Further
                Assurances.

            	 	
              4

            
	
              1.8

            	
              Sales
                and Transfer Taxes.

            	 	
              4

            
	 	 	 	
               

            
	
              ARTICLE
                II CLOSING AND TERMINATION

            	 	
              5

            
	
              2.1

            	
              Closing
                Date.

            	 	
              5

            
	
              2.2

            	
              Termination
                of Agreement.

            	 	
              5

            
	
              2.3

            	
              Procedure
                Upon Termination

            	 	
              5

            
	
              2.4

            	
              Effect
                of Termination.

            	 	
              5

            
	 	 	 	
               

            
	
              ARTICLE
                III REPRESENTATIONS AND WARRANTIES OF THE SELLER

            	 	
              6

            
	
              3.1

            	
              Organization
                and Good Standing.

            	 	
              6

            
	
              3.2

            	
              Authorization
                of Agreement.

            	 	
              6

            
	
              3.3

            	
              Records.

            	 	
              6

            
	
              3.4

            	
              Conflicts;
                Consents of Third Parties.

            	 	
              6

            
	
              3.5

            	
              Ownership
                and Transfer of Assets.

            	 	
              7

            
	
              3.6

            	
              Financial
                Statements.

            	 	
              7

            
	
              3.7

            	
              No
                Undisclosed Liabilities.

            	 	
              7

            
	
              3.8

            	
              Absence
                of Certain Developments

            	 	
              8

            
	
              3.9

            	
              Taxes.

            	 	
              9

            
	
              3.10

            	
              Real
                Property.

            	 	
              11

            
	
              3.11

            	
              Tangible
                Personal Property.

            	 	
              11

            
	
              3.12

            	
              Intangible
                Property.

            	 	
              12

            
	
              3.13

            	
              Material
                Contracts.

            	 	
              12

            
	
              3.14

            	
              Employee
                Benefits.

            	 	
              13

            
	
              3.15

            	
              Labor.

            	 	
              15

            
	
              3.16

            	
              Litigation.

            	 	
              16

            
	
              3.17

            	
              Compliance
                with Laws; Permits.

            	 	
              16

            
	
              3.18

            	
              Environmental
                Matters.

            	 	
              16

            
	
              3.19

            	
              Insurance.

            	 	
              17

            
	
              3.20

            	
              Inventories;
                Receivables; Payables.

            	 	
              17

            
	
              3.21

            	
              Customers
                and Suppliers.

            	 	
              18

            
	
              3.22

            	
              Financial
                Advisors. .

            	 	
              18
                

            
	
              3.23
                

            	
              Patriot
                Act

            	 	
              18

            
	
              3.24

            	
              No
                Misrepresentations.

            	 	
              18

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

            	 	
              19

            
	
              4.1

            	
              Organization
                and Good Standing.

            	 	
              19

            
	
              4.2

            	
              Authorization
                of Agreement.

            	 	
              19

            
	
              4.3

            	
              Conflicts;
                Consents of Third Parties.

            	 	
              19

            
	
              4.4

            	
              Litigation.

            	 	
              20

            
	
              4.5

            	
              Financial
                Advisors

            	 	
              20

            
	
              4.6
                

            	
              Patriot
                Act.

            	 	
              20

            
	
               

            	 	 	
               

            
	
              ARTICLE
                V COVENANTS

            	 	
              20

            
	
              5.1

            	
              Access
                to Information.

            	 	
              20

            
	
              5.2

            	
              Conduct
                of the Business Pending the Closing.

            	 	
              21

            
	
              5.3

            	
              Consents.

            	 	
              23

            
	
              5.4

            	
              Other
                Actions.

            	 	
              23

            
	
              5.5

            	
              No
                Solicitation.

            	 	
              23

            
	
              5.6

            	
              Preservation
                of Records.

            	 	
              23

            
	
              5.7

            	
              Publicity.

            	 	
              24

            
	
              5.8

            	
              Use
                of Name.

            	 	
              24

            
	
              5.9

            	
              Management
                Agreement.

            	 	
              24

            
	
              5.10

            	
              Financial
                Statements.

            	 	
              24

            
	
              5.11

            	
              Non-Competition
                Agreements 

            	 	
              24

            
	
              5.12
                

            	
              Insurnace
                Coverage.

            	 	
              25

            
	
              5.13
                

            	
              Web
                Site Crossover.

            	 	
              25

            
	 	 	 	
               

            
	
              ARTICLE
                VI CONDITIONS TO CLOSING

            	 	
              26

            
	
              6.1

            	
              Conditions
                Precedent to Obligations of Parent.

            	 	
              26

            
	
              6.2

            	
              Conditions
                Precedent to Obligations of the Seller.

            	 	
              26

            
	 	 	 	 
	
              ARTICLE
                VII DOCUMENTS TO BE DELIVERED

            	 	
              27

            
	
              7.1

            	
              Documents
                to be Delivered by the Seller.

            	 	
              27

            
	
              7.2

            	
              Documents
                to be Delivered by the Parent.

            	 	
              27

            
	
               

            	 	 	
               

            
	
              ARTICLE
                VIII INDEMNIFICATION

            	 	
              28

            
	
              8.1

            	
              Non-Tax
                Indemnification.

            	 	
              28

            
	
              8.2

            	
              Limitations
                on Indemnification .

            	 	
              29

            
	
              8.3

            	
              Indemnification
                Procedures.

            	 	
              30

            
	
              8.4

            	
              Exclusive
                Remedy

            	 	
              31

            
	 	 	 	
               

            
	
              ARTICLE
                IX MISCELLANEOUS

            	 	
              31

            
	
              9.1

            	
              Payment
                of Sales, Use or Similar Taxes.

            	 	
              31

            
	
              9.2

            	
              Survival
                of Representations and Warranties.

            	 	
              31

            
	
              9.3

            	
              Expenses.

            	 	
              31

            
	
              9.4

            	
              Specific
                Performance.

            	 	
              32

            
	
              9.5

            	
              Further
                Assurances.

            	 	
              32

            
	
              9.6

            	
              Submission
                to Jurisdiction; Consent to Service of Process.

            	 	
              32

            
	
              9.7

            	
              Table
                of Contents and Headings.

            	 	
              33

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              9.8

            	
              Notices.

            	 	
              33

            
	
              9.9

            	
              Severability.

            	 	
              34

            
	
              9.10

            	
              Binding
                Effect; Assignment.

            	 	
              34

            

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    ASSET
      PURCHASE AGREEMENT

    

    ASSET
      PURCHASE AGREEMENT, dated as of March 30, 2007 (the “Agreement”), between
      Crivello Group, LLC, a limited liability company existing under the laws of
      Florida (the “Parent”), Renewal Fuels, Inc., a corporation existing under the
      laws of Delaware (“Acquisition Sub”) and Biodiesel Solutions, Inc., a
      corporation existing under the laws of Nevada (the “Seller”).

     

    WITNESSETH:

     

    WHEREAS,
      subject to the terms and conditions hereof, Seller desires to sell, transfer
      and
      assign to Acquisition Sub, and Acquisition Sub desires to purchase from Seller,
      all of the properties, rights and assets constituting the business of Seller’s
      FuelMeister division as set forth on Schedule 1.1 attached hereto (the
“Business”). The Business is limited to the development and marketing of
      personal biodiesel processors which produce less than 200 gallons per
      day.

     

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

     

    ARTICLE
      I

    PURCHASE
      AND SALE OF ASSETS.

    

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

    

    (a) Equipment.
      All
      fixed assets, equipment, furniture, fixtures, leasehold improvements used in
      connection with the Business and located within the Seller’s office located at
1395
      Greg
      St., Sparks, NV 89431,
      as
      specified in Exhibit 1.1, and parts, accessories, inventory, office materials,
      software, supplies and other tangible personal property of every kind and
      description owned by Seller and used or held for use in connection with the
      Business, all as set forth on Schedule
      1.1attached
      hereto (“Equipment”); 

    

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

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    (e) Records.
      All of
      Seller’s customer logs, location files and records, engineering records,
      accounting records, knowledge base for customer service and support, and other
      business files and records, in each case specifically relating to the
      Business.

    

    The
      assets, properties and business of Seller being sold to and purchased by
      Acquisition Sub under this Section 1.1, all specifically related to the
      Business, are referred to herein collectively as the “Assets.”

    

    1.2 Excluded
      Assets.
      There
      shall be excluded from the Assets and retained by Seller all assets identified
      on Schedule
      1.2(a)
      attached
      hereto, as well as the following assets (the assets set forth on Schedule 1.2(a)
      together with the assets falling into any of the following enumerated categories
      being referred to as the “Excluded Assets”):

    

    (a) Accounts
      Receivable; Other Assets.
      All
      accounts receivable generated by the Business prior to the date of this
      Agreement as defined by US Generally Accepted Accounting Practices
      (“GAAP”);

    

    (b) Corporate
      Records.
      All of
      Seller’s corporate and other organizational records; 

    

    (c) Cash.
      Cash on
      hand, exclusive of cash reserves associated with undelivered service;

    

    (d) Non-Business
      Assets.
      All
      assets of Seller not used or held for use exclusively for the Business;

    

    (e) Real
      Property.
      All of
      Seller’s right title and interest under, and in and to, all real estate leases;
      and

    

    (f) Permits.
      All of
      Seller's governmental permits and approvals from state, federal or local
      authorities.

    

    1.3 Assumed
      Liabilities; Excluded Liabilities; Employees.

    

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (b) Excluded
      Liabilities.
      It is
      expressly understood that, except for the Assumed Liabilities, Acquisition
      Sub
      shall not assume, pay or be liable for any liability or obligation of Seller
      of
      any kind or nature at any time existing or asserted, whether, known, unknown,
      fixed, contingent or otherwise, not specifically assumed herein by Parent or
      Acquisition Sub, including, without limitation any liability or obligation
      relating to, resulting from or arising out of (i) the Excluded Assets, (ii)
      the employees of the Business or (iii) any fact existing or event occurring
      prior to, or relating to the operation of the Business prior to, the date
      hereof.

    

    (c) Employees,
      Wages and Benefits.

    

    (i) Neither
      Parent nor Acquisition Sub shall assume or have any obligations or liabilities
      with respect to any employees of the Seller or such terminations, including,
      without limitation, any severance obligation, except as specifically consented
      to by the Parent and Acquisition Sub. 

    

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

    

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

    

    (iv) Seller
      acknowledges and agrees that neither Parent nor Acquisition Sub shall acquire
      any rights or interests of Seller in, or assume or have any obligations or
      liabilities of Seller under, any benefit plans maintained by Seller, or for
      the
      benefit of any employees of Seller, including, without limitation, obligations
      for severance or vacation accrued but not taken.

    

    1.4 Purchase
      Price; Adjustment; Payment.
      

    

    (a) Purchase
      Price.
      In
      consideration of the sale by Seller to Acquisition Sub of the Assets, and
      subject to the assumption by Acquisition Sub of the Assumed Liabilities and
      satisfaction of the conditions contained herein, Parent shall pay to Seller
      an
      amount equal to Five Hundred Thousand dollars ($500,000) (the “Purchase Price”),
      which amount shall be adjusted in accordance herewith. In the event the
      inventory, work in process and materials due on open purchase orders on the
      Closing Date, at cost (the “Closing Inventory”), shall be more than $40,000,
      then such excess amount shall be added to the Purchase Price. In the event
      the
      Closing Inventory shall be less than $40,000, then such deficiency shall be
      deducted from the Purchase Price. The amount of Closing Inventory shall be
      mutually agreed upon between the Purchaser and the Seller.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) Payment
      of Purchase Price.
      The
      Parent shall, upon execution of this Agreement, advance to the Seller One
      Hundred Thousand dollars ($100,000) of the Purchase Price (the “Advance”) via
      wire transfer of immediately available funds into an account designated by
      the
      Seller and at the Closing the Parent shall deliver to the Seller the remaining
      Four Hundred Thousand dollars ($400,000) of the Purchase Price, subject to
      adjustment in accordance with Section 1,4(a), via wire transfer of immediately
      available funds into an account designated by the Seller.
      In the
      event that this Agreement is terminated prior to the Closing in accordance
      with
      Section 2.2 hereof, the Advance shall be immediately due and payable by the
      Seller to the Parent.

     

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      II

    CLOSING
      AND TERMINATION

     

    2.1 Closing
      Date.
      

     

    Subject
      to the satisfaction of the conditions set forth in Sections 6.1 and 6.2 hereof
      (or the waiver thereof by the party entitled to waive that condition), the
      closing of the sale and purchase of the Assets provided for in Section 1.1
      hereof (the “Closing”) shall take place at the offices of Sichenzia Ross
      Friedman Ference located at 1605 Avenue of the Americas, 21st
      Floor,
      New York, NY 10018 (or at such other place as the parties may designate in
      writing) on March 20, 2007, or on such other date as the Seller and the Parent
      may designate. The date on which the Closing shall be held is referred to in
      this Agreement as the “Closing Date”.

     

    2.2 Termination
      of Agreement.

     

    This
      Agreement may be terminated prior to the Closing as follows:

     

    (a) at
      the
      election of the Seller or the Parent on or after March 31, 2007, if the Closing
      shall not have occurred by the close of business on such date, provided that
      the
      terminating party is not in default of any of its obligations
      hereunder;

     

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

     

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

     

    2.3 Procedure
      Upon Termination.
      

     

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

     

    2.4 Effect
      of Termination.

     

    In
      the
      event that this Agreement is validly terminated as provided herein, then each
      of
      the parties shall be relieved of their duties and obligations arising under
      this
      Agreement after the date of such termination and such termination shall be
      without liability to the Parent the Seller; provided, however, that the
      obligations of the parties set forth in Section 9.4 hereof shall survive any
      such termination and shall be enforceable hereunder; provided, further, however,
      that nothing in this Section 2.4 shall relieve the Parent or the Seller of
      any
      liability for a breach of this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE SELLER

    

    The
      Seller hereby represents and warrants to the Parent and Acquisition Sub
      that:

     

    3.1 Organization
      and Good Standing.

     

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

    

    3.2 Authorization
      of Agreement.

     

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

     

    3.3 Records.

     

    The
      books
      of account and other financial Records of Seller as they relate to the Business,
      all of which have been made available to Purchaser, are complete and correct
      in
      all material respects and represent actual, bona fide transactions.

     

    3.4 Conflicts;
      Consents of Third Parties. 

     

    (a) Except
      as
      set forth in Schedule 3.4(a), none of the execution and delivery by the Seller
      of this Agreement and the Seller Documents, the consummation of the transactions
      contemplated hereby or thereby, or compliance by the Seller with any of the
      provisions hereof or thereof will (i) conflict with, or result in the breach
      of,
      any provision of the articles of incorporation or by-laws of the Seller; (ii)
      conflict with, violate, result in the breach or termination of, or constitute
      a
      default under any note, bond, mortgage, indenture, license, agreement or other
      instrument or obligation relating to the Business to which the Seller is a
      party
      or by which the Business or its assets are bound; (iii) violate any statute,
      rule, regulation, order or decree of any governmental body or authority by
      which
      the Seller is bound; or (iv) result in the creation of any Lien upon the
      properties or assets of the Seller except, in case of clauses (ii), (iii) and
      (iv), for such violations, breaches or defaults as would not, individually
      or in
      the aggregate, have a Material Adverse Effect.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

    3.5 Ownership
      and Transfer of Assets.

     

    The
      Seller is the record and beneficial owner of the Assets free and clear of any
      and all Liens. The Seller has the corporate power and authority to sell,
      transfer, assign and deliver such Assets as provided in this Agreement, and
      such
      delivery will convey to the Parent good and marketable title to such Assets,
      free and clear of any and all Liens. 

     

    3.6 Financial
      Statements.

     

    The
      Seller has attached as Schedule 3.6 copies of the unaudited balance sheets
      of
      the Business as at December 31, 2006 and 2005 and the related statements of
      income and of cash flows of the Business for the years then ended (the
“Financial Statements”). Each of the Financial Statements is complete and
      correct in all material respects and in conformity with the practices
      consistently applied by the Seller without modification of the accounting
      principles used in the preparation thereof and or will present fairly the
      financial position, results of operations and cash flows of the Business as
      at
      the dates and for the periods indicated, except for the absence of footnote
      disclosures and the potential for normal audit adjustments and except as
      otherwise set forth on Schedule 3.6.

     

    For
      the
      purposes hereof, the unaudited balance sheet of the Seller as at December 31,
      2006 is referred to as the “Balance Sheet” and December 31, 2006 is referred to
      as the “Balance Sheet Date”. 

     

    3.7 No
      Undisclosed Liabilities.

     

    The
      Business has no indebtedness, obligations or liabilities of any kind (whether
      accrued, absolute, contingent or otherwise, and whether due or to become due)
      that would have been required to be reflected in, reserved against or otherwise
      described on the Balance Sheet or in the notes thereto which was not fully
      reflected in, reserved against or otherwise described in the Balance Sheet
      or
      the notes thereto or was not incurred in the ordinary course of business
      consistent with past practice since the Balance Sheet Date.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    3.8 Absence
      of Certain Developments.
      Except
      as expressly contemplated by this Agreement or as set forth on Schedule 3.8,
      since the Balance Sheet Date:

     

    (i) there
      has
      not been any Material Adverse Change in the Business nor has there occurred
      any
      event which is reasonably likely to result in a Material Adverse Change in
      the
      Business;

     

    (ii) there
      has
      not been any damage, destruction or loss, whether or not covered by insurance,
      with respect to the property and assets of the Business having a replacement
      cost of more than $5,000 for any single loss or $10,000 for all such
      losses;

     

    (iii) the
      Seller has not awarded or paid any bonuses to employees of the Seller related
      to
      the Business with respect to the fiscal year ended 2006, except to the extent
      accrued on the Balance Sheet or entered into any employment, deferred
      compensation, severance or similar agreement (nor amended any such agreement)
      or
      agreed to increase the compensation payable or to become payable by it to any
      of
      the employees, agents or representatives related to the Business or agreed
      to
      increase the coverage or benefits available under any severance pay, termination
      pay, vacation pay, company awards, salary continuation for disability, sick
      leave, deferred compensation, bonus or other incentive compensation, insurance,
      pension or other employee benefit plan, payment or arrangement made to, for
      or
      with such directors, officers, employees, agents or representatives (other
      than
      normal increases in the ordinary course of business consistent with past
      practice and that in the aggregate have not resulted in a material increase
      in
      the benefits or compensation expense of the Business);

     

    (iv) there
      has
      not been any change by the Seller in accounting or tax reporting principles,
      methods or policies related to the Business;

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    (x) the
      Seller, with regard to the Business, has not made or committed to make any
      capital expenditures or capital additions or betterments in excess of $10,000
      individually or $20,000 in the aggregate;

     

    (xi) the
      Seller, with regard to the Business, has not instituted or settled any material
      legal proceeding; and

     

    (xii) the
      Seller has not agreed to do anything set forth in this Section 3.8.

     

    3.9 Taxes.

     

    (a) Except
      as
      set forth on Schedule 3.9 or as would otherwise not be material to Parent’s
      acquisition of the Business, (A) all Tax returns required to be filed by or
      on
      behalf of the Seller have been properly prepared and duly and timely filed
      with
      the appropriate taxing authorities in all jurisdictions in which such Tax
      returns are required to be filed (after giving effect to any valid extensions
      of
      time in which to make such filings), and all such Tax returns were true,
      complete and correct in all material respects; (B) all Taxes payable by or
      on
      behalf of the Seller or in respect of its income, assets or operations have
      been
      fully and timely paid, and adequate reserves or accruals for Taxes have been
      provided in the Closing Date Balance Sheet with respect to any period for which
      Tax Returns have not yet been filed or for which Taxes are not yet due and
      owing; and (C) the Seller has not executed or filed with the IRS or any other
      taxing authority any agreement, waiver or other document or arrangement
      extending or having the effect of extending the period for assessment or
      collection of Taxes (including, but not limited to, any applicable statute
      of
      limitation), and no power of attorney with respect to any Tax matter is
      currently in force. “Tax or Taxes” means all federal, state, local or other
      taxes or similar governmental charges, fees, levies or assessments.

