Document:

CONVEYANCE,
      TERMINATION AND RELEASE AGREEMENT

     

    This
      CONVEYANCE,
      TERMINATION AND RELEASE AGREEMENT
      (this
“Agreement”)
      is
      dated as of November 30, 2007, by and among Titan
      Nexus, Inc.,
      a
      Delaware corporation (the “Creditor”),
      Nexus
      Custom Electronics Corp., a
      Florida
      corporation (f/k/a NECI Acquisition, Inc. and hereinafter, “NCEC”)
      and
Nexus
      Nano Electronics, Inc.,
      a Nevada
      corporation (f/k/a Sagamore Holdings, Inc. and hereinafter,
“Nexus
      Nano”,
      and
      collectively with NCEC, the “Debtor”).

     

     

    RECITALS:

     

    WHEREAS,
      Debtor
      is indebted to Creditor in the aggregate sum of $11,245,178.38, plus accrued
      interest from November 1, 2007 through the date hereof (the “Debt”),
      in
      accordance with Schedule
      A,
      annexed
      hereto;

    

    WHEREAS,
      pursuant to the terms of (i) certain security agreements, dated as of September
      20, 2004, granted by NCEC in favor of Comerica Bank, and assigned by Comerica
      Bank to YA Global Investments, L.P. (“YA
      Global”)
      pursuant to that certain Amended and Restated Security Agreement, dated August
      8, 2007, as further assigned by YA Global to the Creditor on November 2,
      2007; (ii) certain security agreements, dated as of November 10, 2005, granted
      by Nexus Nano to CSI Business Finance, Inc., a Texas corporation, and assigned
      to YA Global on March 10, 2006, as amended by that certain Amended and Restated
      Security Agreement, dated as of June 1, 2006 entered into by and between Nexus
      Nano and YA Global, as further assigned by YA Global to the Creditor on
      November 2, 2007; and (iii) certain parent security agreements, dated as of
      July 30, 2007, granted by Nexus Nano to YA Global, as further assigned by
      YA Global to the Creditor on November 2, 2007 (collectively, the
“Security
      Agreements”),
      Creditor has obtained a security interest in its favor of all of Debtor’s
      assets, including, but not limited to, Debtor’s accounts, inventory, machinery,
      equipment, intellectual property, receivables, contractual rights and general
      intangibles; 

     

    WHEREAS,
      the
      Creditor’s security interest have been perfected through the filing of the
      following UCC-1 Financing Statements: (i) UCC Financing Statement naming NCEC
      as
      debtor, in favor of Comerica Bank as secured party, and filed with the Secretary
      of State of Florida on September 22, 2004 as document number 200407923665,
      as
      further assigned to the Creditor; (ii) UCC Financing Statement naming Nexus
      Nano as debtor, in favor of YA Global as secured party, and filed with the
      Secretary of State of Nevada on March 21, 2007 as document
      number 2007008715-9, as further assigned to the Creditor; and (iii) UCC
      Financing Statement naming Nexus Nano as debtor, in favor of YA Global as
      secured party, and filed with the Secretary of State of Nevada on August 1,
      2007
      as document number 2007024948-2, as further assigned to the Creditor
      (collectively, the “UCC-1s”);

     

    WHEREAS,
      subject
      to the terms and conditions hereof, Debtor desire to convey, transfer and assign
      to Creditor, and Creditor desires to acquire and assume from Debtor, the
      Collateral (as such term is defined in the Security Agreements) in accordance
      with this Agreement; 

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      immediately upon the acquisition of the Collateral, it is intended that the
      Creditor’s security interest in the Debtor shall be released; and

     

    WHEREAS,
      immediately upon the acquisition of the Collateral, it is intended that the
      Creditor shall release Debtor from any liability in connection with the Security
      Agreements or otherwise and that the Security Agreements shall be terminated
      and
      be of no further force or effect.

     

     

    AGREEMENT:

     

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

     

    ARTICLE
      I.

    ACQUISITION
      OF COLLATERAL

     

    1.1. Acquisition
      of Collateral.
      Because
      of the inability of the Debtor to pay the Debt, Debtor hereby transfer, convey
      and assign to the Creditor all right, title and interest of possession in and
      to
      the Collateral, including, without limitation, the following assets of the
      Debtor:

     

    (a) all
      equipment, computer hardware, machinery, furniture, fixtures, dies, tools,
      vehicles, trucks, cars, tractors, trailers, fork lifts, cranes, hoists and
      tangible personal property of Debtor, and all accessions and attachments to
      or
      relating to any of the foregoing;

     

    (b) all
      books, records, computer software and other property relating to or referring
      to
      any of the foregoing; 

     

    (c) all
      patents, trade names, trade styles, service marks, all rights associated with
      the foregoing, and goodwill;

     

    (d) all
      present and future accounts, contract rights, general intangibles, chattel
      paper, documents and instruments, as such terms are defined in the Uniform
      Commercial Code, including without limitation, all accounts receivable and
      other
      receivables of any kind, and all obligations for the payment of money arising
      out of the sale of goods, rendition of services or the lease by the Debtor
      of
      their property;

     

    (e) all
      other
      property of the Debtor, including, without limitation, all of the issued and
      outstanding capital stock of NCEC;

     

    (f) all
      guaranties or other agreements securing or relating to any of the items referred
      to in subparagraphs (a)-(e) above, or acquired for the purpose of securing
      and
      enforcing any such items; and

     

    (g) all
      proceeds of any of the foregoing in whatever form, including, without
      limitation, any claims against third parties for loss or damage to or
      destruction of any or all of the foregoing and cash, negotiable instruments
      and
      other instruments for the payment of money, chattel paper, Security Agreements
      or other documents.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    The
      assets, properties and business of Debtor being acquired by the Creditor under
      this Section 1.1 are referred to herein collectively as the “Collateral”.

     

    1.2. Waiver.
      Debtor
      acknowledge that they have defaulted in the payment of the Debt to Creditor
      and
      hereby waives and renounces all rights to notification under Section 9-611
      of
      the Uniform Commercial Code as adopted in the State of Nevada (“UCC”)
      as to
      the sale or other disposition by the Creditor of the Collateral and under
      Sections 9-620 and 9-623 of the UCC regarding acceptance of the Collateral
      as
      discharge of the Debt of the Debtor and waiver of the Debtor’s right to redeem
      the Collateral, respectively. The Debtor knowingly and voluntarily waive any
      rights they may have to notice and a hearing before a court of competent
      jurisdiction and consent to Creditor’s entry on the premises where the aforesaid
      Collateral is located for the purposes set forth herein.

     

    1.3. Cancellation
      of Debt; Release of Claims Against Debtor and Affiliates. In
      consideration of the assumption of the Collateral, and for other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, Creditor hereby agrees to release Debtor from any and all
      obligations to pay the Debt and agrees to file UCC-3 termination statements
      in
      order to effectively and fully release the UCC-1s (the “UCC-3s”).
      

     

    1.4. Debt
      Allocation.
      Creditor
      and Debtor shall mutually agree on the allocation of the Debt. Such allocation
      shall be binding upon Creditor and Debtor for all purposes (including
      financial accounting purposes, financial and regulatory reporting purposes
      and
      tax purposes). Creditor and Debtor each further agrees to file its Federal
      income tax returns and its other tax returns reflecting such allocation, Form
      8594 and any other reports required by Section 1060 of the Internal Revenue
      Code
      of 1986, as amended.

     

    1.5. Further
      Assurances.
      Debtor
      shall, from time to time after the consummation of the transactions contemplated
      herein, at the request of Creditor and without further consideration, execute
      and deliver further instruments of transfer and assignment and take such other
      action as Creditor may reasonably require to more effectively transfer and
      assign to, and vest in, Creditor the Collateral.

     

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

     

    1.7. Transfer
      of Subject Collateral.
      Debtor
      shall deliver or cause to be delivered to Creditor good and sufficient
      instruments of transfer transferring to Creditor title to all of the Collateral,
      together with all required consents. Such instruments of transfer (a) shall
      contain appropriate warranties and covenants which are usual and customary
      for
      transferring the type of property involved under the laws of the jurisdictions
      applicable to such transfers, (b) shall be in form and substance reasonably
      satisfactory to Creditor and its counsel and (c) shall effectively vest in
      Creditor good and marketable title to all of the Collateral subject to those
      limitations set forth in Section 2.8 hereof.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    1.8. Releases.

     

    (a) Release
      by Creditor.
      In
      consideration of the mutual agreements contained herein and for other good
      and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, Creditor, on behalf of itself and its successors, assigns, and
      other legal representatives, hereby absolutely, unconditionally and irrevocably
      releases, remises and forever discharges Debtor and their respective successors
      and assigns, former and current stockholders, Debtor’s affiliates, subsidiaries,
      divisions, predecessors, former and current directors and officers, attorneys,
      employees, agents and other representatives (Debtor and all such other persons
      being hereinafter referred to collectively in this Section 1.8(a) as the
“Releasees”
and
      individually as a “Releasee”),
      of
      and from all demands, actions, causes of action, suits, covenants, contracts,
      controversies, agreements, promises, sums of money, accounts, bills, reckonings,
      damages and any and all other claims, counterclaims, defenses, rights of
      set-off, demands and liabilities whatsoever (individually, a “Claim”
and
      collectively, “Claims”)
      of
      every name and nature, known or unknown, suspected or unsuspected, both at
      law
      and in equity, which Creditor or any of its successors, assigns, or other legal
      representatives may now or hereafter own, hold, have or claim to have against
      the Releasees or any of them for, upon, or by reason of any circumstance,
      action, cause or thing whatsoever which arises at any time on or prior to the
      day and date of this Agreement, including, without limitation, for or on account
      of, or in relation to, or in any way in connection with any of the Security
      Agreements, or any of the loan documents related thereto or transactions
      thereunder or related thereto; provided, however, that this release does not
      release, waive, impair or diminish Creditor’s rights under this Agreement. The
      Creditor understands, acknowledges and agrees that the release set forth above
      may be pleaded as a full and complete defense and may be used as a basis for
      an
      injunction against any action, suit or other proceeding which may be instituted,
      prosecuted or attempted in breach of the provisions of such release. The
      Creditor agrees that no fact, event, circumstance, evidence or transaction
      which
      could now be asserted or which may hereafter be discovered shall affect in
      any
      manner the final, absolute and unconditional nature of the release set forth
      above.

