Document:

ex10_1.htm

EXHIBIT 10.1

Execution Copy

COMMON STOCK PURCHASE AGREEMENT

           COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of November 29, 2011 by and between COMVERGE, INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”).  Capitalized terms used herein and not
otherwise defined herein are defined in Section 10 hereof.

           WHEREAS:

           Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, up to Ten Million Dollars ($10,000,000) of the Company’s common stock, par value $0.001 (the “Common Stock”).  The shares of Common Stock to be purchased hereunder are referred to herein as the “Purchase Shares.”

           NOW THEREFORE, the Company and the Buyer hereby agree as follows:

	
  

	
1.

	
PURCHASE OF COMMON STOCK.

           Subject to the terms and conditions set forth in this Agreement, the Company has the right to sell to the Buyer, and the Buyer has the obligation to purchase from the Company, Purchase Shares as follows:

           (a)           Commencement of Purchases of Common Stock.  After the Commencement Date (as defined below), the purchase and sale of Purchase Shares hereunder shall occur from time to time upon written notices by the Company to the Buyer on the terms and conditions as set forth herein following the satisfaction of the conditions (the “Commencement”) as set forth in Sections 6 and 7 below (the date of satisfaction of such conditions, the “Commencement
Date”).

           (b)           The Company’s Right to Require Regular Purchases.  Subject to the terms and conditions of this Agreement, on any given Business Day after the Commencement Date, the Company shall have the right but not the obligation to direct the Buyer by its delivery to the Buyer of a Purchase Notice from time to time, and the Buyer thereupon shall have the obligation, to buy the number of Purchase Shares specified in such notice, up to a maximum of 100,000 Purchase Shares, on such Business Day (as long as such notice is delivered on or before 5:00 p.m. Eastern time on such Business Day) (each such purchase, a
“Regular Purchase”) at the Purchase Price on the Purchase Date; however, in no event shall the Purchase Amount of a Regular Purchase exceed five hundred thousand dollars ($500,000) per Business Day, unless the Buyer and the Company mutually agree.  The Company and the Buyer may mutually agree to increase the number of Purchase Shares that may be sold per Regular Purchase to as much as an additional 1,000,000 Purchase Shares per Business Day.  The Company may deliver additional Purchase Notices to the Buyer from time to time so long as the most recent purchase has been completed.  The share amounts in the first and second sentences of this Section 1(b) shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split, or other
similar transaction.

           (c)           VWAP Purchases.  Subject to the terms and conditions of this Agreement, in addition to purchases of Purchase Shares as described in Section 1(b) above, with one Business Day’s prior written notice, the Company shall also have the right but not the obligation to direct Buyer by the Company’s delivery to Buyer of a VWAP Purchase Notice from time to time, and Buyer thereupon shall have the obligation, to buy the VWAP Purchase Share Percentage of the trading volume of the Common Stock on the VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase Date (each such purchase, a “VWAP Purchase”) at the
VWAP Purchase Price.  The Company may deliver a VWAP Purchase Notice to the Buyer only on a date on which the Company also submitted a Purchase Notice for a Regular Purchase of at least 100,000 Purchase Shares to the Buyer.  A VWAP Purchase shall automatically be deemed completed at such time on the VWAP Purchase Date that the sale price of the Common Stock falls below the VWAP Minimum Price Threshold; in such circumstance, the VWAP Purchase Amount shall be calculated using the (i) the VWAP Purchase Share Percentage of the aggregate shares traded for such portion of the VWAP Purchase Date prior to the time that the sale price of the Common Stock fell below the VWAP Minimum Price Threshold and (ii) the volume weighted average price of Common Stock sold during such portion of the VWAP Purchase Date prior to the time that the sale price of the Common Stock fell below
the VWAP Minimum Price Threshold.  Each VWAP Purchase Notice must be accompanied by instructions to the Company’s Transfer Agent to immediately issue to the Buyer an amount of Common Stock equal to the VWAP Purchase Share Estimate, a good faith estimate by the Company of the number of Purchase Shares that the Buyer shall have the obligation to buy pursuant to the VWAP Purchase Notice.  In no event shall the Buyer pursuant to any VWAP Purchase, purchase a number of Purchase Shares that exceeds the VWAP Purchase Share Estimate issued on the VWAP Purchase Date in connection with such VWAP Purchase Notice; however, the Buyer will immediately return to the Company any amount of Common Stock issued pursuant to the VWAP Purchase Share Estimate that exceeds the number of Purchase Shares the Buyer actually purchases in connection with such VWAP Purchase.  Upon
completion of each VWAP Purchase Date, the Buyer shall submit to the Company a confirmation of the VWAP Purchase in form and substance reasonably acceptable to the Company.  The Company may deliver additional VWAP Purchase Notices to the Buyer from time to time so long as the most recent purchase has been completed.

 

 

(d)           Payment for Purchase Shares.  For each Regular Purchase, the Buyer shall pay to the Company an amount equal to the Purchase Amount as full payment for such Purchase Shares via wire transfer of immediately available funds on the same Business Day that the Buyer receives such Purchase Shares.  For each VWAP Purchase, the Buyer shall pay to the Company an amount equal to the VWAP Purchase Amount as full payment for such Purchase Shares via wire transfer of immediately available funds on the third Business Day following the VWAP Purchase Date.  All payments made under this Agreement shall be made in lawful money of the
United States of America via wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice in accordance with the provisions of this Agreement.  Whenever any amount expressed to be due by the terms of this Agreement is due on any day that is not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day.

 

 

(e)           Purchase Price Floor.  The Company and the Buyer shall not effect any sales under this Agreement on any Purchase Date where the Closing Sale Price is less than the Floor Price.  “Floor Price” means $1.00 per share of Common Stock, which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.

(f)           Records of Purchases.  The Buyer and the Company shall each maintain records showing the remaining Available Amount at any given time and the dates and purchase amounts for each purchase, or shall use such other method reasonably satisfactory to the Buyer and the Company to reconcile the remaining Available Amount.

(g)           Taxes.  The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery of any shares of Common Stock to the Buyer made under this Agreement.

(h)           Compliance with Principal Market Rules.  Notwithstanding anything in this Agreement to the contrary, and in addition to the limitations set forth in Section 1(e), the total number of shares of Common Stock that may be issued under this Agreement, including the Commitment Shares (as defined in Section 4(e) hereof), shall be limited to 5,083,596 shares of Common Stock (the “Exchange Cap”), which equals 19.99% of the Company’s outstanding shares of Common Stock as of the date hereof, unless stockholder approval is obtained to issue more than such 19.99%.  The Company shall not be required or permitted to issue, and the Buyer shall not be required to purchase, any shares of Common Stock
under this Agreement if such issuance would breach the Company's obligations under the rules or regulations of the Principal Market.  The Company will, in its sole discretion, determine whether to obtain stockholder approval to issue more than 19.99% of its outstanding shares of Common Stock.

2.           BUYER'S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to the Company that as of the date hereof and as of the Commencement Date:

(a)           Investment Purpose.  The Buyer is entering into this Agreement and acquiring the Commitment Shares and the Purchase Shares (the Purchase Shares and the Commitment Shares are collectively referred to herein as 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; provided however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term.

 

 

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

(c)           [Intentionally Omitted.]

(d)           Information.  The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been reasonably requested by the Buyer, including, without limitation, the SEC Documents (as defined in Section 3(f) hereof).  The Buyer understands that its investment in the Securities involves a high degree of risk.  The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii) has such knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of the Company and others matters related to an investment in the Securities.  Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives shall modify, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.  The 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.  The 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.

(f)           [Intentionally Omitted.]

        (g)           Organization. The Buyer is a limited liability company duly organized and validly exiting in good standing under the laws of the jurisdiction in which it is organized, and has the requisite organizational power and authority to own its properties and to carry on its business as not being conducted.

        (h)           Validity; Enforcement.  This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and is a valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to (i) general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and (ii) public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation) with regards to indemnification, contribution or exculpation. The execution and
delivery of the Transaction Documents by the Buyer and the consummation by it of the transactions contemplated hereby and thereby do not conflict with the Buyer’s certificate of organization or operating agreement or similar documents, and do not require further consent or authorization is required by the Buyer, its managers or its members.

(i)           Residency.  The Buyer is a resident of the State of Illinois.

(j)           No Prior Short Selling.  The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement has any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

3.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer that as of the date hereof and as of the Commencement Date:

(a)           Organization and Qualification.  The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns more than 50% of the voting stock or capital stock or other similar equity interests) are corporations or limited liability companies duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated or organized, and have the requisite corporate or organizational power and authority 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 or limited liability
company to do business and is in good standing in every jurisdiction in which its ownership of property or 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 could not reasonably be expected to have a Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means any material adverse effect on any of: (i) the business, properties, assets, operations, results of operations or financial condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined in Section 3(b) hereof).  The Company has no material Subsidiaries except as set forth on Schedule
3(a).

        (b)           Authorization; Enforcement; Validity.  (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement and each of the other agreements entered into by the parties on the Commencement Date and attached hereto as exhibits to 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 Commitment
Shares and the reservation for issuance and the issuance of the Purchase Shares issuable under this Agreement, have been duly authorized by the Company’s Board of Directors or duly authorized committee thereof, do not conflict with the Company’s Certificate of Incorporation or Bylaws, and do not require further consent or authorization by the Company, its Board of Directors or its stockholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly executed and delivered by the Company and (iv) this Agreement constitutes, and each other Transaction Document upon its execution on behalf of the Company, shall 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 (y) 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 and (z) public policy underlying any law, rule or regulation (including any federal or states securities law, rule or regulation) with regards to indemnification, contribution or exculpation.  The Board of Directors of the Company or duly authorized committee thereof has approved the resolutions (the “Signing Resolutions”) substantially in the form as set forth as Exhibit C attached hereto to authorize this Agreement and the transactions contemplated hereby.  The Signing Resolutions are valid, in full force and effect and have not been modified or supplemented in any material respect.  The Company has delivered to the Buyer a true and correct copy of a unanimous written consent
adopting the Signing Resolutions executed by all of the members of the Board of Directors of the Company.

        (c)           Capitalization.  As of the date hereof, the authorized capital stock of the Company consists of (i) 150,000,000 shares of Common Stock, par value $0.001, of which as of the date hereof 25,430,700 shares are issued and outstanding, 45,415 shares are held as treasury shares, 4,238,791 shares are reserved for future issuance pursuant to the Company’s equity incentive plan(s) of which approximately 1,606,443 shares remain available for future option grants or stock awards, and 2,747,252 shares are issuable and reserved for issuance pursuant to securities (other than stock options or equity based awards
issued pursuant to the Company’s stock incentive plans) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii)15,000,000 shares of preferred stock, with per share liquidation preferences set forth on Schedule 3(c), of which as of the date hereof, zero shares are issued and outstanding.  All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable.  Except as disclosed in Schedule 3(c), (i) no shares of the Company’s capital stock are 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 debt securities of the Company or any of its Subsidiaries, (iii) 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, any shares of 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 shares of 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, any shares of capital stock of the Company or any of its Subsidiaries, (iv) there are no material agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement), (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 as described in this Agreement and (vii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.  The Company has furnished or made available to the Buyer true and correct 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”).

(d)           Issuance of Securities.  The Commitment Shares have been duly authorized and, upon issuance in accordance with the terms hereof, the Commitment Shares shall be (i) validly issued, fully paid and non-assessable and (ii) free from all taxes, liens and charges with respect to the issue thereof.  5,083,596 shares of Common Stock have been duly authorized and reserved for issuance upon purchase under this Agreement.  Upon issuance and payment therefore in accordance with the terms and conditions of this Agreement, the Purchase Shares shall be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

         (e)           No Conflicts.  Except as disclosed in Schedule 3(e), 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 reservation for issuance and issuance of the Purchase Shares) will not (i) result in a violation of the Certificate of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the Bylaws or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) 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 result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market 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 conflicts, defaults, terminations, amendments, accelerations, cancellations and violations under clause (ii), which could not reasonably be expected to result in a Material Adverse Effect.  Except as disclosed in Schedule 3(e), neither the Company nor its Subsidiaries is in
violation of any term of or in default under its Certificate of Incorporation, any Certificate of Designation, Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively.  Except as disclosed in Schedule 3(e), neither the Company nor any of its Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible violations, defaults, terminations or amendments that could not reasonably be expected to have 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 law, ordinance, or
regulation of any governmental entity, except for possible violations, the sanctions for which either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.  Except as specifically contemplated by this Agreement, reporting obligations under the 1934 Act, and as required under the 1933 Act or applicable state securities laws or the filing of a Listing of Additional Shares Notification Form with the Principal Market, 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 or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with the terms hereof or thereof.  Except as disclosed in Schedule 3(e) and for
reporting obligations under the 1934 Act, all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall be obtained or effected on or prior to the Commencement Date.  The Company is not subject to any notices or actions from or to the Principal Market other than routine matters incident to listing on the Principal Market and not involving a violation of the rules of the Principal Market.  The Principal Market has not commenced any delisting proceedings against the Company.

       (f)           SEC Documents; Financial Statements. Except as disclosed in Schedule 3(f), since September 30, 2010, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to 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”).  As of their respective dates (except
as they have been correctly amended), the SEC Documents complied in all material respects with the requirements of the 1934 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 (except as they may have been properly amended), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  As of their respective dates (except as they have been properly amended), 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).  Except as disclosed in Schedule 3(f) or routine correspondence, such as comment letters and notices of effectiveness in connection with previously filed registration statements or periodic reports publicly available
on EDGAR, to the Company’s knowledge, the Company or any of its Subsidiaries are not presently the subject of any inquiry, investigation or action by the SEC.

(g)           Absence of Certain Changes.  Except as disclosed in Schedule 3(g), since September 30, 2011, there has been no material adverse change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries.  For purposes of this Agreement, neither a decrease in cash or cash equivalents nor losses incurred in the ordinary course of the Company’s business shall be deemed or considered a material adverse change.  The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings.  The Company is financially solvent and is generally able to pay its debts as they become due.

       (h)           Absence of Litigation. To the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against the Company, the Common Stock or any of the Company's Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, which could reasonably be expected to have a Material Adverse Effect (each, an “Action”).  A description of each
such Action  is set forth in Schedule 3(h).

(i)           Acknowledgment Regarding Buyer’s Status.  The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Buyer or any of its representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities.  The Company further represents to the Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives and advisors.

        (j)           Intellectual Property Rights.  To the Company’s knowledge, the Company and its Subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (collectively, “Intellectual Property”) necessary to conduct their respective businesses as now conducted, except as set forth in Schedule 3(j) or to the
extent that the failure to own, possess, license or otherwise hold adequate rights to use Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect.  Except as disclosed in Schedule 3(k), none of the Company’s active and registered Intellectual Property have expired or terminated, or, by the terms and conditions thereof, will expire or terminate within two years from the date of this Agreement.  The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of any Intellectual Property or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others with respect to the Company’s or its Subsidiaries’ Intellectual Property and, except as set forth on Schedule 3(j), 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 Intellectual Property, which could reasonably be expected to have a Material Adverse Effect.

      (k)           Environmental Laws.  The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety or the environment and with respect to 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, except where, in each of the three foregoing clauses, the failure to so comply or receive such approvals could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

       (l)           Title.  The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them that is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(l) or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries or could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.  Any real property and facilities held under lease by the Company and any of its Subsidiaries, to the Company’s knowledge, 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.

       (m)           Insurance.  The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be reasonable 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 reasonably be expected to have a Material Adverse Effect.

       (n)           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 as currently conducted, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such material certificate, authorization or permit.

       (o)           Tax Status.  The Company and each of its Subsidiaries has made or filed all federal and state income and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books reserves reasonably adequate for the payment of all unpaid and unreported taxes) and 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 reserves reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  To the Company’s knowledge, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction.

       (p)           Transactions With Affiliates.  Except as set forth on Schedule 3(p) and other than the grant or exercise of stock options or any other equity securities offered pursuant to duly adopted stock or incentive compensation plans, none of the officers, directors or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors and reimbursement for expenses incurred on behalf of the Company), 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 material interest or is an officer, director, trustee or general partner.

       (q)           Application of Takeover Protections.  The Company and its board of directors have taken or will take prior to the Commencement Date all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the
Securities and the Buyer's ownership of the Securities.

(r)           Registration Statement.  The Shelf Registration Statement (as defined in Section 4(a) hereof) has been declared effective by the SEC, and no stop order has been issued or is pending or, to the knowledge of the Company, threatened by the SEC with respect thereto.  As of the date hereof, the Company has a dollar amount of securities registered and unsold under the Shelf Registration Statement, which is not less than the sum of (i) the Available Amount and (ii) the market value of the Commitment Shares on the date hereof.

4.           COVENANTS.

(a)           Filing of Form 8-K and Prospectus Supplement.  The Company agrees that it shall, within the time required under the 1934 Act, file a Current Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby.  The Company shall within two (2) Business Days from the date hereof file with the SEC a prospectus supplement to the Company’s existing shelf registration statement on Form S-3 (File No. 333-161400, the “Shelf Registration Statement”) covering the sale of the Commitment Shares and Purchase Shares (the
“Prospectus Supplement”) in accordance with the terms of the Registration Rights Agreement between the Company and the Buyer, dated as of the date hereof (the “Registration Rights Agreement”).  The Company shall use reasonable best efforts to keep the Shelf Registration Statement and any New Registration Statement (as defined in the Registration Rights Agreement) effective pursuant to Rule 415 promulgated under the 1933 Act and available for sales of all Securities to the Buyer until such time as (i) it no longer qualifies to make sales under the Shelf Registration Statement, (ii) the date on which all the Securities have been sold under this Agreement and no Available Amount remains thereunder, or (iii) the Agreement has been
terminated.  The Shelf Registration Statement (including any amendments or supplements thereto and prospectuses or prospectus supplements, including the Prospectus Supplement, contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

(b)           Blue Sky. The Company shall take such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify (i) the initial sale of the Securities to the Buyer under this Agreement and (ii) any subsequent sale of the Securities by the Buyer, in each case, under applicable securities or “Blue Sky” laws of the states of the United States in such states as is reasonably requested by the Buyer from time to time, and shall provide evidence of any such action so taken to the Buyer.

       (c)           Listing.  The Company shall promptly secure the listing of all of the Securities upon each national securities exchange and automated quotation system that requires an application by the Company for listing, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain such listing, so long as any other shares of Common Stock shall be so listed.  The Company shall maintain the Common Stock’s listing on the Principal Market.  Neither the Company nor any of its Subsidiaries shall take any action that would be reasonably expected to
result in the delisting or suspension of the Common Stock on the Principal Market, unless the Common Stock is immediately thereafter traded on the New York Stock Exchange, the NYSE Amex Equities, the Nasdaq Global Select Market, the Nasdaq Capital Market or the OTC Bulletin Board.  The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section.

(d)           Limitation on Short Sales and Hedging Transactions.  The Buyer agrees that beginning on the date of this Agreement and ending on the date of termination of this Agreement as provided in Section 11(k), the Buyer and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

(e)           Issuance of Commitment Shares.  In connection with the Commencement, the Company shall issue to the Buyer as consideration for the Buyer entering into this Agreement 144,927 shares of Common Stock (the “Commitment Shares”).  The Commitment Shares shall be issued without any restrictive legend. 

       (f)           Due Diligence.  The Buyer shall have the right, from time to time as the Buyer may reasonably deem appropriate, to perform reasonable due diligence on the Company during normal business hours.  The Company and its officers and employees shall provide information and reasonably cooperate with the Buyer in connection with any reasonable request by the Buyer related to the Buyer’s due diligence of the Company, including, but not limited to, any such request made by the Buyer in connection with (i) the filing of the registration statement described in Section 4(a) hereof and (ii) the Commencement;
provided, however, that at no time is the Company required or permitted to disclose material nonpublic information to the Buyer or breach any obligation of confidentiality or non-disclosure to a third party.  Each party hereto agrees not to disclose any Confidential Information of the other party to any third party and shall not use the Confidential Information of such other party for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby.  Each party hereto acknowledges that the Confidential Information shall remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the other party.

        5.           TRANSFER AGENT INSTRUCTIONS.

All of the Purchase Shares to be issued under this Agreement shall be issued without any restrictive legend unless the Buyer expressly consents otherwise.  The Company shall issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue Common Stock in the name of the Buyer for the Purchase Shares (the “Irrevocable Transfer Agent Instructions”).  The Company warrants to the Buyer that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to the Transfer Agent with respect to the Purchase Shares and that the Commitment
Shares and the Purchase Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Registration Rights Agreement.