     

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

     

    (c) Parent
      has received complete copies of (A) all federal, state, local and foreign income
      or franchise Tax Returns of the Seller relating to the taxable periods since
      2002 and (B) any audit report issued within the last three years relating to
      any
      material Taxes due from or with respect to the its income, assets or operations.
      All income and franchise Tax returns filed by or on behalf of the Seller for
      the
      taxable years ended on the respective dates set forth on Schedule 3.9 have
      been
      examined by the relevant taxing authority or the statute of limitations with
      respect to such Tax Returns has expired.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d) Schedule
      3.9 lists all material types of Taxes paid and material types of Tax returns
      filed by or on behalf of the Seller. Except as set forth on Schedule 3.9, no
      claim has been made by a taxing authority in a jurisdiction where the Seller
      does not file Tax Returns such that it is or may be subject to taxation by
      that
      jurisdiction. 

     

    (e) Except
      as
      set forth on Schedule 3.9, all deficiencies asserted or assessments made as
      a
      result of any examinations by the IRS or any other taxing authority of the
      Tax
      Returns of or covering or including the Seller have been fully paid, and there
      are no other audits or investigations by any taxing authority in progress,
      nor
      has the Seller received any written notice from any taxing authority that it
      intends to conduct such an audit or investigation. No issue has been raised
      in
      writing by a federal, state, local or foreign taxing authority in any current
      or
      prior examination which, by application of the same or similar principles,
      could
      reasonably be expected to result in a proposed deficiency for any subsequent
      taxable period.

     

    (f) Except
      as
      set forth on 3.9, the Seller has (A) filed a consent pursuant to Section 341(f)
      of the Code or agreed to have Section 341(f)(2) of the Code apply to any
      disposition of a subsection (f) asset (as such term is defined in Section
      341(f)(4) of the Code) owned by the Seller, (B) agreed to or is required to
      make
      any adjustments pursuant to Section 481(a) of the Code or any similar provision
      of state, local or foreign law by reason of a change in accounting method
      initiated by the Seller or has any knowledge that the Internal Revenue Service
      (“IRS”) has proposed any such adjustment or change in accounting method, or has
      any application pending with any taxing authority requesting permission for
      any
      changes in accounting methods that relate to the business or operations of
      the
      Seller, (C) executed or entered into a closing agreement pursuant to Section
      7121 of the Code or any predecessor provision thereof or any similar provision
      of state, local or foreign law with respect to the Seller, or (D) requested
      any
      extension of time within which to file any Tax Return, which Tax Return has
      since not been filed.

     

    (g) No
      property owned by the Seller related to the Business is (i) property required
      to
      be treated as being owned by another Person pursuant to the provisions of
      Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
      immediately prior to the enactment of the Tax Reform Act of 1986, (ii)
      constitutes “tax-exempt use property” within the meaning of Section 168(h)(1) of
      the Code or (iii) is “tax-exempt bond financed property” within the meaning of
      Section 168(g) of the Code.

     

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

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (m) Except
      as
      set forth on Schedule 3.9, the Seller has no elections in effect for federal
      income tax purposes under Sections 108, 168, 338, 441, 463, 472, 1017, 1033
      or
      4977 of the code.

     

    3.10 Real
      Property.
      

     

    Seller
      is
      not transferring to the Parent or the Acquisition Sub herein (i) any real
      property and interests in real property owned in fee by the Seller related
      to
      the Business (individually, an “Owned Property” and collectively, the “Owned
      Properties”), or (ii) any real property and interests in real property leased by
      the Seller related to the Business (individually, a “Real Property Lease” and
      the real properties specified in such leases, together with the Owned
      Properties, being referred to herein individually as a “Seller Property” and
      collectively as the “Seller Properties”) as lessee or lessor. 

     

    3.11 Tangible
      Personal Property.

     

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

     

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

     

    (c) The
      Seller has good and marketable title to all of the items of tangible personal
      property reflected in the Balance Sheet (except as sold or disposed of
      subsequent to the date thereof in the ordinary course of business consistent
      with past practice), free and clear of any and all liens other than as set
      forth
      on Schedule 3.11. All such items of tangible personal property which,
      individually or in the aggregate, are material to the operation of the business
      of the Seller are in good condition and in a state of good maintenance and
      repair (ordinary wear and tear excepted). 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

    3.12 Intangible
      Property.

     

    Schedule
      3.12 contains a complete and correct list of each patent, trademark, trade
      name,
      service mark and copyright owned or used by the Seller solely in connection
      with
      the Business as well as all registrations thereof and pending applications
      therefor, and each license or other agreement relating thereto. Except as set
      forth on Schedule 3.12, each of the foregoing is owned by the party shown on
      such Schedule as owning the same, free and clear of all mortgages, claims,
      liens, security interests, charges and encumbrances and is in good standing
      and
      not the subject of any challenge. To the knowledge of the Seller, there have
      been no claims made and the Seller has not received any notice or otherwise
      knows or has reason to believe that any of the foregoing is invalid or conflicts
      with the asserted rights of others. The Seller possesses, owns or licenses
      all
      patents, patent licenses, trade names, trademarks, service marks, brand marks,
      brand names, copyrights, know-how, formulate and other proprietary and trade
      rights necessary for the conduct of the Business as now conducted, not subject
      to any restrictions and without any known conflict with the rights of others
      and
      has not forfeited or otherwise relinquished any such patent, patent license,
      trade name, trademark, service mark, brand mark, brand name, copyright,
      know-how, formulate or other proprietary right necessary for the conduct of
      the
      Business as conducted on the date hereof. The Seller is not under any obligation
      to pay any royalties or similar payments in connection with any license to
      any
      Affiliate thereof. “Affiliate” means, with respect to any person, any other
      person directly or indirectly controlling, controlled by or under common control
      with such person and for purposes of individuals, Affiliates would include
      an
      individual’s spouse and minor children.

     

    3.13 Material
      Contracts.

     

    Schedule
      3.13 sets forth all of the following Contracts to which the Seller is a party
      or
      by which it is bound to the extent applicable to the Business (collectively,
      the
“Material Contracts”): (i) Contracts with any current officer or director of the
      Seller; (ii) Contracts with any labor union or association representing any
      employee of the Seller; (iii) Contracts pursuant to which any party is required
      to purchase or sell a stated portion of its requirements or output from or
      to
      another party; (iv) Contracts for the sale of any of the assets of the Seller
      other than in the ordinary course of business or for the grant to any person
      of
      any preferential rights to purchase any of its assets; (v) joint venture
      agreements; (vi) material Contracts containing covenants of the Seller not
      to
      compete in any line of business or with any person in any geographical area
      or
      covenants of any other person not to compete with the Seller in any line of
      business or in any geographical area; (vii) Contracts relating to the
      acquisition by the Seller of any operating business or the capital stock of
      any
      other person; (viii) Contracts relating to the borrowing of money; or (ix)
      any
      other Contracts which involve the expenditure of more than $25,000 in the
      aggregate or $10,000 annually or require performance by any party more than
      one
      year from the date hereof. There have been made available to the Parent, its
      affiliates and their representatives true and complete copies of all of the
      Material Contracts. Except as set forth on Schedule 3.13, all of the Material
      Contracts and other agreements are in full force and effect and are the legal,
      valid and binding obligation of the Seller, enforceable against it in accordance
      with its terms, subject to applicable bankruptcy, insolvency, reorganization,
      moratorium and similar laws affecting creditors’ rights and remedies generally
      and subject, as to enforceability, to general principles of equity (regardless
      of whether enforcement is sought in a proceeding at law or in equity). Except
      as
      set forth on Schedule 3.13, the Seller is not in default in any material respect
      under any Material Contracts, nor, to the knowledge of the Seller, is any other
      party to any Material Contract in default thereunder in any material
      respect.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    3.14 Employee
      Benefits.

     

    (a) Schedule
      3.14 sets forth a complete and correct list of (i) all “employee benefit plans”,
      as defined in Section 3(3) of the Employee Retirement Income Security Act of
      1974, as amended (“ERISA”), and any other pension plans or employee benefit
      arrangements, programs or payroll practices (including, without limitation,
      severance pay, vacation pay, company awards, salary continuation for disability,
      sick leave, retirement, deferred compensation, bonus or other incentive
      compensation, stock purchase arrangements or policies, hospitalization, medical
      insurance, life insurance and scholarship programs) maintained by the Seller
      or
      to which the Seller contributes or is obligated to contribute thereunder with
      respect to employees of the Seller related to the Business(“Employee Benefit
      Plans”) and (ii) all “employee pension plans”, as defined in Section 3(2) of
      ERISA, maintained by the Seller or any trade or business (whether or not
      incorporated) which are under control, or which are treated as a single
      employer, with Seller under Section 414(b), (c), (m) or (o) of the (“ERISA
      Affiliate”) or to which the Seller or any ERISA Affiliate contributed or is
      obligated to contribute thereunder (“Pension Plans”) related to the Business.
      Schedule 3.14 clearly identifies, in separate categories, Employee Benefit
      Plans
      or Pension Plans that are (i) subject to Section 4063 and 4064 of ERISA
      (“Multiple Employer Plans”), (ii) multiemployer plans (as defined in Section
      4001(a)(3) of ERISA) (“Multiemployer Plans”) or (iii) “benefit plans”, within
      the meaning of Section 5000(b)(1) of the Code providing continuing benefits
      after the termination of employment (other than as required by Section 4980B
      of
      the Code or Part 6 of Title I of ERISA and at the former employee’s or his
      beneficiary’s sole expense).

     

    (b) The
      Purchaser would not have any withdrawal or other liability (contingent or
      otherwise) under Title IV of ERISA with respect to any Multiple Employer Plan
      or
      Multiemployer Plan if they had not purchased the Assets from Seller at the
      Effective Time in accordance with the terms of this Agreement.

     

    (c) Each
      of
      the Employee Benefit Plans and Pension Plans intended to qualify under Section
      401 of the Code (“Qualified Plans”) so qualify and the trusts maintained thereto
      are exempt from federal income taxation under Section 501 of the Code, and,
      except as disclosed on Schedule 3.16(c), nothing has occurred with respect
      to
      the operation of any such plan which could cause the loss of such qualification
      or exemption or the imposition of any liability, penalty or tax under ERISA
      or
      the Code.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

    (e) The
      benefit liabilities, as defined in Section 4001(a)(16) of ERISA, of each of
      the
      Employee Benefit Plans and Pension Plans subject to Title IV of ERISA using
      the
      actuarial assumptions that would be used by the Pension Benefit Guaranty
      Corporation (the “PBGC”) in the event it terminated each such plan do not exceed
      the fair market value of the assets of each such plan. The liabilities of each
      Employee Benefit Plan that has been terminated or otherwise wound up, have
      been
      fully discharged in full compliance with applicable Law.

     

    (f) There
      has
      been no “reportable event” as that term is defined in Section 4043 of ERISA and
      the regulations thereunder with respect to any of the Employee Benefit Plans
      or
      Pension Plans subject to Title IV of ERISA which would require the giving of
      notice, or any event requiring notice to be provided under Section 4041(c)(3)(C)
      or 4063(a) of ERISA.

     

    (g) There
      has
      been no violation of ERISA with respect to the filing of applicable returns,
      reports, documents and notices regarding any of the Employee Benefit Plans
      or
      Pension Plans with the Secretary of Labor or the Secretary of the Treasury
      or
      the furnishing of such notices or documents to the participants or beneficiaries
      of the Employee Benefit Plans or Pension Plans.

     

    (h) True,
      correct and complete copies of the following documents, with respect to each
      of
      the Employee Benefit Plans and Pension Plans (as applicable), have been
      delivered to the Parent (A) any plans and related trust documents, and all
      amendments thereto, (B) the most recent Forms 5500 for the past three years
      and
      schedules thereto, (C) the most recent financial statements and actuarial
      valuations for the past three years, (D) the most recent Internal Revenue
      Service determination letter, (E) the most recent summary plan descriptions
      (including letters or other documents updating such descriptions) and (F)
      written descriptions of all non-written agreements relating to the Employee
      Benefit Plans and Pension Plans.

     

    (i) There
      are
      no pending Legal Proceedings which have been asserted or instituted against
      any
      of the Employee Benefit Plans or Pension Plans, the assets of any such plans
      or
      the Seller, or the plan administrator or any fiduciary of the Employee Benefit
      Plans or Pension Plans with respect to the operation of such plans (other than
      routine, uncontested benefit claims), and there are no facts or circumstances
      which could form the basis for any such Legal Proceeding.

     

    (j) Each
      of
      the Employee Benefit Plans and Pension Plans has been maintained, in all
      material respects, in accordance with its terms and all provisions of applicable
      Law. All amendments and actions required to bring each of the Employee Benefit
      Plans and Pension Plans into conformity in all material respects with all of
      the
      applicable provisions of ERISA and other applicable Laws have been made or
      taken
      except to the extent that such amendments or actions are not required by law
      to
      be made or taken until a date after the Closing Date and are disclosed on
      Schedule 3.16(j).

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (k) The
      Seller and any ERISA Affiliate which maintains a “benefits plan” within the
      meaning of Section 5000(b)(1) of ERISA, have complied with the notice and
      continuation requirements of Section 4980B of the Code or Part 6 of Title I
      of
      ERISA and the applicable regulations thereunder.

     

    (l) None
      of
      the Seller, any ERISA Affiliate or any organization to which any is a successor
      or parent corporation, has divested any business or entity maintaining or
      sponsoring a defined benefit pension plan having unfunded benefit liabilities
      (within the meaning of Section 4001(a)(18) of ERISA) or transferred any such
      plan to any person other than the Seller or any ERISA Affiliate during the
      five-year period ending on the Closing Date.

     

    (m) 
      Neither
      the Seller nor any “party in interest” or “disqualified person” with respect to
      the Employee Benefit Plans or Pension Plans has engaged in a “prohibited
      transaction” within the meaning of Section 4975 of the Code or Section 406 of
      ERISA.

     

    (n) Neither
      the Seller nor any ERISA Affiliate has terminated any Employee Benefit Plan
      or
      Pension Plan subject to Title IV of ERISA, or incurred any outstanding liability
      under Section 4062 of ERISA to the Pension Benefit Guaranty Corporation or
      to a
      trustee appointed under Section 4042 of ERISA.

     

    (o) Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions contemplated hereby will (i) result in any payment becoming due
      to
      any employee of the Seller; (ii) increase any benefits otherwise payable under
      any Employee Benefit Plan or Pension Plan; or (iii) result in the acceleration
      of the time of payment or vesting of any such benefits.

     

    (p) No
      stock
      or other security issued by Seller forms or has formed a material part of the
      assets of any Employee Benefit Plan or Pension Plan.

     

    3.15 Labor.

     

    (a) Except
      as
      set forth on Schedule 3.15, the Seller is not party to any labor or collective
      bargaining agreement and there are no labor or collective bargaining agreements
      which pertain to employees of the Seller engaged in the Business. The Seller
      has
      delivered or otherwise made available to the Parent true, correct and complete
      copies of the labor or collective bargaining agreements listed on Schedule
      3.15,
      together with all amendments, modifications or supplements thereto.

     

    (b) Except
      as
      set forth on Schedule 3.15, no employees of the Seller related to the Business
      are represented by any labor union. No labor union or group of employees of
      the
      Seller has made a pending demand for recognition, and there are no
      representation proceedings or petitions seeking a representation proceeding
      presently pending or, to the best knowledge of the Seller, threatened to be
      brought or filed, with the National Labor Relations Board or other labor
      relations tribunal. There is no organizing activity involving the Seller pending
      or, to the best knowledge of the Seller, threatened by any labor union or group
      of employees of the Seller related to the Business.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

    3.16 Litigation.

     

    Except
      as
      set forth in Schedule 3.16, there is no suit, action, proceeding, or order
      pending or, to the knowledge of the Seller, overtly threatened against the
      Seller or to the knowledge of the Seller, pending or threatened, against any
      of
      the officers, directors or key employees of the Seller with respect to the
      Business activities on behalf of the Seller, or to which the Seller is otherwise
      a party, which, if adversely determined, would have a Material Adverse Effect,
      before any court, or before any governmental department, commission, board,
      agency, or instrumentality; nor to the knowledge of the Seller is there any
      reasonable basis for any such action, proceeding, or investigation. The Seller
      is not subject to any judgment, order or decree of any court or governmental
      agency except to the extent the same are not reasonably likely to have a
      Material Adverse Effect and is not engaged in any legal action to recover monies
      due it or for damages sustained by it. Nor is there, to the knowledge of the
      Seller, and investigation or claim pending or overtly threatened against the
      Seller or pending or threatened, against any of the officers, directors or
      key
      employees of the Seller with respect to the Business activities on behalf of
      the
      Seller, or to which the Seller is otherwise a party. 

     

    3.17 Compliance
      with Laws; Permits.

     

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

     

    3.18 Environmental
      Matters.

     

    Except
      as
      set forth on Schedule 3.18 hereto, or as would not adversely impact the Business
      in Parent’s hands:

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

    3.19 Insurance.

     

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

     

    3.20 Inventories;
      Receivables; Payables.

     

    (a) The
      inventories of the Seller related to the Business are in good and marketable
      condition, and are saleable in the ordinary course of business. Schedule 3.20
      sets forth the reserves that have been reflected in the Balance Sheet by the
      Seller for shorts, drops, off-cuts, obsolete or otherwise unusable inventory
      in
      connection with the Business, which reserves were calculated in a manner
      consistent with past practice.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (b) All
      accounts receivable of the Business reflected in the Balance Sheet sheet or
      arising after the date thereof have arisen from bona fide transactions in the
      ordinary course of business consistent with past practice. 

     

    (c) All
      accounts payable of the Business reflected in the Balance Sheet or arising
      after
      the date thereof are the result of bona fide transactions in the ordinary course
      of business.

     

    3.21 Customers
      and Suppliers.

     

    Schedule
      3.21 sets forth a list of the twenty (20) largest customers and the twenty
      (20) largest
      suppliers of the Business, as measured by the dollar amount of purchases
      therefrom or thereby, during each of the fiscal years ended 2005 and 2006,
      showing the approximate total sales by the Business to each such customer and
      the approximate total purchases by the Business from each such supplier, during
      such period. Since the Balance Sheet Date, the Seller has not been notified
      of
      any material adverse change in the business relationship of the Seller with
      customer or supplier listed on Schedule 3.21 and has not received complaints
      or
      notices of default from such customers or suppliers, in each case except as
      set
      forth on Schedule 3.21.

     

    3.22 Financial
      Advisors.

     

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

    

    3.23 Patriot
      Act.

     

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

    

    3.24  No
      Misrepresentations.

     

    No
      representation or warranty of the Seller contained in this Agreement or in
      any
      schedule hereto or in any certificate furnished by the Seller to the Parent
      pursuant to the Article VI hereof, contains any untrue statement of a material
      fact or omits to state a material fact necessary to make the statements
      contained herein or therein not misleading.