     

    (b) Release
      by Debtor.
      In
      consideration of the mutual agreements contained herein and for other good
      and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, Debtor, on behalf of themselves and their successors, assigns,
      and
      other legal representatives, hereby absolutely, unconditionally and irrevocably
      releases, remises and forever discharges Creditor and its successors and
      assigns, former and current stockholders, affiliates, subsidiaries, divisions,
      predecessors, former and current directors and officers, attorneys, employees,
      agents and other representatives (Creditor and all such other persons being
      hereinafter referred to collectively in this Section 1.8(b) as the “Releasees”
and
      individually as a “Releasee”),
      of
      and from all demands, actions, causes of action, suits, covenants, contracts,
      controversies, agreements, promises, sums of money, accounts, bills, reckonings,
      damages and any and all other claims, counterclaims, defenses, rights of
      set-off, demands and liabilities whatsoever (individually, a “Claim”
and
      collectively, “Claims”)
      of
      every name and nature, known or unknown, suspected or unsuspected, both at
      law
      and in equity, which Debtor or any of their successors, assigns, or other legal
      representatives may now or hereafter own, hold, have or claim to have against
      the Releasees or any of them for, upon, or by reason of any circumstance,
      action, cause or thing whatsoever which arises at any time on or prior to the
      day and date of this Agreement, including, without limitation, for or on account
      of, or in relation to, or in any way in connection with any of the Security
      Agreements, or any of the loan documents related thereto or transactions
      thereunder or related thereto; provided, however, that this release does not
      release, waive, impair or diminish Debtor’s rights under this Agreement. The
      Debtor understand, acknowledge and agree that the release set forth above may
      be
      pleaded as a full and complete defense and may be used as a basis for an
      injunction against any action, suit or other proceeding which may be instituted,
      prosecuted or attempted in breach of the provisions of such release. The Debtor
      agree that no fact, event, circumstance, evidence or transaction which could
      now
      be asserted or which may hereafter be discovered shall affect in any manner
      the
      final, absolute and unconditional nature of the release set forth
      above.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    ARTICLE
      II.

    REPRESENTATIONS
      AND WARRANTIES OF THE DEBTOR 

     

    The
      Debtor hereby represent and warrant to the Creditor that:

     

    2.1. Organization
      and Good Standing.
      The
      Debtor are corporations duly organized, validly existing and in good standing
      under the laws of the jurisdictions of their incorporation as set forth above
      and have all requisite power and authority to own, lease and operate their
      properties and to carry on their business as now conducted. 

     

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

     

    2.3. Ownership
      and Transfer of Collateral.
      Debtor
      have good and marketable title to all of the Collateral free and clear of all
      mortgages, pledges, security interests, charges, liens, restrictions and
      encumbrances of any kind (collectively, “Liens”),
      except those in favor of the Creditor or as otherwise set forth on Schedule
      A
      attached
      hereto. Upon the assignment, transfer and delivery of the Collateral to the
      Creditor hereunder and under the Debtor Documents, there will be vested in
      the
      Creditor good, marketable and indefeasible title to the Collateral, free and
      clear of all Liens subject to those exceptions set forth on Schedule
      A
      attached
      hereto. The Collateral includes all of the assets and properties (i) held for
      use by Debtor to conduct their business as presently conducted and
      (ii) necessary for Creditor to operate the Business in the same manner as
      such business is currently operated by Debtor.

     

    2.4. Stockholder
      Approval.
      On
      November 27, 2007, Nexus Nano obtained majority stockholder approval of this
      Agreement and the transactions contemplated hereby.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    2.5. No
      Misrepresentations.
      No
      representation or warranty of the Debtor contained in this Agreement or in
      any
      schedule hereto or in any certificate or other instrument furnished by the
      Debtor to the Creditor pursuant to the terms hereof, taken as a whole, contains
      any untrue statement of a material fact or omits to state a material fact
      necessary to make the statements contained herein or therein not
      misleading.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES OF THE CREDITOR 

     

    The
      Creditor represents and warrants that:

     

    3.1. Organization
      and Good Standing. The
      Creditor is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware.

     

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

     

    3.3. No
      Misrepresentations.
      No
      representation or warranty of the Creditor contained in this Agreement contains
      any untrue statement of a material fact or omits to state a material fact
      necessary to make the statements contained herein or therein not
      misleading.

     

    ARTICLE
      IV.

    COVENANTS;
      OTHER AGREEMENTS

     

    4.1 Cancellation
      of UCC-1s.
      Creditor shall file, within five (5) business days following its receipt of
      the
      Collateral, UCC-3s in order to effectively and fully release all of the UCC-1s.
      

     

    4.2 Termination
      of Security Agreements.
      Upon
      the receipt of the Collateral by the Creditor, the Security Agreements shall
      immediately terminate and be of no further force of effect. 

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    4.3. Other
      Actions.
      Each of
      the Debtor and Creditor shall use its best efforts to (i) take all actions
      necessary or appropriate to consummate the transactions contemplated by this
      Agreement and (ii) cause the fulfillment at the earliest practicable date of
      all
      of the conditions to their respective obligations to consummate the transactions
      contemplated by this Agreement.

     

    4.4 Valuation
      Acknowledgment.
      The
      parties hereto hereby acknowledge and agree that Creditor engaged Lehrer
      Financial Economic Advisory Services (the “Economist”)
      to
      determine the Fair Market Forced Liquidation Value of Debtor and that Economist
      did determine the total assets (excluding cash) of Debtor to be Four Million
      One
      Hundred Thousand Dollars ($4,100,000) as set forth in that certain Forced
      Liquidation Valuation, dated as of October 31, 2007, issued on November 15,
      2007
      and attached hereto as Exhibit
      A.

     

    4.5 Defense
      of Actions.
      Creditor hereby agrees to defend, indemnify and hold harmless each of Debtor’s
      former and current directors and officers, attorneys, employees, agents and
      other representatives (collectively, the “Indemnitees”)
      from
      any and all defense costs incurred by any Indemnitee by reason of or arising
      out
      of any and all demands, actions, causes of action, suits, controversies, damages
      and any and all other claims, counterclaims, defenses, rights of set-off,
      demands and liabilities whatsoever of every name and nature both at law and
      in equity, which anyone may now or hereafter assert, own, hold, have or claim
      to
      have against the Indemnitees or any of them for, upon, or by reason of any
      circumstance, action, cause or thing whatsoever arising under this Agreement
      or
      the transactions contemplated hereby up to a maximum of One Hundred Thousand
      Dollars ($100,000).

     

    4.6. Assumption
      of Leases.
      Creditor hereby agrees to assume those leases referenced in Schedule A hereto.
      

     

    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1. Expenses.
      Except
      as otherwise provided in this Agreement, the Debtor and the Creditor shall
      each
      bear its own expenses incurred in connection with the negotiation and execution
      of this Agreement and each other agreement, document and instrument contemplated
      by this Agreement and the consummation of the transactions contemplated hereby
      and thereby.
      Notwithstanding the foregoing, the Creditor has agreed to pay up to Fifteen
      Thousand Dollars ($15,000) for legal fees of the Debtor contemporaneously with
      the execution of this Agreement.

     

    5.2. Specific
      Performance.
      The
      Debtor acknowledge and agree that the breach of this Agreement would cause
      irreparable damage to the Creditor and that the Creditor will not have an
      adequate remedy at law. Therefore, the Debtor’ obligation to transfer the
      Collateral to the Creditor, shall be enforceable by a decree of specific
      performance issued by any court of competent jurisdiction, and appropriate
      injunctive relief may be applied for and granted in connection therewith. Such
      remedies shall, however, be cumulative and not exclusive and shall be in
      addition to any other remedies which any party may have under this Agreement
      or
      otherwise.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    5.3. Submission
      to Jurisdiction; Consent to Service of Process.

     

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

     

    (b) Each
      of
      the parties hereto hereby consents to process being served by any party to
      this
      Agreement in any suit, action or proceeding by the mailing of a copy thereof
      in
      accordance with the provisions of Section 5.7.

     

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

     

    5.5. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas.

     

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

     

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

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              If
                to Creditor:

            
	 	 
	 	
              Titan
                Nexus, Inc.

            
	 	
              1700
                Jay Ell Drive Suite 200

            
	 	
              Richardson,
                Texas 75081

            
	 	
              Attention: Bryan
                M. Chance, President & CEO

            
	 	
              Telephone: (972)
                470-9100

            
	 	
              Facsimile: (972)
                767-3117

            
	 	 
	 	
              With
                a copy to:

            
	 	 
	 	
              Sichenzia
                Ross Friedman Ference LLP

            
	 	
              61
                Broadway

            
	 	
              New
                York, New York 10006

            
	 	
              Attention: Thomas
                A. Rose, Esq.

            
	 	
              Telephone: (212)
                930-9700

            
	 	
              Facsimile: (212)
                930-9725

            
	 	 
	 	
              If
                to Debtor:

            
	 	 
	 	
              Nexus
                Nano Electronics, Inc.

            
	 	
              Nexus
                Custom Electronics Corp.

            
	 	
              402
                Prospect Street

            
	 	
              Branson,
                Vermont 05733

            
	 	
              Attention: Jerry
                Panos, President and CEO

            
	 	
              Telephone: (802)
                247-6811

            
	 	
              Facsimile: (781)
                938-6207

            
	 	 
	 	
              With
                a copy to:

            
	 	 
	 	
              Kirkpatrick
                & Lock Preston Gates Ellis LLP

            
	 	
              Wachovia
                Financial Center

            
	 	
              200
                S. Biscayne Boulevard, Suite 2000

            
	 	
              Miami,
                Florida 33131

            
	 	
              Attention: Clayton
                E. Parker, Esq.