	
  

	
6.

	
CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE

	
  

	 	
SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.

The right of the Company hereunder to commence sales of the Purchase Shares is subject to the satisfaction of each of the following conditions on or before the Commencement Date (the date that the Company may begin sales):

	
  

	
(a)

	
The Buyer shall have executed each of the Transaction Documents and delivered the same to the Company;

	
  

	
(b)

	
The representations and warranties of the Buyer shall be true and correct and the Buyer shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Commencement Date; and

	
  

	
(c)

	
The Prospectus Supplement shall have been delivered to the Buyer and no stop order with respect to the registration statement covering the sale of shares to the Buyer shall be pending or threatened by the SEC.

	 	
7.

	
CONDITIONS TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON STOCK.

	
 

The obligation of the Buyer to buy Purchase Shares under this Agreement is subject to the satisfaction of each of the following conditions on or before the Commencement Date (the date that the Company may begin sales of Purchase Shares) and once such conditions have been initially satisfied, there shall not be any ongoing obligation to satisfy such conditions after the Commencement has occurred:

  (a)           The Company shall have executed each of the Transaction Documents and delivered the same to the Buyer;

              (b)           The Company shall have issued to the Buyer the Commitment Shares;

     (c)           The Common Stock shall be authorized for quotation on the Principal Market, trading in the Common Stock shall not have been within the last 365 days suspended by the SEC or the Principal Market, other than a general halt in trading in the Common Stock by the Principal Market under halt codes indicating pending or released material news, and the Securities shall be approved for listing upon the Principal Market;

         (d)           The Buyer shall have received the opinion of the Company's legal counsel dated as of the Commencement Date substantially in the form of Exhibit A attached hereto;

         (e)           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 of this Agreement and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of such specific date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.  The Buyer shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing effect in the form attached hereto as Exhibit B;

         (f)           The Board of Directors of the Company or a duly authorized committee thereof shall have adopted resolutions substantially in the form attached hereto as Exhibit C which shall be in full force and effect without any amendment or supplement thereto as of the Commencement Date;

(g)           [Intentionally Omitted];

(h)           The Irrevocable Transfer Agent Instructions, in form acceptable to the Buyer shall have been delivered to and acknowledged in writing by the Company and the Company’s Transfer Agent;

(i)           The Company shall have delivered to the Buyer a certificate evidencing the incorporation and good standing of the Company in the State of Delaware issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business Days of the Commencement Date;

         (j)           The Company shall have delivered to the Buyer a certified copy of the Certificate of Incorporation, as certified by the Secretary of State of the State of Delaware within ten (10) Business Days of the Commencement Date;

(k)           The Company shall have delivered to the Buyer a secretary’s certificate executed by the Secretary of the Company, dated as of the Commencement Date, in the form attached hereto as Exhibit D;

        (l)           The Shelf Registration Statement shall have been declared effective under the 1933 Act by the SEC and no stop order with respect thereto shall be pending or threatened by the SEC.  The Company shall have prepared and delivered to the Buyer a final and complete form of prospectus supplement, dated and current as of the Commencement Date, to be used in connection with any issuances of any Commitment Shares or any Purchase Shares to the Buyer, and to be filed by the Company two (2) Business Days after the Commencement Date.  The Company shall have made all filings under all applicable federal and
state securities laws necessary to consummate the issuance of the Commitment Shares and the Purchase Shares pursuant to this Agreement in compliance with such laws;

        (m)           No Event of Default has occurred and is continuing, or any event which, after notice and/or lapse of time, would become an Event of Default has occurred;

        (n)           On or prior to the Commencement Date, the Company shall take all necessary action, if any, and such actions as reasonably requested by the Buyer, in order to render inapplicable any control share acquisition, business combination, stockholder rights plan or poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation that is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company's issuance of the
Securities and the Buyer's ownership of the Securities; and

(o)           The Company shall have provided the Buyer with the information reasonably requested by the Buyer in connection with its due diligence requests made prior to, or in connection with, the Commencement, in accordance with the terms of Section 4(f) hereof.

	
  

	
8.

	
INDEMNIFICATION.

        In consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Buyer and all of its affiliates, members, officers, directors, and employees, and any of the foregoing person’s agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “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 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 any Indemnitee 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 the 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 the 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 Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or  document contemplated hereby or thereby, other than with respect to Indemnified Liabilities which directly and primarily result from (A) a breach of any of the Buyer’s representations and warranties, covenants or agreements contained in this Agreement, or (B) the gross negligence or willful misconduct of the Buyer or any other Indemnitee.  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.

9.           EVENTS OF DEFAULT.

An “Event of Default” shall be deemed to have occurred at any time as any of the following events occurs:

(a)           during any period in which the effectiveness of any registration statement is required to be maintained pursuant to the terms of the Registration Rights Agreement, the effectiveness of such registration statement lapses for any reason (including, without limitation, the issuance of a stop order) or is unavailable to the Company for sale of all of the Registrable Securities (as defined in the Registration Rights Agreement) to the Buyer in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a
period of ten (10) consecutive Business Days or for more than an aggregate of thirty (30) Business Days in any 365-day period;

(b)           the suspension from trading or failure of the Common Stock to be listed on a Principal Market for a period of three (3) consecutive Business Days;

(c)           the delisting of the Common Stock from the Principal Market, and the Common Stock is not immediately thereafter trading on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Capital Market, the NYSE Amex Equities or the OTC Bulletin Board;

               (d)           the failure for any reason by the Transfer Agent to issue Purchase Shares to the Buyer within five (5) Business Days after the applicable Purchase Date that the Buyer is entitled to receive;

(e)           the breach of any representation, warranty, covenant or other term or condition under any Transaction Document if such breach could have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably curable, only if such breach continues for a period of at least five (5) Business Days;

(f)           if any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law ;

        (g)           if the Company pursuant to or within the meaning of any Bankruptcy Law; (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, or (E) becomes insolvent;

        (h)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C) orders the liquidation of the Company or any Subsidiary; or

(i)           if at any time after the Commencement Date, the Exchange Cap is reached unless and until stockholder approval is obtained pursuant to Section 1(h) hereof. The Exchange Cap shall be deemed to be reached at such time if, upon submission of a Purchase Notice or VWAP Purchase Notice under this Agreement, the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue under this Agreement without breaching the Company's obligations under the rules or regulations of the Principal Market.

In addition to any other rights and remedies under applicable law and this Agreement, including the Buyer termination rights under Section 11(k) hereof, so long as an Event of Default has occurred and is continuing, or if any event which, after notice and/or lapse of time, would become an Event of Default, has occurred and is continuing, or so long as the Closing Sale Price is below the Floor Price, the Company may not require and the Buyer shall not be obligated or permitted to purchase any shares of Common Stock under this Agreement.  If pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian
is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to the Company without further action or notice by any Person.  No such termination of this Agreement under Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement.

10.           CERTAIN DEFINED TERMS.

For purposes of this Agreement, the following terms shall have the following meanings:

(a)           “1933 Act” means the Securities Act of 1933, as amended.

(b)           “Available Amount” means initially Ten Million Dollars ($10,000,000) in the aggregate which amount shall be reduced by the Purchase Amount each time the Buyer purchases shares of Common Stock pursuant to Section 1 hereof.

                (c)           “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

(d)           “Business Day” means any day on which the Principal Market is open for trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time), including any day on which the Principal Market is open for trading for a period of time less than the customary time.

(e)           “Closing Sale Price” means the last closing trade price for the Common Stock on the Principal Market as reported by the Principal Market.

               (f)           “Confidential Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment), which is designated as “Confidential,” “Proprietary” or some similar designation. Information communicated orally shall be considered Confidential Information if such information is confirmed in writing as
being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s
obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.

(g)           “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

(h)           “Maturity Date” means the date that is twenty-four (24) months from the Commencement Date.

(i)           “Person” means an individual or entity including any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(j)           “Principal Market” means the Nasdaq Global Market; provided however, that in the event the Company’s Common Stock is ever listed or traded on the Nasdaq Global Select Market, the Nasdaq Capital Market, the New York Stock Exchange, the NYSE Amex Equities or the OTC Bulletin Board, then the “Principal Market” shall mean such other market or exchange on which the Company’s Common Stock is then listed or traded.

(k)           “Purchase Amount” means, with respect to any particular purchase made hereunder, the portion of the Available Amount to be purchased by the Buyer pursuant to Section 1 hereof as set forth in a valid Purchase Notice or VWAP Purchase Notice which the Company delivers to the Buyer.

(l)           “Purchase Date” means with respect to any Regular Purchase made hereunder, the Business Day of receipt by the Buyer of a valid Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(b) hereof.

                (m)           “Purchase Notice” shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy Purchase Shares pursuant to Section 1(b) hereof as specified by the Company therein at the applicable Purchase Price on the Purchase Date.

(n)            “Purchase Price” means the lower of (i) the lowest Sale Price of the Common Stock on the Purchase Date or (ii) the arithmetic average of the three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12) consecutive Business Days ending on the Business Day immediately preceding such Purchase Date (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

(o)           “Sale Price” means any trade price for the shares of Common Stock on the Principal Market during normal trading hours, as reported by the Principal Market.

(p)           “SEC” means the United States Securities and Exchange Commission.

(q)           “Transfer Agent” means the transfer agent of the Company as set forth in Section 11(f) hereof or such other person who is then serving as the transfer agent for the Company in respect of the Common Stock.

(r)           “VWAP Minimum Price Threshold” means, with respect to any particular VWAP Purchase Notice, the Sale Price on the VWAP Purchase Date equal to the greater of (i) 90% of the Closing Sale Price on the Business Day immediately preceding the VWAP Purchase Date or (ii) such higher price as set forth by the Company in the VWAP Purchase Notice.

(s)           “VWAP Purchase Amount” means, with respect to any particular VWAP Purchase Notice, the portion of the Available Amount to be purchased by the Buyer pursuant to Section 1(c) hereof as set forth in a valid VWAP Purchase Notice which requires the Buyer to buy the VWAP Purchase Share Percentage of the aggregate shares traded on the Principal Market during normal trading hours on the VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum, subject to the VWAP Minimum Price Threshold.

(t)           “VWAP Purchase Date” means, with respect to any VWAP Purchase made hereunder, the Business Day following the receipt by the Buyer of a valid VWAP Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(c) hereof.

(u)           “VWAP Purchase Notice” shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy Purchase Shares on the VWAP Purchase Date pursuant to Section 1(c) hereof as specified by the Company therein at the applicable VWAP Purchase Price with the applicable VWAP Purchase Share Percentage specified therein.

(v)           “VWAP Purchase Share Percentage” means, with respect to any particular VWAP Purchase Notice pursuant to Section 1(c) hereof, the percentage set forth in the VWAP Purchase Notice which the Buyer will be required to buy as a specified percentage of the aggregate shares traded on the Principal Market during normal trading hours up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase Date subject to Section 1(c) hereof but in no event shall this percentage exceed a maximum of thirty percent (30%) of such VWAP Purchase Date’s share trading volume of the Common Stock
on the Principal Market during normal trading hours.

(w)            “VWAP Purchase Price” means the lesser of (i) the Closing Sale Price on the VWAP Purchase Date; or (ii) ninety-five percent (95%) of volume weighted average price for the Common Stock traded on the Principal Market during normal trading hours on (A) the VWAP Purchase Date if the aggregate shares traded on the Principal Market on the VWAP Purchase Date have not exceeded the VWAP Purchase Share Volume Maximum, or (B) the portion of the VWAP Purchase Date until such time as the sooner to
occur of (1) the time at which the aggregate shares traded on the Principal Market has exceeded the VWAP Purchase Share Volume Maximum, or (2) the time at which the sale price of Common Stock falls below the VWAP Minimum Price Threshold (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

(x)            “VWAP Purchase Share Estimate” means the number of shares of Common Stock that the Company has in its sole discretion irrevocably instructed its Transfer Agent to issue to the Buyer via the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program in connection with a VWAP Purchase Notice pursuant to Section 1(c) hereof and issued to the Buyer’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian (DWAC) system on the VWAP Purchase Date (to be
appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

(y)            “VWAP Purchase Share Volume Maximum” means a number of shares of Common Stock traded on the Principal Market during normal trading hours on the VWAP Purchase Date equal to: (i) the VWAP Purchase Share Estimate, divided by (ii) the VWAP Purchase Share Percentage (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

11.           MISCELLANEOUS.

        (a)           Governing Law; Jurisdiction; Jury Trial.  The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders.  All other questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of Illinois.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

        (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; provided that a facsimile or pdf (or other electronic reproduction) signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction) signature.

        (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.  This Agreement and the Registration Rights Agreement supersede all other prior oral or written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents 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 the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  The
Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in this Agreement.

(f)           Notices.  Any notices, consents 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 receipt when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after timely 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:

 

If to the Company:

Comverge, Inc.

5390 Triangle Parkway, Suite 300

Norcross, Georgia 30092

Telephone:                 678-392-4954

Facsimile:

Attention:          David Mathieson

                             Executive Vice President and Chief Financial Officer

 

With a copy to (which shall not constitute delivery to the Company):

        Baker Botts L.L.P.

         98 San Jacinto Blvd., Suite 1500

         Austin, Texas 78701

         Telephone:                      512-322-2500

         Facsimile:                      512-322-2501

         Attention:                      Steven M. Tyndall, Esq.

If to the Buyer:

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Telephone:                      312-658-0400

Facsimile:                      312-658-4005

Attention:                      Christos Komissopoulos

 

With a copy to (which shall not constitute delivery to the Buyer):

O’Melveny & Myers LLP

1625 Eye Street, NW

Washington, DC 20006

Telephone:                      202-383-5418

Facsimile:                      202-383-5414

Attention:                      Martin P. Dunn, Esq.

 

If to the Transfer Agent:

                         American Stock Transfer & Trust Company

6201 15th Avenue

2nd Floor – Admin Team 9

Brooklyn, NY 11219

Telephone:                      718-921-8360

Facsimile:                      718-921-8310

Attention:  Jennifer Donovan/Marianela Patterson

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party one (1) Business Day prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such notice, consent or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, and recipient facsimile number or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of receipt in accordance with clause (i), (ii) or (iii) above, respectively.

(g)           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer, including by merger or consolidation.  The Buyer may not assign its rights or obligations under this Agreement.

(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)           Publicity.  The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by or on behalf of the Company whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or any aspect of this Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or other public disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations so long as the Company and its counsel consult with the
Buyer in connection with any such press release or other public disclosure at least two (2) Business Days prior to its release.  The Buyer must be provided with a copy thereof at least two (2) Business Days prior to any release or use by the Company thereof. 

(j)           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.

(k)           Termination.  This Agreement may be terminated only as follows:

(i)           By the Buyer any time an Event of Default exists without any liability or payment to the Company.  However, if pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to the Company without further action
or notice by any Person.  No such termination of this Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement.

(ii)           In the event that the Commencement shall not have occurred, the Company shall have the option to terminate this Agreement for any reason or for no reason without any liability whatsoever of either party to the other party under this Agreement except as set forth in Section 11(k)(viii) hereof.

              (iii)           In the event that the Commencement shall not have occurred on or before January 1, 2012, due to the failure to satisfy any of the conditions set forth in Sections 6 and 7 above with respect to the Commencement, either party shall have the option to terminate this Agreement at the close of business on such date or thereafter without liability of either party to any other party; provided, however, that the right to terminate this Agreement under this Section 11(k)(iii) shall not be available to either party if such failure to satisfy
any of the conditions set forth in Sections 6 and 7 is the result of a breach of this Agreement by such party or the failure of any representation or warranty of such party included in this Agreement to be true and correct in all material respects.

(iv)            At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no reason by delivering notice (a “Company Termination Notice”) to the Buyer electing to terminate this Agreement without any liability whatsoever of either party to the other party under this Agreement except as set forth in Section 11(k)(viii) hereof.  The Company Termination Notice shall not be effective until one (1) Business Day after it has been received by the Buyer.

(v)           This Agreement shall automatically terminate on the date that the Company sells and the Buyer purchases the full Available Amount as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to any other party under this Agreement except as set forth in Section 11(k)(viii) hereof.

(vi)           If by the Maturity Date for any reason or for no reason the full Available Amount under this Agreement has not been purchased as provided for in Section 1 of this Agreement, this Agreement shall automatically terminate on the Maturity Date, without any action or notice on the part of any party and without any liability whatsoever of any party to any other party under this Agreement except as set forth in Section 11(k)(viii) hereof.

(vii)           Except as set forth in Sections 11(k)(i) (in respect of an Event of Default under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and 11(k)(vi), any termination of this Agreement pursuant to this Section 11(k) shall be effected by written notice from the Company to the Buyer, or the Buyer to the Company, as the case may be, setting forth the basis for the termination hereof.

 

 

(viii)           The representations and warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification provisions set forth in Section 8 hereof and the agreements and covenants set forth in Sections 4(e) and 11, shall survive the Commencement and any termination of this Agreement.  No termination of this Agreement shall affect the Company's or the Buyer's rights or obligations (i) under the Registration Rights Agreement which shall survive any such termination in accordance with its terms or (ii) under this Agreement with respect to pending purchases
and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement.

(l)           No Financial Advisor, Placement Agent, Broker or Finder.  The Company represents and warrants to the Buyer that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby.  The Buyer represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby.  Each party shall be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by such party relating to or arising
out of the transactions contemplated hereby.  Each party shall pay, and hold the other party harmless against, any liability, loss or expense (including, without limitation, attorneys' fees and out of pocket expenses) arising in connection with any such claim.

(m)           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.

           (n)           Failure or Indulgence Not Waiver.  No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

*     *     *     *     *

  

  

  

IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock Purchase Agreement to be duly executed as of the date first written above.

THE COMPANY:

 

COMVERGE, INC.

By:  /s/ R. Blake Young

Name:  R. Blake Young

Title:  President and Chief Executive Officer

 

BUYER:

 

ASPIRE CAPITAL FUND, LLC

BY: ASPIRE CAPITAL PARTNERS, LLC

BY: CHRISKO INVESTORS, INC.

 

By: /s/ Christos Komissoupoulos

Name:  Christos Komissopoulos

Title:  President

                                                             

  

  

  

                                                            SCHEDULES

Schedule 3(a)                                Subsidiaries

Schedule 3(c)                                Capitalization

Schedule 3(e)                                Conflicts

Schedule 3(f)                                SEC Documents

Schedule 3(g)                               Material Changes

Schedule 3(h)                               Litigation

Schedule 3(j)                                Intellectual Property Rights

Schedule 3(l)                                Liens

Schedule 3(p)                               Transactions with Affiliates

                                                              EXHIBITS

	
Exhibit A

	
Form of Company Counsel Opinion

	
Exhibit B

	
Form of Officer’s Certificate

	
Exhibit C

	
Form of Resolutions of Board of Directors of the Company

	
Exhibit D

	
Form of Secretary’s Certificate

  

  

  

DISCLOSURE SCHEDULES

The following schedules are provided in connection with the various representations and warranties contained in Section 3 of the Common Stock Purchase Agreement dated as of November 29, 2011, (the “Agreement”) by and between Comverge, Inc., a Delaware corporation (the “Company”) and Aspire Capital Fund, LLC, an Illinois limited liability company (the “Buyer”).  These disclosure schedules are an integral part of the Agreement.  Any terms defined in the Agreement shall have the same meaning when
used in these schedules, unless the context indicates otherwise.  Any disclosure herein shall constitute a disclosure under other disclosure schedules, where such disclosure is appropriate and reasonably apparent.

Schedule 3(a)

Subsidiaries

6D Comverge, Inc.

Alternative Energy Resources, Inc.

Clean Power Markets, Inc.

Comverge Energy Management, Inc.

Comverge Energy Partners, Ltd.

Comverge Canada, Inc.

Comverge Giants, LLC

Comverge Utah, Inc.

Enerwise Global Technologies, Inc.

PES NY, LLC

Public Energy Solutions NY, LLC

Public Energy Solutions, LLC

Public Electric, Inc.

Schedule 3(c)

Capitalization

3(c)           2,747,252 shares are issuable and reserved for issuance pursuant to securities (other than stock options or equity based awards issued pursuant to the Company’s stock incentive plans) exercisable or exchangeable for, or convertible into, shares of Common Stock, under that certain Loan and Security Agreement by and between the Company and Partners for Growth III, L.P., dated November 5, 2010, as amended.