     

    
      
        
        

      

      
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    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER AND ACQUISITION SUB

     

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

    

    4.1 Organization
      and Good Standing.

     

    (a) The
      Parent is a corporation duly organized, validly existing and in good standing
      under the laws of the State of New Jersey; and

     

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

     

    4.2 Authorization
      of Agreement.

     

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

     

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

     

    4.3 Conflicts;
      Consents of Third Parties.
      

     

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

     

    
      
        
        

      

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

     

    4.4 Litigation.

     

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

     

    4.5 Financial
      Advisors.

     

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

     

    4.6 Patriot
      Act.

     

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

    

    ARTICLE
      V

    COVENANTS

     

    5.1 Access
      to Information.

     

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

     

    
      
        
        

      

      
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    5.2 Conduct
      of the Business Pending the Closing.

     

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

     

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

     

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

     

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

     

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

     

    (v) comply
      in
      all material respects with applicable Laws, including, without limitation,
      Environmental Laws related to the Business.

     

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

     

    (i) 
      (A)
      materially increase the annual level of compensation of any of its employees
      related to the Business, (B) increase the annual level of compensation payable
      or to become payable by the it to any of its executive officers, (C) grant
      any
      unusual or extraordinary bonus, benefit or other direct or indirect compensation
      to any employee, director or consultant related to the Business, other than
      in
      the ordinary course consistent with past practice and in such amounts as are
      fully reserved against in the Financial Statements, (D) increase the coverage
      or
      benefits available under any (or create any new) severance pay, termination
      pay,
      vacation pay, company awards, salary continuation for disability, sick leave,
      deferred compensation, bonus or other incentive compensation, insurance, pension
      or other employee benefit plan or arrangement made to, for, or with any of
      its
      directors, officers, employees, agents or representatives or otherwise modify
      or
      amend or terminate any such plan or arrangement or (E) enter into any
      employment, deferred compensation, severance, consulting, non-competition or
      similar agreement (or amend any such agreement) involving a director, officer
      or
      employee of the Seller in his or her capacity as a director, officer or employee
      of the Seller related to the Business;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (iv) acquire
      any material properties or assets or sell, assign, transfer, convey, lease
      or
      otherwise dispose of any of its material properties or assets (except for fair
      consideration in the ordinary course of business consistent with past practice)
      except, with respect to the items listed on Schedule
      5.2(b)(viii)
      hereto,
      as previously consented to by the Parent;

     

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

     

    (vi) enter
      into any commitment for capital expenditures in excess of $5,000 for
      any
      individual commitment and $10,000 for
      all
      commitments in the aggregate;

     

    (vii) enter
      into, modify or terminate any labor or collective bargaining agreement or,
      through negotiation or otherwise, make any commitment or incur any liability
      to
      any labor organization with respect to it;

     

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

     

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

     

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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

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

    

    5.3 Consents.

     

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

     

    5.4 Other
      Actions.

     

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

     

    5.5 No
      Solicitation.

     

    The
      Seller will not, and will not cause or permit any of its directors, officers,
      employees, representatives or agents (collectively, the “Representatives”) to,
      directly or indirectly, (i) discuss, negotiate, undertake, authorize, recommend,
      propose or enter into any transaction involving the Business other than the
      transactions contemplated by this Agreement (an “Acquisition Transaction”), (ii)
      facilitate, encourage, solicit or initiate discussions, negotiations or
      submissions of proposals or offers in respect of an Acquisition Transaction,
      (iii) furnish or cause to be furnished, to any Person, any information
      concerning its business, operations, properties or assets in connection with
      an
      Acquisition Transaction, or (iv) otherwise cooperate in any way with, or assist
      or participate in, facilitate or encourage, any effort or attempt by any other
      Person to do or seek any of the foregoing. The Seller will inform the Parent
      in
      writing immediately following the receipt by the Seller or any Representative
      of
      any proposal or inquiry in respect of any Acquisition Transaction.

     

    5.6 Preservation
      of Records.

     

    Subject
      to Section 8.4(e) hereof (relating to the preservation of Tax records), the
      Seller, the Parent and Acquisition Sub agree that each of them shall preserve
      and keep the records held by it relating to the business of the Seller for
      a
      period of three years from the Closing Date and shall make such records and
      personnel available to the other as may be reasonably required by such party
      in
      connection with, among other things, any insurance claims by, legal proceedings
      against or governmental investigations of the Seller, the Parent or Acquisition
      Sub or any of their Affiliates or in order to enable the Seller, the Parent
      or
      Acquisition Sub to comply with their respective obligations under this
      Agreement, the Employment Agreement and each other agreement, document or
      instrument contemplated hereby or thereby. In the event the Seller, the Parent
      or Acquisition Sub wishes to destroy such records after that time, such party
      shall first give ninety (90) days prior written notice to the other and such
      other party shall have the right at its option and expense, upon prior written
      notice given to such party within that ninety (90) day period, to take
      possession of the records within one hundred and eighty (180) days after the
      date of such notice.

     

    
      
        
        

      

      
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    5.7 Publicity.

     

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

     

    5.8 Use
      of
      Name.
      

     

    The
      Seller hereby agrees that upon the consummation of the transactions contemplated
      hereby, the Parent and Acquisition Sub shall have the sole right to the use
      of
      the name “FuelMeister” and the domain names www.fuelmeister.com and www.makebiodiesel.com
      and,
      other than in connection with a reasonable transition period following the
      Closing in which the parties will cooperate with each other to separate the
      FuelMeister name and marks from Seller’s ongoing business, the Seller shall not,
      and shall not cause or permit any Affiliate to use such name or any variation
      or
      simulation thereof. 

     

    5.9 Management
      Agreement.

     

    The
      Seller hereby agrees that, on or prior to the Closing Date, the Seller shall
      enter into a management services agreement, substantially in the form of Exhibit
      B hereto (the “Management Agreement”).

     

    5.10 Financial
      Statements.

     

    The
      Seller shall cooperate with the Parent to provide all information required
      for
      the completion of audited financial statements of the Business to be prepared
      and delivered no later than 4 days from the Closing Date.

    

    5.11 Non-Competition.
      

     

    For
      a
      period of three years after the Closing Date, Sellers agree not to engage in
      any
      of the following competitive activities: (a) engaging directly or indirectly
      in
      any business or activity involving the development, manufacture or sale of
      personal scale biodiesel processing products with less than 200 gallons per
      day
      of output; (b) interfering with any contractual or other relationship between
      the Business or the Purchaser and any employee, agent, representative,
      contractor, supplier, vendor, customer, franchisee, lender or investor; or
      (c)
      using, for the benefit of any person or entity other than the Business, any
      confidential information of the Business or the Purchaser. In addition, the
      Seller shall not make or permit the making of any negative statement of any
      kind
      concerning the Business, the Purchaser or their affiliates, or their directors,
      officers or agents; provided that the foregoing shall not prohibit or limit
      the
      Seller’s ability to respond truthfully to any inquiries from or satisfy any
      disclosure requirements to (a) existing or potential sources of debt or equity
      financing, (b) existing or potential parties to business transactions with
      Seller following the Closing, (c) any governmental or regulatory authorities,
      or
      (d) any party to any legal or similar adversarial proceeding involving the
      Seller or its affiliates, nor shall it apply to any statements made during
      the
      course of any legal action between the parties

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    5.12 Insurance
      Coverage.
      

     

    The
      Parent and Acquisition Sub hereby covenants and agrees that subsequent to the
      Closing Date it shall use commercially reasonable efforts to keep in full force
      and effect liability insurance at least comparable in amount and scope of
      coverage to that currently maintained with respect to the Business by the
      Seller. 

    

    5.13 Web
      Site Crossover.
      The
      Sellers, Parent and Acquisition Sub hereby covenants and agrees
      that:

     

    (a) At
      the
      Closing Seller shall:

     

    (i) post
      a
      notice on the Seller’s current web site, mutually agreed upon by all of the
      parties, that the FuelMeister products have been sold to the Acquisition Sub,
      but despite the reference to Biodiesel Solutions all products can be ordered
      at
      (775) 358-6400 from Acquisition Sub;

     

    (ii) turn
      off
      the Cart-32 commerce engine, to prevent internet orders going to Seller;
      and

     

    (iii) immediately
      upon being notified that Acquisition Sub’s web site is operational, take down
      the current web site and remove all references to FuelMeister except sale
      notification and a link to Acquisition Sub’s web site, which shall remain in
      place for 36 weeks.

     

    (b) Within
      two weeks of the Closing Date, Parent and Acquisition Sub shall take Acquisition
      Sub’s web site source code, replace Seller’s name throughout site, and enable
      e-commerce, and host the site under its own URL.

     

    
      
        
        

      

      
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    ARTICLE
      VI

    CONDITIONS
      TO CLOSING

     

    6.1 Conditions
      Precedent to Obligations of Parent and Acquisition Sub.
      

     

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

     

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

     

    (b) the
      Seller shall have performed and complied in all material respects with all
      obligations and covenants required by this Agreement to be performed or complied
      with by it on or prior to the Closing Date, including, without limitation,
      those
      set forth on Schedule 6.1 attached hereto;

     

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

     

    (d) there
      shall not have been or occurred any Material Adverse Change;

     

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

     

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

     

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

     

    (h) the
      Management Agreement shall have been executed by Seller.

     

    6.2 Conditions
      Precedent to Obligations of the Seller.
      

     

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

     

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

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

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

     

    (c) the
      Parent and Acquisition Sub shall have performed and complied in all material
      respects with all obligations and covenants required by this Agreement to be
      performed or complied with by Parent and Acquisition Sub on or prior to the
      Closing Date, including, without limitation, those set forth on Schedule 6.2
      attached hereto

     

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

     

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

     

    ARTICLE
      VII

    DOCUMENTS
      TO BE DELIVERED

     

    7.1 Documents
      to be Delivered by the Seller.
      

     

    At
      the
      Closing, the Seller shall deliver, or cause to be delivered, to the Parent
      and
      Acquisition Sub the following:

     

    (a) copies
      of
      all consents and waivers referred to in Section 6.1(e) hereof;

     

    (b) Management
      Agreement, substantially in the form of Exhibit B hereto, duly executed by
      the
      Seller; and

     

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

     

    7.2 Documents
      to be Delivered by the Parent and Acquisition Sub.
      

     

    At
      the
      Closing, the Parent and/or Acquisition Sub shall deliver to the Seller the
      following

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

    ARTICLE
      VIII

    INDEMNIFICATION

     

    8.1 Indemnification.

     

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

     

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

     

    (ii) subject
      to Section 9.2, any and all losses, liabilities, obligations, damages, costs
      and
      expenses based upon, attributable to or resulting from the failure of any
      representation or warranty of the Seller set forth in Section 3 hereof, or
      any
      representation or warranty contained in any certificate delivered by or on
      behalf of the Seller pursuant to Article VI of this Agreement, to be true and
      correct in all respects as of the date made; 

     

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

     

    (iv) any
      and
      all losses (including any loss of use of Seller Property or any of the tangible
      personal property of the Seller, liabilities, obligations, claims, damages,
      costs and expenses arising from:

     

    (A)
      any
      failure of any of the representations and warranties contained in Section
      3.20 of
      this
      Agreement, or any representation or warranty with respect to environmental
      matters contained in any certificate delivered by or on behalf of the Seller
      pursuant to this Agreement, to have been true and correct in all respects as
      of
      the date made;

     

    (B)
      any
      Release in, on, at, or from the Seller Properties which occurred, or resulted
      from operations occurring, as of or prior to the Closing;

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (C)
      any
      tort liability to third parties as a result of any Releases or from exposure
      to
      Hazardous Materials arising from any Releases as of or prior to the
      Closing;

     

    (D)
      notification or designation under any Environmental Law as a potentially
      responsible party for onsite or offsite disposal of Hazardous Materials, which
      disposal occurred as of or prior to the Closing, or the listing of any Purchased
      Asset on the CERCLA National Priorities List or any similar list under any
      Environmental Law as a result of onsite disposal of Hazardous Materials as
      of or
      prior to the Closing; and

     

    (E)
      any
      fines or penalties with respect to any violation of Environmental Law occurring
      as of or prior to the Closing; and

     

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

     

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

     

    (i) subject
      to Section 9.2, any and all Losses based upon, attributable to or resulting
      from
      the failure of any representation or warranty of the Parent sand Acquisition
      Sub
      set forth in Section 4 hereof, or any representation or warranty contained in
      any certificate delivered by or on behalf of the Parent pursuant to Article
      VI
      of this Agreement, to be true and correct as of the date made;

     

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

     

    (iii) any
      and
      all Expenses incident to the foregoing; and

     

    (iv) any
      and
      all liabilities of the Parent and Acquisition Sub of every kind, nature and
      description, absolute or contingent, existing as against the Parent and
      Acquisition Sub subsequent to the Closing Date coming into being or arising
      by
      reason of any state of facts existing, or any transaction entered into,
      subsequent to the Closing Date, except to the extent that the same has occurred
      due to any actions of the Seller prior to the Closing Date. 

     

    8.2 Limitations
      on Indemnification.

     

    (a) An
      indemnifying party shall not have any liability under Section 8.1(a)(ii) or
      Section 8.1(b)(i) hereof unless the aggregate amount of Losses and Expenses
      to
      the indemnified parties finally determined to arise thereunder based upon,
      attributable to or resulting from the failure of any representation or warranty
      to be true and correct, other than the representations and warranties set forth
      in Sections 3.7, 3.11, 3.16, 3.20, 3.22 and 4.5 hereof, exceeds $10,000 (the
      “Basket”) and, in such event, the indemnifying party shall be required to pay
      the entire amount of such Losses and Expenses in excess of $10,000 (the
“Deductible”).

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (b) Nothwithstanding
      anything herein to the contrary, an indemnifying party shall have no liability
      under Section 8.1(a)(i), (ii), (iv) or (v) or 8.1(b)(i) or (iii), other than
      claims made on or prior to the date eighteen (18) months from the Closing
      Date.

     

    (c) Nothwithstanding
      anything herein to the contrary, except with respect to third party claims
      concerning any product sold by the Seller prior to the Closing Date which
      alleges the occurrence of any loss or injury resulting from either an alleged
      defect in design, manufacture or materials of any product, an alleged failure
      to
      warn as to the condition or use of any product, or an alleged breach of implied
      warranties or representations made with respect to any product, Seller’s
      aggregate liability under this Article VIII shall not exceed the Purchase
      Price.

     

    8.3 Indemnification
      Procedures.

     

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

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    8.4 Exclusive
      Remedy.
      The
      parties agree that the indemnification provisions of this Article VIII shall
      be
      the sole and exclusive remedy of each party to this Agreement with respect
      to
      any claim arising out of the transactions contemplated by this Agreement.

     

    ARTICLE
      IX

    MISCELLANEOUS

     

    9.1 Payment
      of Sales, Use or Similar Taxes.
      

     

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

     

    9.2 Survival
      of Representations and Warranties.
      

     

    The
      parties hereto hereby agree that the representations and warranties contained
      in
      this Agreement or in any certificate, document or instrument delivered in
      connection herewith, shall survive the execution and delivery of this Agreement,
      and the Closing hereunder, regardless of any investigation made by the parties
      hereto; provided, however, that any claims or actions with respect thereto
      shall
      terminate unless within eighteen (18) months after the Closing Date written
      notice of such claims is given to the Seller or such actions are
      commenced.

     

    9.3 Expenses.
      

     

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

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    9.4 Specific
      Performance.
      

     

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

     

    9.5 Further
      Assurances.
      

     

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

     

    9.6 Submission
      to Jurisdiction; Consent to Service of Process.

     

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

     

    (b) Each
      of
      the parties hereto hereby consents to process being served by any party to
      this
      Agreement in any suit, action or proceeding by the mailing of a copy thereof
      in
      accordance with the provisions of Section 9.8.

     

    (c) Entire
      Agreement; Amendments and Waivers. This Agreement (including the schedules
      and
      exhibits hereto) represents the entire understanding and agreement between
      the
      parties hereto with respect to the subject matter hereof and can be amended,
      supplemented or changed, and any provision hereof can be waived, only by written
      instrument making specific reference to this Agreement signed by the party
      against whom enforcement of any such amendment, supplement, modification or
      waiver is sought. No action taken pursuant to this Agreement, including without
      limitation, any investigation by or on behalf of any party, shall be deemed
      to
      constitute a waiver by the party taking such action of compliance with any
      representation, warranty, covenant or agreement contained herein. The waiver
      by
      any party hereto of a breach of any provision of this Agreement shall not
      operate or be construed as a further or continuing waiver of such breach or
      as a
      waiver of any other or subsequent breach. No failure on the part of any party
      to
      exercise, and no delay in exercising, any right, power or remedy hereunder
      shall
      operate as a waiver thereof, nor shall any single or partial exercise of such
      right, power or remedy by such party preclude any other or further exercise
      thereof or the exercise of any other right, power or remedy. All remedies
      hereunder are cumulative and are not exclusive of any other remedies provided
      by
      law.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

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

     

    9.7 Table
      of Contents and Headings.
      

     

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

     

    9.8 Notices.
      

     

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

     

    

    If
      to
      Parent or Acquisition Sub: 

     

    
      	 	
              Renewal
                Fuels, Inc.

            
	 	
              1818
                North Farwell Avenue

            
	 	
              Milwaukee,
                Wisconsin 53202

            
	 	
              Attention:
                President and Chief Executive Officer

            
	 	
              Telephone:
                (414) 283-2616

            
	 	
              Facsimile:
                (312) 873-3739

            
	 	 
	
              With
                copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

            
	 	
              1065
                Avenue of the Americas

            
	 	
              New
                York, New York 10018

            
	 	
              Attention:
                Thomas A. Rose, Esq.

            
	 	
              Telephone:
                (212) 930-9700

            
	 	
              Facsimile:
                (212) 930-9725

            
	 	 
	
              If
                to Seller:

            	
              Biodiesel
                Solutions, Inc.

            
	 	
              1395
                Greg Street, Suite #102

            
	 	
              Sparks,
                Nevada 89431

            
	 	
              Attention:
                President

            
	 	
              Telephone:
                (775) 358-6400

            
	 	
              Facsimile:
                (775) 358-6499

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              With
                copy to:

            	
              Hale
                Lane

            
	 	
              5441
                Kietzke Lane, Second Floor

            
	
               

            	
              Reno,
                Nevada 89511

            
	 	
              Attention:
                David A. Garcia, Esq.

            
	 	
              Telephone:
                (775) 327-3000

            
	 	
              Facsimile:
                (775) 786-6179

            

    

     

    9.9 Severability.
      

     

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

     

    9.10 Binding
      Effect; Assignment.

     

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

     

    [REMAINDER
      OF PAGE INTENTIONALL LEFT BLANK]

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed on the day and year first above written.

     

    
      	 	 	 
	 	
              BIODIESEL
                SOLUTIONS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              RUDOLF A. WIEDEMANN
	 	
              
Name:
              Rudolf A. Wiedemann
	 	Title:
              CEO

      	
            	 	 
	 	RENEWAL FUELS, INC.
	 
 	 
 	 
 
	
            	By:  	/s/
              JOHN
              KING
	 	
              
Name:
              John King
	 	Title:
              President

    

     

    
      	
            	 	 
	 	
              CRIVELLO
                GROUP, LLC

            
	 
 	 
 	 
 
	
            	By:  	/s/ FRANK CRIVELLO
	 	
              
Name:
              Frank Crivello
	 	
              Title:
                Managing Member

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    Schedule
      1.1 - List of Assets

    

    What
      is
      included in the Business (all as of the closing date of sale):

    

    
      	 	
              ·

            	
              All
                FuelMeister name brands, trademarks, copyrights and all other related
                rights.