            
	 	
              Telephone: (305)
                539-3300

            
	 	
              Facsimile: (305)
                358-7095

            
	 	 

    

     

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

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    5.9. Binding
      Effect; Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and permitted assigns. Nothing in this Agreement
      shall create or be deemed to create any third party beneficiary rights in any
      person or entity not a party to this Agreement except as provided below. No
      assignment of this Agreement or of any rights or obligations hereunder may
      be
      made by either the Debtor or the Creditor (by operation of law or otherwise)
      without the prior written consent of the other parties hereto and any attempted
      assignment without the required consents shall be void; provided, however,
      that
      the Creditor may assign this Agreement and any or all rights or obligations
      hereunder (including, without limitation, the Creditor’s rights to acquire the
      Collateral, the Creditor’s rights to foreclose on the Collateral and the
      Creditor’s rights to rely on any of Debtor’s representations and warranties made
      hereunder). Upon any such permitted assignment, the references in this Agreement
      to the Creditor shall also apply to any such assignee unless the context
      otherwise requires. 

     

    5.10. Opportunity
      to Hire Counsel; Role of Kirkpatrick & Lockhart Preston Gates Ellis
      LLP.
      Creditor hereby acknowledges that it has been advised and has been given an
      opportunity to hire counsel and that its has hired counsel with respect to
      this
      Agreement and the transactions contemplated hereby. Creditor further
      acknowledges that the law firm of Kirkpatrick & Lockhart Preston Gates Ellis
      LLP has solely represented Debtor in connection with this Agreement and the
      transactions contemplated hereby and no other person.

     

    [Intentionally
      Left Blank]

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Conveyance, Termination and Release
      Agreement to be executed by their respective officers thereunto duly authorized
      as of the day and year first above written.

    
      	 	 	 
	 	 	TITAN
              NEXUS, INC.
	 
 	 
 	 
 
	 	 	By: /s/ Bryan
              M. Chance
	 	
              
Bryan
              M. Chance
	 	
              Title:
                President 

            
	 	 
	 	 
	 	
              NEXUS
                NANO ELECTRONICS, INC.

            
	 	 
	 	By: /s/
              Jerry
              Panos                              
              
	 	
              Name:   
Jerry
                Panos                          
                

            
	 	Title:      
              President                             
                                   
              
	 	 
	 	 
	 	
              NEXUS
                CUSTOM ELECTRONICS CORP.

            
	 	 
	 	By: /s/
              Jerry
              Panos                           
              
	 	Name: Jerry
              Panos                           
              
	 	Title:    President                              
              

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    

    1)
      Letter
      Agreement, dated June 22, 2007, with Cohn & Dussi (on behalf of GE Capital
      Corporation and Lyon Financial Services, Inc.) pursuant to which Debtor
      purchased Leased Equipment (Orbotech AOI Machine) which had previously been
      in
      the possession of Mass Tech. Associates, Inc., d/b/a MassTech EMS.

    

    2)
      Security Agreement, by and between Nexus Custom Electronics Corp. and UPS
      Capital Business Credit, pursuant to which UPS received a first priority
      security interest in the Collateral named therein.

    

    3)
      Debtor
      pays a monthly fee for the leasing of a Juki 760 Placement Machine (with feeders
      and conveyors) through Citicorp, this lease was never formally assigned to
      Debtor (from MassTech EMS). 

    

    3)
      Those
      UCC-1s attached as hereto as Annex
      A.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    UCC-1
      FINANCING STATEMENTS TO FOLLOW EXHIBIT A HEREIN

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    As
      of -
      October 31, 2007

    Issued
      -
      November 15, 2007

    

    The
      Board
      of Directors

    Nexus
      Nano Electronics, Inc.

    402
      Prospect Street

    Brandon,
      Vermont 05733

    

    ATTN:
      Mr.
      Chris
      Mathers, Chief Financial Officer and Member of the Board of
      Directors

    

    

    
      	 	
              RE:
                

            	
              Forced
                Liquidation Valuation of Nexus Custom Electronics
                Corporation

            
	 	 	
              (A
                Florida Corporation)

            

    

    

    Dear
      Mr.
      Mathers and Gentlemen:

    

    Per
      our
      agreement, you have requested the undersigned Economist to determine a Fair
      Market Forced Liquidation Value of Nexus Custom Electronics Corporation (a
      Florida Corporation) a wholly owned subsidiary of Nexus Nano Electronics, Inc.
      (“NXNO”) (a Nevada Corporation) headquartered in Brandon, Vermont as of October
      31, 2007.

    

    In
      most
      similar circumstances, an Economist or Analyst seeking to determine the Fair
      Market Forced Liquidation Value of an organization, only needs to look at the
      local newswire service to determine the price of the stock on any given day
      and
      simply multiply the number of shares issued by the then existing price in order
      to compute a total Fair Market Value, if the company was a publicly traded
      organization. From that Fair Market Valuation, the analyst would then determine
      a discount or liquidation factor for the forced liquation and a Forced Liquation
      Value would then have been determined. However, in the specific matter at hand,
      the organization and its shares are not a publicly traded organization and
      need
      to be independently valued.

    

    The
      undersigned, in order to perform the desired valuation has been supplied with
      a
      variety of accounting and financial data on the corporation for recent periods.
      The data furnished and relied upon by the undersigned includes the following:
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

        

      

    

     

    Page
      2.

     

    1)
      The
      corporate website of Nexus Custom Electronics, Inc. and the information
      contained therein;

     

    
      2)
        Term
        note in the amount of $1,200,000 between NECI Acquisition, Inc. and Comerica
        Bank dated September 20, 2004;

      

      3)
        Amended and Restated Secured Convertible Debenture issued by Sagamore Holdings,
        Inc. to Cornell Capital Partners, LP, dated March 10, 2006 in the amount
        of
        $743,284.72 and denoted as No. CCP-1;

      

      4)
        Secured Convertible Debenture issued by Sagamore Holdings, Inc. to Cornell
        Capital Partners, LP, dated June 1, 2006 in the amount of $850,000 and denoted
        as No. CCP-2;

      

      5)
        Secured Convertible Note in the amount of $660,000 between Nexus Nano
        Electronics, Inc. and YA Global Investments, dated July 30, 2007, Numbered
        NXNO
        4-1;

      

      6)
        Secured Convertible Note in the amount of $6,723,087 between Nexus Nano
        Electronics, Inc. and YA Global Investments dated July 30, 2007, Numbered
        NXNO
        4-2

      

      7)
        Limited recourse assignment between YA Global Investments, LP, f/k/a Cornell
        Partners, LP and Titan-Nexus, Inc., a wholly-owned subsidiary of Titan PCB
        West,
        Inc.;

      

      8)
        Form
        10-KSB of Sagamore Holdings, Inc., for the fiscal year ended June 30, 2005,
        as
        filed with the Securities and Exchange Commission on May 12, 2006;

      

      9)
        Form
        10-KSB of Titan Global Holdings, Inc. for the fiscal year ended August 31,
        2006,
        as filed with the Securities and Exchange Commission on December 15, 2006;
        

      

      10)
        Appraisal report and valuation analysis on real property located at 402 Prospect
        Street in the town of Brandon, Vermont, consisting of a one-story, steel-framed
        building of approximately 30,418 square feet located upon a 5.7 acre parcel
        of
        land. This report was prepared by Scranton Appraisals, Inc. and dated as
        of
        November 17, 2006;

       

      
 

      
        Lehrer
          Financial Economic Advisory ServiceS /
          5555 Del Monte Dr. - St. 802 / Houston, Tx.
          77056 / (713) 972-7912; FAX (713) 964-0444

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            3.

        

      

    

    
       

      11)
        Desktop orderly liquidation value appraisal on Nexus Custom Electronics,
        Inc.
        machinery and equipment located in Brandon, Vermont and Woburn, Massachusetts
        with an effective date of August 31, 2007. This report was prepared by Joseph
        Finn Co., Inc. of Newton, Massachusetts;

      

      12)
        A
        variety of financial statements and information on Nexus Custom Electronics,
        Inc. as prepared by the Management and Staff of the organization;

      

      13)
        Reviewed certain industry and financial information provided to the undersigned
        by the Officers and Management of Nexus Custom Electronics, Inc. and their
        respective representatives;

      

      14)
        The
        undersigned has arranged to visit corporate facilities in both Brandon, Vermont
        and Woburn, Massachusetts during the week of November 19, 2007. This report
        is
        issued subject to that visitation addendum;

      

      15)
        Reviewed certain limited publicly available financial data on organizations
        in
        the same overall sectors as Nexus Custom Electronics, Inc.;

      

      16)
        Reviewed and analyzed general Financial and Economic data, such as, but not
        limited to, interest rates analysis that effect the overall ability of the
        organization to function and reorganize in the United States; and

      

    

     

     

    
      Lehrer
        Financial Economic Advisory ServiceS /
        5555 Del Monte Dr. - St. 802 / Houston, Tx.
        77056 / (713) 972-7912; FAX (713) 964-0444

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            4.

        

      

    

     

     

    
      17)
        Analyzed and reviewed such other studies, analyses, inquiries and investigations
        as we deemed appropriate for the purpose of this valuation opinion.

       

    

    In
      rendering our opinion, we have relied upon and assumed, without independent
      verification, the accuracy and completeness of financial and other information
      that was available to us from public and non public sources and all the
      financial and other information provided to us by either / or Nexus Custom
      Electronics, Inc. or their representatives. We have further relied upon the
      assurances of the Senior Management of Nexus Custom Electronics, Inc. that
      they
      are unaware of any facts that would make the information regarding either /
      or
      Nexus Custom Electronics, Inc. or the general industry data, as provided,
      inaccurate, incomplete or misleading.