3(c)(ii).                      There are no preferred shares issued and outstanding.

3(c)(iii)                      Up to 1,200,000 warrants are issuable and reserved for issuance pursuant to that certain Joint Venture Master Agreement by and between the Company and Projects International, Inc., dated June 10, 2010.

3(c)(iv)                      Registration rights are reserved under the Amended and Restated Registration Rights Agreement, dated October 16, 2007.

 

 

Schedule 3(e)

Conflicts

None.

 

 

Schedule 3(f)

SEC Documents

None.

 

 

Schedule 3(g)

Material Changes

None.

 

 

Schedule 3(h)

Litigation

None.

 

 

Schedule 3(j)

Intellectual Property Rights

None.

 

 

Schedule 3(l)

Liens

None.

 

 

Schedule 3(p)

Transactions with Affiliates

None.

  

  

  

EXHIBIT A

FORM OF COMPANY COUNSEL OPINION

           Capitalized terms used herein but not defined herein, have the meaning set forth in the Common Stock Purchase Agreement.  Based on the foregoing, and subject to the assumptions and qualifications set forth herein, we are of the opinion that:

1.      The Company is a corporation existing and in good standing under the laws of the State of Delaware.  With your consent, based soley on certificates and confirmations from public officials, we confirm that the Company is qualified to do business as a foreign corporation in the States of ________, __________, and ________.

 

2.      The Company has the corporate power to execute and deliver, and perform its obligations under, each Transaction Document to which it is a party.  The Company has the corporate power to conduct its business as, to the best of our knowledge, it is now conducted, and to own and use the properties owned and used by it.

 

3.      The execution, delivery and performance by the Company of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate action on the part of the Company.  The execution and delivery of the Transaction Documents by the Company, the performance of the obligations of the Company thereunder and the consummation by it of the transactions contemplated therein have been duly authorized and approved by the Company's Board of Directors and no further consent, approval or authorization of the Company, its Board of Directors or its stockholders is required (except to the extent the Company desires to obtain stockholder consent to exceed
the Exchange Cap pursuant to Section 1(h) of the Common Stock Purchase Agreement).  The Transaction Documents to which the Company is a party have been duly executed and delivered by the Company and are valid and binding obligations of the Company, enforceable against the Company in accordance with their terms except as such enforceability may be limited by law, general principles of equity or applicable bankruptcy, insolvency, liquidation or similar laws relating to, or affecting creditor’s rights and remedies.

 

4.      The execution and delivery by the Company of the Transaction Documents, the consummation by the Company of the transactions contemplated thereby including the offering, sale and issuance of the Commitment Shares and the Purchase Shares in accordance with the terms and conditions of the Common Stock Purchase Agreement, and fulfillment and compliance with terms of the Transaction Documents, does not on the date hereof: (i) conflict with, constitute a breach of or default (or an event which, with the giving of notice or lapse of time or both, constitutes or could constitute a breach or a default), under (a) the Certificate of Incorporation or the Bylaws of the Company, or (b)
any material agreement, note, lease, mortgage, deed or other material instrument to which to our knowledge the Company is a party or by which the Company or any of its assets are bound, (ii) result in any violation of any statute, law, rule or regulation applicable to the Company, or (iii) to our knowledge, violate any order, writ, injunction or decree applicable to the Company or any of its subsidiaries.

 

5.      The issuance of the Purchase Shares and Commitment Shares pursuant to the terms and conditions of the Transaction Documents has been duly authorized by all necessary corporate action of the Company and, when issued to Aspire Capital in accordance with the terms of the Common Stock Purchase Agreement, the Commitment Shares will be validly issued, fully paid and non-assessable, to our knowledge, free of all taxes, liens, charges, restrictions, rights of first refusal and preemptive rights. When issued and paid for in accordance with the Common Stock Purchase Agreement, the Purchase Shares shall be validly issued, fully paid and non-assessable, to our knowledge, free of all
taxes, liens, charges, restrictions, rights of first refusal and preemptive rights.  To our knowledge, the execution and delivery of the Registration Rights Agreement do not, and the performance by the Company of its obligations thereunder shall not as of the date hereof, give rise to any rights of any other person for the registration under the 1933 Act of any shares of Common Stock or other securities of the Company that have not been waived.

 

6.      As of the date hereof, the authorized capital stock of the Company set forth in the Company’s Certificate of Incorporation filed with the Secretary of State for the State of Delaware consists of 150 million shares of common stock, par value $0.001 per share.  Except as set forth on Schedule 3(c) of the Common Stock Purchase Agreement, to our knowledge, there are no outstanding shares of capital stock or other securities convertible into or exchangeable or exercisable for shares of the capital stock of the Company.

 

7.      Other than that which has been obtained and completed prior to the date hereof, and except as contemplated by the Common Stock Purchase Agreement and the Registration Rights Agreement, no authorization, approval, consent, filing or other order of any federal or Delaware governmental body, regulatory agency, or stock exchange or market, or any court, or, to our knowledge, any third party is required to be obtained by the Company to enter into and perform its obligations under the Transaction Documents or for the Company to issue and sell the Commitment Shares and the Purchase Shares as contemplated by the Transaction Documents.

 

                      8.  The Common Stock is registered with the Securities and Exchange Commission pursuant to Section 12(b) of the 1934 Act.  To our knowledge, since September 30, 2010, the Company has been in compliance with the reporting requirements of the 1934 Act applicable to it.  To our knowledge, since  January 1, 2011, the Company has not received any written notice from the Principal Market stating that the Company has not been in compliance with any of the rules and regulations (including the requirements for continued listing) of the Principal Market,
except as disclosed in its filings with the SEC.

 

           In addition, we have participated in the preparation of the prospectus supplement dated November [__], 2011 to the Shelf Registration Statement (SEC File No. 333-161400) covering the sale of the Purchase Shares andthe Commitment Shares and in conferences with officers and other representatives of the Company during which the contents of the Shelf Registration Statement and related matters were discussed and reviewed and, although we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Shelf Registration Statement, on the basis of the information that was developed in
the course of the performance of the services referred to above, considered in the light of our understanding of the applicable law, nothing came to our attention that caused us to believe that the Shelf Registration Statement (other than the financial statements and schedules and the other financial and statistical data included therein, as to which we express no belief), as of their dates, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

  

  

  

EXHIBIT B

FORM OF OFFICER’S CERTIFICATE

This Officer’s Certificate (“Certificate”) is being delivered pursuant to Section 7(e) of that certain Common Stock Purchase Agreement dated as of November 29, 2011 (the “Common Stock Purchase Agreement”), by and between COMVERGE, INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability
company (the “Buyer”).  Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement.

The undersigned, ___________, ____________ of the Company, hereby certifies as follows:

1.           I am the ______________ of the Company and make the statements contained in this Certificate;

2.           The representations and warranties of the Company are 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 of the Common Stock Purchase Agreement, in which case, such representations and warranties are true and correct without further qualification) as of the date when made and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date);

3.           The Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.

	 	
4.

	
The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due.

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of ___________.

      ______________________

       Name:

       Title:

The undersigned as Secretary of COMVERGE, INC., a Delaware corporation, hereby certifies that ___________ is the duly elected, appointed, qualified and acting ________ of Comverge, Inc. and that the signature appearing above is his genuine signature.

 

                      ___________________________________

Secretary

  

  

  

EXHIBIT C

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

           WHEREAS, there has been presented to the Board of Directors of the Corporation a draft of the Common Stock Purchase Agreement (the “Purchase Agreement”) by and between the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for the purchase by Aspire of up to Ten Million Dollars ($10,000,000) of the Corporation’s common stock, par value $0.001 (the “Common Stock”); and

           WHEREAS, after careful consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board of Directors, the Board of Directors has determined that it is advisable and in the best interests of the Corporation to engage in the transactions contemplated by the Purchase Agreement, including, but not limited to, the issuance of a number of shares of Common Stock representing a dollar value equal to 2.0% of $10,000,000 to Aspire as a commitment fee (the “Commitment Shares”) and the sale of shares of Common Stock to Aspire up to the
available amount under the Purchase Agreement (the “Purchase Shares”).

Transaction Documents

 

NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase Agreement are hereby approved and the Chairman, Chief Executive Officer and Chief Financial Officer (the “Authorized Officers”) are severally authorized to execute and deliver the Purchase Agreement, and any other agreements or documents contemplated thereby including, without limitation, a registration rights agreement (the “Registration Rights Agreement”) providing for the registration of the shares of the Company’s Common Stock issuable in respect of the Purchase Agreement on behalf of the
Corporation, with such amendments, changes, additions and deletions as the Authorized Officers may deem to be appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the Registration Rights Agreement by and among the Corporation and Aspire are hereby approved and the Authorized Officers are authorized to execute and deliver the Registration Rights Agreement (pursuant to the terms of the Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officer may deem appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent Instructions (the “Instructions”) are hereby approved and the Authorized Officers are authorized to execute and deliver the Instructions (pursuant to the terms of the Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officers may deem appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and

 

 

Execution of Purchase Agreement

 

FURTHER RESOLVED, that the Corporation be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of common stock of the Corporation having an aggregate value of up to $10,000,000; and

 

Issuance of Common Stock

 

FURTHER RESOLVED, that the Corporation is hereby authorized to issue the Commitment Shares to Aspire Capital Fund, LLC as Commitment Shares and that upon issuance of the Commitment Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof; and

 

FURTHER RESOLVED, that the Corporation is hereby authorized to issue shares of Common Stock upon the purchase of Purchase Shares up to the available amount under the Purchase Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will be duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof; and

 

Listing of Shares on the NASDAQ Global Market

 

FURTHER RESOLVED, that the officers of the Corporation with the assistance of counsel be, and each of them hereby is, authorized and directed to take all necessary steps and do all other things necessary and appropriate to effect the listing of the Commitment Shares and Purchase Shares on the NASDAQ Global Market; and

 

Approval of Actions

 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on behalf of the Corporation and to take all such steps as deemed necessary or appropriate, with the advice and assistance of counsel, to cause the Corporation to consummate the agreements referred to herein and to perform its obligations under such agreements; and

 

           FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf of and in the name of the Corporation, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered all such further agreements, amendments, documents, certificates, reports, schedules, applications, notices, letters and undertakings and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect the purpose and intent of any and all of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Corporation in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified and confirmed in all respects.

  

  

  

                                                             EXHIBIT D

                                        FORM OF SECRETARY’S CERTIFICATE

           This Secretary’s Certificate (the “Certificate”) is being delivered pursuant to Section 7(k) of that certain Common Stock Purchase Agreement dated as of November 29, 2011 (the “Common Stock Purchase Agreement”), by and between COMVERGE, Inc., a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND, LLC, an Illinois limited
liability company (the “Buyer”), pursuant to which the Company may sell to the Buyer up to Ten Million Dollars ($10,000,000) of the Company’s Common Stock, par value $0.001 (the “Common Stock”).  Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement.

           The undersigned, _________________ Secretary of the Company, hereby certifies as follows:

1.           I am the Secretary of the Company and make the statements contained in this Secretary’s Certificate.

2.           Attached hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s bylaws (“Bylaws”) and Certificate of Incorporation (“Articles”), in each case, as amended through the date hereof, and no action has been taken by the Company, its directors, officers or stockholders, in contemplation of the filing of any further amendment relating to or affecting the Bylaws or Articles.

3.           Attached hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company on _____________, at which a quorum was present and acting throughout.  Such resolutions have not been amended, modified or rescinded and remain in full force and effect and such resolutions are the only resolutions adopted by the Company’s Board of Directors, or any committee thereof, or the stockholders of the Company relating to or affecting (i) the entering into and performance of the Common Stock
Purchase Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment Shares and (ii) and the performance of the Company of its obligation under the Transaction Documents as contemplated therein.

4.           As of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth on Exhibit D hereto.

           IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of ____________.

                                                                                                         _________________________

                                                                                        _________________, Secretary

The undersigned as ______________ of COMVERGE, INC., a Delaware corporation, hereby certifies that _______________ is the duly elected, appointed, qualified and acting Secretary of COMVERGE, INC., and that the signature appearing above is his genuine signature.

 

_______________________________Unassociated Document

Exhibit 10.1

 

ACQUISITION AGREEMENT

This Agreement dated as of the 19 day of July, 2011 (“Entry Date”) and retroactively effective on June 30, 2011 (“Effective Date”)  by and between Aclor, Inc., a Georgia corporation, with an address at 11204 McPherson Road, Unit 116, Laredo, Texas 78045 (“Aclor”), Metiscan, Inc., a Delaware corporation with an address at 12225 Greenville Avenue, Suite 700, Dallas, Texas 75243 (“Metiscan”), Metiscan Holdings, Inc., a Nevada corporation with an address at 12225 Greenville Avenue, Suite 700, Dallas, Texas 75243 (“Holdings”) and the shareholders of Aclor set forth on Exhibit “A” (the “Aclor Shareholders”).

WITNESSETH

 

WHEREAS, the Aclor Shareholders desire to acquire from Metiscan common shares and preferred shares of Metiscan as set forth below in Section 4.B. (the “Metiscan Stock”), including shares to be distributed to the Aclor Shareholders and shares to be issued after the Closing to satisfy certain debts, in exchange for sixty (60%) percent of the issued and outstanding shares of the common stock of Aclor, par value $ 0.001 per share (the “Aclor Common Stock”);

WHEREAS, Metiscan desires to acquire from the Aclor Shareholders sixty (60%) percent of the Aclor Common Stock in exchange for Metiscan Stock;

 

WHEREAS, the Board of Directors of both Aclor and Metiscan believe that this Agreement is: (i) in the best interests of each corporation, the Aclor Shareholders and the stockholders of Metiscan and (ii) will advance the long-term business interests of both Aclor and Metiscan.

NOW, THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the mutual covenants and agreements of the parties hereinafter set forth, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which is hereby acknowledged;

IT IS AGREED:

1.           Recitals.  The parties hereto adopt as part of this Agreement each of the recitals which is set forth in the WHEREAS clauses and agree that such recitals shall be binding upon the Parties hereto by way of contract and not merely by way of recital or inducement.  Such WHEREAS clauses are hereby confirmed and ratified as being true and accurate by each Party to this Agreement.

2.           Definitions.

A.      “Acquisition” shall refer to the following: (i) Metiscan’s acquisition of sixty (60%) percent of the Aclor Common Stock in exchange for Metiscan Stock and (ii) Aclor becoming a  subsidiary of Metiscan.

  

1

  

 

B.      The “Closing Date” of the Acquisition shall mean a mutually agreed upon date on or prior to July 26, 2011.

 

C.      “DGCL” shall refer to the Delaware General Corporation Law.

D.      “GCPAL” shall refer to the Georgia Corporations, Partnerships, and Associations Law.

3.           Pre-Closing Transactions.

A.      Simultaneously with, or prior to, the Closing, Holdings shall acquire from Metiscan all of Metiscan’s assets, including but not limited to, one hundred (100%) percent of the issued and outstanding capital stock owned by Metiscan in each of the following subsidiaries of Metiscan (the “Metiscan Subsidiaries”):

i.      100 shares of First View EHR, Inc. evidenced by certificate number 001;

ii.     100,000 shares of Taptopia, Inc. evidenced by certificate number CS001;

iii.    100,000 shares of Shoreline Employment Services, Inc. evidenced by certificate number CS001; and

iv.    8,400 shares of Schuylkill Open MRI, Inc. evidenced by certificate number 007; in exchange for 750,000 shares of the Series C Preferred Stock  of Metiscan which constitutes one hundred (100%) percent of the issued and outstanding Series C Preferred Stock of Metiscan.  After Metiscan receives the 750,000 shares of the Series C Preferred Stock, the Series C Preferred Stock of Metiscan shall be cancelled and no Series C Preferred Stock shall be issued and outstanding.

B.      Prior to the Closing, the Board of Directors of Aclor and the Aclor Shareholders shall approve this Agreement and the transactions contemplated by this Agreement, pursuant to the applicable provisions of the GCPAL.

C.      Prior to the Closing, the Board of Directors of Metiscan shall approve this Agreement and the transactions contemplated by this Agreement, pursuant to the applicable provisions of the DGCL.

4.           Closing Transactions.

A.      At the Closing, the Aclor shareholders shall deliver to Metiscan  sixty thousand (60,000) shares of Aclor Common Stock, constituting sixty percent (60%) of its issued and outstanding stock, together with duly executed stock powers executed in blank.  The following list sets forth the number of shares which the Aclor shareholders shall deliver to Metiscan:

 

  

2

  

 

	
Name

	
# of Shares

	
Goodfuture Limited

	
30,000

	
Sunbell Limited

	
30,000

B.      At the Closing, Metiscan shall deliver to the Aclor Shareholders such number of shares of Common Stock as set forth below which, together with the shares of Common Stock and Preferred Stock of Metiscan to be issued in satisfaction of certain debts of Aclor. These shares shall be distributed to the Aclor shareholders in exchange for their ownership interest in Aclor as follows:

	
Name

	
% Ownership in Aclor

	
# Shares of Metiscan Common Stock

	
Goodfuture Limited

	
30%

	
1,163,750,000

	
Sunbell Limited

	
30%

	
1,163,750,000

	
Total

	  	
2,327,500,000

Additionally, the following shares shall be issued to satisfy the following debts after the Closing of the Agreement::

 

	
Name

	
Amount of Debt

	
# Shares of Metiscan Common Stock

	
# Shares of Metiscan Preferred Stock

	
 

Chung Hsin Wu (Forth Wu)

	
 

$300,000

	
 

150,000,000

	  
	
 

Go Right Holding Limited

	
 

$ 1,130,187.50

 

	
 

1,506,917,000

	
 

750,000

	
 

Ever Thrive Limited

	
 

$ 1,130,187.50

 

	
 

1,506,917,000

	
 

750,000

	
Total

	  	
3,163,834,000

	
1,500,000

The Board of Directors shall adopt the resolution to authorize the creation of the class of preferred stock to facilitate the above described debt conversion. The newly created class of preferred stock shall be:

Series G Convertible Preferred Stock, Par Value $ 0.0001

The number of shares constituting such series shall be Five Million (5,00,000) shares, each share of which can be converted into One (1) shares of Common Stock, par value $ 0.0001, at the option of the holder.

 

  

3

  

 

Each share of Series G Convertible Preferred Stock has One (1) vote in all actions properly brought for a vote by the shareholders. If the board declares cash or stock dividends on the Common Stock of the Corporation, the shares of Series A Convertible Preferred Stock, par value $ 0.0001, shall participate as if it had been exchanged for shares of Common Stock prior to the declaration of such dividends. In the event of a partial or full liquidation and distribution of assets or pursuant to a voluntary or involuntary dissolution, Series A shares take precedence over and are senior to all subsequent issuances of Preferred Stock and to all of the Common Stock of the Issuer, regardless of when such common shares were issued.

The above shares are being issued to the Aclor Shareholders which, based upon the fact that there shall be 2,929,650,554 shares issued and outstanding at the time of the Closing.

 

C.      At the Closing, the following notes due to Metiscan shall be assigned to Holdings:

i.      All Note payable from Shoreline Employment Services, Inc. to Metiscan ; and

ii.     All Note payable from Taptopia, Inc. to Metiscan.

D.      At the Closing, all corporate books and records of Aclor shall be delivered to Metiscan including, but not limited to, the following:  its Certificate of Incorporation, bylaws, Minutes of Directors’ Meetings, Minutes of Shareholders’ Meetings, and all financial records.

E.      Subject to, and consistent with, the provisions of this Agreement, Aclor shall become a subsidiary of Metiscan as a result of the transactions set forth in Paragraphs “A” and “B” of this Article “4” of this Agreement.

 

5.           Post-Closing Transactions.

A.      Immediately after the Closing, the Board of Directors of Aclor shall designate  new Directors of Metiscan (the “Designated Directors”).  The Directors of Metiscan serving immediately prior to the Closing shall appoint the Designated Directors to the Board of Directors of Metiscan and resign immediately thereafter.