            

    

     

    
      	 	
              ·

            	
              Manufacturing
                and marketing ownership of the following
                products:

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                II

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                II eXpansion Tank

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                II Dual

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                Upgrade Kit

            

    

     

    
      	 	
              ·

            	
              Oil
                Pre-heater Kit

            

    

     

    
      	 	
              ·

            	
              Oil
                Transfer Kit

            

    

     

    
      	 	
              ·

            	
              Fuel
                Station Kit

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                II Dryer Lit

            

    

     

    
      	 	
              ·

            	
              Field
                Test Kit

            

    

     

    
      	 	
              ·

            	
              All
                spare parts associated with the above
                products.

            

    

     

    
      	 	
              ·

            	
              All
                copyrighted FuelMeister documents, literature, videos,
                photos

            

    

     

    
      	 	
              ·

            	
              Current
                Biodiesel Solutions Website source files & CART 32 e-commerce module
                interface with Biodiesel Solutions names and logos.   Buyer is
                responsible for “name change” at his cost. 

            

    

     

    
      	 	
              ·

            	
              Tooling,
                fixtures, procedures, documents related directly to FuelMeister
                production, including shop furniture at book value. Shop tooling
                and
                furniture is estimated at $9,145, and includes the following (quantity,
                unit cost):

            

    

     

    
      	 	
              ·

            	
              Pallet
                Jack (1 @ $499)

            

    

     

    
      	 	
              ·

            	
              Hand
                Truck (1 @ $89)

            

    

     

    
      	 	
              ·

            	
              Band
                Strap Machine w/crimper (1@ $221)

            

    

     

    
      	 	
              ·

            	
              Fixed
                Stairway (1 @ $1,000)

            

    

     

    
      	 	
              ·

            	
              Mobile
                OSHA Step (1 @ $205) 

            

    

     

    
      	 	
              ·

            	
              Peanut
                Hopper (1 @ $50)

            

    

     

    
      	 	
              ·

            	
              Fold
                Up Tables (5 @ $49)

            

    

     

    
      	 	
              ·

            	
              Shelves,
                Pizza style, some rolling (12 @
                $89)

            

    

     

    
      	 	
              ·

            	
              Work
                Tables (white top) (12 @ $236)

            

    

     

    
      	 	
              ·

            	
              Rubber
                Maid Carts (2 @ $129)

            

    

     

    
      	 	
              ·

            	
              Drill
                Press (1 @ $300)

            

    

     

    
      	 	
              ·

            	
              Hand
                Drills (Battery) (5 @ $199)

            

    

     

    
      	 	
              ·

            	
              Table
                Vise (4 @ $59)

            

    

     

    
      	 	
              ·

            	
              Hand
                Tools for Each Station (various, estimated total value
                $800)

            

    

     

    
      	 	
              ·

            	
              Plastic
                Chop Saw (1 @ $99)

            

    

     

    
      	 	
              ·

            	
              Pipe
                Clamp (1 @ $49)

            

    

     

    
      	 	
              ·

            	
              Cutting
                Table and Roll Stand (1 @ $199)

            

    

     

    
      	 	
              ·

            	
              Knowledge
                base for customer service and
                support

            

    

     

    
      	 	
              ·

            	
              All
                engineering and component specification files associated with
                FuelMeister.

            

    

     

    
      	 	
              ·

            	
              All
                FuelMeister vendor and purchase history
                files.

            

    

     

    
      	 	
              ·

            	
              A
                copy of all Intuit QuickBooksTM accounting data files since Aug 2004
                subject to non-disclosure agreement for BDS financial performance
                prior to
                the sale.

            

    

     

    
      	 	
              ·

            	
              FuelMeister
                Customer files of all house accounts and dealer customers (where
                identified), provided in hard
                format.

            

    

     

    
      	 	
              ·

            	
              Dealer
                network and training information, subject to the understanding that
                Dealers are independent companies and that either party may end dealer
                agreement at any time.

            

    

     

    
      	 	
              ·

            	
              Unfulfilled
                and unpaid order backlog at closing
                date.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ·

            	
               In
                the event the inventory, work in process and materials due on open
                purchase orders on the Closing Date, at cost (the “Closing Inventory”),
                shall be more than $40,000, then such excess amount shall be added
                to the
                Purchase Price. In the event the Closing Inventory shall be less
                than
                $40,000, then such deficiency shall be deducted from the Purchase
                Price.
                The amount of Closing Inventory shall be mutually agreed upon between
                the
                Purchaser and the Seller.

            

    

     

    
      	 	
              ·

            	
              Agreement
                not to compete with personal-scale products (<200
                GPD)

            

    

     

    
      	 	
              ·

            	
              Assignment
                of provisional patent for Direct Catalyst Injection (lye lid), with
                reciprocal non-exclusive rights to be granted to
                BSI

            

    

     

    
      	 	
              ·

            	
              www.fuelmeister.com
                and www.makebiodiesel.com
                domain names.

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Schedule
      1.2 (a) - Accounts Receivable, Excluded Assets

    

    
      	
              ·

            	
              Seller
                will present an Accounts Receivable as listing from QuickBooks printed
                one
                day prior to Closing.

            

    

     

    
      	
              ·

            	
              Excluded
                Assets:

            

    

     

    
      	 	
              ·

            	
              Biodiesel
                Solutions company name, logo, marks,
                copyrights

            

    

     

    
      	 	
              ·

            	
              Biodiesel
                Solutions equity or tangible assets (including Accounts Receivable)
                other
                than named above

            

    

     

    
      	 	
              ·

            	
              Biodiesel
                Solutions intellectual property

            

    

     

    
      	 	
              ·

            	
              Building
                Lease

            

    

     

    
      	 	
              ·

            	
              Office
                furniture and machines

            

    

     

    
      	 	
              ·

            	
              Computer,
                Network Domain, Application Software, Printers,
                LAN

            

    

     

    
      	 	
              ·

            	
              Phone
                System

            

    

     

    
      	 	
              ·

            	
              Vehicles
                and Forklift

            

    

     

    
      	 	
              ·

            	
              Biodiesel
                Solutions Domain Name

            

    

     

    
      	 	
              ·

            	
              Customer
                Owned FM Inventory (Paid for before closing and held at BDS for drop
                shipping at a later date)

            

    

     

    
      	 	
              ·

            	
              Any
                inventory required to complete orders that were booked and paid prior
                to
                closing.

            

    

     

    
      	 	
              ·

            	
              Intuit
                QuickBooks Premier 2004 Mfg. and Wholesale Ed. Application Software
                or
                licenses.

            

    

     

    
      	 	
              ·

            	
              Any
                and all assets not specifically defined in Schedule
                1.1

            

    

     

    
      	
              ·

            	
              Excluded
                Contracts:

            

    

     

    
      	 	
              ·

            	
              Green
                Fuels Ltd. of the U.K. has a license from Seller to use “FuelMeister by
                Green Fuels” name, and has been granted manufacturing license to build
                FuelMeister (original version only) and market it in Europe, Africa,
                and
                the Middle East. There is no requirement for notification or consent
                by
                Green Fuels Ltd. needed for this
                agreement.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Schedule
      1.3 (a) - Assumed Liability to Acquisition Sub

     

    
      	
              ·

            	
              End
                Customer Product Support for products of the Business sold by
                Seller.

            

    

     

    
      	
              ·

            	
              Balance
                of 90 days parts warranty for product sold by
                Seller.

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    Schedule
      1.5 - Purchase Price Allocation

     

    The
      following definitions are designations shall apply in this Allocation, without
      regard
      to
      number or gender:

     

    BUSINESS: FuelMeister
      Division of Biodiesel Solutions, Inc.

     

    BUYER: Renewal
      Fuels, Inc.

     

    SELLER: Biodiesel
      Solutions, Inc

     

    The
      parties to the sale of the above Business agree that the purchase price shall
      be
      allocated among the assets purchased as follows:

    

    
      	
              1)

            	
              Registered
                Vehicles

            	 	
              $
                0

            
	
              2)

            	
              Other
                Tangible Personal Property:

            	 	 
	 	
              (a)
                Subject
                to Sales Tax:

            	 	
              $
                9,145 (tools)

            
	 	
              (b)
                Not Subject to Sales Tax:

            	 	
              $
                50,150 (website & domain names

            
	
              3)

            	
              Leasehold
                Improvements:

            	 	
              $
                0

            
	
              4)

            	
              Value
                of the Premise Lease:

            	 	
              $
                0

            
	
              5)

            	
              Goodwill:

            	 	
              $
                365,705

            
	
              6)

            	
              Covenant
                Not to Compete:

            	 	
              $
                20,000

            
	
              7)

            	
              Resale
                Inventory:

            	 	
              $
                40,000

            
	
              8)

            	
              Other:
                Provisional Patent & Trademarks

            	 	
              $
                15,000

            
	 	 	 	 
	 	
              TOTAL
                PURCHASE PRICE:

            	 	
              $
                500,000

            

    

     

    The
      above
      allocation has been determined by the parties (not through any recommendation
      of
      Broker or Escrow Holder) and is effective subject to the disapproval
by
      the
      appraisers, accountants, or legal advisors of either party if given to Escrow
      Holder
      within
      10 days. Each party agrees to report this sale for tax and other purposes in
      accordance with the above and holds the other harmless from any liability or
      expense resulting from a failure to do so. The down payment and any note
      payments for the Business shall be apportioned among the various assets on
      the
      basis of the above allocation.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Schedule
      3.4 (a) - Conflicts, Consents of Third Parties

    

    
      	
              ·

            	
              Green
                Fuels Ltd. has a license from Seller to use “FuelMeister by Green Fuels”
                name, and has been granted manufacturing license to build FuelMeister
                (original version only) and market it in Europe, Africa, and the
                Middle
                East. There is no requirement for notification or consent by Green
                Fuels
                Ltd. needed for this agreement.

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Schedule
      3.6 - Unaudited Balance Sheets and Incomes Statements and
      Notes:

    

    
      	
              ·

            	
              Adobe
                Acrobat files of the 2005 and 2006 Balance Sheets and Income Statements
                are provided for closing. Please Print and include
                here.

            

    

     

    Note:
      The
      $75,000 Allowance for Bad Debt and $125,000 Reserve for Return on the 2006
      Balance Sheet pertain to BiodieselMaster business and have no direct effect
      on
      the Business.

    

    Schedule
      3.8 - Absence of Certain Developments

    

    
      	
              ·

            	
              Seller
                has overdue accounts payable with some vendors. Seller as part of
                this
                agreement has agreed to pay off all vendors of the Business within
                two
                days of closing with proceeds from the
                sale.

            

    

    

    Schedule
      3.9 (a) - Taxes

    

    
      	
              ·

            	
              2006
                Tax Returns (not due yet) have not been
                filed.

            

    

    

    Schedule
      3.10 - Real Property

     

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.11 - Schedule of Tangible Personal Property

    

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.12 - Intangible Property

    

    
      	
              ·

            	
              Refer
                to separate Trademark and Patent Assignment
                Agreements.

            

    

     

    
      	
              ·

            	
              Green
                Fuels Ltd. has a license from Seller to use “FuelMeister by Green Fuels”
                name, and has been granted manufacturing license to build FuelMeister
                (original version only) and market it in Europe, Africa, and the
                Middle
                East. There is no requirement for notification or consent by Green
                Fuels
                Ltd. needed for this agreement.

            

    

    

    Schedule
      3.13 - Material Contracts

    

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.14 - Employee Benefits

    

    
      	
              ·

            	
              Health
                Insurance 

            

    

     

    
      	 	
              ·

            	
              Company
                pays 100% of employee premium, OR

            

    

     

    
      	 	
              ·

            	
              Company
                pays 80% of employee & Spouse premium,
                OR

            

    

     

    
      	 	
              ·

            	
              Company
                pays 80% of employee & Children premium,
                OR

            

    

     

    
      	 	
              ·

            	
              Company
                pays 50% of employee’s Family
                premium.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              ·

            	
              Sick
                and vacation pay - 10 day paid per
                year

            

    

     

    
      	
              ·

            	
              Holidays
                - 10 major holidays paid per year

            

    

     

    
      	
              ·

            	
              GP
                Bonus: Part of the Salary for Greg Springer is made up of 5% of the
                monthly GP. For most of 2005 and all of 2006 this bonus has not been
                paid
                to Greg and is accrued on the Balance Sheet as part of the Accounts
                Receivable.

            

    

    

    Schedule
      3.15 - Labor

    

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.16 - Litigation

    

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.18 - Environmental Matters

    

    
      	
              ·

            	
              None.

            

    

    

    Schedule
      3.19 - Insurance: List of Policies

    

    
      	
              ·

            	
              Worker’s
                Compensation Policy #57WBCPQ5547, Term 8/10/06 to 8/10/07, Twin City
                Fire
                Insurance Company (Hartford)

            

    

     

    
      	
              ·

            	
              General
                Liability Policy VCGP013288, Term 9/24/06 to 9/24/07, Gemini Insurance
                Company, Limits $1M each occurrence, $2M
                Aggregate

            

    

     

    
      	
              ·

            	
              Umbrella
                Policy EBU0839082, Term 11/01/06 to 9/24/07, National Union Fire
                Insurance
                Company of Pittsburgh, Limits $5M Each Occurrence, $5M
                Aggregate

            

    

     

    
      	
              ·

            	
              Health
                Insurance Policy 920YK200, Effective date 12/1/2006, SignatureOptions
                (PPO) Plan N14 and Outpatient Prescription
                Drugs

            

    

    

    Schedule
      3.20 - Reserves for Bad Inventory

    

    
      	
              ·

            	
              None

            

    

    

    Schedule
      3.21 Customers
      and Supplier’s

    

    
      	
               

            	
              FM
                Customers 2005

            	 	
              Jan
                - Dec 05

            	 	
              Status

            
	 	
              Green
                Fuels, Ltd.

            	 	
              139,709.80

            	 	
              Has
                manufacturing license for original FM in Europe, Africa, and Middle
                East.

            
	 	
              Azure
                Biodiesel

            	 	
              103,704.89

            	 	
              Current
                Dealer

            
	 	
              Homemade
                Biodiesel

            	 	
              101,650.87

            	 	
              Current
                Dealer

            
	 	
              Cascade
                Biodiesel

            	 	
              51,193.56

            	 	
              Current
                Dealer

            
	 	
              New
                England Biodiesel

            	 	
              23,206.25

            	 	
              Current
                Dealer

            
	 	
              Dave
                Butler

            	 	
              23,030.12

            	 	
              End
                Customer

            
	 	
              Blaze
                Petroleum

            	 	
              20,857.00

            	 	
              Current
                Dealer

            
	 	
              San
                Dan LLC

            	 	
              20,238.75

            	 	
              Former
                Dealer

            
	 	
              Trimline
                Design Centre Inc

            	 	
              18,852.79

            	 	
              Current
                Dealer

            
	 	
              Williamson
                Greenhouse

            	 	
              18,153.75

            	 	
              Former
                Dealer

            
	 	
              Renewable
                Energy

            	 	
              13,440.75

            	 	
              Former
                Dealer

            
	 	
              Maris
                Krasnikovs

            	 	
              12,364.07

            	 	
              End
                Customer

            
	 	
              Real
                Goods

            	 	
              10,364.50

            	 	
              Catalog
                Dealer

            
	 	
              Anthony
                Fitzhenry

            	 	
              8,590.00

            	 	
              End
                Customer

            
	 	
              C
                & E Biodiesel

            	 	
              8,561.75

            	 	
              Current
                Dealer

            
	 	
              Nina
                Babiarz, Larry Dashiell

            	 	
              7,810.44

            	 	
              End
                Customer

            
	 	
              Freedom
                Fuel America

            	 	
              7,386.52

            	 	
              Former
                Dealer

            
	 	
              WRC,
                Inc

            	 	
              6,983.75

            	 	
              Former
                Dealer

            
	 	
              Zepeda
                Corp

            	 	
              6,896.67

            	 	
              Current
                Dealer

            
	 	
              Lewis
                Allen

            	 	
              6,698.08

            	 	
              End
                Customer

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              FM
                Customers 2006

            	 	
              Jan
                - Dec 06

            	 	
              Status

            
	 	
              Azure
                Biodiesel

            	 	
              175,333.80

            	 	
              Current
                Dealer

            
	 	
              New
                England Biodiesel

            	 	
              149,425.75

            	 	
              Current
                Dealer

            
	 	
              Cascade
                Biodiesel

            	 	
              132,927.57

            	 	
              Current
                Dealer

            
	 	
              Tri-State
                Alternative Energy

            	 	
              36,848.40

            	 	
              Current
                Dealer

            
	 	
              Renewable
                Energy

            	 	
              21,848.75

            	 	
              Former
                Dealer

            
	 	
              Provident
                Farm Supply

            	 	
              15,932.50

            	 	
              Current
                Dealer

            
	 	
              Fossiless
                Fuels, L.L.P.

            	 	
              15,517.65

            	 	
              Current
                Dealer

            
	 	
              Trimline
                Design Centre Inc

            	 	
              15,265.75

            	 	
              Current
                Dealer

            
	 	
              C
                & E Biodiesel

            	 	
              14,083.87

            	 	
              Current
                Dealer

            
	 	
              Independent
                Power Corp

            	 	
              13,009.75

            	 	
              Former
                Dealer, Dropped Since 12/31/06

            
	 	
              Valley
                View Electric

            	 	
              8,860.50

            	 	
              Current
                Dealer

            
	 	
              Pen-Ergy

            	 	
              8,568.75

            	 	
              Current
                Dealer

            
	 	
              California
                Biodiesel Solutions

            	 	
              7,471.75

            	 	
              Current
                Dealer

            
	 	
              JetAxe
                Motor Sports

            	 	
              7,416.25

            	 	
              Current
                Dealer

            
	 	
              Green
                Fuels, Ltd.

            	 	
              7,400.00

            	 	
              Has
                manufacturing license for original FM in Europe, Africa, and Middle
                East.

            
	 	
              Sonny's
                Solar & Biodiesel

            	 	
              7,371.00

            	 	
              Current
                Dealer

            
	 	
              CTT
                Supply

            	 	
              7,106.40

            	 	
              Current
                Dealer

            
	 	
              Zepeda
                Corp

            	 	
              6,368.75

            	 	
              Current
                Dealer

            
	 	
              Cowee
                Harmony Gardens

            	 	
              5,708.75

            	 	
              Former
                Dealer

            
	 	
              Bruce
                Morley

            	 	
              5,678.50

            	 	
              End
                User

            

    

     

    
      	
               

            	
              FM
                Vendors 2005

            	 	
              Jan
                - Dec 05

            	 	
              Status

            
	 	
              Den
                Hartog Industries

            	 	
              222,625.15

            	 	 
	 	
              Wolverine
                Brass, Inc.

            	 	
              92,250.38

            	 	 
	 	
              Grainger
                Supply

            	 	
              64,848.15

            	 	
              Some
                of this total was for BiodieselMaster

            
	 	
              Electro-Flex
                Heat, Inc.