    

    In
      examining and valuing corporations that are basically service or “small”
semi-manufacturing organizations as opposed to “large” manufacturers or
      distributors, entities / corporations such as Nexus Custom Electronics, Inc.
      that are privately held and non-publicly traded corporate entities, and is
      owned
      and / or operated by an individual or a small group or unit (or a family),
      such
      corporations need to be valued according to standard methods and approaches.
      This is especially true of applying the appropriate methods for a specific
      entity in a specific type of business activity. While different Appraisers
      can
      use and include their own favorite approaches to support their findings, one
      of
      the basic and widely acceptable methods of valuing corporations such as the
      type
      and size of Nexus Custom Electronics, Inc. is the Comparative Market Method,
      utilizing a multiple of earnings, such as net earnings (“net
      income”).

    

    In
      order
      to clearly rectify and denote the differences between organizations that are
      publicly traded and operated on a daily basis by “hired” management, whose goals
      can often conflict with the goals and desires of individual shareholders, the
      Internal Revenue Service promulgated a method of its own for valuing many small
      businesses. This method, which has been utilized since the early 1920s, is
      commonly known as and referred to as the “Excess Earnings Method”. This method,
      unlike other methods, removes a great deal of speculation from the overall
      valuation process and has become widely relied upon to value small businesses,
      especially professional practices. In other words, it values organizations
      that
      do not possess a great deal of tangible assets and / or whose assets are
      basically the talents, skill and input of an individual or a group of a few
      individuals. This has commonly come to be referred to as “intellectual property”
valuations.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            5.

        

      

    

    

    

    Valuation
      methods, such as and including the Capitalization of Net Cash Flow, the Market
      Approach and Debt Capacity methods are all open to a variety of projections,
      Appraiser bias and use and reliance upon data that often could be suspect in
      accuracy, as in the case of the market approach. Instead of trying to create
      a
      value by mixing and blending a number of approaches that require interpretation,
      projections and use of data that is not open to the public and can easily be
      skewed to reflect the desires of an Appraiser, a clear and obvious answer is
      to
      utilize the method that was recommended by the United States Treasury and the
      Internal Revenue Service for the valuation of small service business, namely
      the
      Excess Earnings Method. This method is not open to projections, a wide variety
      of assumptions and the reliance upon data that is not public in nature and
      not
      subject to financial scrutiny of collection, and analytical
      methods.

    

    However,
      in the matter at hand, the Excess Earnings Method and the other methods outlined
      and described above CANNOT be utilized in the liquidation valuation of a small
      business such as and including Nexus Custom Electronics, Inc. The reason said
      approach cannot be employed is that the Excess Earnings Method and all other
      methods thus far described rely upon the fact that the business is and will
      remain an ongoing entity, which is clearly not the circumstances based upon
      the
      facts of a forced liquidation. In as much as there is no published or standard
      norm for the liquidation or liquidation value of organizations such as Nexus
      Custom Electronics, Inc. the methods outlined above will be discarded in favor
      of the Liquidation Methods of Valuation, (described below, herein) that can
      be
      applied via the utilization of proper economic and financial techniques and
      well
      utilized and recognized in the economic / financial / securities
      industry.

     

    Before
      turning to the Fair Market Forced Liquidation Valuation of the organization
      -
      Nexus Custom Electronics, Inc., an explanation of the organization, namely
      a
      small contract manufacturer / supplier to industrial original equipment
      manufacturers (OEM”) and the circumstances surrounding that business explored
      and explained.

     

     

    OVERALL
      OUTLINE OF NEXUS CUSTOM ELECTRONICS, INC.

    

    Nexus
      Custom Electronics, Inc., a wholly owned subsidiary of Nexus Nano Electronics,
      Inc., provides contract-manufacturing services to industrial original equipment
      manufacturers ("OEMs") customers. The core customer base consists primarily
      of
      small and medium-sized manufacturers that produce electronic equipment used
      in a
      wide variety of industries. Sales from the business is recognized at the time
      products are shipped to customers and may vary depending on the time of
      customers' orders, product mix and availability of component parts.
      Substantially all of the business is performed on a turnkey basis that involves
      the procurement of specified components and raw materials from its network
      of
      suppliers and other suppliers, assembly of components on printed circuit boards
      and post-assembly testing. OEMs then incorporate the printed circuit boards
      into
      their finished products. In assembling printed circuit boards, Nexus is capable
      of employing both conventional pin-through-hole interconnection technology,
      as
      well as advanced surface mount technology. Pin-through-hole interconnection
      technology is a method of assembling printed circuit boards in which component
      leads are inserted and soldered into plated holes in the board. Surface mount
      technology is a method of assembling printed circuit boards in which components
      are fixed directly to the surface of the board, rather than being inserted
      into
      holes. The gross profit margin for such materials is generally lower than the
      gross profit associated with the manufacturing process and other value-added
      services.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            6.

        

      

    

    

    

    The
      company does not typically enter into long-term purchase orders or commitments
      from its customers. Instead, the company works with its customers to develop
      forecasts for future orders that are not binding. Customers may cancel their
      orders, change their orders, and change production quantities from forecasted
      volumes or delay production for a number of reasons beyond the company control.
      Cancellations, reductions or delays by a significant customer or by a group
      of
      customers could have an adverse effect on the company. In addition, as many
      of
      the costs and operating expenses are relatively fixed, a reduction in customer
      demand can adversely affect the gross margins and operating income.

    

    Corporate
      Operations

    

    Nexus
      conducts contract manufacturing operations through a wholly owned subsidiary,
      Nexus, at two locations. The first location is an approximately 32,000 square
      foot facility located in Brandon, Vermont and offers full turnkey contract
      manufacturing services. In November 2005, Nexus scaled back its second facility
      located in Woburn, Massachusetts. The Woburn facility is a satellite of Nexus
      specializing in prototype, new customer introduction, as well as operating
      two
      (2) dedicated lines for a defense contractor and an automotive customer. Nexus
      provides turnkey contract manufacturing services to OEM customers which includes
      procurement of customer specified components and raw materials from a network
      of
      suppliers and other suppliers, assembly of components on printed circuit boards
      and post-assembly testing. OEMs then incorporate the printed circuit boards
      into
      finished products. In assembling printed circuit boards, Nexus is capable of
      employing both pin-through-hole and surface mount technology.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            7.

        

      

    

    

    Pin-through-hole
      interconnection technology is a method of assembling printed circuit boards
      in
      which component leads are inserted and soldered into plated holes in the board.
      Surface mount technology is a method of assembling printed circuit boards in
      which components are fixed directly to the surface of the board, rather than
      being inserted into holes. The surface mount technology process allows for
      more
      miniaturization, cost savings and shorter lease paths between components (which
      results in greater signal speed).

    

    Nexus
      provides electronics manufacturing services to the communications, aviation,
      defense, medical devices and instrumentation industries, and serves the
      continental United States, with its concentrated market in the eastern region
      of
      the United States. Both of Nexus' manufacturing facilities have earned ISO
      9001:2000 certification by the Geneva-based organization dedicated to the
      development of worldwide standards for quality management guidelines and quality
      assurance. Management believes sophisticated customers increasingly are
      requiring their manufacturers to be ISO 9001 certified for purposes of quality
      assurance.

    

    Manufacturing
      Of Electronic Assemblies

    

    

    Printed
      Circuit Board Assembly

    

    Printed
      circuit boards are platforms on which integrated circuits and other electronic
      components are mounted.

    

    Semiconductor
      designs are complex and often require printed circuit boards with many layers
      of
      narrow, densely spaced wiring. Rapid technological advances have occurred in
      the
      electronics industry in recent years that have increased the speed and
      performance of components while reducing their size. These technological
      advances have caused printed circuit boards to become smaller with components
      more densely attached to the board requiring increasingly advanced surface
      mount
      manufacturing technologies, in addition to traditional surface mount and pin
      through-hole technology.

    

    In
      pin-through-hole production, components are attached by pins, also called leads,
      inserted through and soldered to plated holes in the printed circuit board.
      In
      traditional surface mount technology production, the leads on integrated
      circuits, and other electronic components are soldered to the surface of the
      printed circuit board rather than inserted into holes. Surface mount
      technologies can accommodate a substantially higher number of leads in a given
      area than pin-through-hole production. As a result, surface mount technologies
      allow the printed circuit board to interconnect a greater density of integrated
      circuits. This density permits tighter component spacing and a reduction in
      the
      printed circuit board dimensions. Additionally, surface mount technologies
      allow
      components to be placed on both sides of the printed circuit board to permit
      even greater density. The substantially finer lead-to- lead spacing in surface
      mount technologies requires a manufacturing process far more exacting than
      the
      pin-through-hole interconnect products. An advanced surface mount technology
      called micro ball grid array allows for even greater densities than traditional
      surface mount technology. The ball grid array assembly process uses small balls
      of solder, instead of leads that could bend and break, located directly
      underneath the part, to interconnect the component and circuit board. Because
      of
      their high number of leads, most complex or very large-scale integrated circuits
      are configured for surface mount technologies production.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            8.
             

          

        

      

    

    

    

    Nexus
      employs advanced surface mount technologies in its printed circuit board
      assembly operations in addition to traditional surface mount technologies.
      The
      company also continues to support pin-through-hole technology and related
      semi-automated and manual placement processes for existing and new applications
      that require these technologies.

    

    Nexus
      focuses on low to moderate volume manufacturing of highly complex printed
      circuit board assemblies. The company manufactures these complex assemblies
      on a
      batch basis and has developed expertise in quickly changing equipment set-up
      and
      manufacturing capabilities in order to respond to customers' changing needs.
      The
      company believes this capability provides customers with optimal flexibility
      in
      product design while allowing for rapid turnaround of new or highly complex,
      but
      lower volume products.