B.      Metiscan shall enter into a consulting agreement (the “Consulting Agreement”) with Bridgepoint Partners, LLC (“Bridgepoint”), in the form annexed hereto and made a part hereof as Exhibit B, which shall provide that Bridgepoint shall receive, in consideration for the consulting services which Bridgepoint shall provide pursuant to the Consulting Agreement, twelve and one-half (12.5%) percent of any proceeds received from the segregated account holding funds, or from any warrant exercise, from Metiscan’s Rule 504 and 506 offerings (the “Investor Proceeds”), including future offerings. The remaining eighty-seven and one-half (87.5%) percent of the Investor Proceeds shall be retained by Metiscan. Bridgepoint directs that its twelve and one-half (12.5%) percent of the Investor Proceeds shall be paid by Metiscan as follows:

 

  

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i.      two and one-half (2.5%) percent of the Investor Proceeds shall be paid on a monthly basis to Kim Moore, up to a total of $300,000 (after Kim Moore has received $300,000 the payment to Kim Moore shall cease and this 2.5% of the Investor Proceeds shall be paid to Bridgepoint);

ii.     ten (10%) of the Investor Proceeds shall be paid on a monthly basis to Mintz & Fraade, P.C., up to a total of $200,000.  After Mintz & Fraade, P.C. has received $200,000 then five (5%) of the Investor Proceeds shall be paid on a monthly basis to Mintz & Fraade, P.C., up to an additional total of $100,000 (after Mintz & Fraade, P.C. has received a total of $300,000 the payment to Mintz & Fraade, P.C. shall cease and this 5% of the Investor Proceeds shall be paid to Bridgepoint); and

iii.    zero (0%) of the Investor Proceeds shall be paid on a monthly basis to Bridgepoint until Mintz & Fraade, P.C. receives a total of $200,000 of the Investor Proceeds, unless directed in writing otherwise by both Mintz & Fraade, P.C. and Bridgepoint.  After Mintz & Fraade, P.C. has received $200,000 then five (5%) percent of the Investor Proceeds shall be distributed on a monthly basis to Bridgepoint.

C.      Removed.

D.      Removed.

E.      Metiscan shall issue any shares required to be issued pursuant to its 2009 Rule 504 offering and obtain a legal opinion, if necessary, to issue such additional shares under this offering.

F.      Metiscan shall engage in a reverse stock split.

G.      After Aclor becomes a subsidiary of Metiscan, Metiscan shall amend its Certificate of Incorporation to change its name to a name not including the word Metiscan.

H.      Metiscan shall amend its Certificate of Incorporation to create the Series G Convertible Preferred Stock, par value $ 0.0001, and shall issue such Series G Preferred Stock to satisfy the following debts after the Closing of the Agreement, as follows:

	
Name

	
Amount of Debt

	
# Shares of Metiscan Common Stock

	
# Shares of Metiscan Preferred Stock

	
 

Chung Hsin Wu (Forth Wu)

	
 

$300,000

	
 

150,000,000

	  
	
 

Go Right Holding Limited

	
 

$ $ 1,130,187.50

 

	
 

1,506,917,000

	
 

750,000

	
 

Ever Thrive Limited

	
 

$ $ 1,130,187.50

 

	
 

1,506,917,000

	
 

750,000

	
Total

	  	
3,163,834,000

	
1,500,000

  

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6.           Representations, Warranties and Covenants of Metiscan, the Metiscan Subsidiaries, and Holdings.  Metiscan, the Metiscan Subsidiaries, and Holdings jointly and severally represent, warrant and covenant to Aclor as follows:

A. Corporate Status.

i.      Metiscan is a corporation duly organized, validly existing and in good standing pursuant to the laws of the State of Delaware, with all requisite power and authority to carry on its business as presently conducted in all jurisdictions where presently conducted, to enter into this Agreement and to consummate the transactions set forth in this Agreement; and

ii.      Copies of (a) the Certificate of Incorporation of Metiscan, and all amendments to the Certificate of Incorporation, certified by the Secretary of State of the State of Delaware and (b) the Bylaws of Metiscan, as amended, certified by the Secretary of Metiscan are annexed to, and made a part of, this Agreement as Exhibits “C” and “D”, respectively, and are complete and correct as of the date of this Agreement.

iii.     For purposes of this Article 6 of this Agreement, references to Metiscan shall include its subsidiaries:  First View EHR, Inc.; Taptopia, Inc.; Shoreline Employment Services, Inc.; and Schuylkill Open MRI, Inc.

B.      Capitalization.  Metiscan does not have any (i) subscriptions, options, warrants, rights or other agreements outstanding to acquire from Metiscan shares of stock of Metiscan or any other equity security or security convertible into an equity security of Metiscan, except for the number of shares of Common stock issued and outstanding payable to S.B.C.H Charitable Trust Foundation, or (ii) agreements or commitments to increase, decrease or otherwise alter the authorized capital stock of Metiscan.  As of the Closing Date, there shall be no shares of Metiscan’s Series C Preferred Stock issued and outstanding.  Metiscan currently has 60 shares of Series E Preferred Stock issued and outstanding, and 72 shares of Series F Preferred Stock issued and outstanding.  Metiscan is obligated to redeem these shares. As of April 1, 2011, the balance of the Series E Preferred Stock was forty-three (43) shares, of which one (1) share is required to be redeemed each month for payment each month of six thousand six hundred sixty-six dollars and sixty-seven cents ($6,666.67), and the balance of the Series F Preferred Stock was fifty-five (55) shares, of which one (1) share is required to be redeemed each month for payment each month of two thousand seven hundred seventy-seven dollars and seventy-eight cents ($2,777.78).

C.      Authority of Metiscan.  Metiscan has full corporate power and authority to execute, deliver and perform this Agreement and has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions set forth in this Agreement, and no other corporate action on its part is necessary to authorize and approve this Agreement or to consummate the transactions contemplated by this Agreement.  This Agreement and the consummation by Metiscan of the transactions set forth in this Agreement have been duly and validly authorized, executed and delivered by the Board of Directors of Metiscan, and (assuming the valid authorization, execution and delivery of this Agreement by Aclor) this Agreement is valid and binding upon Metiscan and enforceable against Metiscan in accordance with its terms (except as the enforceability of this Agreement may be limited by bankruptcy, insolvency, bank moratorium or similar laws affecting creditors' rights generally and laws restricting the availability of equitable remedies, and may be subject to general principles of equity whether or not such enforceability is considered in a proceeding at law or in equity).  An executed certified resolution of the Board of Directors of Metiscan and a form of consent to be executed by Holdings, which owns a majority of the issued and outstanding shares of Metiscan Common Stock, approving Metiscan’s entry into this Agreement and the consummation of the transactions set forth in this Agreement are annexed to, and made a part of, this Agreement as Exhibits “E” and “F”.

 

  

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D.      Compliance with the Law and Other Instruments.  Metiscan is and has been in material compliance in all material respects with any and all legal requirements applicable to Metiscan, including, but not limited to, all applicable federal and state “blue-sky” securities laws.  Metiscan (i) has not received or entered into any citations, complaints, consent orders, compliance schedules, or other similar enforcement orders or received any written notice from any governmental authority or any other written notice which would indicate that Metiscan is not currently in compliance with all applicable legal requirements, and (ii) is not in default under any legal requirement applicable to Metiscan, and Metiscan has no knowledge that any condition exists (whether or not covered by insurance) that with or without notice or lapse of time or both would constitute a default under, or breach or violation of, any legal requirement applicable to Metiscan.  Without limiting the generality of the foregoing, Metiscan has not received notice of, and Metiscan has no knowledge of any basis for, any claim, action, suit, investigation or proceeding which might result in a finding that Metiscan is not or has not been in compliance with legal requirements relating to (i) the development, testing, manufacture, packaging, distribution, and marketing of its products, (ii) employment, safety and health, and/or (iii) environmental protection, building, zoning and land use.

E.      Absence of Conflicts.  The execution and delivery of this Agreement, and the consummation by Metiscan of the transactions set forth in this Agreement: (i) do not and shall not conflict with or result in a breach of any provision of Metiscan’s Certificate of Incorporation or Bylaws, (ii) do not and shall not result in any breach of, or constitute a default or cause an acceleration under any arrangement, agreement or other instrument to which Metiscan is a party to or by which any of its assets are bound, (iii) do not and shall not cause Metiscan to violate or contravene any provision of law or any governmental rule or regulation, and (iv) will not and shall not result in the imposition of any lien, or encumbrance upon, any property of Metiscan.  Metiscan has performed in all material respects all of its obligations which are, as of the date of this Agreement, required to be performed, pursuant to the terms of any such agreement, contract or commitment.

 

F.  Financial Statements. Attached hereto as Exhibit “G” are the following audited  and unaudited financial statements of Metiscan (collectively the “Metiscan Financial Statements”): (1) (i) consolidated balance sheets as of December 31, 2010, (ii) statements of income as of December 31, 2010, (iii) changes in stockholders’ equity as of December 31, 2010, and (iv) cash flow from inception to December 31, 2010, (2) a letter issue by the current auditor of Metiscan regarding the “accumulated deficits” of Metiscan an its subsidiaries; (3) (i) consolidated  balance sheets as of June 30, 2011, (ii) statement of income as of June 30, 2011, (4) (i) the unconsolidated balance sheets of Metiscan as of June 30, 2011 and (ii) the unconsolidated income statement of Metiscan as of June 30, 2011. The Metiscan Financial Statements (including the notes thereto) have been prepared on a consistent basis throughout the periods covered thereby and present fairly the financial condition of Metiscan as of such dates and the results of operations of Metiscan for such periods; provided, however, that the Metiscan Financial Statements are subject to normal year-end adjustments (which will not be material, individually or in the aggregate).

  

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G. Environmental Compliance.

i. Metiscan has complied and is in compliance, in all material respects, with all applicable federal, state, local and foreign statutes, regulations, ordinances and similar provisions having the force or effect of law, all judicial and administrative orders and determinations, and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment including, but not limited to, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls (a banned toxic chemical utilized as a coolant, sealant and in paints), noise or radiation (the “Environmental, Health and Safety Requirements”).

ii. Metiscan has not received any written or oral notice, report or other information with respect to any actual or alleged material violation of Environmental, Health and Safety Requirements, or any material liabilities or potential material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any material investigatory, remedial or corrective obligations, relating to its business or its facilities arising under Environmental, Health and Safety Requirements.

iii. Neither this Agreement nor the consummation of the transactions which are the subject of this Agreement will result in any material obligations for site investigation or cleanup, or notification to or consent of government agencies or third parties, pursuant to any of the so-called “transaction-triggered” or “responsible property transfer” Environmental, Health and Safety Requirements.

H. OSHA Compliance.  Metiscan is in compliance with any applicable federal, state and local laws, rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and charges pursuant to OSHA and other governmental requirements relating to occupational health and safety including, but not limited to, OSHA.

 

  

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I. Non-Tax Liabilities. Metiscan does not have any liabilities of any nature, accrued or contingent, including, but not limited to, liabilities to customers or suppliers, other than the following:

i.  Liabilities for which full provision has been made on the Metiscan Financial Statements; and

ii. Other liabilities arising since December 31, 2010 and prior to the date of this Agreement in the ordinary course of business (which shall not include liabilities to customers on account of defective products or services) as set forth in Section “6I” of the Metiscan Disclosure Statement which is annexed hereto as Exhibit “H” which are not inconsistent with the representations and warranties of Metiscan or any other provision of this Agreement.

J. Representations and Obligations Regarding Taxes.

i. As used in this Paragraph “J” of this Article “6” of this Agreement, “Affiliated Group” means any affiliated group within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”) or any similar group defined under a similar provision of state, local, or foreign law; “Tax” means any Federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, and “Taxes” means any or all of the foregoing collectively; and “Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.

ii. Metiscan has filed all tax returns which it was required to file, all such tax returns were true, correct, and complete in all material respects, all taxes owed by Metiscan (whether or not shown on any tax return and whether or not any tax return was required) have been paid, Metiscan is not currently the beneficiary of any extension of time within which to file any tax return, no claim has ever been made by a taxing authority in a jurisdiction where the Metiscan does not file tax returns which it is or may be subject to taxation by that jurisdiction, and there are no liens on any of the assets of Metiscan that arose in connection with any failure (or alleged failure) to pay any tax, except for liens for taxes not yet due.

iii. Metiscan has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

 

  

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iv. No director or officer (or employee responsible for tax matters) of Metiscan has received any notification (whether written or oral) that any taxing authority will assess any additional taxes for any period for which tax returns have been filed.  There is no dispute or claim concerning any tax liability of Metiscan either (i) claimed or raised by any taxing authority or (ii) as to which Metiscan has knowledge (after reasonable investigation).  Except as otherwise set forth in Section “6J” of Exhibit “K” attached hereto, no issue relating to taxes has been raised by a taxing authority during any pending audit or examination, and no issue relating to taxes was raised by a taxing authority in any completed audit or examination, which reasonably can be expected to recur in a later taxable period.

v. Metiscan has not waived any statute of limitations with respect to taxes or agreed to any extension of time with respect to a tax assessment or deficiency.

vi. Metiscan has not made any payments, is not obligated to make any payments and is not a party to any agreement which under certain circumstances could obligate it to make any payments that will not be deductible under section 280G of the Code. Metiscan has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.  Metiscan has disclosed on its Federal income tax returns all positions taken therein which could give rise to a substantial understatement of Federal income tax within the meaning of Section 6662 of the Code.  Metiscan is not a party to any tax allocation or sharing agreement. Metiscan (a) has not been a member of an Affiliated Group filing a consolidated Federal income tax return and (b) has no liability for the taxes of any person under treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise.

vii. The unpaid taxes of Metiscan did not, as of the most recent fiscal year end, exceed the reserve for tax liability (rather than any reserve for deferred taxes established to reflect timing differences between book and tax income) set forth on the face of the balance sheet contained in the Financial Statements (rather than in any notes thereto).

viii. Metiscan shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income which accrued in a prior taxable period but was not recognized in any prior taxable period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, or Section 481 of the Code or any comparable provision of state, local, or foreign tax law.

ix. Except as otherwise set forth in Section “6J” of Exhibit “H” attached hereto, Metiscan is not a party to any joint venture, partnership, or other arrangement or contract which could be treated as a partnership for Federal income tax purposes.

x. Metiscan has not entered into any sale leaseback or leveraged lease transaction which fails to satisfy the requirements of Revenue Procedure 75-21 (or similar provisions of foreign law) or any safe harbor lease transaction.

xi. All elections with respect to taxes affecting Metiscan are disclosed or attached to a tax return of Metiscan.

 

  

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xii. All private letter rulings issued by the Internal Revenue Service to Metiscan (and any corresponding ruling or determination of any state, local, or foreign taxing authority) have been disclosed in Section “6J” of Exhibit “H”, and there are no pending requests for any such rulings (or corresponding determinations).

K. Contracts.  Except as set forth in Section “6K” of Exhibit “H”, Metiscan is not a party to any material contracts.

L.  Absence of Changes.  Since December 31, 2010, except as set forth in Section “6L” of Exhibit “H”, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Metiscan taken as a whole. Without limiting the generality of the foregoing, except as set forth in Section “6L” of Exhibit “H”, since December 31, 2010:

i. Metiscan has not sold, leased, transferred, or assigned any material assets, tangible or intangible, outside of the ordinary course of business;

ii. Metiscan has not entered into any material agreement, contract, lease, or license outside of the ordinary course of business;

iii. no party (including Metiscan) has accelerated, terminated, made material modifications to, or canceled any material agreement, contract, lease, or license to which Metiscan is a party;

iv. Metiscan has not imposed any security interest upon any of its assets, tangible or intangible;

v. Metiscan has not made any material expenditures of its capital outside of the ordinary course of business;

vi. Metiscan has not made any material capital investment in, or any material loan to, any other person or entity outside of the ordinary course of business;

vii. Metiscan has not created, incurred, assumed, or guaranteed indebtedness for borrowed money and capitalized lease obligations;

viii. Metiscan has not granted any license or sublicense of any material rights under or with respect to any intellectual property;

ix. there has been no change made or authorized in the Certificate of Incorporation or Bylaws of Metiscan;

x. Metiscan has not issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;

  

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xi. Metiscan has not declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock;

xii. Metiscan has not experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property;

xiii. Metiscan has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees outside of the ordinary course of business;

xiv. Metiscan has not entered into any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

xv. Metiscan has not granted any increase in the base compensation of any of its directors, officers, and employees outside of the ordinary course of business;

xvi. Metiscan has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other employee benefit plan);

xvii. Metiscan has not made any other material change in employment terms for any of its directors, officers, and employees outside of the ordinary course of business;

xviii. Metiscan has not experienced any event, circumstance, or change (other than general economic conditions) which had or can reasonably be expected to have a material adverse effect upon the business, operations, prospects, properties, financial condition, or working capital of Metiscan;

xix. Metiscan has not made any change in any existing election, or made any new election, with respect to any tax law in any jurisdiction which election could have an effect upon the tax treatment of Metiscan or its business operations;

xx. Metiscan has not settled any claim or litigation, or filed any motions, orders, briefs, or settlement agreements in any proceeding before any governmental authority or any arbitrator;

xxi. Metiscan has not maintained its books of account other than in the usual, regular, and ordinary manner and on a basis consistent with prior periods or made any change in any of its accounting methods or practices;

xxii. Metiscan has not suffered any extraordinary losses or waived any rights of any value;

 

  

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xxiii. Metiscan has not (a) liquidated inventory or accepted product returns other than in the ordinary course, (b) accelerated receivables, (c) delayed payables, or (d) changed in any material respect its practices in connection with the payment of payables and/or the collection of receivables; and

xxiv. Metiscan has not committed to do any of the actions set forth in Subparagraphs “i” through “xxiii” of this Paragraph “L” of this Article “6” of this Agreement.

M.  No Approvals.  No approval of any third party including, but not limited to, any governmental authority is required in connection with the consummation of the transactions set forth in this Agreement.

N.  Broker.  Metiscan has not had any dealing with respect to the transactions set forth in this Agreement with any business broker, firm or salesman, or any person or corporation, investment banker or financial advisor who is or shall be entitled to any broker's or finder's fee or any other commission or similar fee with respect to the transactions set forth in this Agreement.  Metiscan represents that it has not dealt with any such person, firm or corporation and agrees to indemnify and hold harmless Aclor from and against any and all claims for brokerage commissions by any person, firm or corporation on the basis of any act or statement alleged to have been made by Metiscan or its affiliates or agents.

O. Securities Laws.  Neither Metiscan nor, to Metiscan's knowledge, any director or executive officer of Metiscan, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of Metiscan, there is not, pending or contemplated, any investigation by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA), or other regulatory authority with respect to Metiscan or, to Metiscan's knowledge, any current or former director or executive officer of Metiscan. Metiscan is currently listed on OTC Pink, formerly known as the Pink Sheets.  Metiscan has filed a Form S-1 Registration Statement and, although not required to do so, periodic filings with the SEC which are current.

P. Intellectual Property.

i. Metiscan has not interfered with, infringed upon, misappropriated, or violated any material intellectual property rights of third parties in any material respect, and none of the directors and officers of Metiscan has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that Metiscan must license or refrain from using any intellectual property rights of any third party). To the knowledge of Metiscan, no third party has interfered with, infringed upon, misappropriated, or violated any material intellectual property rights of Metiscan in any material respect.

 

  

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ii. Section “6P” of Exhibit “H” identifies each patent or registration which has been issued to Metiscan with respect to any of its intellectual property, identifies each pending patent application or application for registration which Metiscan has made with respect to any of its intellectual property, and identifies each license, agreement, or other permission which Metiscan has granted to any third party with respect to any of its intellectual property (together with any exceptions).  Section “6P” of Exhibit “H” sets forth correct and complete copies of all such patents, registrations, applications, licenses, agreements, and permissions (as amended to date).  Section “6P” of Exhibit “H” also identifies each trade name or unregistered trademark and each copyright used by Metiscan in connection with any of its businesses.

With respect to each item of intellectual property required to be identified in Section “6P” of Exhibit “H” pursuant to the prior paragraph of this Subparagraph “ii” of this Paragraph “P” of this Article “6” of this Agreement:

a. Metiscan possesses all right, title, and interest in and to the item, free and clear of any security interest, license, or other restriction;

b. the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

c. no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the knowledge of Metiscan, is threatened which challenges the legality, validity, enforceability, use, or ownership of the item; and

d. Metiscan has never agreed to indemnify any person or entity for or against any interference, infringement, misappropriation, or other conflict with respect to the item.

iii. Section “6P” of Exhibit “H” identifies each material item of intellectual property which any third party owns and which Metiscan uses pursuant to license, sublicense, agreement, or permission. Section “6P” of Exhibit “H” sets forth correct and complete copies of all such licenses, sublicenses, agreements, and permissions (with all amendments, if any).