            	 	
              56,445.00

            	 	 
	 	
              Harrington
                Plastics (Sacramento)

            	 	
              52,573.75

            	 	 
	 	
              FarmTek

            	 	
              39,679.77

            	 	
              Not
                using for FM2

            
	 	
              LabPro

            	 	
              39,170.10

            	 	 
	 	
              D
                & N Precision

            	 	
              38,414.10

            	 	
              Not
                using for FM2

            
	 	
              Dale
                Hardware

            	 	
              33,588.67

            	 	 
	 	
              Russ
                Emelio

            	 	
              31,284.00

            	 	
              Webmaster

            
	 	
              Custom
                Powder Coaters

            	 	
              31,146.50

            	 	 
	 	
              Northern
                Tool (Great Plains)

            	 	
              29,955.68

            	 	 
	 	
              Anachemia
                Science

            	 	
              27,003.95

            	 	 
	 	
              Acam

            	 	
              26,838.50

            	 	
              Not
                using for FM2

            
	 	
              Industrial
                Wood Products

            	 	
              20,973.78

            	 	
              Not
                using for FM2

            
	 	
              Harbor
                Freight Tools

            	 	
              19,758.15

            	 	 
	 	
              Graybar

            	 	
              18,708.89

            	 	
              Some
                of this total was for BiodieselMaster

            
	 	
              Packaging
                Corporation of America

            	 	
              11,518.75

            	 	 
	 	
              Harrington
                Plastics (Hayward)

            	 	
              11,350.10

            	 	
              Replaced
                by Harrington (Sacramento)

            
	 	
              Uline
                Corp.

            	 	
              10,783.04

            	 	 

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              FM
                Vendors 2006

            	 	
              Jan
                - Dec 06

            	 	
              Status

            
	 	
              Den
                Hartog Industries

            	 	
              113,818.26

            	 	 
	 	
              Harrington
                Plastics (Sacramento)

            	 	
              91,567.79

            	 	 
	 	
              Wolverine
                Brass, Inc.

            	 	
              55,532.64

            	 	 
	 	
              Grainger
                Supply

            	 	
              33,139.83

            	 	
              Some
                of this total was for BiodieselMaster

            
	 	
              Northern
                Tool (Great Plains)

            	 	
              31,018.92

            	 	 
	 	
              Custom
                Powder Coaters

            	 	
              25,121.25

            	 	
              Some
                of this total was for BiodieselMaster

            
	 	
              Electro-Flex
                Heat, Inc.

            	 	
              23,626.63

            	 	 
	 	
              Calvey
                Nevada

            	 	
              19,563.65

            	 	 
	 	
              LabPro

            	 	
              17,722.23

            	 	 
	 	
              Anachemia
                Science

            	 	
              17,657.05

            	 	 
	 	
              Mazzei
                Injector Corp.

            	 	
              17,288.13

            	 	 
	 	
              Harbor
                Freight Tools

            	 	
              16,954.34

            	 	 
	 	
              Graybar

            	 	
              15,784.52

            	 	
              Some
                of this total was for BiodieselMaster

            
	 	
              American
                Weigh Scales

            	 	
              14,527.00

            	 	 
	 	
              FarmTek

            	 	
              13,128.00

            	 	 
	 	
              Artisan
                Controls

            	 	
              12,126.57

            	 	 
	 	
              LiquiDynamics

            	 	
              12,008.79

            	 	 
	 	
              Dale
                Hardware

            	 	
              10,859.82

            	 	 
	 	
              D
                & N Precision

            	 	
              9,297.80

            	 	
              Not
                using for FM2

            
	 	
              Atkinson
                Engineering

            	 	
              8,099.65

            	 	 

    

     

    Note:
      Many of the vendors of the Business have overdue A/P balances. These will all
      be
      paid down to zero within two days of closing.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Schedule
      4.3 - Conflicts;
      Consents of Third Parties

    

    None

    

    Schedule
      6.1 - Parent
      and Acquisition Sub Conditions to Closing

    

    
      	 	
              1.

            	
              Dealer
                Notification Letter (to be agreed on by Parent and Acquisition Sub
                and to
                be sent immediately after the
                Closing)

            

    

    

    (NOTE:
      The following items are to be completed by Seller and billed to Acquisition
      Sub
      at a rate consistent with terms in the Management Agreement):

    

    
      	 	
              2.

            	
              Product
                Re-label

            

    

     

    
      	 	
              a.

            	
              Product
                Manual (Logo, name, address)

            

    

     

    
      	 	
              b.

            	
              Bumper
                Sticker

            

    

     

    
      	 	
              c.

            	
              Product
                Sticker

            

    

     

    
      	 	
              d.

            	
              DVD
                (long-term requires a re-shoot of the
                video)

            

    

     

    
      	 	
              e.

            	
              QC
                Check Sheets

            

    

     

    
      	 	
              f.

            	
              Instruction
                Sheets for Accessory Products 

            

    

     

    
      	 	
              g.

            	
              Sales
                Literature Re-label

            

    

     

    
      	 	
              3.

            	
              Infrastructure

            

    

     

    
      	 	
              a.

            	
              Phone
                Line - Answering Service

            

    

     

    
      	 	
              b.

            	
              Quickbooks
                set-up of new company record, new forms, starting balances
                

            

    

    

    Schedule
      6.2 -Seller Conditions to Closing

    

    
      	 	
              1.

            	
              Obtain
                License(s) to operate Business in
                Nevada

            

    

     

    
      	 	
              2.

            	
              Draft
                Press Release on Ownership Change (to be agreed on by Seller and
                to be
                released immediately after the
                Closing)

            

    

     

    
      	 	
              3.

            	
              Obtain
                Product Liability Insurance

            

    

     

    
      	 	
              4.

            	
              Complete
                financial audit

            

    

     

    
      	 	
              5.

            	
              Set
                up Banking & Accounting

            

    

     

    
      	 	
              a.

            	
              Credit
                Card Service

            

    

     

    
      	 	
              b.

            	
              Checking
                Account

            

    

     

    
      	 	
              c.

            	
              Link
                E-commerce module to banking
                services

            

    

    

    
      
        
        

      

      
        11SECURITIES
        PURCHASE AGREEMENT

      

      THIS SECURITIES
        PURCHASE AGREEMENT
        (this
“Agreement”),
        dated
        as of April 20, 2007, by and among TECH
        LABORATORIES, INC.,
        a New
        Jersey corporation (the “Company”),
        and
        the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
or
        collectively “Buyers”).

       

      WITNESSETH

      

      WHEREAS,
        the
        Company and the Buyer(s) are executing and delivering this Agreement in reliance
        upon an exemption from securities registration pursuant to Section 4(2) and/or
        Rule 506 of Regulation D (“Regulation
        D”)
        as
        promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”);

       

      WHEREAS,
        the
        parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Buyer(s), as provided herein,
        and the Buyer(s) shall purchase (i) up to One Million Four Hundred Thousand
        Dollars ($1,400,000) of secured convertible debentures in the form attached
        hereto as “Exhibit
        A”
(the
        “Convertible
        Debentures”),
        which
        shall be convertible into shares of the Company’s common stock, par value $0.01
        (the “Common
        Stock”)
        (as
        converted, the “Conversion
        Shares”)
        of
        which One Million Dollars ($1,000,000) shall be funded on the date hereof
        (the
“First
        Closing”)
        and
        Four Hundred Thousand Dollars ($400,000) shall be funded within five (5)
        business day following the date the Information Statement, (as defined in
        Section 7 (xvii) herein), is approved by the United States Securities and
        Exchange Commission (the “SEC”)
        (the
“Second
        Closing”)
        (individually referred to as a “Closing”
        collectively referred to as the “Closings”)
        for a
        total purchase price of up to One Million Four Hundred Thousand Dollars
        ($1,400,000), (the “Purchase
        Price”)
        in the
        respective amounts set forth opposite each Buyer(s) name on Schedule I (the
        “Subscription
        Amount”);
        

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering a Registration Rights Agreement (the
        “Registration
        Rights Agreement”)
        pursuant to which the Company has agreed to provide certain registration
        rights
        under the Securities Act and the rules and regulations promulgated there
        under,
        and applicable state securities laws; 

       

      WHEREAS,
        the
        Company has agreed to provide the Buyers a security interest pursuant to
        the
        Restated Security Agreement dated as of the date hereof (“Security
        Agreement”)
        and
        all of the assets of the Company identified therein and perfected via the
        corresponding UCC-1 No.: 22395825 filed with the New Jersey Secretary of
        State
        UCC Division on June 1, 2004, as well as a security interest in all of the
        assets of Renewal Fuels, Inc., incorporated and existing under the laws of
        Delaware and a subsidiary of the Company (“Renewal
        Fuels”);

       

      WHEREAS,
        the
        Convertible Debentures are secured by a security interest in the shares of
        capital stock of Renewal Fuels owned by the Company as set forth in the Pledge
        and Escrow Agreement of even date herewith (the “Pledge
        and Escrow Agreement”)
        by and
        between the Company and the Buyers;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        the
        Convertible Debenture are secured by a security interest in Patent Collateral,
        as this term is defined in the Patent Security Agreement of even date herewith
        the “Patent
        Security Agreement”)
        by and
        between the Company, Renewal Fuels and the Buyers as evidenced by the Patent
        Security Agreement (collectively the Security Agreement, the Pledge and Escrow
        Agreement, and the Patent Security Agreement are referred to as the
“Security
        Documents”);
        

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering Irrevocable Transfer Agent Instructions
        (the
“Irrevocable
        Transfer Agent Instructions”);
        and

       

      WHEREAS,
        the
        Convertible Debentures, the Conversion Shares, the Warrants, and the Warrants
        Shares collectively are referred to herein as the “Securities”).
        

       

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants and other agreements contained in this
        Agreement the Company and the Buyer(s) hereby agree as follows:

       

      1. PURCHASE
        AND SALE OF CONVERTIBLE DEBENTURES.

       

      (a) Purchase
        of Convertible Debentures.
        Subject
        to the satisfaction (or waiver) of the terms and conditions of this Agreement,
        each Buyer agrees, severally and not jointly, to purchase at each Closing
        and
        the Company agrees to sell and issue to each Buyer, severally and not jointly,
        at each Closing, Convertible Debentures in amounts corresponding with the
        Subscription Amount set forth opposite each Buyer’s name on Schedule I hereto
        and the Warrants to acquire up that number of Warrant Shares as set forth
        opposite such Buyer’s name in column (5) on Schedule I . 

       

      (b) Closing
        Dates.
        The
        First Closing of the purchase and sale of the Convertible Debentures shall
        take
        place at 10:00 a.m. Eastern Standard Time on the date hereof, subject to
        notification of satisfaction of the conditions to the First Closing set forth
        herein and in Sections 6 and 7 below (or such later date as is mutually agreed
        to by the Company and the Buyer(s)) (the “First
        Closing Date”)
        and
        the Second Closing of the purchase and sale of the Convertible Debentures
        shall
        take place at 4:00 p.m. Eastern Standard Time on the fifth (5th)
        business day following the date the Information Statement is approved by
        the
        SEC, subject to notification of satisfaction of the conditions to the Second
        Closing set forth herein and in Sections 6 and 7 below (or such later date
        as is
        mutually agreed to by the Company and the Buyer(s)) (the “Second
        Closing Date”)
        (collectively referred to a the “Closing
        Dates”).
        The
        Closings shall occur on the respective Closing Dates at the offices of Yorkville
        Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
        (or
        such other place as is mutually agreed to by the Company and the Buyer(s)).
        

       

      (c) Form
        of Payment.
        Subject
        to the satisfaction of the terms and conditions of this Agreement, on each
        Closing Date, (i) the Buyers shall deliver to the Company such aggregate
        proceeds for the Convertible Debentures to be issued and sold to such Buyer
        at
        such Closing, minus the fees to be paid directly from the proceeds of such
        Closing as set forth herein, and (ii) the Company shall deliver to each
        Buyer, Convertible Debentures which such Buyer is purchasing at such Closing
        in
        amounts indicated opposite such Buyer’s name on Schedule I, duly executed on
        behalf of the Company.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2. BUYER’S
        REPRESENTATIONS AND WARRANTIES.

       

      Each
        Buyer represents and warrants, severally and not jointly, that:

       

      (a) Investment
        Purpose.
        Each
        Buyer is acquiring the Securities for its own account for investment only
        and
        not with a view towards, or for resale in connection with, the public sale
        or
        distribution thereof, except pursuant to sales registered or exempted under
        the
        Securities Act; provided, however, that by making the representations herein,
        such Buyer reserves the right to dispose of the Securities at any time in
        accordance with or pursuant to an effective registration statement covering
        such
        Securities or an available exemption under the Securities Act. Such Buyer
        does
        not presently have any agreement or understanding, directly or indirectly,
        with
        any Person to distribute any of the Securities. 

       

      (b) Accredited
        Investor Status.
        Each
        Buyer is an “Accredited
        Investor”
as
        that
        term is defined in Rule 501(a) (3) of Regulation D.

       

      (c) Reliance
        on Exemptions.
        Each
        Buyer understands that the Securities are being offered and sold to it in
        reliance on specific exemptions from the registration requirements of United
        States federal and state securities laws and that the Company is relying
        in part
        upon the truth and accuracy of, and such Buyer’s compliance with, the
        representations, warranties, agreements, acknowledgments and understandings
        of
        such Buyer set forth herein in order to determine the availability of such
        exemptions and the eligibility of such Buyer to acquire the
        Securities.

       

      (d) Information.
        Each
        Buyer and its advisors (and his or, its counsel), if any, have been furnished
        with all materials relating to the business, finances and operations of the
        Company and information he deemed material to making an informed investment
        decision regarding his purchase of the Securities, which have been requested
        by
        such Buyer. Each Buyer and its advisors, if any, have been afforded the
        opportunity to ask questions of the Company and its management. Neither such
        inquiries nor any other due diligence investigations conducted by such Buyer
        or
        its advisors, if any, or its representatives shall modify, amend or affect
        such
        Buyer’s right to rely on the Company’s representations and warranties contained
        in Section 3 below. Each Buyer understands that its investment in the Securities
        involves a high degree of risk. Each Buyer is in a position regarding the
        Company, which, based upon employment, family relationship or economic
        bargaining power, enabled and enables such Buyer to obtain information from
        the
        Company in order to evaluate the merits and risks of this investment. Each
        Buyer
        has sought such accounting, legal and tax advice, as it has considered necessary
        to make an informed investment decision with respect to its acquisition of
        the
        Securities.

       

      (e) No
        Governmental Review.
        Each
        Buyer understands that no United States federal or state agency or any other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Securities, or the fairness or suitability of the investment
        in the Securities, nor have such authorities passed upon or endorsed the
        merits
        of the offering of the Securities.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (f) Transfer
        or Resale.
        Each
        Buyer understands that except as provided in the Registration Rights Agreement:
        (i) the Securities have not been and are not being registered under the
        Securities Act or any state securities laws, and may not be offered for sale,
        sold, assigned or transferred unless (A) subsequently registered thereunder,
        (B)
        such Buyer shall have delivered to the Company an opinion of counsel, in
        a
        generally acceptable form, to the effect that such Securities to be sold,
        assigned or transferred may be sold, assigned or transferred pursuant to
        an
        exemption from such registration requirements, or (C) such Buyer provides
        the
        Company with reasonable assurances (in the form of seller and broker
        representation letters) that such Securities can be sold, assigned or
        transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
        the Securities Act, as amended (or a successor rule thereto) (collectively,
        “Rule
        144”),
        in
        each case following the applicable holding period set forth therein; (ii)
        any
        sale of the Securities made in reliance on Rule 144 may be made only in
        accordance with the terms of Rule 144 and further, if Rule 144 is not
        applicable, any resale of the Securities under circumstances in which the
        seller (or the person through whom the sale is made) may be deemed to be an
        underwriter (as that term is defined in the Securities Act) may require
        compliance with some other exemption under the Securities Act or the rules
        and
        regulations of the SEC thereunder; and (iii) neither the Company nor any
        other
        person is under any obligation to register the Securities under the Securities
        Act or any state securities laws or to comply with the terms and conditions
        of
        any exemption thereunder. 

       

      (g) Legends.
        Except
        as provided herein, each Buyer agrees to the imprinting, on each document
        evidencing the Securities so long as is required by this Section 2(g), of
        a
        restrictive legend in substantially the following form:

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
        THE
        SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH
        A VIEW
        TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
        IN
        THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
        OR AN
        OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
        NOT
        REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

       

      Certificates
        evidencing the Conversion Shares or Warrant Shares shall not contain any
        legend
        (including the legend set forth above), (i) while a registration statement
        (including the Registration Statement) covering the resale of such security
        is
        effective under the Securities Act, (ii) following any sale of such Conversion
        Shares or Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares
        or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such
        legend is not required under applicable requirements of the Securities Act
        (including judicial interpretations and pronouncements issued by the staff
        of
        the SEC). The Company shall cause its counsel to issue a legal opinion to
        the
        Company’s transfer agent promptly after the effective date (the “Effective
        Date”)
        of a
        Registration Statement (as defined in the registration Rights Agreement)
        if
        required by the Company’s transfer agent to effect the removal of the legend
        hereunder. If all or any portion of the Convertible Debentures or Warrants
        are
        exercised by a Buyer that is not an Affiliate of the Company (a “Non-Affiliated
        Buyer”)
        at a
        time when there is an effective registration statement to cover the resale
        of
        the Conversion Shares or the Warrant Shares, such Conversion Shares or Warrant
        Shares shall be issued free of all legends. The Company agrees that following
        the Effective Date or at such time as such legend is no longer required under
        this Section 2(g), it will, no later than three (3) Trading Days following
        the
        delivery by a Non-Affiliated Buyer to the Company or the Company’s transfer
        agent of a certificate representing Conversion Shares or Warrant Shares,
        as the
        case may be, issued with a restrictive legend (such third Trading Day, the
        “Legend
        Removal Date”),
        deliver or cause to be delivered to such Non-Affiliated Buyer a certificate
        representing such shares that is free from all restrictive and other legends.
        The Company may not make any notation on its records or give instructions
        to any
        transfer agent of the Company that enlarge the restrictions on transfer set
        forth in this Section. Each Buyer acknowledges that the Company’s agreement
        hereunder to remove all legends from Conversion Shares or Warrant Shares
        is not
        an affirmative statement or representation that such Conversion Shares or
        Warrant Shares are freely tradable. Each Buyer, severally and not jointly
        with
        the other Buyers, agrees that the removal of the restrictive legend from
        certificates representing Securities as set forth in this Section 3(g) is
        predicated upon the Company’s reliance that the buyer will sell any Securities
        pursuant to either the registration requirements of the Securities Act,
        including any applicable prospectus delivery requirements, or an exemption
        therefrom, and that if Securities are sold pursuant to a Registration Statement,
        they will be sold in compliance with the plan of distribution set forth
        therein.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (h) Authorization,
        Enforcement.
        This
        Agreement has been duly and validly authorized, executed and delivered on
        behalf
        of such Buyer and is a valid and binding agreement of such Buyer enforceable
        in
        accordance with its terms, except as such enforceability may be limited by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors’ rights and
        remedies.

       

      (i) Receipt
        of Documents.
        Each
        Buyer and his or its counsel has received and read in their entirety: (i)
        this
        Agreement and each representation, warranty and covenant set forth herein
        and
        the Transaction Documents (as defined herein); (ii) all due diligence and
        other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
        the fiscal year ended December 31, 2006; (iv) the Company’s Form 10-QSB for the
        fiscal quarter ended September 30, 2006 and (v) answers to all questions
        each
        Buyer submitted to the Company regarding an investment in the Company; and
        each
        Buyer has relied on the information contained therein and has not been furnished
        any other documents, literature, memorandum or prospectus.

       

      (j) Due
        Formation of Corporate and Other Buyers.
        If the
        Buyer(s) is a corporation, trust, partnership or other entity that is not
        an
        individual person, it has been formed and validly exists and has not been
        organized for the specific purpose of purchasing the Securities and is not
        prohibited from doing so.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (k) No
        Legal Advice From the Company.
        Each
        Buyer acknowledges, that it had the opportunity to review this Agreement
        and the
        transactions contemplated by this Agreement with his or its own legal counsel
        and investment and tax advisors. Each Buyer is relying solely on such counsel
        and advisors and not on any statements or representations of the Company
        or any
        of its representatives or agents for legal, tax or investment advice with
        respect to this investment, the transactions contemplated by this Agreement
        or
        the securities laws of any jurisdiction. 