     

    Customers
      and Markets

     

    Nexus
      serves a wide range of customers from emerging growth companies to established
      multinational corporations in a variety of markets. The timing and level of
      orders from its customers varies substantially from period to
      period.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        RE:
          In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
          Valuation continued
          ...../.....
           

          Page
            9.

        

      

    

    

    

    The
      historic level of net sales Nexus Electronics has received from a specific
      customer in one particular period is not necessarily indicative of net sales
      the
      company may receive from that customer in any future period. While the company
      focuses on maintaining long term relationships with its customers for various
      reasons including consolidation in its customers' industries; Nexus Electronics
      has in the past and will continue in the future to terminate or lose
      relationships with customers. Customers may also significantly reduce the level
      of business done with Nexus Electronics or delay the volume of manufacturing
      services ordered from the company. Significant or numerous terminations,
      reductions or delays in its customers' orders could negatively impact its
      operating results in future quarters.

    

    The
      company's three (3) largest customers, GSI Lumonics, Frequency Electronics,
      and
      S-TEC, accounted for 70.0% of total sales in fiscal 2005 (lasted data supplied),
      and as a result of its importance, Nexus Electronics is dependent upon
      continuing its business with these customers. The company, nonetheless,
      continues to focus on expanding and diversifying its customer base to reduce
      dependence on any individual customer or market.

    

    In
      many
      cases, the company's customers utilize more than one contract manufacturing
      provider across product lines. The company's goal is to be the primary contract
      manufacturing provider for its customers. Nexus Electronics seeks to manufacture
      the high-value, leading-edge products of its customers and target OEMs that
      require moderate volume production. The low-to-medium volume, low cost
      facilities enable the company to offer its customers a broad range of volume
      production and cost alternatives. The company believes that it is advantageously
      positioned to be selected to provide manufacturing and value-added services
      for
      its customers' new product offerings due to:

    

    
      	 	
              ·

            	
              Close
                interaction with the design engineering personnel of its customers
                at the
                product development stage;

            

    

    

    
      	 	
              ·

            	
              Prototype
                production experience;

            

    

    

    
      	 	
              ·

            	
              Advanced
                manufacturing and engineering capabilities, such as radio frequency
                capabilities; and

            

    

    

    
      	 	
              ·

            	
              Established
                and dependable materials pipeline.

            

    

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        RE:
          In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
          Valuation continued
          ...../.....
           

          Page
            10.

        

      

    

     

     

    Nexus
      generally warrants that its products will be free from defects in workmanship
      for twelve months. Nexus also passes on to its customers any warranties provided
      by component manufacturers and material suppliers to the extent permitted under
      its arrangements with these parties. The company warranty provides that during
      the warranty period, action will be taken to repair or replace failed products.
      Nexus tests substantially all of our assemblies prior to shipment. In addition,
      customers generally test or have tested final products on a sample basis prior
      to deployment in the field. Warranty costs have not been material to
      date.

    

    Corporate
      Suppliers

    

    Nexus
      OEM
      customers require:

    

    
      	 	
              ·

            	
              Assurance
                that the short and long term supply of materials and components to
                manufacture their products;

            

    

    

    
      	 	
              ·

            	
              Negotiate
                low prices for these materials;

            

    

    

    
      	 	
              ·

            	
              Secure
                high quality and reliable
                materials;

            

    

    

    
      	 	
              ·

            	
              Assure
                the on-time delivery of these materials;
                and

            

    

    

    
      	 	
              ·

            	
              Provide
                flexibility to change their production requirements on short
                notice.

            

    

    

    

    To
      compete effectively in this business environment, Nexus Electronics has
      developed a materials procurement strategy whereby it maintains strong,
      long-term relationships with a limited number of suppliers who conform to its
      highest standards. The company seeks to work with suppliers that consistently
      deliver the best technology and quality materials at low total cost on short
      and
      flexible lead times. Nexus Electronics consistently evaluates all of its
      suppliers' performances and provides suggestions for improving its
      relationships. When Nexus does business with a supplier at its customer's
      direction, the company closely monitors the supplier's performance and work
      with
      both the supplier and the customer to improve the supplier's performance when
      necessary. The company believes this strategy enables it to provide optimal
      flexibility to its OEM customers and enables it to better satisfy their EMS
      needs.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            11.

        

      

    

     

     

    The
      Nexus
      team of materials acquisition professionals is responsible for all materials
      procurement and planning. The company has a strategic purchasing group that
      develops its worldwide materials and commodity procurement strategy. This
      strategic group is responsible for understanding the needs of its customers
      and
      the commodity supply market, evaluating the overall quality of suppliers and
      negotiating and executing low cost commodity supply contracts with preferred
      suppliers. The company also has a group that focuses on the day-to-day tactical
      execution of its materials procurement process to attempt to insure that
      material or component costs or shortages do not prevent the company from
      providing optimal services to its customers. This group is responsible for
      proactively managing inventory programs, evaluating day-to-day supplier
      performance, and coordinating customer plan production changes.

    

    Nexus
      Electronics typically procures components when a purchase order or forecast
      is
      received from a customer. Due to its utilization of just-in-time inventory
      techniques, the timely availability of many components depends on its ability
      to
      both develop accurate forecasts of customer requirements and manage the
      materials supply chain. Given the company’s direct component procurement
      strategy with quality suppliers, Nexus Electronics relies on a single or limited
      number of suppliers for many proprietary and other components used in the
      assembly process. Although Nexus Electronics has strong relationships with
      high
      quality suppliers, the company does not have any long-term supply agreements,
      except with Jaco, as described below. Shortages of materials and components
      have
      occurred from time to time and will likely occur in the future despite the
      development of select long-term supplier relationships. The company believes
      its
      direct procurement strategy and the division of responsibility within its
      materials procurement team enables them to better manage its supply chain in
      order to reduce the occurrence and minimize the effect on its customers of
      materials or component shortages.

    

    Nexus
      entered into a five-year Supply Agreement with Jaco Electronics, Inc., on
      September 20, 2004. Pursuant to the Supply Agreement, Jaco provides electronic
      components to Nexus for use in its manufacturing operations. Under the Supply
      Agreement, Nexus must purchase at least 15.0% of the dollar amount of its annual
      purchases of electronic components that are included in Jaco's line card and
      are
      compatible with Nexus' needs. However, Nexus may submit requests for proposals
      to other suppliers as it may choose. If Jaco's proposal contains the lowest
      price, then Nexus must purchase its components from Jaco. 

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            12.

        

      

    

    

    

    Corporate
      Competition

    

    The
      electronics contract manufacturing industry is highly fragmented and is
      characterized by relatively high levels of volatility, competition and pricing
      and margin pressure. Many large contract manufacturers operate high-volume
      facilities and primarily focus on high-volume product runs. In contrast, certain
      contract manufacturers, such as Nexus, focus on low-to-medium volume and
      service-intensive products.

    

    Nexus
      competes against numerous providers with global operations, including Benchmark
      Electronics, Celestica, Flextronics, Jabil Circuit, Plexus, Sanmina-SCI, Suntron
      and Solectron. Nexus also faces competition from a number of EMS providers
      that
      operate on a local or regional basis. In addition, current and prospective
      customers continually evaluate the merits of manufacturing products
      internally.

    

    Consolidation
      in the EMS industry results in a continually changing competitive landscape.
      The
      consolidation trend in the industry also results in larger and more
      geographically diverse competitors who have significant combined resources
      with
      which to compete against Nexus. Nexus believes that the principal competitive
      factors in the segments of the electronics contract manufacturing industry
      in
      which it operates are:

    

    
      	 	 	
              Geographic
                location and coverage;

            

    

    

    
      	 	 	
              Flexibility
                in adapting to customers' needs;

            

    

    

    
      	 	 	
              Manufacturing
                capability;

            

    

    

    
      	 	 	
              Price;

            

    

    

    
      	 	 	
              Service;

            

    

    

    
      	 	 	
              Technology;

            

    

    

    
      	 	 	
              Quality;

            

    

    

    
      	 	 	
              Reliability;
                and

            

    

    

    
      	 	 	
              Timeliness
                in delivering finished products.

            

    

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            13.

        

      

    

     

    
 

    Nexus
      believes that it has developed a particular strength relative to some of its
      major competitors in the manufacturing of complex, low-to-moderate volume,
      leading-edge products. Competition from existing or potential competitors could
      result in reduced prices, margins and market share which would significantly
      and
      negatively impact operating results.

    

    Nexus
      has
      entered into a business development services agreement with Celerity Systems,
      Inc. Pursuant to the agreement with Celerity, upon request, Celerity shall
      assist us in managerial assistance, including significant guidance and counsel
      in management, operations or business objectives and policies. Such assistance
      may include strategic and financial planning, designing budgets, and control
      systems. No services have been provided by Celerity to date.

    

    Nexus
      is
      well-known in the industry in which it competes, particularly in the northeast
      region. Together with its website and other marketing activities, the company
      believes its trade name and trademark has value to the business. In connection
      with the acquisition purchase price allocation, the company recorded $257,735
      valuation for its trademark and trade name. Subsequently, an impairment charge
      in the amount of $45,070 was taken in Fiscal 2005 in accordance with SFAS No.
      142, “Accounting for Goodwill and Other Intangible Assets”.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            14.

        

      

    

     

     

    CORPORATE
      FINANCIAL DATA 

    

    

    

    In
      order
      to help determine a Fair Market Forced Liquidation Valuation, an analyst needs
      to look at the finances of the overall and general formulation of the
      organization. Value depends upon a great many factors, especially, past
      performance, risk and industry growth rate potential / reward. In as much as
      Nexus Custom Electronics, Inc. is NOT a publicly traded organization, the amount
      of data both collected and available is limited. However, an overall financial
      review of the organization is denoted via the information furnished the
      undersigned to be utilized in regard to this corporate Fair Market Forced
      Liquidation Valuation.