With respect to each item of intellectual property required to be identified in Section “6P” of Exhibit “H” pursuant to the prior paragraph of this Subparagraph “iii” of this Paragraph “P” of this Article “6” of this Agreement:

a. the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect in all material respects;

b. to the knowledge of Metiscan, no other party to the license, sublicense, agreement, or permission is in material breach or default thereof , and no event has occurred which with notice or lapse of time would constitute a material breach or default by such other party or permit termination, modification or acceleration thereof by Metiscan;

c. Metiscan is not in material breach or default of any such license, sublicense, agreement, or permission, and no event has occurred which with notice or lapse of time would constitute a material breach or default by Metiscan or permit termination, modification, or acceleration thereof by another party thereto;

  

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d. to the knowledge of Metiscan, no other party to the license, sublicense, agreement, or permission has repudiated any material provision thereof;

e. Metiscan has not repudiated any material provision of any license, sublicense, agreement, or permission; and

f. Metiscan has not granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission.

iv. Metiscan is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, which would interfere with his or her duties to Metiscan or that would conflict with Metiscan’s business as conducted.

Q. Insurance.  Section “6Q” of Exhibit “H” sets forth the following information with respect to each material insurance policy (including policies providing property, casualty, liability, and workers’ compensation coverage and bond and surety arrangements) with respect to which Metiscan is a party, a named insured, or otherwise the beneficiary of coverage:

i. the name, address, and telephone number of the agent;

ii. the name of the insurer, the name of the policyholder, and the name of each covered insured;

iii. the policy number and the period of coverage;

iv. the scope (including an indication of whether the coverage is on a claims made, occurrence, or other basis) and the amount (including a description of how deductibles and ceilings are calculated and operate) of coverage; and

v. a description of any retroactive premium adjustments or other material loss-sharing arrangements.

With respect to each such insurance policy: (i) the policy is legal, valid, binding, enforceable, and in full force and effect in all material respects; (ii) neither any of Metiscan nor any other party to the policy is in material breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a material breach or default, or permit termination, modification, or acceleration, under the policy (including but not limited to retroactive premium adjustments); and (iii) no party to the policy has repudiated any material provision thereof.  Section “6Q” of Exhibit “H” describes any material self-insurance arrangements affecting Metiscan, and identifies each material insurance claim made by Metiscan in the three (3) years prior to the date of this Agreement.

  

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R. Employee Benefits.  There is no employee benefit plan which Metiscan maintains or to which Metiscan contributes or has any obligation to contribute.

S. Guaranties.  Except as set forth in Section “6S” of Exhibit “H”, Metiscan is not a guarantor or is not otherwise responsible for any liability or obligation (including indebtedness) of any other person or entity.

T. Certain Business Relationships.  Except as set forth in Section “6T” of Exhibit “H”, none of the officers, directors or stockholders of Metiscan has been involved in any material business arrangement or relationship with Metiscan, and none of the officers, directors or stockholders of Metiscan owns any material asset, tangible or intangible, which is used in the business of Metiscan.

U. Registration Rights.  Except as is set forth in Section “6U” of Exhibit “H”, Metiscan has not granted or agreed to grant to any person or entity any rights (including piggyback registration rights) to have any securities of Metiscan registered with the United States Securities and Exchange Commission or any other governmental authority.

V. Change of Control Payments.  Neither the execution, delivery and performance by Metiscan of this Agreement nor the consummation of any of the transactions contemplated by this Agreement shall require any payment by Metiscan, in cash or kind, under any agreement, plan, policy, commitment or other arrangement of Metiscan.  There are no agreements, plans, policies, commitments or other arrangements with respect to any compensation, benefits or consideration which will be materially increased, or the vesting of benefits of which will be materially accelerated, as a result of the execution and delivery of this Agreement and any of the Exhibits to this Agreement or the occurrence of any of the transactions completed by this Agreement.  There are no payments or other benefits, the value of which will be calculated on the basis of any of the transactions contemplated by this Agreement.  Metiscan has not made, is not obligated to make, and is not a party to any agreement that under certain circumstances could obligate it to make any “excess parachute payment” as defined in Code Section 280G.

W. Investments.  Metiscan owns no debt or equity securities of any entities except as set forth in Section “6W” of Exhibit “H” attached hereto.

X. Accounts Receivable.  Except as otherwise set forth in Section “6X” of Exhibit “H”, the accounts receivable reflected on the December 31, 2010 balance sheet included in the Metiscan Financial Statements and all of Metiscan’s accounts receivable arising since December 31, 2010 arose from bona fide transactions in the ordinary course of business, and the goods and services involved have been sold, delivered, and performed to the account obligors, and no further filings (with governmental authorities, insurers or others) are required to be made, no further goods are required to be provided and no further services are required to be rendered in order to complete the sales and fully render the services and to entitle Metiscan to collect the accounts receivable in full.  Except as otherwise set forth in Section “6X” of Exhibit “H” attached hereto, no such account has been assigned or pledged to any other person or entity, and, except only to the extent fully reserved against as set forth in the December 31, 2010 balance sheet included in the Metiscan Financial Statements, no defense or set-off to any such account has been asserted by the account obligor, and Metiscan has no knowledge that any such defense or set-off exists.

 

  

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Y. Inventory.  Metiscan does not have any inventory.

Z. Properties and Assets.  Metiscan has and will have as of the Closing Date legal and beneficial ownership of any and all properties and assets (real, personal or mixed, tangible or intangible) set forth in Section “6Z” of Exhibit “H”, or the legal right to use such properties and assets through lease agreements, licenses or the like, free and clear of any and all liens.  Except as otherwise set forth in Section “6Z” of Exhibit “H”, Metiscan’s properties and assets are suitable for the purposes for which intended and in operating condition and repair consistent with normal industry standards, except for ordinary wear and tear, and except for such properties and assets as shall have been taken out of service on a temporary basis for repairs or replacement consistent with Metiscan’s prior practices and normal industry standards.  Except as otherwise set forth in Section “6Z” of Exhibit “H”, since the date of Metiscan’s incorporation, September 9, 2008, there has not been any significant interruption of Metiscan’s business due to inadequate maintenance or obsolescence of the properties and assets.

AA. Real Property.  Except as set forth on Section “6AA” of Exhibit “H” Metiscan has no interest in any real property.

BB. Commitments.

i. Except as otherwise set forth in Section “6BB” of Exhibit “H”, Metiscan is not a party to or bound by any of the following, whether written or oral:

a. any contract which cannot by its terms be terminated by Metiscan upon 30 days’ or less notice without penalty or whose term continues beyond one year after the date of this Agreement;

b. any contract or commitment for capital expenditures by Metiscan not in the ordinary course of business;

c. any lease or license with respect to any properties, real or personal, whether as landlord, tenant, licensor, or licensee;

d. any contract, indenture, or other instrument relating to the borrowing of money or the guarantee of any obligation or the deferred payment of the purchase price of any Properties;

e. any partnership agreement, joint venture agreement or limited liability company agreement;

 

  

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f. any contract with any affiliate of Metiscan relating to the provision of goods or services by or to Metiscan;

g. any contract for the sale of any assets not in Metiscan’s ordinary course of business;

h. any contract which purports to limit Metiscan’s freedom to compete freely in any line of business or in any geographic area;

i. preferential purchase right, right of first refusal, or similar contract; or

j. other contract with respect to the business of Metiscan.

ii. Except as disclosed in Section “6BB” of Exhibit “H”, all of the contracts listed or required to be listed in Section “6BB” of Exhibit “H” are valid, binding, and in full force and effect, Metiscan has not been notified or advised by any party thereto of such party’s intention or desire to terminate or modify any such contract in any respect, and Metiscan is not, and Metiscan has no knowledge of any other party which is, in breach of any of the terms or covenants of any contract listed or required to be listed in Section “6BB” of Exhibit “H”.

iii. Except as otherwise set forth in Section “6BB” of Exhibit “H”, Metiscan is not a party to or bound by any contract or contracts the terms of which were arrived at by or otherwise reflect less-than-arm’s-length negotiations or bargaining.

CC. Permits. Metiscan has any and all permits, rights, approvals, licenses, authorizations, legal status, orders, or contracts under any legal requirement or otherwise granted by any governmental authority (“Permits”) necessary for Metiscan to own, operate, use, and/or maintain its properties and to conduct its business and operations as presently conducted and as it presently expects such business and operations to be conducted in the future.  All such Permits are in effect, no proceeding is pending to modify, suspend or revoke, withdraw, terminate, or otherwise limit any such Permits, and Metiscan has no knowledge of any such proceeding which is threatened. No administrative or governmental actions have been taken, and Metiscan has no knowledge of any such actions which are threatened in connection with the expiration or renewal of such Permits which could reasonably be expected to adversely affect the ability of Metiscan to own, operate, use, or maintain any of its properties or to conduct its business and operations as presently conducted and as expected to be conducted in the future.  Metiscan has no knowledge of (i) any violations which have occurred that remain uncured, unwaived, or otherwise unresolved, or are occurring in respect of any such Permits, other than inconsequential violations, and (ii) any circumstances which exist that would prevent or delay the obtaining of any requisite consent, approval, waiver, or other authorization of the transactions contemplated by this Agreement with respect to such Permits that by their terms or under applicable law may be obtained only after Closing.

 

  

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DD. Banks.  Section “6DD” of Exhibit “H” sets forth (i) the name of each bank, trust company, or other financial institution and stock or other broker with which Metiscan has an account, credit line or safe deposit box or vault, (ii) the names of all persons authorized to draw thereon or to have access to any safe deposit box or vault, (iii) the purpose of each such account, safe deposit box, or vault, and (iv) the names of all persons authorized by proxies, powers of attorney, or other like instrument to act on behalf of Metiscan in matters concerning any of its business or affairs.  Except as otherwise set forth in Section “6DD” of Exhibit “H” attached hereto, no such proxies, powers of attorney, or other like instruments are irrevocable.

EE. Absence of Certain Business Practices.  Metiscan has no knowledge of any instance where Metiscan or any affiliate or agent of Metiscan, or any other person acting on behalf of or associated with Metiscan, acting alone or together, has received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any customer, supplier, employee, or agent of any customer or supplier.

FF. Transactions with Affiliates.  Except as set forth in Section “6FF” of Exhibit “H” attached hereto and except for normal advances to employees consistent with past practices, payment of compensation for employment to employees consistent with past practices, and participation in employee benefit plans by employees, Metiscan has not purchased, acquired, or leased any property or services from, or sold, transferred, or leased any property or services to, or loaned or advanced any money to, or borrowed any money from, or entered into or been subject to any management, consulting, or similar agreement with, or engaged in any other significant transaction with any officer, director, or stockholder of Metiscan or any of their respective affiliates.  Except as set forth in Section “6FF” of Exhibit “H”, no officer, director, or stockholder of Metiscan and none of their respective affiliates is indebted to Metiscan for money borrowed or other loans or advances, and Metiscan is not indebted to any such affiliate.

GG. Litigation.  There are no legal, administrative, arbitration or other proceedings or governmental investigations materially affecting Metiscan or its properties, assets or businesses, or with respect to any matter arising out of the conduct of Metiscan’s business pending or to its knowledge threatened, by or against, any officer or director of Metiscan in connection with its affairs, whether or not covered by insurance.  (i) neither Metiscan nor its officers or directors are subject to any order, writ, injunction or decree of any court, department, agency or instrumentality affecting Metiscan, and (ii) Metiscan is not presently engaged in any legal action.  Section “6GG” of Exhibit “H” also includes a listing of all claims, actions, suits, investigations, or proceedings involving Metiscan which were pending, settled, or adjudicated.

HH. Business Conducted in No Other Name; Subsidiaries.  All business of Metiscan has been conducted in its name or the names of its subsidiaries and for its benefit and there are no parties related, either directly or indirectly, which are competing for the business of Metiscan.

 

  

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II. Metiscan represents and warrants that, except for the debts and liabilities set forth on the Section “6II” of Exhibit “H”, including (i.) Series E and Series F Preferred stock as set forth in Section "6B" of Exhibit "H", (ii.) SBCH Charitable Foundation Note #1 and Note #2 as set forth in Section "6I" and Section "6BB" of Exhibit "H", (iii.) SOMRI note as set forth in Section "6S" and "6BB" of Exhibit "H", and (iv.) the payables owed to Mintz & Fraade, P.C. as set forth in Exhibit "G", all debts and liabilities shown on the consolidated financial statements of Metiscan and Metiscan Subsidiaries as of March 31, 2011 are exclusively owed by Metiscan Subsidiaries (“Metiscan Subsidiaries Liabilities”) and upon completion of disposition of Metiscan Subsidiaries to Holdings at the Closing, all the Metiscan Subsidiaries Liabilities shall no longer affect Metiscan and at no time Metiscan shall be held responsible for Metiscan Subsidiaries Liabilities. Any breach of this representation shall constitute a “material breach” that warrants the termination of this Agreement as set forth in Section “C” of Article “13” of this Agreement.

JJ.  Complete Disclosure.  No representation or warranty of Metiscan which is set forth in this Agreement, or in a writing furnished or to be furnished pursuant to this Agreement, to Metiscan’s knowledge contains or shall contain any untrue statement of a material fact, or omits or shall omit to state any fact which is required to make the statements which are contained in this Agreement or in a writing furnished or to be furnished pursuant to this Agreement, in light of the circumstances under which they were made, not materially misleading.  There is no fact relating to the business, affairs, operations, conditions (financial or otherwise) or prospects of Metiscan which would materially adversely affect same which has not been disclosed to Aclor in this Agreement.

KK.  No Defense.  It shall not be a defense to a suit for damages for any misrepresentation or breach of covenant or warranty that Aclor knew or had reason to know that any covenant, representation or warranty of Metiscan in this Agreement or furnished or to be furnished to Aclor contained untrue statements.

7.           Representations, Warranties and Covenants of Aclor and the Aclor Shareholders.  Aclor and the Aclor Shareholders jointly and severally represent, warrant and covenant to Metiscan as follows:

A. Corporate Status.

i.      Aclor is a corporation duly organized, validly existing and in good standing pursuant to the laws of the State of Georgia, with all of the requisite power and authority to carry on its business as presently conducted in all jurisdictions where presently conducted, to enter into this Agreement and to consummate the transactions set forth in this Agreement; and

ii.      Copies of (a) the Certificate of Incorporation of Aclor, and any amendments to the Certificate of Incorporation, certified by the Secretary of State of the State of Georgia and (b) the Bylaws of Aclor, as amended, certified by the Secretary of Aclor are annexed to, and made a part of, this Agreement as Exhibits “I” and “J”, respectively, and are complete and correct as of the date of this Agreement.

 

  

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B.      Capitalization.  Aclor does not have any (i) subscriptions, options, warrants, rights or other agreements outstanding to acquire from Aclor shares of stock of Aclor or any other equity security or security convertible into an equity security of Aclor, (ii) outstanding shares of preferred stock or (iii) agreements or commitments to increase, decrease or otherwise alter the authorized capital stock of Aclor.

C.      Authority of Aclor.  Aclor has full corporate power and authority to execute, deliver and perform this Agreement and has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions set forth in this Agreement, and no other corporate action on its part is necessary to authorize and approve this Agreement or to consummate the transactions contemplated by this Agreement.  This Agreement and the consummation by Aclor of the transactions set forth in this Agreement have been duly and validly authorized, executed and delivered by the Board of Directors of Aclor, and (assuming the valid authorization, execution and delivery of this Agreement by Metiscan) this Agreement is valid and binding upon Aclor and enforceable against Aclor in accordance with its terms (except as the enforceability of this Agreement may be limited by bankruptcy, insolvency, bank moratorium or similar laws affecting creditors' rights generally and laws restricting the availability of equitable remedies, and may be subject to general principles of equity whether or not such enforceability is considered in a proceeding at law or in equity).  An executed certified resolution of the Board of Directors of Aclor approving Aclor’s entry into this Agreement and the consummation of the transactions set forth in this Agreement are annexed to, and made a part of, this Agreement as Exhibit “K”.

D.      Compliance with the Law and Other Instruments.  Except as otherwise set forth in Section “7D” of the Aclor Disclosure Statement which is annexed hereto as Exhibit “L”, Aclor is and has been in material compliance in all material respects with any and all legal requirements applicable to Aclor, including, but not limited to, all applicable federal and state “blue sky” securities laws.  Except as otherwise set forth in Section “7D” of Exhibit “L”, Aclor (i) has not received or entered into any citations, complaints, consent orders, compliance schedules, or other similar enforcement orders or received any written notice from any governmental authority or any other written notice which would indicate that Aclor is not currently in compliance with all applicable legal requirements, and (ii) is not in default under any legal requirement applicable to Aclor, and Aclor has no knowledge that any condition exists (whether or not covered by insurance) that with or without notice or lapse of time or both would constitute a default under, or breach or violation of, any legal requirement applicable to Aclor.  Without limiting the generality of the foregoing, Aclor has not received notice of, and, Aclor has no knowledge of any basis for, any claim, action, suit, investigation or proceeding which might result in a finding that Aclor is not or has not been in compliance with legal requirements relating to (i) the development, testing, manufacture, packaging, distribution, and marketing of its products, (ii) employment, safety and health, and/or (iii) environmental protection, building, zoning and land use.

E.      Absence of Conflicts.  The execution and delivery of this Agreement, and the consummation by Aclor of the transactions set forth in this Agreement: (i) do not and shall not conflict with or result in a breach of any provision of Aclor’s Certificate of Incorporation or Bylaws, (ii) do not and shall not result in any breach of, or constitute a default or cause an acceleration under any arrangement, agreement or other instrument to which Aclor is a party to or by which any of its assets are bound, (iii) do not and shall not cause Aclor to violate or contravene any provision of law or any governmental rule or regulation, and (iv) will not and shall not result in the imposition of any lien, or encumbrance upon, any property of Aclor.  Aclor has performed in all material respects all of its obligations which are, as of the date of this Agreement, required to be performed, pursuant to the terms of any such agreement, contract or commitment.

  

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F.  Financial Statements.   Attached hereto as Exhibit “M” are the following unaudited financial statements of Aclor (collectively the “Aclor Financial Statements”): (i) consolidated balance sheets as of December 31, 2010, (ii) statements of income, (iii) changes in stockholders’ equity, and (iv) cash flow from inception to December 31, 2010. The Aclor Financial Statements (including the notes thereto) have been prepared on a consistent basis throughout the periods covered thereby and present fairly the financial condition of Aclor as of such dates and the results of operations of Aclor for such periods; provided, however, that the Aclor Financial Statements are subject to normal year-end adjustments (which will not be material, individually or in the aggregate).

G. Environmental Compliance.

i. Aclor has complied and is in compliance, in all material respects, with all applicable federal, state, local and foreign statutes, regulations, ordinances and similar provisions having the force or effect of law, all judicial and administrative orders and determinations, and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment including, but not limited to, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls (a banned toxic chemical utilized as a coolant, sealant and in paints), noise or radiation (the “Environmental, Health and Safety Requirements”).

ii. Aclor has not received any written or oral notice, report or other information with respect to any actual or alleged material violation of Environmental, Health and Safety Requirements, or any material liabilities or potential material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any material investigatory, remedial or corrective obligations, relating to its business or its facilities arising under Environmental, Health and Safety Requirements.

iii. Neither this Agreement nor the consummation of the transactions which are the subject of this Agreement will result in any material obligations for site investigation or cleanup, or notification to or consent of government agencies or third parties, pursuant to any of the so-called “transaction-triggered” or “responsible property transfer” Environmental, Health and Safety Requirements.

H. OSHA Compliance.  Aclor is in compliance with all applicable federal, state and local laws, rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and charges pursuant to OSHA and other governmental requirements relating to occupational health and safety including, but not limited to, OSHA.

 

  

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I. Non-Tax Liabilities.  Aclor does not have any liabilities of any nature, accrued or contingent, including, but not limited to, liabilities to customers or suppliers, other than the following:

i.  Liabilities for which full provision has been made on the Aclor Financial Statements; and

ii.  Other liabilities arising since December 31, 2010 and prior to the date of this Agreement in the ordinary course of business (which shall not include liabilities to customers on account of defective products or services) as set forth in Section “7I” of Exhibit “L” which are not inconsistent with the representations and warranties of Aclor or any other provision of this Agreement.