       

      3. REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY.

       

      Except
        as
        set forth under the corresponding section of the Disclosure Schedules which
        Disclosure Schedules shall be deemed a part hereof and to qualify any
        representation or warranty otherwise made herein to the extent of such
        disclosure, the Company hereby makes the representations and warranties set
        forth below to each Buyer: 

       

      (a) Subsidiaries.
        All of
        the direct and indirect subsidiaries of the Company are set forth on
Schedule
        3(a).
        The
        Company owns, directly or indirectly, all of the capital stock or other equity
        interests of each subsidiary free and clear of any liens, and all the issued
        and
        outstanding shares of capital stock of each subsidiary are validly issued
        and
        are fully paid, non-assessable and free of preemptive and similar rights
        to
        subscribe for or purchase securities.

       

      (b) Organization
        and Qualification.
        The
        Company and its subsidiaries are corporations duly organized and validly
        existing in good standing under the laws of the jurisdiction in which they
        are
        incorporated, and have the requisite corporate power to own their properties
        and
        to carry on their business as now being conducted. Each of the Company and
        its
        subsidiaries is duly qualified as a foreign corporation to do business and
        is in
        good standing in every jurisdiction in which the nature of the business
        conducted by it makes such qualification necessary, except to the extent
        that
        the failure to be so qualified or be in good standing would not have or
        reasonably be expected to result in (i) a material adverse effect on the
        legality, validity or enforceability of any Transaction Document, (ii) a
        material adverse effect on the results of operations, assets, business or
        condition (financial or otherwise) of the Company and the subsidiaries, taken
        as
        a whole, or (iii) a material adverse effect on the Company’s ability to perform
        in any material respect on a timely basis its obligations under any Transaction
        Document (any of (i), (ii) or (iii), a “Material
        Adverse Effect”)
        and no
        proceeding has been instituted in any such jurisdiction revoking, limiting
        or
        curtailing or seeking to revoke, limit or curtail such power and authority
        or
        qualification.

       

      (c) Authorization,
        Enforcement, Compliance with Other Instruments.
        (i) The Company has the requisite corporate power and authority to enter
        into and perform its obligations under this Agreement, the Convertible
        Debentures, the Warrants, the Security Documents, the Registration Rights
        Agreement, the Irrevocable Transfer Agent Instructions, and each of the other
        agreements entered into by the parties hereto in connection with the
        transactions contemplated by this Agreement (collectively the “Transaction
        Documents”)
        and to
        issue the Securities in accordance with the terms hereof and thereof, (ii)
        the
        execution and delivery of the Transaction Documents by the Company and the
        consummation by it of the transactions contemplated hereby and thereby,
        including, without limitation, the issuance of the Securities, the reservation
        for issuance and the issuance of the Conversion Shares, and the reservation
        for
        issuance and the issuance of the Warrant Shares, have been duly authorized
        by
        the Company’s Board of Directors and no further consent or authorization is
        required by the Company, its Board of Directors or its stockholders, (iii)
        the
        Transaction Documents have been duly executed and delivered by the Company,
        (iv)
        the Transaction Documents constitute the valid and binding obligations of
        the
        Company enforceable against the Company in accordance with their terms, except
        as such enforceability may be limited by general principles of equity or
        applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
        or
        similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies. The authorized officer of the Company executing the
        Transaction Documents knows of no reason why the Company cannot file the
        Registration Statement as required under the Registration Rights Agreement
        or
        perform any of the Company’s other obligations under the Transaction Documents.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (d) Capitalization.
        The
        authorized capital stock of the Company consists of 3,000,000,000 shares
        of
        Common Stock and 20,000,000 shares of Preferred Stock, par value $0.01
        (“Preferred
        Stock”)
        of
        which 10,100,210 shares of Common Stock and zero shares of Preferred Stock
        are
        issued and outstanding. All of the outstanding shares of capital stock of
        the
        Company are validly issued, fully paid and nonassessable, have been issued
        in
        compliance with all federal and state securities laws, and none of such
        outstanding shares was issued in violation of any preemptive rights or similar
        rights to subscribe for or purchase securities. Except as disclosed in Schedule
        3(d): (i) none of the Company's capital stock is subject to preemptive rights
        or
        any other similar rights or any liens or encumbrances suffered or permitted
        by
        the Company; (ii) there are no outstanding options, warrants, scrip, rights
        to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, or exercisable or exchangeable for,
        any
        capital stock of the Company or any of its subsidiaries, or contracts,
        commitments, understandings or arrangements by which the Company or any of
        its
        subsidiaries is or may become bound to issue additional capital stock of
        the
        Company or any of its subsidiaries or options, warrants, scrip, rights to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, or exercisable or exchangeable for,
        any
        capital stock of the Company or any of its subsidiaries; (iii) there are
        no
        outstanding debt securities, notes, credit agreements, credit facilities
        or
        other agreements, documents or instruments evidencing indebtedness of the
        Company or any of its subsidiaries or by which the Company or any of its
        subsidiaries is or may become bound; (iv) there are no financing statements
        securing obligations in any material amounts, either singly or in the aggregate,
        filed in connection with the Company or any of its subsidiaries; (v) there
        are
        no outstanding securities or instruments of the Company or any of its
        subsidiaries which contain any redemption or similar provisions, and there
        are
        no contracts, commitments, understandings or arrangements by which the Company
        or any of its subsidiaries is or may become bound to redeem a security of
        the
        Company or any of its subsidiaries; (vi) there are no securities or instruments
        containing anti-dilution or similar provisions that will be triggered by
        the
        issuance of the Securities; (vii) the Company does not have any stock
        appreciation rights or "phantom stock" plans or agreements or any similar
        plan
        or agreement; and (viii) the Company and its subsidiaries have no liabilities
        or
        obligations required to be disclosed in the SEC Documents but not so disclosed
        in the SEC Documents, other than those incurred in the ordinary course of
        the
        Company's or its subsidiaries' respective businesses and which, individually
        or
        in the aggregate, do not or would not have a Material Adverse Effect. The
        Company has furnished to the Buyers true, correct and complete copies of
        the
        Company's Certificate of Incorporation, as amended and as in effect on the
        date
        hereof (the “Certificate
        of Incorporation”),
        and
        the Company's Bylaws, as amended and as in effect on the date hereof (the
        “Bylaws”),
        and
        the terms of all securities convertible into, or exercisable or exchangeable
        for, shares of Common Stock and the material rights of the holders thereof
        in
        respect thereto. No further approval or authorization of any stockholder,
        the
        Board of Directors of the Company or others is required for the issuance
        and
        sale of the Securities. There are no stockholders agreements, voting agreements
        or other similar agreements with respect to the Company’s capital stock to which
        the Company is a party or, to the knowledge of the Company, between or among
        any
        of the Company’s stockholders. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (e) Issuance
        of Securities.
        The
        issuance of the Convertible Debentures and the Warrants is duly authorized
        and
        free from all taxes, liens and charges with respect to the issue thereof.
        Upon
        conversion in accordance with the terms of the Convertible Debentures or
        exercise in accordance with the Warrants, as the case may be, the Conversion
        Shares and Warrant Shares, respectively, when issued will be validly issued,
        fully paid and nonassessable, free from all taxes, liens and charges with
        respect to the issue thereof. The Company has reserved from its duly authorized
        capital stock the appropriate number of shares of Common Stock as set forth
        in
        this Agreement. 

       

      (f) No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated hereby
        and
        thereby (including, without limitation, the issuance of the Convertible
        Debentures and the Warrants, and reservation for issuance and issuance of
        the
        Conversion Shares and the Warrant Shares) will not (i) result in a violation
        of
        any certificate of incorporation, certificate of formation, any certificate
        of
        designations or other constituent documents of the Company or any of its
        subsidiaries, any capital stock of the Company or any of its subsidiaries
        or
        bylaws of the Company or any of its subsidiaries or (ii) conflict with, or
        constitute a default (or an event which with notice or lapse of time or both
        would become a default) in any respect under, or give to others any rights
        of
        termination, amendment, acceleration or cancellation of, any agreement,
        indenture or instrument to which the Company or any of its subsidiaries is
        a
        party, or (iii) result in a violation of any law, rule, regulation, order,
        judgment or decree (including foreign, federal and state securities laws
        and
        regulations and the rules and regulations of the National Association of
        Securities Dealers Inc.’s OTC Bulletin Board) applicable to the Company or any
        of its subsidiaries or by which any property or asset of the Company or any
        of
        its subsidiaries is bound or affected; except in the case of each of clauses
        (ii) and (iii), such as could
        not, individually or in the aggregate, have or reasonably be expected to
        result
        in a Material Adverse Effect.
        The
        business of the Company and its subsidiaries is not being conducted, and
        shall
        not be conducted in violation of any material law, ordinance, or regulation
        of
        any governmental entity. Except as specifically contemplated by this Agreement
        and as required under the Securities Act and any applicable state securities
        laws, the Company is not required to obtain any consent, authorization or
        order
        of, or make any filing or registration with, any court or governmental agency
        in
        order for it to execute, deliver or perform any of its obligations under
        or
        contemplated by this Agreement or the Registration Rights Agreement in
        accordance with the terms hereof or thereof. All consents, authorizations,
        orders, filings and registrations which the Company is required to obtain
        pursuant to the preceding sentence have been obtained or effected on or prior
        to
        the date hereof. The Company and its subsidiaries are unaware of any facts
        or
        circumstance, which might give rise to any of the foregoing.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (g) SEC
        Documents; Financial Statements.
        The
        Company has filed all reports, schedules, forms, statements and other documents
        required to be filed by it with the SEC under the Securities Exchange Act
        of
        1934, as amended (the “Exchange
        Act”),
        for
        the two years preceding the date hereof (or such shorter period as the Company
        was required by law or regulation to file such material) (all of the foregoing
        filed prior to the date hereof or amended after the date hereof and all exhibits
        included therein and financial statements and schedules thereto and documents
        incorporated by reference therein, being hereinafter referred to as the
“SEC
        Documents”)
        on
        timely basis or has received a valid extension of such time of filing and
        has
        filed any such SEC Document prior to the expiration of any such extension.
        The
        Company has delivered to the Buyers or their representatives, or made available
        through the SEC’s website at http://www.sec.gov., true and complete copies of
        the SEC Documents. To the best knowledge of the current management of the
        Company, as of their respective dates, the SEC Documents complied in all
        material respects with the requirements of the Exchange Act and the rules
        and
        regulations of the SEC promulgated thereunder applicable to the SEC Documents,
        and none of the SEC Documents, at the time they were filed with the SEC,
        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 the light of the circumstances under which they were made, not
        misleading. As of their respective dates, the financial statements of the
        Company included in the SEC Documents complied as to form in all material
        respects with applicable accounting requirements and the published rules
        and
        regulations of the SEC with respect thereto. Such financial statements have
        been
        prepared in accordance with generally accepted accounting principles,
        consistently applied, during the periods involved (except (i) as may be
        otherwise indicated in such financial statements or the notes thereto, or
        (ii)
        in the case of unaudited interim statements, to the extent they may exclude
        footnotes or may be condensed or summary statements) and fairly present in
        all
        material respects the financial position of the Company as of the dates thereof
        and the results of its operations and cash flows for the periods then ended
        (subject, in the case of unaudited statements, to normal year-end audit
        adjustments). No other information provided by or on behalf of the Company
        to
        the Buyers which is not included in the SEC Documents, including, without
        limitation, information referred to in Section 2(i) of this Agreement, contains
        any untrue statement of a material fact or omits to state any material fact
        necessary in order to make the statements therein, in the light of the
        circumstance under which they are or were made and not misleading. 

       

      (h) 10(b)-5.
        The SEC
        Documents do not include any untrue statements of material fact, nor do they
        omit to state any material fact required to be stated therein necessary to
        make
        the statements made, in light of the circumstances under which they were
        made,
        not misleading.

       

      (i) Absence
        of Litigation.
        There
        is no action, suit, proceeding, inquiry or investigation before or by any
        court,
        public board, government agency, self-regulatory organization or body pending
        against or affecting the Company, the Common Stock or any of the Company’s
        subsidiaries, wherein an unfavorable decision, ruling or finding would have
        a
        Material Adverse Effect.

       

      (j) Acknowledgment
        Regarding Buyer’s Purchase of the Convertible Debentures.
        The
        Company acknowledges and agrees that each Buyer is acting solely in the capacity
        of an arm’s length purchaser with respect to this Agreement and the transactions
        contemplated hereby. The Company further acknowledges that each Buyer is
        not
        acting as a financial advisor or fiduciary of the Company (or in any similar
        capacity) with respect to this Agreement and the transactions contemplated
        hereby and any advice given by each Buyer or any of their respective
        representatives or agents in connection with this Agreement and the transactions
        contemplated hereby is merely incidental to such Buyer’s purchase of the
        Securities. The Company further represents to each Buyer that the Company’s
        decision to enter into this Agreement has been based solely on the independent
        evaluation by the Company and its representatives.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (k) No
        General Solicitation.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf, has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D under the Securities Act) in connection
        with
        the offer or sale of the Securities.

       

      (l) No
        Integrated Offering.
        Neither
        the Company, 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
        require
        registration of the Securities under the Securities Act or cause this offering
        of the Securities to be integrated with prior offerings by the Company for
        purposes of the Securities Act.

       

      (m) Employee
        Relations.
        Neither
        the Company nor any of its subsidiaries is involved in any labor dispute
        or, to
        the knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened. None of the Company’s or its subsidiaries’ employees is a member of
        a union and the Company and its subsidiaries believe that their relations
        with
        their employees are good.

       

      (n) Intellectual
        Property Rights.
        The
        Company and its subsidiaries own or possess adequate rights or licenses to
        use
        all trademarks, trade names, service marks, service mark registrations, service
        names, patents, patent rights, copyrights, inventions, licenses, approvals,
        governmental authorizations, trade secrets and rights necessary to conduct
        their
        respective businesses as now conducted. The Company and its subsidiaries
        do not
        have any knowledge of any infringement by the Company or its subsidiaries
        of
        trademark, trade name rights, patents, patent rights, copyrights, inventions,
        licenses, service names, service marks, service mark registrations, trade
        secret
        or other similar rights of others, and, to the knowledge of the Company there
        is
        no claim, action or proceeding being made or brought against, or to the
        Company’s knowledge, being threatened against, the Company or its subsidiaries
        regarding trademark, trade name, patents, patent rights, invention, copyright,
        license, service names, service marks, service mark registrations, trade
        secret
        or other infringement; and the Company and its subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

       

      (o) Environmental
        Laws.
        The
        Company and its subsidiaries are (i) in compliance with any and all applicable
        foreign, federal, state and local laws and regulations relating to the
        protection of human health and safety, the environment or hazardous or toxic
        substances or wastes, pollutants or contaminants (“Environmental
        Laws”),
        (ii)
        have received all permits, licenses or other approvals required of them under
        applicable Environmental Laws to conduct their respective businesses and
        (iii)
        are in compliance with all terms and conditions of any such permit, license
        or
        approval.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (p) Title.
        All
        real property and facilities held under lease by the Company and its
        subsidiaries are held by them under valid, subsisting and enforceable leases
        with such exceptions as are not material and do not interfere with the use
        made
        and proposed to be made of such property and buildings by the Company and
        its
        subsidiaries.

       

      (q) Insurance.
        The
        Company and each of its subsidiaries is insured by insurers of recognized
        financial responsibility against such losses and risks and in such amounts
        as
        management of the Company believes to be prudent and customary in the businesses
        in which the Company and its subsidiaries are engaged. Neither the Company
        nor
        any such subsidiary has been refused any insurance coverage sought or applied
        for and neither the Company nor any such subsidiary has any reason to believe
        that it will not be able to renew its existing insurance coverage as and
        when
        such coverage expires or to obtain similar coverage from similar insurers
        as may
        be necessary to continue its business at a cost that would not materially
        and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

       

      (r) Regulatory
        Permits.
        The
        Company and its subsidiaries possess all material certificates, authorizations
        and permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such certificate, authorization
        or
        permit.

       

      (s) Internal
        Accounting Controls.
        The
        Company and each of its subsidiaries maintains a system of internal accounting
        controls sufficient to provide reasonable assurance that (i) transactions
        are
        executed in accordance with management’s general or specific authorizations,
        (ii) transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, and (iii) the recorded amounts for assets
        are
        compared with the existing assets at reasonable intervals and appropriate
        action
        is taken with respect to any differences.

       

      (t) No
        Material Adverse Breaches, etc.
        Neither
        the Company nor any of its subsidiaries is subject to any charter, corporate
        or
        other legal restriction, or any judgment, decree, order, rule or regulation
        which in the judgment of the Company’s officers has or is expected in the future
        to have a Material Adverse Effect on the business, properties, operations,
        financial condition, results of operations or prospects of the Company or
        its
        subsidiaries. Neither the Company nor any of its subsidiaries is in breach
        of
        any contract or agreement which breach, in the judgment of the Company’s
        officers, has or is expected to have a Material Adverse Effect on the business,
        properties, operations, financial condition, results of operations or prospects
        of the Company or its subsidiaries.

       

      (u) Tax
        Status.
        The
        Company and each of its subsidiaries has made and filed all federal and state
        income and all other tax returns, reports and declarations required by any
        jurisdiction to which it is subject and (unless and only to the extent that
        the
        Company and each of its subsidiaries has set aside on its books provisions
        reasonably adequate for the payment of all unpaid and unreported taxes) has
        paid
        all taxes and other governmental assessments and charges that are material
        in
        amount, shown or determined to be due on such returns, reports and declarations,
        except those being contested in good faith and has set aside on its books
        provision reasonably adequate for the payment of all taxes for periods
        subsequent to the periods to which such returns, reports or declarations
        apply.
        There are no unpaid taxes in any material amount claimed to be due by the
        taxing
        authority of any jurisdiction, and the officers of the Company know of no
        basis
        for any such claim.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (v) Certain
        Transactions.
        Except
        for arm’s length transactions pursuant to which the Company makes payments in
        the ordinary course of business upon terms no less favorable than the Company
        could obtain from third parties and other than the grant of stock options
        disclosed in the SEC Documents, none of the officers, directors, or employees
        of
        the Company is presently a party to any transaction with the Company (other
        than
        for services as employees, officers and directors), including any contract,
        agreement or other arrangement providing for the furnishing of services to
        or
        by, providing for rental of real or personal property to or from, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any corporation, partnership, trust or other entity
        in
        which any officer, director, or any such employee has a substantial interest
        or
        is an officer, director, trustee or partner.

       

      (w) Fees
        and Rights of First Refusal.
        The
        Company is not obligated to offer the securities offered hereunder on a right
        of
        first refusal basis or otherwise to any third parties including, but not
        limited
        to, current or former shareholders of the Company, underwriters, brokers,
        agents
        or other third parties.

       

      (x) Investment
        Company.
        The
        Company is not, and is not an affiliate of, and immediately after receipt
        of
        payment for the Securities, will not be or be an affiliate of, an “investment
        company” within the meaning of the Investment Company Act of 1940, as amended.
        The Company shall conduct its business in a manner so that it will not become
        subject to the Investment Company Act.

       

      (y) Registration
        Rights.
        To the
        best knowledge of the current management of the Company, other than each
        of the
        Buyers, no Person has any right to cause the Company to effect the registration
        under the Securities Act of any securities of the Company. There are no
        outstanding registration statements not yet declared effective and there
        are no
        outstanding comment letters from the SEC or any other regulatory
        agency.