    

    

    NEXUS
      CUSTOM ELECTRONICS

    

    Statement
      of Income

    

    July
      1, 2007 - September 30, 2007

    

    First
      Quarter - Fiscal Year 2008

     

     

    

      
        	 	 	
                1st
                  Quarter

              	 
	 	 	
                Totals

              	 
	 	 	 	 
	
                Sales

              	 	 	
                1,904,567

              	 
	
                Sales
                  Discounts

              	 	 	
                7,396

              	 
	
                 Net
                  Sales Billed

              	 	 	
                1,897,170

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                Materials

              	 	 	
                1,069,781

              	 
	
                Outside
                  Services

              	 	 	
                100

              	 
	
                Material
                  Overhead

              	 	 	
                131,861

              	 
	
                Direct
                  Labor

              	 	 	
                280,275

              	 
	
                Manufacturing
                  Overhead

              	 	 	
                897,090

              	 
	
                Inv
                  Reval and Physical Adjustments

              	 	 	
                (41,292

              	
                )

              
	
                Scrap
                  and Restock Charges

              	 	 	
                6,834

              	 
	
                Excess
                  Material Provision

              	 	 	
                0.00

              	 
	
                NRE
                  Costs

              	 	 	
                22,316

              	 
	
                Cash
                  Discounts Taken

              	 	 	
                0.00

              	 
	
                Overhead
                  Adjustment

              	 	 	
                (113,750

              	
                )

              
	
                Manufacturing
                  Expense

              	 	 	
                2,253,214

              	 
	 	 	 	 	 
	
                GROSS
                  PROFIT

              	 	 	
                (356,043

              	
                )

              
	
                (Gross
                  Profit Percentage)

              	 	 	
                -18.77

              	
                %

              

      

    

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            15.

        

      

    

    

    

      

        
          	
                  Admin
                    Expense

                	 	 	
                  296,385

                	 
	
                  Selling
                    Expense

                	 	 	
                  42,854

                	 
	
                   Indirect
                    Expense

                	 	 	
                  339,239

                	 
	 	 	 	 	 
	
                  Operating
                    Profit

                	 	 	
                  (695,282

                	
                  )

                
	
                  Mfg
                    Consultant (Expense)

                	 	 	
                  0

                	 
	
                  Other
                    Income (Expense)

                	 	 	
                  1,757

                	 
	 	 	 	 	 
	
                   EBIT

                	 	 	
                  (693,526

                	
                  )

                
	
                  (EBIT
                    Percentage)

                	 	 	
                  -36.56

                	
                  %

                
	 	 	 	 	 
	 	 	 	 	 
	
                  Net
                    Interest Expense (Income)

                	 	 	
                  142,773

                	 
	
                  Woburn
                    Re-Structure

                	 	 	
                  4,020

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  Profit
                    / Loss Before Taxes

                	 	 	
                  (840,318

                	
                  )

                
	 	 	 	 	 
	
                  Cash
                    Purchase Acctg Expense 

                	 	 	
                  128,638

                	 
	
                  Non-Cash
                    PA Exp (Amort. Intang)

                	 	 	
                  37,227

                	 
	
                  Adjusted
                    Pretax

                	 	 	
                  (1,006,183

                	
                  )

                
	 	 	 	 	 
	 	 	 	 	 
	
                  Federal
                    Taxes

                	 	 	
                  0

                	 
	
                  State
                    Taxes

                	 	 	
                  133

                	 
	
                  Total
                    Taxes

                	 	 	
                  133

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  Net
                    Profit/(Loss)

                	 	 	
                  (1,006,316

                	
                  )

                
	
                  (Net
                    Profit Percentage)

                	 	 	
                  -53.04

                	
                  %

                
	 	 	 	 	 
	
                  EBITDA

                	 	 	 	 
	 	 	 	 	 
	
                  EBIT

                	 	 	
                  (693,526

                	
                  )

                
	
                  Depreciation

                	 	 	
                  133,911

                	 
	
                   EBITDA

                	 	 	
                  (559,614

                	
                  )

                
	
                  (EBITDA
                    Percentage)

                	 	 	
                  -29.50

                	
                  %

                

        

      

    

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            16.

        

      

    

    

    NEXUS
      CUSTOM ELECTRONICS

    

    Balance
      Sheet

    

    September
      30, 2007

    

    

    

      
        	
                ASSETS

              	 	 	 
	 	 	 	 
	
                CURRENT
                  ASSETS:

              	 	 	 
	
                Cash
                  

              	 	 	
                114,574.56

              	 
	
                Accounts
                  receivable (Net)

              	 	 	
                727,807.84

              	 
	
                Inventory

              	 	 	
                1,744,933.81

              	 
	
                 Identifiable
                  Intangibles

              	 	 	
                858,879.76

              	 
	
                Other
                  Current Assets

              	 	 	
                126,901.31

              	 
	 	 	 	 	 
	
                Current
                  Assets

              	 	 	
                3,573,097.28

              	 
	 	 	 	 	 
	
                PPE
                  - Cost

              	 	 	
                9,218.308.44

              	 
	
                Accumulated
                  Depreciation

              	 	 	
                (7,823,621.38

              	
                )

              
	 	 	 	 	 
	
                 Net
                  PPE

              	 	 	
                1,394,687,06

              	 
	 	 	 	 	 
	
                Prepaid
                  Income Taxes

              	 	 	
                9,386.48

              	 
	 	 	 	 	 
	
                Long
                  Term Asset; Goodwill

              	 	 	
                110,170.25

              	 
	 	 	 	 	 
	
                TOTAL
                  ASSETS:

              	 	 	
                5,087,341.07

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                LIABILITIES
                  AND EQUITY

              	 	 	 	 
	 	 	 	 	 
	
                LIABILITIES

              	 	 	 	 
	
                 Accounts
                  Payable

              	 	 	
                3,819,038.44

              	 
	
                Accrued
                  Compensation

              	 	 	
                249,190.35

              	 
	
                Accrued
                  Expenses

              	 	 	
                795,925.76

              	 
	
                Current
                  Portion of LTD and Capital Leases

              	 	 	
                196,578.30

              	 
	
                Current
                  Portion, MyData Equipment

              	 	 	
                118,703.00

              	 
	
                CSI
                  Funding

              	 	 	
                350,000.00

              	 
	
                 
                  --Revolver, Comerica

              	 	 	
                0.00

              	 
	
                Current
                  Liabilities

              	 	 	
                5,529,435.85

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                JACO
                  Earn Out Obligation, 9/30/2005

              	 	 	
                105,453.00

              	 
	
                Long
                  Term Debt, Comerica

              	 	 	
                0.00

              	 
	
                Long
                  Term Debt, UPS Capital

              	 	 	
                240,000.00

              	 
	
                JACO
                  Note Payable

              	 	 	
                2,750,000.00

              	 
	
                Intercompany,
                  Sagamore

              	 	 	
                1,506,070.51

              	 
	
                YA
                  Global Funding

              	 	 	
                2,478,321.98

              	 
	 	 	 	 	 
	
                Long
                  Term Liabilities

              	 	 	
                7,079,845.49

              	 
	
                 

              	 	 	 	 
	
                TOTAL
                  LIABILITIES

              	 	 	
                12,609,281.34

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                EQUITY

              	 	 	 	 
	 	 	 	 	 
	
                Sagamore
                  Equity

              	 	 	
                (5,250,000.00

              	
                )

              
	 	 	 	 	 
	
                Retained
                  Earnings, FY05

              	 	 	
                5,809,449.12

              	 
	
                Retained
                  Earnings, FY06

              	 	 	
                3,453,110.59

              	 
	
                Retained
                  Earnings, FY07

              	 	 	
                2,503,064.18

              	 
	
                (Profit)/Loss,
                  FY08

              	 	 	
                1,006,316.38

              	 
	 	 	 	 	 
	
                 TOTAL
                  EQUITY

              	 	 	
                (7,521,940.27

              	
                )

              
	 	 	 	 	 
	 	 	 	 	 
	
                TOTAL
                  LIABILITIES AND EQUITY

              	 	 	
                5,087,341.07

              	 

      

    

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            17.

        

      

    

    

    

    Notes
      Regarding The Company and the Balance Sheet

    

    

    COMPANY
      FACES INVENTORY OBSOLESCENCE AND SLOW MOVING INVENTORY

    

    

    Nexus
      purchases raw materials specified in the material requirements to manufacture
      products that customers order. If a customer cancels an order and materials
      cannot be returned to suppliers, nor used on other products, the inventory
      may
      need to be adjusted downward in the financial statements or written off. Prior
      to its acquisition by Sagamore, Nexus had never prepared financial statements
      that had been audited. As a result of the preparation of the financial
      statements of Nexus, and the related audits for the period from July 1, 2004
      through October 3, 2004, and the years ended June 30, 2004 and 2003, which
      were
      done in connection with and at the time of the company's acquisition and the
      filing of its initial registration statement; Sagamore determined that Nexus
      purchased customized component parts that were included in raw material
      inventory that arose from customer orders that were subsequently replaced or
      cancelled prior to July 1, 2002. These materials could not be returned to
      suppliers nor used in connection with orders from other customers. As a result,
      Nexus effectively recorded obsolescence charges of approximately $2,000,000
      prior to July 1, 2002. 

    

    The
      company has adopted procedures currently to periodically perform an in depth
      review of its inventory to determine if adjustments are required to its carrying
      value for accounting purposes. The company recorded an obsolescence and slow
      moving inventory reserve of $913,777 in Fiscal 2005 as the result of reduction
      of sales, cancelled purchase orders, and technical obsolescence. 

     

     

    2007

    

    Further,
      the undersigned has been informed by Corporate Management that as of October
      29,
      2007 Nexus had a total of $1,540,277 of inventory that is considered “slowing
      moving” and its value would have to be substantially reduced on the corporate
      balance sheet and records. 