J. Representations and Obligations Regarding Taxes.

i. As used in this Paragraph “J” of this Article “7” of this Agreement, “Affiliated Group” means any affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of state, local, or foreign law; “Tax” means any Federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, and “Taxes” means any or all of the foregoing collectively; and “Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.

ii. Except as set forth in Section “7J” of Exhibit “L”, Aclor has filed all tax returns which it was required to file, all such tax returns were true, correct, and complete in all material respects, all taxes owed by Aclor (whether or not shown on any tax return and whether or not any tax return was required) have been paid, Aclor is not currently the beneficiary of any extension of time within which to file any tax return, no claim has ever been made by a taxing authority in a jurisdiction where Aclor does not file tax returns which it is or may be subject to taxation by that jurisdiction, and there are no liens on any of the assets of Aclor that arose in connection with any failure (or alleged failure) to pay any tax, except for liens for taxes not yet due.

iii. Aclor has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

iv. No director or officer (or employee responsible for tax matters) of Aclor has received any notification (whether written or oral) that any taxing authority will assess any additional taxes for any period for which tax returns have been filed.  There is no dispute or claim concerning any tax liability of Aclor either (i) claimed or raised by any taxing authority or (ii) as to which Aclor has knowledge (after reasonable investigation).  Except as otherwise set forth in Section “7J” of Exhibit “L” attached hereto, no issue relating to taxes has been raised by a taxing authority during any pending audit or examination, and no issue relating to taxes was raised by a taxing authority in any completed audit or examination, which reasonably can be expected to recur in a later taxable period.

  

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v. Aclor has not waived any statute of limitations with respect to taxes or agreed to any extension of time with respect to a tax assessment or deficiency.

vi. Aclor has not made any payments, is not obligated to make any payments and is not a party to any agreement which under certain circumstances could obligate it to make any payments that will not be deductible under section 280G of the Code. Aclor has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.  Aclor has disclosed on its Federal income tax returns all positions taken therein which could give rise to a substantial understatement of Federal income tax within the meaning of Section 6662 of the Code.  Aclor is not a party to any tax allocation or sharing agreement. Aclor (a) has not been a member of an Affiliated Group filing a consolidated Federal income tax return and (b) has no liability for the taxes of any person under treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise.

vii. Section “7J” of Exhibit “L” sets forth the following information with respect to Aclor as of December 31, 2010 (as well as on an estimated pro forma basis as of the Closing giving effect to the consummation of the transactions contemplated by this Agreement):  (i) the basis of Aclor in its assets; and (ii) the amount of any net operating loss, net operating loss carryover, net capital loss, net capital loss carryover, tax credit, tax credit carryover, or excess charitable contribution of Aclor.

viii. The unpaid taxes of Aclor did not, as of the most recent fiscal year end, exceed the reserve for tax liability (rather than any reserve for deferred taxes established to reflect timing differences between book and tax income) set forth on the face of the balance sheet contained in the Financial Statements (rather than in any notes thereto).

ix. Aclor shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income which accrued in a prior taxable period but was not recognized in any prior taxable period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, or Section 481 of the Code or any comparable provision of state, local, or foreign tax law.

x. Except as otherwise set forth in Section “7J” of Exhibit “L” attached hereto, Aclor is not a party to any joint venture, partnership, or other arrangement or contract which could be treated as a partnership for Federal income tax purposes.

xi. Except as otherwise set forth in Section “7J” of Exhibit “L” attached hereto, Aclor has not entered into any sale leaseback or leveraged lease transaction which fails to satisfy the requirements of Revenue Procedure 75-21 (or similar provisions of foreign law) or any safe harbor lease transaction.

 

  

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xii. All elections with respect to taxes affecting Aclor are disclosed or attached to a tax return of Aclor.

xiii. All private letter rulings issued by the Internal Revenue Service to Aclor (and any corresponding ruling or determination of any state, local, or foreign taxing authority) have been disclosed in Section “7J” of Exhibit “L”, and there are no pending requests for any such rulings (or corresponding determinations).

K. Contracts.  Except as set forth in Section “7K” of Exhibit “L”, Aclor is not a party to any material contracts.

L.  Absence of Changes.  Since December 31, 2010, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Aclor taken as a whole. Without limiting the generality of the foregoing, except as set forth in Section “7L” of Exhibit “L” since December 31, 2010:

i. Aclor has not sold, leased, transferred, or assigned any material assets, tangible or intangible, outside of the ordinary course of business;

ii. Aclor has not entered into any material agreement, contract, lease, or license outside of the ordinary course of business;

iii. no party (including Aclor) has accelerated, terminated, made material modifications to, or canceled any material agreement, contract, lease, or license to which Aclor is a party;

iv. Aclor has not imposed any security interest upon any of its assets, tangible or intangible;

v. Aclor has not made any material expenditures of its capital outside of the ordinary course of business;

vi. Aclor has not made any material capital investment in, or any material loan to, any other person or entity outside of the ordinary course of business;

vii. Aclor has not created, incurred, assumed, or guaranteed more than $10,000 in aggregate indebtedness for borrowed money and capitalized lease obligations;

viii. Aclor has not granted any license or sublicense of any material rights under or with respect to any intellectual property;

ix. there has been no change made or authorized in the Certificate of Incorporation or Bylaws of Aclor;

 

  

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x. Aclor has not issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;

xi. Aclor has not declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock;

xii. Aclor has not experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property;

xiii. Aclor has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees outside of the ordinary course of business;

xiv. Aclor has not entered into any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

xv. Aclor has not granted any increase in the base compensation of any of its directors, officers, and employees outside of the ordinary course of business;

xvi. Aclor has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other employee benefit plan);

xvii. Aclor has not made any other material change in employment terms for any of its directors, officers, and employees outside of the ordinary course of business;

xviii. Aclor has not experienced any event, circumstance, or change (other than general economic conditions) which had or can reasonably be expected to have a material adverse effect upon the business, operations, prospects, properties, financial condition, or working capital of Aclor;

xix. Aclor has not made any change in any existing election, or made any new election, with respect to any tax law in any jurisdiction which election could have an effect upon the tax treatment of Aclor or its business operations;

xx. Aclor has not settled any claim or litigation, or filed any motions, orders, briefs, or settlement agreements in any proceeding before any governmental authority or any arbitrator;

xxi. Aclor has not maintained its books of account other than in the usual, regular, and ordinary manner and on a basis consistent with prior periods or made any change in any of its accounting methods or practices;

 

  

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xxii. Aclor has not suffered any extraordinary losses or waived any rights of any value;

xxiii. Aclor has not (a) liquidated inventory or accepted product returns other than in the ordinary course, (b) accelerated receivables, (c) delayed payables, or (d) changed in any material respect its practices in connection with the payment of payables and/or the collection of receivables; and

xxiv. Aclor has not committed to do any of the actions set forth in Subparagraphs “i” through “xxiv” of this Paragraph “L” of this Article “7” of this Agreement.

M.  No Approvals.  No approval of any third party including, but not limited to, any governmental authority is required in connection with the consummation of the transactions set forth in this Agreement.

N.  Broker.  Aclor has not had any dealing with respect to the transactions set forth in this Agreement with any business broker, firm or salesman, or any person or corporation, investment banker or financial advisor who is or shall be entitled to any broker's or finder's fee or any other commission or similar fee with respect to the transactions set forth in this Agreement.  Aclor represents that it has not dealt with any such person, firm or corporation and agrees to indemnify and hold harmless Metiscan from and against any and all claims for brokerage commissions by any person, firm or corporation on the basis of any act or statement alleged to have been made by Aclor or its affiliates or agents.

O. Securities Laws.  Neither Aclor nor, to Aclor's knowledge, any director or executive officer of Aclor, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of Aclor, there is not, pending or contemplated, any investigation by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA), or other regulatory authority with respect to Aclor or, to Aclor's knowledge, any current or former director or executive officer of Aclor.

P. Intellectual Property.

i. Aclor has not interfered with, infringed upon, misappropriated, or violated any material intellectual property rights of third parties in any material respect, and none of the directors and officers of Aclor has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that Aclor must license or refrain from using any intellectual property rights of any third party). To the knowledge of Aclor, no third party has interfered with, infringed upon, misappropriated, or violated any material intellectual property rights of Aclor in any material respect.

 

  

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ii. Section “7P” of Exhibit “L” identifies each patent or registration which has been issued to Aclor with respect to any of its intellectual property, identifies each pending patent application or application for registration which Aclor has made with respect to any of its intellectual property, and identifies each license, agreement, or other permission which Aclor has granted to any third party with respect to any of its intellectual property (together with any exceptions).  Section “7P” of Exhibit “L” sets forth correct and complete copies of all such patents, registrations, applications, licenses, agreements, and permissions (as amended to date).  Section “7P” of Exhibit “L” also identifies each trade name or unregistered trademark and each copyright used by Aclor in connection with any of its businesses.

With respect to each item of intellectual property required to be identified in Section “7P” of Exhibit “L” pursuant to the prior paragraph of this Subparagraph “ii” of this Paragraph “P” of this Article “7” of this Agreement:

a. Aclor possesses all right, title, and interest in and to the item, free and clear of any security interest, license, or other restriction;

b. the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

c. no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the knowledge of Aclor, is threatened which challenges the legality, validity, enforceability, use, or ownership of the item; and

d. Aclor has never agreed to indemnify any person or entity for or against any interference, infringement, misappropriation, or other conflict with respect to the item.

iii. Section “7P” of Exhibit “L” identifies each material item of intellectual property which any third party owns and which Aclor uses pursuant to license, sublicense, agreement, or permission. Section “7P” of Exhibit “L” sets forth correct and complete copies of all such licenses, sublicenses, agreements, and permissions (with all amendments, if any).

With respect to each item of intellectual property required to be identified in Section “7P” of Exhibit “L” pursuant to the prior paragraph of this Subparagraph “iii” of this Paragraph “P” of this Article “7” of this Agreement:

a. the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect in all material respects;

b. to the knowledge of Aclor, no other party to the license, sublicense, agreement, or permission is in material breach or default thereof , and no event has occurred which with notice or lapse of time would constitute a material breach or default by such other party or permit termination, modification or acceleration thereof by Aclor;

c. Aclor is not in material breach or default of any such license, sublicense, agreement, or permission, and no event has occurred which with notice or lapse of time would constitute a material breach or default by Aclor or permit termination, modification, or acceleration thereof by another party thereto;

 

  

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d. to the knowledge of Aclor, no other party to the license, sublicense, agreement, or permission has repudiated any material provision thereof;

e. Aclor has not repudiated any material provision of any license, sublicense, agreement, or permission; and

f. Aclor has not granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission.

iv. Aclor is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, which would interfere with his or her duties to Aclor or that would conflict with Aclor’s business as proposed to be conducted.

Q. Insurance.  Aclor does not maintain any insurance currently.

R. Employee Benefits.  There is no employee benefit plan which Aclor maintains or to which Aclor contributes or has any obligation to contribute.

S. Guaranties.  Aclor is not a guarantor or is not otherwise responsible for any liability or obligation (including indebtedness) of any other person or entity.

T. Certain Business Relationships.  Except as set forth in Section “7T” of Exhibit “L”, none of the officers, directors or stockholders of Aclor has been involved in any material business arrangement or relationship with Aclor, and none of the officers, directors or stockholders of Aclor owns any material asset, tangible or intangible, which is used in the business of Aclor.

U. Registration Rights.  Except as set forth in Section “7U” of Exhibit “L”, Aclor has not granted or agreed to grant to any person or entity any rights (including piggyback registration rights) to have any securities of Aclor registered with the United States Securities and Exchange Commission or any other governmental authority.

V. Change of Control Payments.  Neither the execution, delivery and performance by Aclor of this Agreement nor the consummation of any of the transactions contemplated by this Agreement shall require any payment by Aclor, in cash or kind, under any agreement, plan, policy, commitment or other arrangement of Aclor.  There are no agreements, plans, policies, commitments or other arrangements with respect to any compensation, benefits or consideration which will be materially increased, or the vesting of benefits of which will be materially accelerated, as a result of the execution and delivery of this Agreement and any of the Exhibits to this Agreement or the occurrence of any of the transactions completed by this Agreement.  There are no payments or other benefits, the value of which will be calculated on the basis of any of the transactions contemplated by this Agreement.  Aclor has not made, is not obligated to make, and is not a party to any agreement that under certain circumstances could obligate it to make any “excess parachute payment” as defined in Code Section 280G.

 

  

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W. Investments.  Aclor owns the debt or equity securities of the entities set forth in Section “7W” of Exhibit “L” attached hereto.

X. Accounts Receivable.  Except as otherwise set forth in Section “7X” of Exhibit “L”, the accounts receivable reflected on the December 31, 2010 balance sheet included in the Aclor Financial Statements and all of Aclor’s accounts receivable arising since December 31, 2010 arose from bona fide transactions in the ordinary course of business, and the goods and services involved have been sold, delivered, and performed to the account obligors, and no further filings (with governmental authorities, insurers or others) are required to be made, no further goods are required to be provided and no further services are required to be rendered in order to complete the sales and fully render the services and to entitle Metiscan to collect the accounts receivable in full.  Except as otherwise set forth in Section “7X” of Exhibit “L” attached hereto, no such account has been assigned or pledged to any other person or entity, and, except only to the extent fully reserved against as set forth in the December 31, 2010 balance sheet included in the Aclor Financial Statements, no defense or set-off to any such account has been asserted by the account obligor.

Y. Inventory.  Except as set forth on Section “7Y” of Exhibit “L” Aclor does not have any inventory of any type of products.

Z. Property and Assets.  Aclor has and will have as of the Closing Date legal and beneficial ownership of any and all properties and assets (real, personal or mixed, tangible or intangible) set forth in Section “7Z” of Exhibit “L”, or the legal right to use such properties and assets through lease agreements, licenses or the like, free and clear of any and all liens.  Except as otherwise set forth in Section “7Z” of Exhibit “L”, Aclor’s properties and assets are suitable for the purposes for which intended and in operating condition and repair consistent with normal industry standards, except for ordinary wear and tear, and except for such properties and assets as shall have been taken out of service on a temporary basis for repairs or replacement consistent with Aclor’s prior practices and normal industry standards.  Except as otherwise set forth in Section “7Z” of Exhibit “L”, during the past three (3) years there has not been any significant interruption of Aclor’s business due to inadequate maintenance or obsolescence of the properties and assets.

AA. Real Property.  Except as set forth on Section “7AA” of Exhibit “L” Aclor has no interest in any real property.

BB. Commitments.  Except as otherwise set forth in Section “7BB” of Exhibit “L”, Aclor is not a party to or bound by any contract or commitment, whether written or oral.

 

  

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CC. Permits.  Except as otherwise set forth in Section “7CC” of Exhibit “L”, Aclor has any and all permits, rights, approvals, licenses, authorizations, legal status, orders, or contracts under any legal requirement or otherwise granted by any governmental authority (“Permits”) necessary for Aclor to own, operate, use, and/or maintain its properties and to conduct its business and operations as presently conducted and as it presently expects such business and operations to be conducted in the future.  Except as otherwise set forth in Section “7CC” of Exhibit “L”, all such Permits are in effect, no proceeding is pending to modify, suspend or revoke, withdraw, terminate, or otherwise limit any such Permits, and Aclor has no knowledge of any such proceeding which is threatened. No administrative or governmental actions have been taken, and Aclor has no knowledge of any such actions which are threatened in connection with the expiration or renewal of such Permits which could reasonably be expected to adversely affect the ability of Aclor to own, operate, use, or maintain any of its properties or to conduct its business and operations as presently conducted and as expected to be conducted in the future.  Except as otherwise set forth in Section “7CC” of Exhibit “L”, Aclor has no knowledge of (i) any violations which have occurred that remain uncured, unwaived, or otherwise unresolved, or are occurring in respect of any such Permits, other than inconsequential violations, and (ii) any circumstances which exist that would prevent or delay the obtaining of any requisite consent, approval, waiver, or other authorization of the transactions contemplated by this Agreement with respect to such Permits that by their terms or under applicable law may be obtained only after Closing.

DD. Banks.  In Section “7DD” of Exhibit “L” sets forth (i) the name of each bank, trust company, or other financial institution and stock or other broker with which Aclor has an account, credit line or safe deposit box or vault, (ii) the names of all persons authorized to draw thereon or to have access to any safe deposit box or vault, (iii) the purpose of each such account, safe deposit box, or vault, and (iv) the names of all persons authorized by proxies, powers of attorney, or other like instrument to act on behalf of Aclor in matters concerning any of its business or affairs.  Except as otherwise set forth in Section “7DD” of Exhibit “L” attached hereto, no such proxies, powers of attorney, or other like instruments are irrevocable.

EE. Absence of Certain Business Practices.  Aclor has no knowledge of any instance where Aclor or any affiliate or agent of Aclor, or any other person acting on behalf of or associated with Aclor, acting alone or together, has received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any customer, supplier, employee, or agent of any customer or supplier.

FF. Transactions with Affiliates.  Except as set forth in Section “7FF” of Exhibit “L” attached hereto, Aclor has not purchased, acquired, or leased any property or services from, or sold, transferred, or leased any property or services to, or loaned or advanced any money to, or borrowed any money from, or entered into or been subject to any management, consulting, or similar agreement with, or engaged in any other significant transaction with any officer, director, or stockholder of Aclor or any of their respective affiliates.  Except as set forth in Section “7FF” of Exhibit “L”, no officer, director, or stockholder of Aclor and none of their respective affiliates is indebted to Aclor for money borrowed or other loans or advances, and Aclor is not indebted to any such affiliate.

 

  

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GG. Litigation.  Except as set forth in Section “7GG” of Exhibit “L”, there are no legal, administrative, arbitration or other proceedings or governmental investigations materially affecting Aclor or its properties, assets or businesses, or with respect to any matter arising out of the conduct of Aclor’s business pending or to its knowledge threatened, by or against, any officer or director of Aclor in connection with its affairs, whether or not covered by insurance.  Except as set forth in Section “7GG” of Exhibit “L”, (i) neither Aclor nor its officers or directors are subject to any order, writ, injunction or decree of any court, department, agency or instrumentality affecting Aclor, and (ii) Aclor is not presently engaged in any legal action.  Section “7GG” of Exhibit “L” also includes a listing of all claims, actions, suits, investigations, or proceedings involving Aclor which were pending, settled, or adjudicated.

HH. Business Conducted in No Other Name; Subsidiaries.  All business of Aclor has been conducted in its name and for its benefit and there are no parties related, either directly or indirectly, which are competing for the business of Aclor. Except as set forth in Section “HH” of Exhibit “L”, Aclor has no subsidiaries

II.  Complete Disclosure.  No representation or warranty of Aclor which is set forth in this Agreement, or in a writing furnished or to be furnished pursuant to this Agreement, to Aclor’s knowledge contains or shall contain any untrue statement of a material fact, or omits or shall omit to state any fact which is required to make the statements which are contained in this Agreement or in a writing furnished or to be furnished pursuant to this Agreement, in light of the circumstances under which they were made, not materially misleading.  There is no fact relating to the business, affairs, operations, conditions (financial or otherwise) or prospects of Aclor which would materially adversely affect same which has not been disclosed to Metiscan in this Agreement.

JJ.  No Defense.  It shall not be a defense to a suit for damages for any misrepresentation or breach of covenant or warranty that Metiscan knew or had reason to know that any covenant, representation or warranty of Aclor in this Agreement or furnished or to be furnished to Metiscan contained untrue statements.

KK.  Ownership.  The Aclor Shareholders are the record, beneficial and equitable owners of sixty (60%) percent of the issued and outstanding shares of Aclor’s common stock, which is evidenced by sixty thousand (60,000) shares.  They hold said shares free and clear of all liens, claims or encumbrances, and have the full right and authority to exchange or transfer said shares pursuant to the terms of this Agreement.

LL.  Absence of Conflicts.  Their execution and delivery of this Agreement, the transfer of their shares of Aclor Common Stock and the consummation by them of the transactions set forth in this Agreement do not and shall not cause them to violate or contravene any provision of law or any governmental rule or regulation.

MM.  No Approvals.  No approval of any governmental authority is required of them in connection with the consummation of the transactions set forth in this Agreement.

NN.  Complete Disclosure.  No representation or warranty of them which is contained in this Agreement, or in a writing furnished or to be furnished pursuant to this Agreement, to their knowledge contains or shall contain any untrue statement of a material fact, omits or shall omit to state any fact which is required to make the statements which are contained herein or therein, in light of the circumstances under which they were made, not materially misleading.

 

  

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OO.  No Defense.  It shall not be a defense to a suit for damages by another party to this Agreement against them for any misrepresentation or breach of covenant or warranty that the other party which is suing them knew or had reason to know that any covenant, representation or warranty of him in this Agreement contained untrue statements.