       

      (z) Private
        Placement.
        Assuming the accuracy of the Buyers’ representations and warranties set forth in
        Section 2, no registration under the Securities Act is required for the offer
        and sale of the Securities by the Company to the Buyers as contemplated hereby.
        The issuance and sale of the Securities hereunder does not contravene the
        rules
        and regulations of the Primary Market (as defined in section 4(f) herein).
        

       

      (aa) Listing
        and Maintenance Requirements.
        The
        Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
        Exchange Act, and the Company has taken no action designed to terminate,
        or
        which to its knowledge is likely to have the effect of, terminating the
        registration of the Common Stock under the Exchange Act nor has the Company
        received any notification that the SEC is contemplating terminating such
        registration. The Company has not, in the twelve (12) months preceding the
        date
        hereof, received notice from any Primary Market on which the Common Stock
        is or
        has been listed or quoted to the effect that the Company is not in compliance
        with the listing or maintenance requirements of such Primary Market. The
        Company
        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.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (bb) Manipulation
        of Price. 
        The Company 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 Company
        to
        facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
        purchased, or, paid any compensation for soliciting purchases of, any of
        the
        Securities, or (iii) paid or agreed to pay to any Person any compensation
        for
        soliciting another to purchase any other securities of the Company, other
        than,
        in the case of clauses (ii) and (iii), compensation paid to the Company’s
        placement agent in connection with the placement of the Securities.

       

      (cc) Dilutive
        Effect.
        The
        Company understands and acknowledges that the number of Conversion Shares
        issuable upon conversion of the Convertible Debentures and the Warrant Shares
        issuable upon exercise of the Warrants will increase in certain circumstances.
        The Company further acknowledges that its obligation to issue Conversion
        Shares
        upon conversion of the Convertible Debentures in accordance with this Agreement
        and the Convertible Debentures and its obligation to issue the Warrant Shares
        upon exercise of the Warrants in accordance with this Agreement and the
        Warrants, in each case, is absolute and unconditional regardless of the dilutive
        effect that such issuance may have on the ownership interests of other
        stockholders of the Company.

       

      (dd) Acquisition
        of Fuelmeister and Related Assets.
        Renewal
        Fuels has acquired Fuelmeister and all assets (collectively referred to as
        “Fuelmeister”)
        in
        connection therewith from Biodiesel Solutions pursuant to the purchase agreement
        by and between Renewal Fuels and Biodiesel Solutions, Inc., a corporation
        existing under the laws of Nevada (“Biodiesel
        Solutions”),
        dated
        March 9, 2007 (the “Asset
        Purchase Agreement”).

       

      (ee) Acquisition
        of Renewal Fuels, Inc.
        The
        Company has a minimum of two (2) years audited financials of Renewal Fuels
        and
        Fuelmeister which simultaneous with the Closing hereunder will be acquired
        by
        the Company (the “Merger”)
        pursuant to the Merger Agreement by and between the Company and Renewal Fuels
        dated as of the date hereof (the “Merger
        Agreement”),
        in
        order for the Company to file a Form 8-K with the financial statements of
        Renewal Fuels and Fuelmeister not later than ten (10) calendar days from
        the
        date hereof.

       

      (ff) Series
        A Preferred Shares.
        The
        Company has created the Series A Preferred to be issued in connection with
        the
        Merger Agreement.

       

      (gg) Assets
        of Renewal Fuels and Fuelmeister.
        The
        assets of Renewal Fuels and the assets of Fuelmeister are free and clear
        of any
        and all security interests, encumbrances, and rights of any kind or nature
        whatsoever.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      4. COVENANTS.

       

      (a) Best
        Efforts.
        Each
        party shall use its best efforts to timely satisfy each of the conditions
        to be
        satisfied by it as provided in Sections 6 and 7 of this Agreement.

       

      (b) Form
        D.
        The
        Company agrees to file a Form D with respect to the Securities as required
        under
        Regulation D and to provide a copy thereof to each Buyer promptly after such
        filing. The Company shall, on or before the Closing Date, take such action
        as
        the Company shall reasonably determine is necessary to qualify the Securities,
        or obtain an exemption for the Securities for sale to the Buyers at the Closing
        pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
        states of the United States, and shall provide evidence of any such action
        so
        taken to the Buyers on or prior to the Closing Date.

       

      (c) Reporting
        Status.
        Until
        the earlier of (i) the date as of which the Buyer(s) may sell all of the
        Securities without restriction pursuant to Rule 144(k) promulgated under
        the
        Securities Act (or successor thereto), or (ii) the date on which (A) the
        Buyers
        shall have sold all the Securities and (B) none of the Convertible Debentures
        or
        Warrants are outstanding (the “Registration
        Period”),
        the
        Company shall file in a timely manner all reports required to be filed with
        the
        SEC pursuant to the Exchange Act and the regulations of the SEC thereunder,
        and
        the Company shall not terminate its status as an issuer required to file
        reports
        under the Exchange Act even if the Exchange Act or the rules and regulations
        thereunder would otherwise permit such termination.

       

      (d) Use
        of
        Proceeds.
        The
        Company will use the proceeds from the sale of the Convertible Debentures
        to
        acquire Fuelmaster and related assets pursuant to the Asset Purchase Agreement
        and for general corporate and working capital purposes.

       

      (e) Reservation
        of Shares.
        On the
        date hereof, the Company shall reserve for issuance to the Buyers 332,000,000
        shares for issuance upon conversions of the Convertible Dentures and 18,000,000
        shares for issuance upon exercise of the Warrants (collectively, the
“Share
        Reserve”).
        The
        Company represents that it has sufficient authorized and unissued shares
        of
        Common Stock available to create the Share Reserve after considering all
        other
        commitments that may require the issuance of Common Stock. The Company shall
        take all action reasonably necessary to at all times have authorized, and
        reserved for the purpose of issuance, such number of shares of Common Stock
        as
        shall be necessary to effect the full conversion of the Convertible Debentures
        and the full exercise of the Warrants. If at any time the Share Reserve is
        insufficient to effect the full conversion of the Convertible Debentures
        or the
        full exercise of the Warrants, the Company shall increase the Share Reserve
        accordingly. If the Company does not have sufficient authorized and unissued
        shares of Common Stock available to increase the Share Reserve, the Company
        shall call and hold a special meeting of the shareholders within sixty (60)
        days
        of such occurrence, for the sole purpose of increasing the number of shares
        authorized. The Company’s management shall recommend to the shareholders to vote
        in favor of increasing the number of shares of Common Stock authorized.
        Management shall also vote all of its shares in favor of increasing the number
        of authorized shares of Common Stock.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (f) Listings
        or Quotation.
        The
        Company’s Common Stock shall be listed or quoted for trading on any of (a) the
        American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global
        Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board
        (“OTCBB”)
        (each,
        a “Primary
        Market”).
        The
        Company shall promptly secure the listing of all of the Registrable Securities
        (as defined in the Registration Rights Agreement) upon each national securities
        exchange and automated quotation system, if any, upon which the Common Stock
        is
        then listed (subject to official notice of issuance) and shall maintain such
        listing of all Registrable Securities from time to time issuable under the
        terms
        of the Transaction Documents.

       

      (g) Fees
        and Expenses.
        

       

      (i) Each
        of
        the Company and the Buyer(s) shall pay all costs and expenses incurred by
        such
        party in connection with the negotiation, investigation, preparation, execution
        and delivery of the Transaction Documents. The Company shall pay Yorkville
        Advisors LLC a fee equal to ten percent (10%) of the Purchase Price which
        shall
        be paid pro rata directly from the gross proceeds of each Closing. 

       

      (ii) The
        Company shall pay a structuring fee to Yorkville Advisors LLC of Twenty Five
        Thousand Dollars ($25,000), directly from the proceeds of the Closing.

       

      (iii) The
        Company shall pay Yorkville Advisors, LLC a non-refundable due diligence
        fee of
        Fifteen Thousand Dollars ($15,000) which shall be paid directly from the
        proceeds of the Closing.

       

      (iv) At
        the
        First Closing, the Company shall issue to the Buyer(s), on a pro rata basis,
        a
        warrant to purchase eighteen million (18,000,000) shares of the Company’s Common
        Stock at an exercise price of $0.01 per share (the “Warrant”).
        The
        shares of the Company’s Common Stock issuable upon conversion of the Warrant
        shall be referred to as the “Warrant
        Shares”.

       

      (v) Fully
        Earned.
        The
        Warrant shall be deemed fully earned as of the date hereof. 

       

      (vi) Registration
        Rights.
        The
        Warrant Shares shall have “piggy-back” registration rights as set forth in the
        Registration Rights Agreement.

       

      (h) Corporate
        Existence.
        So long
        as any of the Convertible Debentures remain outstanding, the Company shall
        not
        directly or indirectly consummate any merger, reorganization, restructuring,
        reverse stock split consolidation, sale of all or substantially all of the
        Company’s assets or any similar transaction or related transactions (each such
        transaction, an “Organizational
        Change”)
        unless, prior to the consummation an Organizational Change, the Company obtains
        the written consent of each Buyer. In any such case, the Company will make
        appropriate provision with respect to such holders’ rights and interests to
        insure that the provisions of this Section 4(h) will thereafter be applicable
        to
        the Convertible Debentures.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (i) Transactions
        With Affiliates.
        So long
        as any Convertible Debentures are outstanding, the Company shall not, and
        shall
        cause each of its subsidiaries not to, enter into, amend, modify or supplement,
        or permit any subsidiary to enter into, amend, modify or supplement any
        agreement, transaction, commitment, or arrangement with any of its or any
        subsidiary’s officers, directors, person who were officers or directors at any
        time during the previous two (2) years, stockholders who beneficially own
        five
        percent (5%) or more of the Common Stock, or Affiliates (as defined below)
        or
        with any individual related by blood, marriage, or adoption to any such
        individual or with any entity in which any such entity or individual owns
        a five
        percent (5%) or more beneficial interest (each a “Related
        Party”),
        except for (a) customary employment arrangements and benefit programs on
        reasonable terms, (b) any investment in an Affiliate of the Company, (c)
        any
        agreement, transaction, commitment, or arrangement on an arms-length basis
        on
        terms no less favorable than terms which would have been obtainable from
        a
        person other than such Related Party, (d) any agreement, transaction,
        commitment, or arrangement which is approved by a majority of the disinterested
        directors of the Company; for purposes hereof, any director who is also an
        officer of the Company or any subsidiary of the Company shall not be a
        disinterested director with respect to any such agreement, transaction,
        commitment, or arrangement. “Affiliate”
for
        purposes hereof means, with respect to any person or entity, another person
        or
        entity that, directly or indirectly, (i) has a ten percent (10%) or more
        equity
        interest in that person or entity, (ii) has ten percent (10%) or more common
        ownership with that person or entity, (iii) controls that person or entity,
        or
        (iv) shares common control with that person or entity. “Control”
or
        “controls”
for
        purposes hereof means that a person or entity has the power, direct or indirect,
        to conduct or govern the policies of another person or entity.

       

      (j) Transfer
        Agent.
        The
        Company covenants and agrees that, in the event that the Company’s agency
        relationship with the transfer agent should be terminated for any reason
        prior
        to a date which is two (2) years after the Closing Date, the Company shall
        immediately appoint a new transfer agent and shall require that the new transfer
        agent execute and agree to be bound by the terms of the Irrevocable Transfer
        Agent Instructions (as defined herein).

       

      (k) Restriction
        on Issuance of the Capital Stock.
        So long
        as any Convertible Debentures are outstanding, the Company shall not, without
        the prior written consent of the Buyer(s), (i) issue or sell shares of Common
        Stock or Preferred Stock without consideration or for a consideration per
        share
        less than the bid price of the Common Stock determined immediately prior
        to its
        issuance, (ii) issue any preferred stock, warrant, option, right, contract,
        call, or other security or instrument granting the holder thereof the right
        to
        acquire Common Stock without consideration or for a consideration less than
        such
        Common Stock’s Bid Price determined immediately prior to it’s issuance, (iii)
        enter into any security instrument granting the holder a security interest
        in
        any and all assets of the Company, or (iv) except for a registration statement
        on Form S-8 registering a maximum of fifteen million (15,000,000) shares
        of
        Common Stock in connection with a bona fide stock option plan for employees
        of
        the Company, file any other registration statement on Form S-8.

       

      (l) No
        Short Position.
        Neither
        the Buyer(s) nor any of its affiliates have an open short position in the
        Common
        Stock of the Company, and the Buyer(s) agrees that it shall not, and that
        it
        will cause its affiliates not to, engage in any short sales of or hedging
        transactions with respect to the Common Stock as long as any Convertible
        Debentures shall remain outstanding. 

       

      
        
          
          

        

        
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      (m) Rights
        of First Refusal.
        So
        long
        as any portion of Convertible Debentures are outstanding, if the Company
        intends
        to raise additional capital by the issuance or sale of capital stock of the
        Company, including without limitation shares of any class of common stock,
        any
        class of preferred stock, options, warrants or any other securities convertible
        or exercisable into shares of common stock (whether the offering is conducted
        by
        the Company, underwriter, placement agent or any third party) the Company
        shall
        be obligated to offer to the Buyers such issuance or sale of capital stock,
        by
        providing in writing the principal amount of capital it intends to raise
        and
        outline of the material terms of such capital raise, prior to the offering
        such
        issuance or sale of capital stock  to any third parties including, but not
        limited to, current or former officers or directors, current or former
        shareholders and/or investors of the obligor, underwriters, brokers, agents
        or
        other third parties.  The Buyers shall have ten (10) business days from
        receipt of such notice of the sale or issuance of capital stock to accept
        or
        reject all or a portion of such capital raising offer. 

       

      (n) Lock
        Up Agreements.
        On the
        date hereof, the Company shall obtain from each officer and director a lock
        up
        agreement in the form attached hereto as Exhibit
        C.

       

      (o) Additional
        Registration Statements.
        Until
        the effective date of the initial Registration Statement, the Company will
        not
        file a registration statement under the Securities Act relating to securities
        that are not the Securities.

       

      (p) Review
        of Public Disclosures.
        All SEC
        filings (including, without limitation, all filings required under the Exchange
        Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and
        other
        public disclosures made by the Company, including, without limitation, all
        press
        releases, investor relations materials, and scripts of analysts meetings
        and
        calls, shall be reviewed and approved for release by the Company’s attorneys
        and, if containing financial information, the Company’s independent certified
        public accountants.

       

      (q) Disclosure
        of Transaction.
        Within
        four (4) business days following the date of this Agreement, the Company
        shall
        file a Current Report on Form 8-K describing the terms of the transactions
        contemplated by the Transaction Documents in the form required by the Exchange
        Act and attaching the material Transaction Documents (including, without
        limitation, this Agreement, the form of the Convertible Debenture, the form
        of
        Warrant and the form of the Registration Rights Agreement) as exhibits to
        such
        filing.

       

      (r) Transfer
        Agent.
        Within
        thirty (30) calendar days from the date hereof the Company shall have engaged
        Worldwide Stock Transfer, LLC (“Worldwide”)
        as it
        transfer agent and shall have had Worldwide execute the Irrevocable Transfer
        Agent Instructions in form and substance satisfactory to the Buyer of which
        an
        executed copy shall be provided to the Buyers.

       

      (s) Merger
        Filings.
        Not
        later than simultaneous with the Closing, the Company will acquire Renewal
        Fuels
        pursuant to the Merger Agreement and shall make any and all state and federal
        filings in connection with the acquisition of Renewal Fuels pursuant to the
        Merger Agreement, including, but not limited, to the filing of articles of
        merger with the New Jersey Secretary of State and provided proof of such
        filing
        to the Buyer(s).

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (t) 8-K
        with Audited Financials.
        The
        Company shall file a Form 8-K in connection with the Merger which shall include
        the financial statements of Renewal Fuels and Fuelmeister not later than
        ten
        (10) calendar days from the date hereof.

       

      (u) Filing
        of the Information Statement.
        The
        Company shall, within ten (10) calendar days from the date hereof, file the
        Information Statement with the SEC.

       

      (v) Mailing
        of the Information Statement.
        The
        Company shall, within two (2) business days of receiving approval from the
        SEC
        with regard to the Information Statement, mail such Information Statement
        to the
        Company’s shareholders.

       

      (w) Assignment
        of Patent Application and Patents.
        The
        Company shall have successfully consummated and documented the assignment
        and/or
        transfer of all patents and/or patent applications of Renewal Fuels to the
        Company not later than June 30, 2007. The Company shall provide copies of
        all
        such assignment and/or transfer documentation to the Buyers not later than
        July
        1, 2007.

       

      (x) Patent
        Security Agreement.
        The
        Company shall execute the Patent Security Agreement on the date hereof and
        deliver such executed Patent Security Agreement to David Gonzalez, Esq. to
        be
        held in escrow until not later than July 1, 2007 and at such time the Company
        hereby authorizes David Gonzalez, Esq. to file such executed Patent Security
        Agreement with the U.S. Patent and Trademark Office, provided, that the Company
        has satisfied its obligations contained in Section 4(x) herein.

       

      (y) Consent
        to Stock Subdivisions and/or Splits.
        So long
        as any portion of Convertible Debentures are outstanding, the Company shall
        not
        effect any subdivision and/or split of its authorized Common Stock into a
        smaller or larger number of shares without the prior written consent of the
        Buyers.

       

      5. TRANSFER
        AGENT INSTRUCTIONS.

       

      (a) The
        Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
        agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
        Esq. as the Company’s agent for purpose instructing its transfer agent to issue
        certificates or credit shares to the applicable balance accounts at The Deposity
        Trust Company (“DTC”),
        registered in the name of each Buyer or its respective nominee(s), for the
        Conversion Shares and the Warrant Shares issued upon conversion of the
        Convertible Debentures or exercise of the Warrants as specified from time
        to
        time by each Buyer to the Company upon conversion of the Convertible Debentures
        or exercise of the Warrants. The Company shall not change its transfer agent
        without the express written consent of the Buyers, which may be withheld
        by the
        Buyers in their sole discretion. The Company warrants that no instruction
        other
        than the Irrevocable Transfer Agent Instructions referred to in this Section
        5,
        and stop transfer instructions to give effect to Section 2(g) hereof (in
        the
        case of the Conversion Shares or Warrant Shares prior to registration of
        such
        shares under the Securities Act) will be given by the Company to its transfer
        agent, and that the Securities shall otherwise be freely transferable on
        the
        books and records of the Company as and to the extent provided in this Agreement
        and the other Transaction Documents. If a Buyer effects a sale, assignment
        or
        transfer of the Securities in accordance with Section 2(f), the Company shall
        promptly instruct its transfer agent to issue one or more certificates or
        credit
        shares to the applicable balance accounts at DTC in such name and in such
        denominations as specified by such Buyer to effect such sale, transfer or
        assignment and, with respect to any transfer, shall permit the transfer.
        In the
        event that such sale, assignment or transfer involves Conversion Shares or
        Warrant Shares sold, assigned or transferred pursuant to an effective
        registration statement or pursuant to Rule 144, the transfer agent shall
        issue
        such Securities to the Buyer, assignee or transferee, as the case may be,
        without any restrictive legend. Nothing in this Section 5 shall affect in
        any
        way the Buyer’s obligations and agreement to comply with all applicable
        securities laws upon resale of Conversion Shares. The Company acknowledges
        that
        a breach by it of its obligations hereunder will cause irreparable harm to
        the
        Buyer by vitiating the intent and purpose of the transaction contemplated
        hereby. Accordingly, the Company acknowledges that the remedy at law for
        a
        breach of its obligations under this Section 5 will be inadequate and agrees,
        in
        the event of a breach or threatened breach by the Company of the provisions
        of
        this Section 5, that the Buyer(s) shall be entitled, in addition to all
        other available remedies, to an injunction restraining any breach and requiring
        immediate issuance and transfer, without the necessity of showing economic
        loss
        and without any bond or other security being required.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      6. CONDITIONS
        TO THE COMPANY’S OBLIGATION TO SELL.