     

     

    GOING
      CONCERN MATTERS

    

    The
      consolidated financial statements have been prepared assuming that Nexus will
      continue as a going concern. However, the Company incurred a net loss of
      $7,556,949 in Fiscal 2005, and had a net working capital deficiency of
      $3,578,734 at June 30, 2005. It also did not meet certain covenants under its
      credit facility with Comerica and promissory note with Jaco, and accordingly,
      the outstanding balance of $3,779,423 under the credit facility ($2,759,423
      under the revolver and $1,020,000 under the term loan) and the outstanding
      balance of $2,750,000 under the note agreement were in default as of June 30,
      2005, and is classified in current liabilities in the consolidated balance
      sheet. Accordingly, there was in 2005 substantial doubt as to the ability of
      Sagamore Holdings and its subsidiary to continue as going concern. 

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            18.

        

      

    

    

    

    The
      company did not meet the requirements of four (4) covenants under the provisions
      of its credit facility with Comerica: Minimum working capital ratio; debt
      service ratio (“EBITDA”, as defined, divided by interest and principal payment
      requirements); leverage ratio (liabilities to tangible net worth ratio) and
      minimum tangible net worth (tangible net worth includes subordinated debt but
      excludes intangible assets), and, therefore, was in default. During the period
      while the company is in default under the credit facility, the lender may force
      immediate repayment of amounts due ($3,779,423 at June 30, 2005), and invoke
      penalty interest (up to three percentage points or approximately $114,000
      annually) at the lender’s discretion. Since the Company has not been notified
      that it will be charged penalty interest, it has not accrued any as of June
      30,
      2005.

    

    The
      Company entered into a forbearance agreement with Comerica on July 15, 2005,
      effective July 1, 2005 through August 1, 2005, which essentially provided an
      extension of the revolver under the credit facility which expired on July 1,
      2005, and also provided that Comerica would not exercise its right to call
      for
      acceleration of all amounts due under the term loan and revolver under the
      credit facility if the Company met certain conditions. Effective August 1,
      2005,
      the company and Comerica agreed to extend the maturity date of the revolver
      under the credit facility to September 1, 2005. Nexus and Comerica are currently
      negotiating an extension of the forbearance agreement from September 1, 2005
      through June 30, 2006. If an extension is agreed upon, the Company intends
      to
      attempt to negotiate an amendment to the credit facility in order to renew
      the
      facility and have the company in compliance going forward. However, there can
      be
      no assurance that the company will get an extension on the forbearance
      agreement.

    

    Nexus
      Electronics is also in default under its promissory note agreement with Jaco
      due
      to being delinquent on interest payments, as well as effecting a change in
      control event subsequent to June 30, 2005. As a result of these events of
      default, the $2,750,000 underlying note was also classified as a current
      obligation since Jaco has a right to accelerate payment. The company disputes
      the amount due Jaco under the purchase agreement. In addition, the company
      intends to pursue its claims and remedies against Jaco. 

     

    
      
Lehrer
        Financial Economic Advisory
        ServiceS /
        5555 Del
        Monte Dr. - St. 802 / Houston, Tx.
        77056 /
        (713) 972-7912; FAX (713) 964-044

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            19.

        

      

    

     

     

    According
      to information supplied the to the undersigned, while new financial statements
      that have been prepared are not audited, the company is still in default under
      most, if not all of the covenants of the loans as outlined above, herein.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            20.

        

      

    

     

    

    NEXUS
      CORPORATE PROPERTY

    

    Currently,
      corporate headquarters is located at 402 Prospect Street, Brandon Vermont.
      This
      location is an approximately 32,000 square foot facility located in Brandon,
      Vermont, which is also used for manufacturing and storage in addition to our
      office space. This property is owned and occupied by our wholly-owned
      subsidiary, Nexus, and is fully encumbered by a first security interest in
      the
      amount of $5,000,000 held by Comerica Bank on all property Nexus now or later
      owns or has an interest.

    

    The
      company also operates a second facility in Woburn, Massachusetts through Nexus.
      This facility's address is 317 New Boston Street, 2nd Floor, Woburn
      Massachusetts. The property is leased and has a base rent of $14,197 per month.
      The lease expires on July 31, 2008, and has a three-year option to renew with
      base rent increases of 3.34%. Nexus believes that its present facilities will
      be
      adequate to meet our needs for the foreseeable future.

    
 

    Further
      Property Identification

    

    The
      subject property known as Nexus Custom Electronics, Inc., is located at 402
      Prospect Street in the Town of Brandon, Vermont. It consists of a circa 1975
      one-story steel framed building of approximately 30,418 square feet located
      upon
      a 5.7 acre parcel of land. The property is presently owned by NECI Acquisitions,
      Inc., and is described with a QuitClaim Deed recorded September 27, 2004, in
      Book 170, pages 411-412 of the Town of Brandon Land Records.

     

     

    Property
      Location

    

    Brandon
      is located in Rutland County, in the western central portion of the state and
      has a population of roughly 4,194 persons. The town is bisected by Route 7,
      the
      major north-south highway on the west side of the state approximately sixteen
      (16) miles north of Rutland and fourteen miles south of Middlebury. In an
      east-west direction, the town is bisected by Route 73.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            21.

        

      

    

     

     

    The
      downtown of Brandon is a classic New England village with central green, a
      large
      hotel, a well established central business district with fine old residences
      and
      commercial buildings of historic and architectural work. Most shopping and
      professional services are available, including post office, banks, restaurants,
      and retail shops; many of which cater to the tourist trade. Manufacturing
      includes electronic supplies, fertilizers, grist mills, lumber, millwork, and
      woodworking.

    

    The
      subject property is located at 402 Prospect Street which is located
      approximately one-quarter (1/4) mile north off U. S. Route 7, in the Conant
      Square District of the Town of Brandon. The immediate area is an established
      residential neighborhood of primarily single family dwellings, and adjacent
      to
      the Pleasant Height residential subdivision.

    

    

    Property
      Zoning

    

    According
      to the Town of Brandon Zoning Ordinance, the subject property lies in an area
      designated as the "Neighborhood Residential District". Permitted uses in this
      district are residential, planned residential developments and open space.
      Uses
      requiring a conditional use permit within this district include agriculture
      uses, natural resource extraction uses, commercial #1 uses, community support
      and recreational uses, mobile home parks, and public service uses. The minimum
      lot size of this district is 0.25 acres, the minimum front setback is twenty
      (20) feet, and the minimum side and rear setbacks is five (5) feet. The present
      building improvements are a pre-existing legal, non-conforming use under the
      current zoning regulations.

     

     

    Site
      Data

    

    The
      subject site is shown on the town of Brandon Tax Map #20-51 as parcel #42.
      This
      property is irregular in shape and consists of 5.7 acres of land. The land
      is
      level on road grade, being entirely open with a spacious northernly and rear
      lawn area with woods located along the rear boundary. There are two (2) paved,
      single entrance driveways located off Prospect Street, one leads to a visitors
      parking area for approximately twenty-five (25) vehicles and the other leads
      to
      an employee parking area for approximately seventy-five (75) vehicles. Located
      at the rear of the land is a paved surface truck turn-around area and driveway
      leading to the shipping and receiving docks.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

      

      
        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            22.

        

      

    

    
 

    There
      is
      municipal water and sewer, and overhead electrical and telephone service. The
      subject property is located on the National Flood Insurance Program's Flood
      Insurance Rate Map, Community Panel Number 5000900000-5C dated February 19,
      1982. This property is not located within the designated flood hazard
      area.

    

    

    Description
      of the Improvements

    

    Located
      upon the above land parcel in a circa 1975 one-story steel frame building with
      several subsequent additions totaling approximately 30,418 square feet of
      building area. The building is built upon a concrete foundation and concrete
      slab.

    

    The
      building exterior has steel siding, double hung and fixed glass windows, and
      a
      metal and rubber membrane roof. There is a front covered entry leading to the
      main office area, an additional covered entry leading into the main factory
      portion of the building, and a side and rear truck loading dock.

    

    

    The
      interior layout of the building is briefly described as follows:

    

    Main
      reception and waiting room, leading to the executive office area with conference
      room, engineering, accounting, and computer center.

    

    The
      manufacturing area surrounds an open interior court yard, which is accessed
      of
      the employee's kitchenette and dining area. Located in the southwest corner
      of
      the building is a receiving area and the production staff offices; and a
      shipping area located at the rear of the building.

    

    Located
      at the rear of the manufacturing area in the northwest corner of the building
      is
      an area set for spray finishing which has several large exhaust
      fans.

    

    The
      building interior is primarily finished with drywalls and ceilings, vinyl tile
      and carpeted floors, and fluorescent lighting. The building is fully insulated
      and has propane gas-fired heating and air conditioning throughout. The building
      is completely sprinkled.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            23.

        

      

    

    

    Although
      the original building was built in 1975, there have been several subsequent
      additions and extensive renovations, and the general physical condition is
      considered above average.

    

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            24.

        

      

    

     

    

    VALUATION
      COMPARISON TECHNIQUES

    

    Before
      turning to the direct analysis and valuation of Nexus Custom Electronics, Inc.
      an overall explanation of the general methods used to value businesses,
      especially small or family owned or controlled organizations needs to be
      outlined and explored. They are explained below in succinct form for a reader’s
      reference.

    

    

    VALUATION
      METHODS OUTLINE

    

    The
      purpose of this valuation report is to value the above noted contract
      manufacturing corporation that has been conducting business (in whole or part)
      for a substantial period of time. Based upon data, as explained below, the
      valuation we are seeking is a Fair
      Market Forced Liquidation Value
      as
      opposed to a Fair Market Value (FMV - Treasury Regulation 20.2031-1(b); Revenue
      Ruling 59-60, 1959-1 C.B. 237; as modified by Revenue Ruling 65-193; I.R.B.
      1965-2, and Revenue Ruling 68-609, I.R.B. 1968-48) concept, or a book value.
      In
      order to obtain a corporate valuation, several methods can be selected including
      - Comparative Company Method utilizing Net Income or EBITDA, Excess Earnings
      Method and the Discounted Cash Flow method which encompasses Capitalization
      of
      Earnings or the Liquidation Method. In as much as the undersigned has been
      informed that a corporate foreclosure could be in process, the undersigned
      was
      requested to value Nexus Custom Electronics, Inc. under the Fair Market Forced
      Liquidation Method. For completeness of thought and understanding the most
      widely utilized and commonly engaged methods of valuing an organization will
      be
      outlined below.