PP.  Broker.  They have not had any dealing with respect to this transaction with any business broker, firm or salesman, or any person or corporation, investment banker or financial advisor who is or shall be entitled to any broker's or finder's fee or any other commission or similar fee with respect to the transactions set forth in this Agreement. The Aclor Shareholders represent that they have not dealt with any such person, firm or corporation and agrees to indemnify and hold Metiscan harmless from and against any and all claims for brokerage commissions by any person, firm or corporation on the basis of any act or statement alleged to have been made by him or it or his or its affiliates or agents.

8.           Mutual Covenants of Aclor and Metiscan.

A. Public Announcements.  Each of the Parties to this Agreement shall consult with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by this Agreement and no party shall, without the prior written consent of the others, issue any such press release or make any such public statement, except as may be required by applicable Law.

B. Notice of Developments and Updates.  Each of the Parties to this Agreement shall give prompt written notice pursuant to Paragraph “C” of Article “18” of this Agreement to the other Parties to this Agreement of any act, event or occurrence which may cause or constitute a breach of any of its representations and warranties set forth in Articles “6” or “7” of this Agreement, as the case may be.

C. Exclusivity.  The parties shall not, nor shall the parties permit any of their subsidiaries or affiliates to, authorize or permit any of its officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative or agent retained by it or any of its or their subsidiaries or affiliates to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing non-public information or assistance), any inquiries or the making of any proposal which constitutes an “Acquisition Proposal” (as hereinafter defined), (ii) participate in any discussions or negotiations regarding any “Acquisition Proposal” other than the acquisition that is subject of this Agreement, (iii) enter into any agreement with  respect to any “Acquisition Proposal,” or (iv) furnish to any person any proprietary or confidential information of either party which could be used to solicit an Acquisition Proposal, or could be used by such a potential buyer to make or finance an Acquisition Proposal.   For purposes of this Agreement, "Acquisition Proposal" means any inquiry, proposal or offer (or any public announcement of a proposal, plan or intention to do any of the foregoing or any agreement to engage in the foregoing) from any person relating to any direct or indirect acquisition or purchase of 10% or more of the assets of Metiscan and its subsidiaries or 10% or more of any class of equity securities of Metiscan or any of its subsidiaries, any tender offer or exchange offer which if consummated would result in any person beneficially owning 10% or more of any class of equity securities of Metiscan or any of its subsidiaries, or any merger, consolidation, business combination, sale of all or substantially all the assets, recapitalization, liquidation, dissolution or similar transaction involving Metiscan or any of its subsidiaries, other than the Excluded Acquisitions.

 

  

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D. Supplements to Exhibits.  From time to time prior to the Closing Date, the Parties shall promptly supplement or amend, in writing, the Exhibits to this Agreement which they have delivered pursuant to this Agreement with respect to any matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in any such Exhibit or which is necessary to correct any information in any Exhibit which has been rendered inaccurate by any such matter hereafter arising.  No disclosure by any party pursuant to this Paragraph “C” of this Article “8” of this Agreement shall be deemed to cure any misrepresentation, breach of warranty, or breach of covenant unless (i) such disclosure is made prior to the Closing Date and (ii) the other Parties to this Agreement elect to close the Merger in spite of such disclosure, in which event any claims with respect to any such misrepresentations or breaches shall be deemed waived by the Parties.

E. Efforts to Meet Conditions.  Subject to the terms and conditions of this Agreement, each of the Parties to this Agreement shall use its best efforts to perform or satisfy each covenant or condition to be performed or satisfied by each of them prior to and after the Closing and shall use all reasonable efforts to take or cause to be taken all actions and do or cause to be done all things required, whether under applicable legal requirements or otherwise, in order to consummate the transactions contemplated by this Agreement, including, but not limited to, (i) obtaining all permits, authorizations, consents and approvals of any governmental authority or other person which are required for or in connection with the consummation of the transactions contemplated by this Agreement, (ii) taking any and all reasonable actions necessary to satisfy all of the conditions to each party’s obligations in this Agreement, and (iii) executing and delivering all agreements and documents required by this Agreement to be executed and delivered by such party on or prior to the Closing.

F. Cooperation; Notice; Cure.  Subject to compliance with applicable law, from the date of this Agreement until the Closing Date, each of the Parties shall confer on a regular and frequent basis with one or more representatives of the other Parties to report on the general status of ongoing operations.  Aclor shall promptly provide Metiscan or its counsel, and Metiscan shall promptly provide Aclor or its counsel with copies of any filings any of them made with any governmental entity in connection with this Agreement and the transactions contemplated by this Agreement.  Each of the Parties shall notify the others of, and will use all commercially reasonable efforts to cure before the Closing Date, any event, transaction or circumstance, as soon as practical after it becomes known to such party, that causes or will cause any covenant or agreement of the Parties pursuant to this Agreement to be breached or that renders or will render untrue any representation or warranty of the Parties contained in this Agreement.  Each of the Parties shall also notify the others in writing of, and will use all commercially reasonable efforts to cure, before the Closing Date, any violation or breach, as soon as practical after it becomes known to such party, of any representation, warranty, covenant or agreement made by the Parties.  No notice given pursuant to this Paragraph “E” of this Article “8” of this Agreement shall have any effect upon the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any condition contained in this Agreement.

 

  

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G. Full Access.  Aclor will permit representatives of Metiscan to have full access to all premises, properties, personnel, books, records (including Tax records), Contracts, and documents of or pertaining to Aclor and shall make the officers and employees of Aclor available to Metiscan and its representatives as Metiscan and their representatives shall from time to time reasonably request, in each case to the extent that such access and disclosure would not obligate tAclor to take any actions that would disrupt the normal course of its business or violate the terms of any agreement to which Aclor is bound or any applicable Law.

H. Each of Metiscan and Aclor (the “First Party”) shall have delivered to the other of Metiscan or Aclor (the “Second Party”), as the case may be, at or prior to the Closing such other documents (including certificates of officers of the First Party) as the Second Party may reasonably request in order to enable the Second Party to determine whether the conditions to its obligations under this Agreement have been met and otherwise to carry out the provisions of this Agreement.

9.           Conduct of Metiscan Business Prior to the Closing Date. Between the date of this Agreement and the Closing Date, Metiscan shall carry on its business in the ordinary course and in the same manner as heretofore conducted and shall preserve intact the existing business organization of Metiscan, and use its best efforts to (i) keep available to Metiscan the services of Metiscan’s present officers and employees, (ii) preserve Metiscan’s relationships, if any, with customers, suppliers and others having business dealings with Metiscan, to the end that its goodwill and ongoing business shall not be materially impaired on the Closing Date.  Without the prior written consent of Aclor, Metiscan shall not:

A.           make any change in the Certificate of Incorporation or Bylaws of Metiscan;

 

B.           conduct the business of Metiscan in any manner other than in the ordinary course;

 

C.           authorize or issue any capital stock or any rights, warrants, options or convertible securities to acquire such stock.

D.           pay any accrued and unpaid compensation, nor increase the compensation payable to, or to become payable by Metiscan to any officer, director or employee or make any bonus, insurance, pension, or other benefit plan, payment or arrangement to or with any officer, director or employee;

E.            hire any employee other than in the ordinary course of business;

F.            except for liabilities incurred and obligations under contracts entered into in the ordinary course of business, incur any obligation or liability (absolute or contingent), including, but not limited to, any debt or guarantee any such debt or issue or sell any debt securities or guarantee any debt securities of others;

G.           declare or make any payment or distribution to its Stockholders (other than payment of compensation for services rendered, if applicable) or purchase or redeem any shares of capital stock, except pursuant to the terms and conditions of this Agreement;

 

  

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H.           mortgage, pledge or subject to lien, charge or any other encumbrance, any asset, whether tangible or intangible, of Metiscan;

I.            sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets except in the ordinary course of business unless any such successor assumes any and all outstanding liabilities;

J.            take any action or omit to do any act which would cause the representations or warranties of Metiscan contained herein to be untrue or incorrect in any material respect;

K.          commit any act or omit to do any act which would cause a material breach of any agreement, contract or commitment which is listed in an Exhibit annexed to this Agreement; or

L.           commit any other act or omit to do any other act which would have a material adverse effect upon the business, financial condition or earnings of Metiscan.

10.           Conduct of Aclor’s Business Prior to the Closing Date.  Between the date of this Agreement and the Closing Date, Aclor shall carry on its business in the ordinary course and in the same manner as heretofore conducted and shall preserve intact the existing business organization of Aclor, and use its best efforts to (i) keep available to Aclor the services of Aclor’s present officers and employees, (ii) maintain all of Aclor’s properties in their present condition (ordinary wear and tear excepted), (iii) maintain insurance policies with respect to Aclor’s business and properties consistent with current practice, and (iv) maintain Aclor’s rights and franchises. Without the prior written consent of Metiscan, Aclor shall not:

A.           make any change in the Bylaws of Aclor;

B.           authorize or issue any Common Stock or any rights, warrants, options or convertible securities to acquire such interest;

C.           conduct the business of Aclor in any manner other than in the ordinary course;

D.           take any action or omit to do any act which would cause the representations or warranties of Aclor contained herein to be untrue or incorrect in any material respect;

E.           hire any employee other than in the ordinary course of business;

F.           except for liabilities incurred and obligations under contracts entered into in the ordinary course of business, incur any obligation or liability (absolute or contingent), including, but not limited to, any debt or guarantee any such debt or issue or sell any debt securities or guarantee any debt securities of others;

 

  

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G.           declare or make any payment or distribution to its Board of Directors or purchase or redeem any shares of capital stock, except pursuant to the terms and conditions of this Agreement;

H.           mortgage, pledge or subject to lien, charge or any other encumbrance, any asset, whether tangible or intangible, of Aclor;

I.           sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets except in the ordinary course of business unless any such successor assumes any and all outstanding liabilities;

J.           commit any act or omit to do any act which would cause a material breach of any agreement, contract or commitment which is listed in an Exhibit annexed to this Agreement; or

 

K.           commit any other act or omit to do any other act which would have a material adverse effect upon the business, or financial condition of Aclor.

11.           Survival of Representations, Warranties and Covenants.  All covenants, agreements, representations and warranties made in or in connection with this Agreement shall survive the Closing Date hereof, and shall continue in full force and effect, it being understood and agreed that each of such covenants, agreements, representations and warranties is of the essence of this Agreement and the same shall be binding upon and shall inure to the benefit of the parties hereto, and their successors and assigns.

12.           Conditions of Closing.

A.           Conditions to Aclor’s Obligation to Close.  The obligation of Aclor to close the transactions set forth in this Agreement shall be subject to the following conditions:

 

(i)           Representations and Warranties of Metiscan and Holdings to be True.  To the knowledge of Metiscan and Holdings, the representations and warranties of Metiscan and Holdings set forth in this Agreement shall be true in all material respects on the Closing Date with the same effect as though made at such time, except to the extent waived or affected by the transactions set forth in this Agreement; and Metiscan and Holdings shall have delivered to Aclor certificates of Metiscan and Holdings in the form annexed hereto and made a part hereof as Exhibit “N”, signed by the Board of Directors of Metiscan and Holdings and dated the Closing Date to such effect.

 

(i)           Performance of Obligations of Metiscan and Holdings.  Metiscan and Holdings shall have performed all obligations and complied with all covenants set forth in this Agreement to be performed or complied with in all material respects by it prior to the Closing Date, and Metiscan and Holdings shall have delivered to Aclor certificates of Metiscan and Holdings in the form annexed hereto as Exhibit “N” signed by the Board of Directors of Metiscan and Holdings and dated the Closing Date to such effect.

 

  

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(iii)           Statutory Requirements.  Any statutory requirement for the valid consummation by Metiscan of the transactions set forth in this Agreement shall have been fulfilled; any authorizations, consents and approvals of all federal, state and local governmental agencies and authorities required to be obtained, in order to permit consummation by Metiscan of the transactions set forth in this Agreement and to permit the business presently carried on by Metiscan to continue unimpaired following the Closing Date, shall have been obtained, and Metiscan shall have delivered to Aclor a certificate of Metiscan in the form annexed hereto as Exhibit “N”, signed by the Board of Directors of Metiscan and dated the Closing Date to such effect.

(iv)           No Governmental Proceedings.  No action or proceeding shall have been instituted before a court or other governmental body by any governmental agency or public authority to restrain or prohibit the transactions set forth in this Agreement and Metiscan shall have delivered to Aclor a certificate of Metiscan in the form annexed hereto as Exhibit “N”, signed by the Board of Directors of Metiscan and dated the Closing Date to such effect.

(v)           Consents Under Agreements.  Metiscan shall have obtained the consent or approval of each person whose consent or approval shall be required in connection with the transactions set forth in this Agreement and Metiscan shall have delivered to Aclor a certificate of Metiscan in the form annexed hereto as Exhibit “N”, signed by the Board of Directors of Metiscan and dated the Closing Date to such effect.

B.           Conditions to Metiscan’s Obligation to Close.  The obligation of Metiscan to close the transactions set forth in this Agreement shall be subject to the following conditions:

(i)           Representations and Warranties of Aclor to be True.  To Aclor’s knowledge, the representations and warranties of Aclor set forth in this Agreement shall be true in all material respects on the Closing Date with the same effect as though made at such time, except to the extent waived or affected by the transactions set forth in this Agreement; and Aclor shall have delivered to Metiscan a certificate of Aclor in the form annexed hereto and made a part hereof as Exhibit “O”, signed by the President of Aclor and dated the Closing Date to such effect.

(ii)           Performance of Obligations of Aclor.  Aclor shall have performed all obligations and complied with all covenants set forth in this Agreement to be performed or complied with in all material respects on the Closing Date with the same effect as though made at such time, except to the extent waived or affected by the transactions set forth in this Agreement, with the exception of filing the Information Statement pursuant to Paragraph “B” of Article “5” of this Agreement, and Aclor shall have delivered to Metiscan a certificate of Aclor in the form annexed hereto as Exhibit “O”, signed by the President of Aclor and dated the Closing Date to such effect.

(iii)           Statutory Requirements.  Any statutory requirement for the valid consummation by Aclor of the transactions set forth in this Agreement shall have been fulfilled; any authorizations, consents and approvals of all federal, state and local governmental agencies and authorities required to be obtained, in order to permit consummation by Aclor of the transactions set forth in this Agreement and to permit the business presently carried on by Aclor to continue unimpaired following the Closing Date, shall have been obtained and Aclor shall have delivered to Metiscan a certificate of Aclor signed by the President of Aclor and dated the Closing Date to such effect.

 

  

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(iv)           No Governmental Proceedings.  No action or proceeding shall have been instituted before a court or other governmental body by any governmental agency or public authority to restrain or prohibit the transactions set forth in this Agreement and Aclor shall have delivered to Metiscan a certificate of Aclor in the form annexed hereto as Exhibit “O”, signed by the President of Aclor and dated the Closing Date to such effect.

(v)           Consents Under Agreements.  Aclor shall have obtained the consent or approval of each person whose consent or approval shall be required in connection with the transactions set forth in this Agreement, and Aclor shall have delivered to Metiscan a certificate of Aclor signed by the President of Aclor and dated the Closing Date to such effect.

(vi)           Good Standing Certificate.  On the Closing Date, Aclor shall provide a good standing certificate for Aclor issued by the Secretary of State of the State of Georgia complete and correct as of five (5) business days prior to the Closing Date.

13.           Method of Termination.  This Agreement may be terminated by any of the following methods:

A. By mutual written consent of Aclor and Metiscan, authorized by the Board of Directors of both of Aclor and Metiscan;

B. By written notice from any of the Parties, if within ten (10) business days after receipt of written notice that the Closing Date has passed, the Closing has not occurred; provided however, that if the Closing shall not have occurred on, or prior to, the Closing Date as a result of any action taken, or failure to act, by any governmental or regulatory authority including, but not limited to, the withholding of, or a delay in, any approval in connection with any aspect of the transactions contemplated hereby, then the Closing Date shall automatically be extended until a date which is a reasonable time subsequent to the date upon which such governmental or regulatory action is resolved which will allow the Parties to complete the procedures required to consummate the transactions contemplated hereby; provided further, however, that the right to terminate this Agreement pursuant to this Paragraph “B” of this Article “14” of this Agreement shall not be available to any party whose failure to fulfill any obligation pursuant to this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date;

C. by Aclor if there is a material breach of any representation or warranty set forth in Article “6” of this Agreement or any covenant or agreement to be complied with or performed by Metiscan  pursuant to the terms of this Agreement, including, but not limited to, the covenants set forth in Article “7” of this Agreement; provided however, that, Aclor may not terminate this Agreement prior to the Closing Date if Metiscan has not had an adequate opportunity to cure such failure, pursuant to Article “15” of this Agreement; or

 

  

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D. by Metiscan if there is a material breach of any representation or warranty set forth in Article “7” of this Agreement or any covenant or agreement to be complied with or performed by Aclor, including, but not limited to, the covenants set forth in Article “8” of this Agreement; provided however, that, Metiscan may not terminate this Agreement prior to the Closing Date if Aclor has not had an adequate opportunity to cure such failure pursuant to Article “15” of this Agreement.

14.           Effect of Termination.  If this Agreement is terminated pursuant to the provisions set forth in Article “13” of this Agreement, this Agreement shall become null and void and shall have no further force and effect.

15.           Cooperation; Notice; Cure.  Subject to compliance with applicable law, from the date of this Agreement until the Closing Date, each of Metiscan and Aclor shall confer on a regular and frequent basis with one or more representatives of the other party to report on the general status of ongoing operations.  Each of Metiscan and Aclor shall notify the other of, and will use all commercially reasonable efforts to cure before the Closing Date, any event, transaction or circumstance, as soon as practical after it becomes known to such party, that causes or will cause any covenant or agreement of Metiscan or Aclor under this Agreement to be breached or that renders or will render untrue any representation or warranty of Metiscan or Aclor contained in this Agreement. Each of Metiscan and Aclor also shall notify the other in writing of, and will use all commercially reasonable efforts to cure, before the Closing Date, any violation or breach, as soon as practical after it becomes known to such party, of any representation, warranty, covenant or agreement made by Metiscan or Aclor. No notice given pursuant to this paragraph shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any condition contained herein.

16.           Indemnification.

A.           Indemnification by Aclor.

(i)           In order to induce Metiscan to enter into and perform this Agreement, Aclor does hereby indemnify, protect, defend and save and hold harmless Metiscan and each of its Stockholders, affiliates, officers, directors, control persons, employees, attorneys, agents, partners and trustees and personal representatives of any of the foregoing ("Indemnified Parties"), from and against any loss resulting to any of them from any material loss, liability, cost, damage, or expense which the Indemnified Parties may suffer, sustain or incur arising out of or due to a breach by Aclor of the representations, warranties and covenants set forth in this Agreement and from any claim resulting from the delivery and or distribution of shares of Common Stock of Metiscan by Aclor to its Stockholders under this Agreement.

 

(ii)          In order to induce Metiscan to enter into and perform this Agreement, Aclor does hereby indemnify, protect, defend and save and hold harmless the Indemnified Parties against any claims including, but not limited to stockholder appraisal rights pursuant to the applicable provisions of the Delaware General Corporation Law, as set forth in Subparagraph “(vi)” of Paragraph “A” of Article “12” of this Agreement, to Metiscan entering into this Agreement and the transactions set forth in this Agreement.

 

  

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(iii)  In order to induce Holdings to enter into and perform this Agreement, Aclor does hereby indemnify, protect, defend and save and hold harmless Holdings and each of its Stockholders, affiliates, officers, directors, control persons, employees, attorneys, agents, partners and trustees and personal representatives of any of the foregoing against any claims against them with respect to any of the debts or liabilities of Metiscan.

B.           Indemnification by Metiscan

(i)  In order to induce Aclor to enter into and perform this Agreement, Metiscan does hereby indem­nify, protect, defend and save and hold harmless Aclor and each of its Stockholders, affiliates, officers, directors, control persons, employees, attorneys, agents, partners and trustees and personal representatives of any of the foregoing ("Indemnified Parties"), from and against any loss resulting to any of them from any material loss, liability, cost, damage, or expense which the Indemnified Parties may suffer, sustain or incur arising out of or due to a breach by Metiscan of the representations, warranties and covenants set forth in this Agreement and from any claim resulting from the delivery and or distribution of shares of Common Stock of Aclor by Metiscan to its Stockholders under this Agreement.

(ii)  In order to induce Aclor to enter into and perform this Agreement, Metiscan does hereby indemnify, protect, defend and save and hold harmless the Indemnified Parties against any claims including, but not limited to stockholder appraisal rights pursuant to the applicable provisions of the DGCL, made by any Aclor Stockholder who has not consented, as set forth in Subparagraph “(v)” of Paragraph “B” of Article “12” of this Agreement, to Aclor entering into this Agreement and the transactions set forth in this Agreement.