       

      The
        obligation of the Company hereunder to issue and sell the Convertible Debentures
        to the Buyer(s) at the Closings is subject to the satisfaction, at or before
        the
        Closing Dates, of each of the following conditions, provided that these
        conditions are for the Company’s sole benefit and may be waived by the Company
        at any time in its sole discretion:

       

      (a) Each
        Buyer shall have executed the Transaction Documents and delivered them to
        the
        Company.

       

      (b) The
        Buyer(s) shall have delivered to the Company the Purchase Price for the
        Convertible Debentures and Warrants in the respective amounts as set forth
        next
        to each Buyer as set forth on Schedule I attached hereto, minus any fees
        to be
        paid directly from the proceeds the Closings as set forth herein, by wire
        transfer of immediately available U.S. funds pursuant to the wire instructions
        provided by the Company.

       

      (c) The
        representations and warranties of the Buyer(s) shall be true and correct
        in all
        material respects as of the date when made and as of the Closing Dates as
        though
        made at that time (except for representations and warranties that speak as
        of a
        specific date), and the Buyer(s) shall have performed, satisfied and complied
        in
        all material respects with the covenants, agreements and conditions required
        by
        this Agreement to be performed, satisfied or complied with by the Buyer(s)
        at or
        prior to the Closing Dates. 

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      7. CONDITIONS
        TO THE BUYER’S OBLIGATION TO PURCHASE.

       

      (a) The
        obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
        at
        the Closing is subject to the satisfaction, at or before the First Closing
        Date,
        of each of the following conditions:

       

      (i) The
        Company shall have executed the Transaction Documents and delivered the same
        to
        the Buyers.

       

      (ii) The
        Common Stock shall be authorized for quotation or trading on the Primary
        Market,
        trading in the Common Stock shall not have been suspended for any reason,
        and
        all the Conversion Shares issuable upon the conversion of the Convertible
        Debentures shall be approved for listing or trading on the Primary Market.
        

       

      (iii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Closing Date

       

      (iv) The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures and Warrants in the respective amounts set forth opposite each
        Buyer’s name on Schedule I attached hereto.

       

      (v) The
        Buyers shall have received an opinion of counsel from counsel to the Company
        in
        a form satisfactory to the Buyers.

       

      (vi) The
        Company shall have provided to the Buyers a true copy of a certificate of
        good
        standing evidencing the formation and good standing of the Company from the
        secretary of state (or comparable office) from the jurisdiction in which
        the
        Company is incorporated, as of a date within ten (10) days of the Closing
        Date.

       

      (vii) The
        Company shall have delivered to the Buyers a certificate, executed by the
        Secretary of the Company and dated as of the Closing Date, as to (i) the
        resolutions consistent with Section 3(c) as adopted by the Company's Board
        of
        Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
        of
        Incorporation and (iii) the Bylaws, each as in effect at the
        Closing.

       

      (viii) The
        Company shall have filed such amendment to the UCC-1 or such other forms
        as may
        be required to perfect the Buyer’s interest in the Pledged Property as detailed
        in the Security Agreement dated the date hereof and provided proof of such
        filing to the Buyer(s).

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      (ix) The
        Company shall have provided to the Buyer an acknowledgement, to the satisfaction
        of the Buyer, from the Company’s independent certified public accountants as to
        its ability to provide all consents required in order to file a registration
        statement in connection with this transaction.

       

      (x) The
        Company shall have created the Share Reserve. 

       

      (xi) The
        Irrevocable Transfer Agent Instructions, in form and substance satisfactory
        to
        the Buyer, shall have been delivered to and acknowledged in writing by the
        Company’s transfer agent.

       

      (xii) The
        Company shall have filed its Form 10-KSB for the fiscal period ended December
        31, 2006.

       

      (xiii) Renewal
        Fuels shall have acquired Fuelmeister pursuant to the Asset Purchase
        Agreement.

       

      (xiv) The
        Company shall have received approval in excess of fifty percent (50%) of
        the
        Company’s shareholders for approval of the issuance of in excess of forty
        percent (40%) of the Company’s Common Stock in connection with the acquisition
        of Renewal Fuels (“Merger
        Shareholder Approval”)
        proof
        of which shall have been provided to the Buyer(s).

       

      (xv) The
        Company and Renewal Fuels shall have executed the Merger Agreement.

       

      (xvi) The
        Company shall have acquired Renewal Fuels pursuant to the Merger
        Agreement.

       

      (xvii) The
        Series A Preferred Shares of the Company shall have been issued pursuant
        to the
        Merger Agreement.

       

      (xviii) The
        Company shall have executed and delivered the Pledge and Escrow Agreement
        to the
        Buyers and the Company shall deliver the shares of capital stock of Renewal
        Fuels together with a stock power executed in blank with a Medallion guarantee
        within three (3) business days of the date hereof, as set forth in the Pledge
        and Escrow Agreement, to David Gonzalez, Esq.

       

      (b) The
        obligation of the Buyer(s) hereunder to accept the Convertible Debentures
        at the
        Second Closing is subject to the satisfaction, at or before the Second Closing
        Date, of each of the following conditions:

       

      (i) The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason, and all the
        Conversion Shares issuable upon the conversion of the Convertible Debentures
        shall be approved by the OTCBB. 

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      (ii) The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Second Closing
        Date as though made at that time (except for representations and warranties
        that
        speak as of a specific date) and the Company shall have performed, satisfied
        and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Second Closing Date. 

       

      (iii) The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures in the respective amounts set forth opposite each Buyer(s) name
        on
        Schedule I attached hereto.

       

      (iv) (a)
        The
        Company shall have filed an information statement in connection with the
        Merger
        Shareholder Approval with the SEC (the “Information
        Statement”)
        (b)
        the Company shall have been notified by the SEC of their approval of the
        Information Statement and (c) the Company shall have mailed such Information
        Statement to it’s shareholders in accordance with Section 4 herein.

       

      (v) The
        Company shall have certified, in a certificate executed by two officers of
        the
        Company and dated as of the Second Closing Date, that all conditions to the
        Second Closing have been satisfied.

       

      (vi) The
        Company shall have made such filing with United States Patent and Trademark
        Office or such other forms as may be required to perfect the Buyer’s interest in
        the Pledged Property as detailed in the Patent Security Agreement dated the
        date
        hereof and provided proof of such filing to the Buyer(s).

       

      (vii) The
        Company shall have made all state and federal filings in connection with
        the
        Merger including but not limited to the filing of articles of merger with
        the
        New Jersey Secretary of State and provided proof of such filing to the
        Buyer(s).

       

      (viii) The
        Company shall have filed a Form 8-K in
        connection with the Merger which shall include the
        financial statements of Renewal Fuels and Fuelmeister.

       

      (ix) The
        Company shall have converted all of its deposit accounts that it maintains
        into
        Blocked Accounts (as defined in the Security Agreement).

       

      8. INDEMNIFICATION.

       

      (a) In
        consideration of the Buyer’s execution and delivery of this Agreement and
        acquiring the Convertible Debentures and the Conversion Shares hereunder,
        and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Buyer(s) and
        each
        other holder of the Convertible Debentures and the Conversion Shares, and
        all of
        their officers, directors, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Buyer
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Buyer Indemnitee is a party to the action
        for
        which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Buyer Indemnitees or any of them as a result of, or arising
        out
        of, or relating to (a) any misrepresentation or breach of any representation
        or
        warranty made by the Company in this Agreement, the Convertible Debentures
        or
        the other Transaction Documents or any other certificate, instrument or document
        contemplated hereby or thereby, (b) any breach of any covenant, agreement
        or
        obligation of the Company contained in this Agreement, or the other Transaction
        Documents or any other certificate, instrument or document contemplated hereby
        or thereby, or (c) any cause of action, suit or claim brought or made against
        such Buyer Indemnitee and arising out of or resulting from the execution,
        delivery, performance or enforcement of this Agreement or any other instrument,
        document or agreement executed pursuant hereto by any of the parties hereto,
        any
        transaction financed or to be financed in whole or in part, directly or
        indirectly, with the proceeds of the issuance of the Convertible Debentures
        or
        the status of the Buyer or holder of the Convertible Debentures the Conversion
        Shares, as a Buyer of Convertible Debentures in the Company. To the extent
        that
        the foregoing undertaking by the Company may be unenforceable for any reason,
        the Company shall make the maximum contribution to the payment and satisfaction
        of each of the Indemnified Liabilities, which is permissible under applicable
        law.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (b) In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Buyer’s other obligations under this Agreement, the Buyer
        shall defend, protect, indemnify and hold harmless the Company and all of
        its
        officers, directors, employees and agents (including, without limitation,
        those
        retained in connection with the transactions contemplated by this Agreement)
        (collectively, the “Company
        Indemnitees”)
        from
        and against any and all Indemnified Liabilities incurred by the Indemnitees
        or
        any of them as a result of, or arising out of, or relating to (a) any
        misrepresentation or breach of any representation or warranty made by the
        Buyer(s) in this Agreement, instrument or document contemplated hereby or
        thereby executed by the Buyer, (b) any breach of any covenant, agreement
        or
        obligation of the Buyer(s) contained in this Agreement, the Transaction
        Documents or any other certificate, instrument or document contemplated hereby
        or thereby executed by the Buyer, or (c) any cause of action, suit or claim
        brought or made against such Company Indemnitee based on material
        misrepresentations or due to a material breach and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement,
        the
        Transaction Documents or any other instrument, document or agreement executed
        pursuant hereto by any of the parties hereto. To the extent that the foregoing
        undertaking by each Buyer may be unenforceable for any reason, each Buyer
        shall
        make the maximum contribution to the payment and satisfaction of each of
        the
        Indemnified Liabilities, which is permissible under applicable law.

       

      9. GOVERNING
        LAW: MISCELLANEOUS.

       

      (a) Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of New Jersey without regard to the principles of conflict of laws.
        The parties further agree that any action between them shall be heard in
        Hudson
        County, New Jersey, and expressly consent to the jurisdiction and venue of
        the
        Superior Court of New Jersey, sitting in Hudson County and the United States
        District Court for the District of New Jersey sitting in Newark, New Jersey
        for
        the adjudication of any civil action asserted pursuant to this
        Paragraph.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      (b) Counterparts.
        This
        Agreement may be executed in two or more identical counterparts, all of which
        shall be considered one and the same agreement and shall become effective
        when
        counterparts have been signed by each party and delivered to the other party.
        In
        the event any signature page is delivered by facsimile transmission, the
        party
        using such means of delivery shall cause four (4) additional original executed
        signature pages to be physically delivered to the other party within five
        (5)
        days of the execution and delivery hereof.

       

      (c) Headings.
        The
        headings of this Agreement are for convenience of reference and shall not
        form
        part of, or affect the interpretation of, this Agreement.

       

      (d) Severability.
        If any
        provision of this Agreement shall be invalid or unenforceable in any
        jurisdiction, such invalidity or unenforceability shall not affect the validity
        or enforceability of the remainder of this Agreement in that jurisdiction
        or the
        validity or enforceability of any provision of this Agreement in any other
        jurisdiction.

       

      (e) Entire
        Agreement, Amendments.
        This
        Agreement supersedes all other prior oral or written agreements between the
        Buyer(s), the Company, their affiliates and persons acting on their behalf
        with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor any Buyer makes any representation,
        warranty, covenant or undertaking with respect to such matters. No provision
        of
        this Agreement may be waived or amended other than by an instrument in writing
        signed by the party to be charged with enforcement.

       

      (f) Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        confirmation of receipt, when sent by facsimile; (iii) three (3) days after
        being sent by U.S. certified mail, return receipt requested, or (iv) one
        (1) day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      
        	
                If
                  to the Company, to:

              	
                Tech
                  Laboratories, Inc.

              
	 	
                1818
                  North Farwell Avenue

              
	 	
                Milwaukee,
                  WI 53202

              
	 	
                Attention: John
                  King

              
	 	
                Telephone: (414)
                  283-2616

              
	 	
                Facsimile: (312)
                  873-3739

              
	 	 
	
                With
                  a copy to:

              	
                Kirkpatrick
                  & Lockhart Preston Gates Ellis LLP

              
	 	
                201
                  South Biscayne Boulevard, Suite 2000

              
	 	
                Miami,
                  Florida 33131-2399

              
	 	
                Attention: Clayton
                  E. Parker, Esq.

              
	 	
                Telephone: (305)
                  539-3300

              
	 	
                Facsimile: (305)
                  358-7095

              
	 	 

      

      If
        to the
        Buyer(s), to its address and facsimile number on Schedule I, with copies
        to the
        Buyer’s counsel as set forth on Schedule I. Each party shall provide five (5)
        days’ prior written notice to the other party of any change in address or
        facsimile number.

       

      (g) Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and assigns. Neither the Company nor any Buyer
        shall
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of the other party hereto.

       

      (h) No
        Third Party Beneficiaries.
        This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other person.

       

      (i) Survival.
        Unless
        this Agreement is terminated under Section 9(l), the representations and
        warranties of the Company and the Buyer(s) contained in Sections 2 and 3,
        the
        agreements and covenants set forth in Sections 4, 5 and 9, and the
        indemnification provisions set forth in Section 8, shall survive the Closing
        for
        a period of two (2) years following the date on which the Convertible Debentures
        are converted in full. The Buyer(s) shall be responsible only for its own
        representations, warranties, agreements and covenants hereunder.

       

      (j) Publicity.
        The
        Company and the Buyer(s) shall have the right to approve, before issuance
        any
        press release or any other public statement with respect to the transactions
        contemplated hereby made by any party; provided, however, that the Company
        shall
        be entitled, without the prior approval of the Buyer(s), to issue any press
        release or other public disclosure with respect to such transactions required
        under applicable securities or other laws or regulations (the Company shall
        use
        its best efforts to consult the Buyer(s) in connection with any such press
        release or other public disclosure prior to its release and Buyer(s) shall
        be
        provided with a copy thereof upon release thereof).

       

      (k) Further
        Assurances.
        Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (l) Termination.
        In the
        event that the First Closing shall not have occurred with respect to the
        Buyers
        on or before five (5) business days from the date hereof due to the Company’s or
        the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
        above (and the non-breaching party’s failure to waive such unsatisfied
        condition(s)), the non-breaching party shall have the option to terminate
        this
        Agreement with respect to such breaching party at the close of business on
        such
        date without liability of any party to any other party; provided, however,
        that
        if this Agreement is terminated by the Company pursuant to this Section 9(l),
        the Company shall remain obligated to reimburse the Buyer(s) for the fees
        and
        expenses of Yorkville Advisors LLC described in Section 4(g) above.

       

      (m) Brokerage.
        The
        Company represents that no broker, agent, finder or other party has been
        retained by it in connection with the transactions contemplated hereby and
        that
        no other fee or commission has been agreed by the Company to be paid for
        or on
        account of the transactions contemplated hereby. 

       

      (n) No
        Strict Construction.
        The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

      

      [REMAINDER
        PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their respective signature page to this
        Securities Purchase Agreement to be duly executed as of the date first written
        above.

       

      

      
        	 	
                COMPANY:

              
	 	
                TECH
                  LABORATORIES, INC. 

              
	 	 
	 	
                By: 
                  /s/
                  JOHN KING

                
                  

                

                Name: 
                  John King

                
                  Title: 
                    Director and Chief Executive
                    Officer

                

              

      

      

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their respective signature page to this
        Securities Purchase Agreement to be duly executed as of the date first written
        above.

       

      

      
        	 	
                BUYERS:

              
	 	
                CORNELL
                  CAPITAL PARTNERS, L.P. 

              
	 	 
	 	
                By:
                   Yorkville
                  Advisors, LLC 

              
	 	
                Its: Investment
                  Manager

              
	 	 
	 	 
	 	
                By: /s/
                  MARK ANGELO

                
                  

                

                
                

              
	 	
                Name: Mark
                  Angelo

              
	 	
                Its: Portfolio
                  Manager

              

      

      

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS

       

      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS

       

      

        
          	
                  (1)

                	 	
                  (2)

                	 	
                  (3)

                	 	
                  (4)

                	 	
                  (6)

                	 	
                  (7)

                	 	
                  (8)

                	 
	
                  Buyer
                    

                	 	
                  Subscription
                    Amount

                	 	 	 	 	 	
                  Legal
                    Representative’s 

                  Address
                    and Facsimile 

                  Number

                	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
                  Closing

                	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Cornell
                    Capital Partners, L.P.

                   

                  101
                    Hudson Street, Suite 3700

                  Jersey
                    City, NJ 07303

                  Attention:
                    Mark Angelo

                  Telephone:
                    (201) 985-8300

                  Facsimile:
                    (201) 985-8266

                  Residence:
                    Cayman Islands

                	 	 	 	 	
                  $

                	
                  1,400,000

                	 	 	 	 	 	 	 	 	 	 	 	
                  David
                    Gonzalez, Esq.

                  101
                    Hudson Street, Suite 3700

                  Jersey
                    City, New Jersey 07302 

                  Telephone:
                    (201) 985-8300 

                  Facsimile:
                    (201) 985-8266

                	 

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      DISCLOSURE
        SCHEDULE

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      FORM
        OF CONVERTIBLE DEBENTURE

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

       

      FORM
        OF WARRANT

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        C

       

      LOCK
        UP AGREEMENT

       

      The
        undersigned hereby agrees that for a period commencing on April ___, 2007
        and
        expiring on the date thirty (30) days after the date that all amounts owed
        to
        Cornell Capital Partners, LP (the “Buyer”),
        under
        the Secured Convertible Debentures issued to the Buyer pursuant to the
        Securities Purchase Agreement between Tech Laboratories, Inc. (the “Company”)
        and
        the Buyer dated April ___, 2007 have been paid (the “Lock-up
        Period”),
        he,
        she or it will not, directly or indirectly, without the prior written consent
        of
        the Buyer, issue, offer, agree or offer to sell, sell, grant an option for
        the
        purchase or sale of, transfer, pledge, assign, hypothecate, distribute or
        otherwise encumber or dispose of any securities of the Company, including
        common
        stock or options, rights, warrants or other securities underlying, convertible
        into, exchangeable or exercisable for or evidencing any right to purchase
        or
        subscribe for any common stock (whether or not beneficially owned by the
        undersigned), or any beneficial interest therein (collectively, the
“Securities”)
        except
        in accordance with the volume limitations set forth in Rule 144(e) of the
        General Rules and Regulations under the Securities Act of 1933, as
        amended.

       

      In
        order
        to enable the aforesaid covenants to be enforced, the undersigned hereby
        consents to the placing of legends and/or stop-transfer orders with the transfer
        agent of the Company’s securities with respect to any of the Securities
        registered in the name of the undersigned or beneficially owned by the
        undersigned, and the undersigned hereby confirms the undersigned’s investment in
        the Company.

      

        
          	
                  Dated:
                    _______________, 2007

                	 
	 	 
	 	
                  Signature

                
	 	 
	 	
                  Name:
                    __________________________________________

                
	 	
                  Address:
                    ________________________________________

                
	 	
                  City,
                    State, Zip Code: ______________________________

                
	 	 
	 	 __________________________________________
	 	
                  Print
                    Social Security Number 

                  or
                    Taxpayer I.D. Number

                

        

      

      

      
        
          
          

        

        
          4

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