(iii)  In order to induce Holdings to enter into and perform this Agreement, Metiscan does hereby indemnify, protect, defend and save and hold harmless Holdings and each of its Stockholders, affiliates, officers, directors, control persons, employees, attorneys, agents, partners and trustees and personal representatives of any of the foregoing against any claims against them with respect to any of the debts or liabilities of Metiscan.

C.           Reasonable Costs, Etc.  The indemnification, which is set forth in this Article “16” of this Agreement shall be deemed to include not only the specific liabilities or obligations with respect to which such indemnity is provided, but also all counsel fees, reasonable costs, expenses and expenses of settlement relating thereto, whether or not any such liability or obligation shall have been reduced to judgment.

 

  

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D.           Third Party Claims.  If any demand, claim, action or cause of action, suit, proceeding or investigation (collectively, the “Claim”) is brought against an Indemnified Party for which the Indemnified Party intends to seek indemnity from the other party hereto (the "Indemnifying Party"), then the Indemnified Party within twenty-one (21) days after such Indemnified Party's receipt of the Claim, shall notify the Indemnifying Party pursuant to Paragraph “C” of Article “18” of this Agreement which notice shall contain a reasonably thorough description of the nature and amount of the Claim (the "Claim Notice"). The Indemnifying Party shall have the option to undertake, conduct and control the defense of such claim or demand. Such option to undertake, conduct and control the defense of such claim or demand shall be exercised by notifying the Indemnified Party within ten (10) days after receipt of the Claim Notice pursuant to Paragraph “C” of Article “17” of this Agreement (such notice to control the defense is hereinafter referred to as the “Defense Notice”).  The failure of the Indemnified Party to notify the Indemnifying Party of the Claim shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have pursuant to this Article “16” of this Agreement except to the extent that such failure to notify the Indemnifying Party prejudices the Indemnifying Party. The Indemnified Party shall use all reasonable efforts to assist the Indemnifying Party in the vigorous defense of the Claim. All costs and expenses incurred by the Indemnified Party in defending the Claim shall be paid by the Indemnifying Party.  If, however, the Indemnified Party desires to participate in any such defense or settlement, it may do so at its sole cost and expense (it being understood that the Indemnifying Party shall be entitled to control the defense).  The Indemnified Party shall not settle the Claim.   If the Indemnifying Party does not elect to control the defense of the Claim, within the aforesaid ten (10) day period by proper notice pursuant to Paragraph “C” of Article “17” of this Agreement, then the Indemnified Party shall be entitled to undertake, conduct and control the defense of the Claim (a failure by the Indemnifying Party to send the Defense Notice to the Indemnified Party within the aforesaid ten (10) day period by proper notice pursuant to Paragraph “C” of Article “17” of this Agreement shall be deemed to be an election by the Indemnifying Party not to control the defense of the Claim); provided, however, that the Indemnifying Party shall be entitled, if it so desires, to participate therein (it being understood that in such circumstances, the Indemnified Party shall be entitled to control the defense).  Regardless of which party has undertaken to defend any claim, the Indemnifying Party may, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any such claim or demand; provided however, that if any settlement would result in the imposition of a consent order, injunction or decree which would restrict the future activity or conduct of the Indemnified Party, the consent of the Indemnified Party shall be a condition to any such settlement.  Notwithstanding the foregoing provisions of this Article “16” of this Agreement, as a condition to the Indemnifying Party either having the right to defend the Claim, or having control over settlement as indicated in this Article “16” of this Agreement, the Indemnifying Party shall execute an agreement acknowledging its liability for indemnification pursuant to this Article “16” of this Agreement.  Whether the Indemnifying Party shall control and assume the defense of the Claim or only participate in the defense or settlement of the Claim, the Indemnified Party shall give the Indemnifying Party and its counsel access, during normal business hours, to all relevant business records and other documents, and shall permit them to consult with its employees and counsel.

  

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17.           Miscellaneous.

(A)           Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Subscription Agreement.

(B)           Enforceability.  If any provision which is contained in this Agreement, should, for any reason, be held to be invalid or unenforceable in any respect under the laws of any State of the United States, such invalidity or unenforceability shall not affect any other provision of this Agreement and in this Agreement shall be construed as if such invalid or unenforceable provision had not been contained herein.

(C)           Notices.  Any notice or other communication required or permitted hereunder must be in writing and sent by either (i) mail by (a) certified mail, postage prepaid, return receipt requested and (b) first class mail, (ii) overnight delivery with confirmation of delivery or (iii) electronic mail (“E-mail”) or facsimile transmission with an original mailed by first class mail, postage prepaid, addressed as follows:

If to Aclor:                                             Aclor, Inc.

11204 McPherson Road, Unit 116

Laredo, TX  78045

Attention: Mr. Chicheng Gung, President and CEO

Facsimile No.:

E-mail address:

with a copy to:                                      Bernard & Yam, LLP

401 Broadway, Suite 1708

New York, NY 10013

Attention: Bin Zhou, Esq.

Facsimile: 212-219-3604

Email address: binzhou@bernardyam.com

If to Metiscan :                                     Metiscan, Inc.

12225 Greenville Avenue, Suite 700

Dallas, TX  75243

Attention: Mr. Bryan Scott, President and CEO

Facsimile No.:

E-mail address:

with a copy to:                                      Mintz & Fraade, P.C.

488 Madison Avenue, Suite 1100

New York, NY  10022

Attention: Frederick M. Mintz, Esq.

Facsimile No.: (212) 486-0701

E-mail address: FMM@mintzfraade.com

or in each case to such other address, E-mail address and facsimile number as shall have last been furnished by like notice.  If all of the methods of notice set forth in this Paragraph “C” of this Article “18” of this Agreement are impossible for any reason, notice shall be in writing and personally delivered to the aforesaid addresses.  Each notice or communication shall be deemed to have been given as of the following applicable dates:

 

  

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(i)           If sent by mail, five (5) days after the later of sending by (a) certified mail, postage prepaid, return receipt requested or (b) first class mail.

(ii)          If sent by overnight delivery, as of the date of delivery with confirmation of delivery.

(iii)         If sent by E-mail or facsimile, either: (a) as of the date so sent if a copy thereof is also mailed by first class mail on the date sent by E-mail or facsimile or (b) if a copy thereof is not mailed by first class mail on the date sent by E-mail or facsimile, then five (5) days after sending by first class mail.

(iv)         If delivered by personal delivery, as of the date of delivery.

(D)         Governing Law; Disputes.   In order to induce Aclor to enter into this Agreement, including, but not limited to, the provisions of this Paragraph “D” of this Article “19” of this Agreement, and in view of the fact that: (i) the principal place of business of each of Aclor and Metiscan is located in the State of Texas; (ii) Bernard & Yam, LLP and Mintz & Fraade, P.C’s offices are located in the State of New York; and (iii) it is contemplated that virtually all of Bernard & Yam, LLP and Mintz & Fraade, P.C.’s services rendered with respect to the Acquisition and the Closing will be rendered in the State of New York, the Parties agree that this Agreement shall in all respects be construed, governed, applied and enforced in accordance with the laws of the State of New York and be deemed to be an agreement entered into in the State of New York and made pursuant to the laws of the State of New York, without giving effect to the principles of conflicts of law.  Moreover, the parties agree that pursuant to Section 5-1401 of the General Obligations Law of New York, if applicable, this Agreement shall in all respects be construed, governed, applied and enforced in accordance with the laws of the State of New York and be deemed to be an agreement entered into in the State of New York and made pursuant to the laws of the State of New York, without giving effect to the principles of conflicts of law.  The parties agree that they shall be deemed to have agreed to binding arbitration with respect to the entire subject matter of any and all disputes relating to or arising under this Agreement including, but not limited to, the specific matters or disputes as to which arbitration has been expressly provided for by other provisions of this Agreement and that any such arbitration shall be commenced exclusively in New York County, New York.  Any such arbitration shall be by a panel of three arbitrators who shall also be certified public accountants and pursuant to the commercial rules then existing of the American Arbitration Association in the State of New York, County of New York.  In all arbitrations, judgment upon the arbitration award may be entered in any court having jurisdiction.  The parties specifically designate the courts in the State of New York, County of New York as properly having jurisdiction for any proceeding to confirm and enter judgment upon any such arbitration award.  The parties hereby consent to and submit to the exclusive jurisdiction of the courts of the State of New York in any action or proceeding and submit to personal jurisdiction over each of them by such courts.  The parties hereby waive personal service of any and all process and specifically consent that in any such action or proceeding brought in the courts of the State of New York, any service of process may be effectuated upon any of them by certified mail, return receipt requested, in accordance with Paragraph “C” of this Article “19” of this Agreement.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

 

  

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The Parties agree, further, that the prevailing party in any such arbitration as determined by the arbitrators shall be entitled to such costs and attorney's fees, if any, in connection with such arbitration as may be awarded by the arbitrators.  In connection with the arbitrators’ determination for the purpose of which party, if any, is the prevailing party, they shall take into account all of the factors and circumstances including, without limitation, the relief sought, and by whom, and the relief, if any, awarded, and to whom.  In addition, and notwithstanding the foregoing sentence, a party shall not be deemed to be the prevailing party in a claim seeking monetary damages, unless the amount of the arbitration award exceeds the amount offered in a legally binding writing by the other party by fifteen percent (15%) or more.  For example, if the party initiating arbitration (“A”) seeks an award of $100,000 plus costs and expenses, the other party (“B”) has offered A $50,000 in a legally binding written offer prior to the commencement of the arbitration proceeding, and the arbitration panel awards any amount less than $57,500 to A, the panel should determine that B has “prevailed”.

The arbitration panel shall have no power to award non-monetary or equitable relief of any sort.  It shall also have no power to award (i) damages inconsistent with any applicable agreement between the parties or (ii) punitive damages or any other damages not measured by the prevailing party’s actual damages; and the parties expressly waive their right to obtain such damages in arbitration or in any other forum.  In no event, even if any other portion of these provisions is held invalid or unenforceable, shall the arbitration panel have power to make an award or impose a remedy which could not be made or imposed by a court deciding the matter in the same jurisdiction.

Discovery shall be permitted in connection with the arbitration only to the extent, if any, expressly authorized by the arbitration panel upon a showing of substantial need by the party seeking discovery.

All aspects of the arbitration shall be treated as confidential.  The parties and the arbitration panel may disclose the existence, content or results of the arbitration only as provided in the rules of the American Arbitration Association in the State of New York, County of New York.  Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interest.

The parties agree that in any litigation relating to this Agreement or among the parties, Mintz & Fraade, P.C. shall only represent Holdings, Bridgepoint and Bryan A. Scott, Brian Hart or Janine Frieh individually or on behalf of Metiscan

(E)           Expenses.  Each party to this Agreement shall bear and pay its own costs and expenses incurred in connection with the execution and delivery of this Agreement and the transactions set forth in this Agreement.

 

  

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(F)           Entire Agreement.  This Agreement and all documents and instruments referred to herein (i) constitute the entire agreement and supersede all prior and contemporaneous agreements and understandings, excluding any agreements which are referred to in this Agreement or any of the documents or instruments required to be executed pursuant to this Agreement, both written and oral, among the parties with respect to the subject matter hereof and thereof, and (ii) are not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.  Each party to this Agreement agrees that, except for the representations and warranties contained in this Agreement, no party makes any other representations or warranties, and each hereby disclaims any other representations and warranties made by itself or any of its officers, directors, employees, agents, financial and legal advisors or other representatives, with respect to the execution and delivery of this Agreement or the transactions contemplated hereby, notwithstanding the delivery or disclosure of any documentation or other information with respect to any one or more of the foregoing.

(G)           Confidentiality.  The Parties agree that the terms of this Agreement are confidential and they shall not make public disclosure of the terms of this Agreement, except: (i) as may be required by law, (ii) in connection with litigation or other legal proceeding against a party, (iii) by judicial or other compulsory process, including, without being limited to, any court order, (iv) as may be required by any federal and/or state regulatory agency, or (v) as may be required in connection with its obligations under federal securities laws and pursuant to the Securities and Exchange Commission or listing requirements.  If either party intends to make a disclosure of the terms of this Agreement as required by law, by judicial or other compulsory process, including, without being limited to, any court order, by any federal and/or state regulatory agency, or as may be required in connection with its obligations under federal securities laws, such party shall notify the other party, if feasible, in advance of any such disclosure.  The Parties agree that the terms of this Paragraph “G” of this Article “18” of this Agreement regarding confidentiality are not material to this Agreement and any breach of this paragraph shall not be considered a material breach of this Agreement.  In the event of such a breach of this Paragraph “G” of this Article “18” of this Agreement, the non-breaching party shall only be entitled to injunctive relief and/or monetary damages for actual harms caused by the breach.

(H)           No Assignment. The parties hereby agree that the obligations under this Agreement shall not be transferred or assigned to any third parties without the prior written consent of each party to this Agreement.

(I)           Enforceability.  If any provision which is contained in this Agreement, should, for any reason, be held to be invalid or unenforceable in any respect under the laws of any State of the United States, such invalidity or unenforceability shall not affect any other provision of this Agreement and in this Agreement shall be construed as if such invalid or unenforceable provision had not been contained herein.

(J)           Further Assurances.  The Parties agree to execute any and all such other further instruments and documents, and to take any and all such further actions which are reasonably required to effectuate this Agreement and the intents and purposes hereof.

 

  

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(K)           Non-Waiver.  Except as otherwise expressly provided herein, no waiver of any covenant, condition, or provision of this Agreement shall be deemed to have been made unless expressly in writing and signed by the party against whom such waiver is charged; and (i) the failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants or conditions, (ii) the acceptance of performance of anything required by this Agreement to be performed with knowledge of the breach or failure of a covenant, condition or provision hereof shall not be deemed a waiver of such breach or failure and (iii) no waiver by any party of one breach by another party shall be construed as a waiver of any other or subsequent breach.

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

(M)          Facsimile and E-mail Signatures.  Any signature which is delivered via facsimile or via E-mail in portable document format (“.pdf”) shall be deemed to be an original and have the same force and effect as if such facsimile or .pdf signature were the original thereof.

(N)           Binding upon Execution and Delivery. No party to this Agreement shall be bound hereby until fully executed counterparts to this Agreement have been executed by, and delivered to, each party, or their respective attorneys, by all other parties or their respective attorneys.

(O)           Construction.  Each of the parties hereto further agrees that this Agreement shall not be construed more strictly against any party responsible for its drafting regardless of any presumption or rule requiring construction against the party who drafted this Agreement.  Each of the parties acknowledge that this Agreement was drafted by Mintz & Fraade, P.C. on behalf of Metiscan.

(P)           Modifications.  This Agreement may not be changed, modified, extended, terminated or discharged orally, except by a written agreement specifically referring to this Agreement which is signed by Metiscan and Aclor.

  

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

	
Goodfuture Limited

 

 

 

	  	
Metiscan, Inc.

	
Chicheng (Curtis) Gung, President

 

	  	
Bryan A. Scott, President

	
Sunbell Limited

 

 

 

	  	
Metiscan Holdings, Inc.

	
Chicheng (Curtis) Gung

 

 

	  	
Bryan A. Scott

	
Chung Hsin Wu (Forth Wu)

 

 

 

	  	
Bridgepoint Partners, LLC with respect to Article 5, Paragraph B

 

 

 

	
Chicheng (Curtis) Gung with Power of Attorney

 

	  	
Bryan A. Scott

	
 

Go Right Holding Limited

 

 

 

	  	  
	
Chicheng (Curtis) Gung with Power of Attorney

 

	  	  
	
 

Ever Thrive Limited

 

 

 

	  	  
	
Chicheng (Curtis) Gung with Power of Attorney

 

	  	  
	
Aclor

 

 

 

	  	  
	
Chicheng (Curtis) Gung, President and CEO

	  	  

 

  

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Exhibit List

 

	Exhibit A   	 	Aclor’s Shareholders
	 	 	 
	Exhibit B 	 	Consulting Agreement with Bridgepoint
	 	 	 
	Exhibit C 	 	Metiscan Certificate of Incorporation
	 	 	 
	Exhibit D 	 	Metiscan Bylaws
	 	 	 
	Exhibit E 	 	Resolution of Board of Directors of Metiscan
	 	 	 
	Exhibit F   	 	Consent of Metiscan Stockholders
	 	 	 
	Exhibit G	 	Metiscan Financial Statements
	 	 	 
	Exhibit H  	 	Metiscan’s Disclosure Statement

            

	 	Section “6A”: 	Corporate Status
	 	Section “6B”:    	Capitalization
	 	Section “6C”:   	Authority of Metiscan
	 	Section “6D”: 	Compliance with the Law
	 	Section “6E”:  	Absence of Conflicts
	 	Section “6F”:   	Financial Statements
	 	Section “6G”:  	Environmental Compliance
	 	Section “6H”:  	OSHA Compliance
	 	Section “6I”:	Non-Tax Liabilities
	 	Section “6J”: 	Taxes
	 	Section “6K”:    	Material Contracts
	 	Section “6L”: 	Changes Since December 31, 2010
	 	Section “6M”:   	No Approvals
	 	Section “6N”: 	Broker
	 	Section “6O”: 	Securities Law
	 	Section “6P”:  	Intellectual Property
	 	Section “6Q”:   	Insurance
	 	Section “6R”: 	Employee Benefits
	 	Section “6S”:   	Guaranties
	 	Section “6T”: 	Certain Business Relationships
	 	Section “6U”:  	Registration Rights
	 	Section “6V”:   	Change of Control Payments
	 	Section “6W”: 	Investments
	 	Section “6X”:  	Accounts Receivable
	 	Section “6Y”:    	Inventory

                              

  

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	 	Section “6Z” 	Properties and Assets
	 	Section “6AA”:  	Real Property
	 	Section “6BB”:   	Commitments
	 	Section “6CC”:   	Permits
	 	Section “6DD”:  	Banks
	 	Section “6EE”:      	Absence of Certain Business Practices.
	 	Section “6FF”: 	Transactions with Affiliates
	 	Section “6GG”:	Litigation
	 	Section “6HH”:   	Business Conducted in No Other Name; Subsidiaries
	 	Section “6II”: 	SEC Documents

 

	Exhibit I  	 	Aclor Certificate of Incorporation
	 	 	 
	Exhibit J  	 	Aclor Bylaws
	 	 	 
	Exhibit K	 	Resolution of Board of Directors of Aclor
	 	 	 
	Exhibit L	 	Aclor’s Disclosure Statement

 

	 	Section “7A”: 	Corporate Status
	 	Section “7B”:  	Capitalization
	 	Section “7C”:   	Authority of Aclor
	 	Section “7D”:  	Compliance with the Law
	 	Section “7E”:     	Absence of Conflicts
	 	Section “7F”:  	Financial Statements
	 	Section “7G”:  	Environmental Compliance
	 	Section “7H”:    	OSHA Compliance
	 	Section “7I”:  	Non-Tax Liabilities
	 	Section “7J”:    	Taxes
	 	Section “7K”:  	Material Contracts
	 	Section “7L”:   	Changes Since December 31, 2010
	 	Section “7M”: 	No Approvals
	 	Section “7N”:  	Broker
	 	Section “7O”:      	Securities Law
	 	Section “7P”:    	Intellectual Property
	 	Section “7Q”:	Insurance
	 	Section “7R”:      	Employee Benefits
	 	Section “7S”:      	Guaranties
	 	Section “7T”:    	Certain Business Relationships
	 	Section “7U”:	Registration Rights
	 	Section “7V”:       	Change of Control Payments
	 	Section “7W”:   	Investments
	 	Section “7X”:   	Accounts Receivable
	 	Section “7Y”:   	Inventory
	 	Section “7Z”  	Properties and Assets
	 	Section “7AA”:	Real Property

                                                                                                           

  

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	 	Section “7BB”:	Commitments
	 	Section “7CC”:        	Permits
	 	Section “7DD”:   	Banks
	 	Section “7EE”:  	Absence of Certain Business Practices.
	 	Section “7FF”: 	Transactions with Affiliates
	 	Section “7GG”:   	Litigation
	 	Section “7HH”;   	Subsidiary

                            

	Exhibit M    	 	Aclor Financial Statements
	 	 	 
	Exhibit N    	 	Certificate of Metiscan
	 	 	 
	Exhibit O     	 	Certificate of Aclor

 

                                                                                                                                                                                                   

51

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