    

    

    Comparative
      Earnings Method Utilizing Net Income

    

    The
      idea
      behind the Comparative Earnings Method is that the value of companies,
      organizations or service entities involving comparative ventures in the same
      or
      similar industry provide objective evidence as to values at which investors
      are
      willing to, value, buy or sell in a specific industry.

    

    In
      applying the comparative earnings valuation approach, the consultant usually
      computes a value multiple for each comparative method or industry. The
      appropriate multiple is then determined and adjusted for the unique aspects
      of
      the organization being valued, namely a Net Income is computed. The multiple
      is
      then applied to the organization being valued to arrive at an estimate of value
      for either the entire organization and / or the appropriate ownership interest.
      A market multiple represents a ratio that expresses the fair market value of
      an
      organization as a percentage of annual net revenues (or financial position)
      as
      the denominator. Value multiples can either be computed on a per share basis
      or
      a total annual earnings or other measure. The most well known value multiple
      is
      price / earnings whereby a company’s stock price is divided by its earnings per
      share. Once a number of comparative organizations and their adjusted financial
      information has been selected, the last step is to determine and compute the
      appropriate earning multiples.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            25.

        

      

    

     

     

    In
      valuing organizations, such as Nexus Custom Electronics, Inc., the comparative
      method, also sometimes known as or referred to as Market Data Comparable
      Approach, is well known and utilized in the overall business services sector.
      The approach requires the analyst to have some first hand information of actual
      purchases or sales of similar organizations that are involved in or known as
      “electronic contract manufacturers” and evidence that these organizations are
      comparable in “economic fiber” to the subject organization under analysis. The
      database of comparative corporate data should be broad based and contain data
      involving a good number of organizations, related organizations and affiliated
      organizations in the electronic contract manufacturing business sector, in
      addition to geographic locations, sizes, average revenues, mark-ups utilized,
      and a whole host of other economic and financial data. While a significant
      amount of this type of information is often confidential in nature, a good
      number of such organizations that are similar to Nexus Custom Electronics,
      Inc.
      have available data via public / SEC sources and databases.

    

    Based
      upon the above, in order to place all of the variable information into a usable
      number or guideline, a price-annual or revenue multiplier has often been
      utilized in recent years. Here, the subject corporation’s revenues are
      capitalized by the price-revenues multiple and the result is an estimate of
      the
      fair market value of the subject organization under analysis. While this
      approach can often require limited finance or economics as it analyzes
      organizations of a similar nature, the accuracy of the final valuation is also
      based upon general overall data often times referred to as a “rule of thumb”
analysis.

    

    This
      technique for electronic contract manufacturing sector is generally relied
      upon
      and has become more customized and tailored to the specific corporation or
      entity under analysis. Hence, this method would have been utilized if the
      undersigned was seeking a Fair Market Value of Nexus Custom Electronics Inc.
      organization.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            26.

        

      

    

     

     

    However,
      this valuation method denotes that the organization would continue operating
      in
      its normal mode of operation and remain a going concern. Since data has been
      presented to the undersigned that a possible corporate foreclosure is being
      considered that would effectively end the ability of the company to continue
      as
      a going concern, said valuation method will not be utilized herein to obtain
      a
      Fair Market Forced Liquidation Value for an electronic contract manufacturing
      services type organization.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            27.

        

      

    

     

    

    The
      Excess Earnings Method

    

    The
      Excess Earnings Method was developed by the United States Treasury Department
      in
      1920 in Appeals and Review Memorandum 34 (ARM 34). Its current version is found
      in Revenue Ruling 68-609. The excess earnings method is commonly used in valuing
      a wide variety of small businesses.

    

    The
      idea
      for the Excess Earnings Method is to compute the company’s equity value based on
      the “appraised” value of tangible assets, plus an additional amount for
      intangible assets. A company’s tangible assets should provide a current return
      to its owners. Since there are risks associated with owning the company’s
      assets, the rate of return on those assets should be commensurate with the
      risks
      involved. That rate of return should be either the prevailing industry rate
      of
      return required to attract capital to that industry or an appropriate rate
      above
      the risk-free rate.

    

    Any
      returns produced by the company above the rate on tangible assets are considered
      to arise from intangible assets of the organization. Accordingly, the weighted
      average capitalization rate for tangible assets and intangible assets should
      be
      equivalent to the capitalization rate for the entire company.

    

    While
      the
      Internal Revenue Service and a substantial number of professionals in the
      Financial and Economic industries have come to utilize and rely upon this
      valuation technique, this method is usually employed and relied upon in the
      analysis of professional and medical practices. In these instances, it is the
      earnings of the professional that are above “normal compensation” as determined
      by industry standards that create the corporate value. In the matter at hand,
      especially for business service / business maintenance organizations, no such
      normal earnings or industry standards are collected, published or made available
      and therefore the excess earnings method, in spite of its sound fundamental
      and
      economic underpinnings, cannot be utilized for the present corporate valuation
      under analysis.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            28.

        

      

    

     

    

    Discounted
      Net Cash Flow Approach

    

    The
      Discounted Net Cash Flow Approach and the Capitalized Returns Approach are
      based
      upon the premise that the value of an ownership interest in a company is equal
      to the net present value of the future benefits of that ownership. The two
      (2)
      well known and accepted valuation approaches that directly use this premise
      are
      the Discounted Net Cash Flow Approach and the Capitalized Returns
      Approach.

    

    The
      Capitalized Returns Approach tends to be the more appropriate valuation method
      when it appears that an organization’s current operations are indicative of its
      future operations (assuming a normal growth rate). On the other hand, if there
      is going to be a sale or transfer of an organization, the Discounted Net Cash
      Flow Approach tends to be more appropriate, since future returns could be
      expected to be “substantially different” from current operations.
      (“Substantially different” means materially greater or less than a normal growth
      rate.) In some cases, it may be desirable to use both of these approaches to
      estimate a company’s value.

    

    The
      Discounted Net Cash Flow Approach requires an analyst to quantify the financial
      benefits associated with future ownership of a specific ongoing corporate
      organization. In order to achieve these goals, projection of net cash flows
      are
      made for a specific period of time, usually five (5) to eight (8) years.
      Usually, the projected number of years equates to the length of time it would
      take for an organization to create, from the ground up, a comparable on-going
      corporate entity that is competitive with the established organization. The
      projection requires an income forecast, usually by category of income (type
      of
      product, number of products sold, length of existing contracts and type of
      sales
      organization utilized), and expense forecast, based upon the normal expected
      future costs (allowing for inflation) to operate the organization and an
      investment forecast for expenditures on new equipment, if any, and a cost of
      capital forecast.

    

    This
      last
      forecast takes into consideration the total capital structure of the
      organization, along with the inherent risks that inure to the specific
      organization in a specific industry based upon known or reasonably projected
      economic, financial, and legal ramifications as reflected in the discount rate
      chosen. The fair market value of the organization under analysis is then the
      cumulative present value of all future cash flows.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            29.

        

      

    

     

     

    Since
      the
      laws, rules and regulations regarding electronic contract manufacturer
      providers, as reflected in the report herein above are mostly set, they are
      not
      subject to a constant revisions or alterations regarding their operations.
      In
      addition, the general operations of business service organizations are usually
      not effected by most of the ongoing changes in our national legal system,
      including multiple and sometimes conflicting national and state legislation.
      Thus, it would appropriate to utilize this method, as a check or support for
      the
      Comparative Market Method in the valuation of Nexus Custom Electronics, Inc.
      IF
      the organization had earned a profit in the proper periods AND was going to
      remain as a “going concern” in the overall stream of business and commerce.

    

    Since
      data has been presented to the undersigned that a possible corporate foreclosure
      is being considered that would effectively end the ability of the company to
      continue as a going concern, said valuation method will not be utilized herein
      to obtain a Fair Market Forced Liquidation Value for an electronic contract
      manufacturing services type organization. Under a forced corporate foreclosure
      accurate or moderately accurate cash flow projections usually cannot be prepared
      or supported and are basically not relied upon for an organization in a
      potential foreclosure position. Thus, the potential foreclosure will not allow
      for accurate future projections and use of the Discounted Cash Flow
      Method.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            30.

        

      

    

     

    

    Liquidation
      Approach

    

    A
      Liquidation Value assumes that the company will not remain a going concern
      and
      the owner will sell its assets piecemeal. Usually, a liquidation sale will
      loose
      some or all of the value reflected by economic goodwill. The assessment of
      liquidation value must consider the time required to sell assets in an orderly
      fashion or the discounts associated with a fire sale (or both). The valuation
      should consider costs of liquidating assets, such as commissions, shrinkage
      of
      inventory and receivables, and ongoing operating expenses. 

    

    

    VALUE
      IN EXCHANGE, IN AN ORDERLY DISPOSITION

    

    Under
      this premise, it is assumed subject assets are sold piecemeal, and not as part
      of a mass assemblage. It is assumed the assets are given an adequate level
      of
      exposure in their normal secondary marketplace.

    

    However,
      due to the orderly disposition market transaction assumption, this premise
      does
      not contemplate any contributory value effect of the subject tangible assets
      on
      the intangible assets or of the subject intangible assets on the tangible
      assets.

     

     

    VALUE
      IN EXCHANGE, IN A FORCED LIQUIDATION

    

    Under
      this premise, it is assumed the subject assets are sold piecemeal, and not
      as
      part of a mass assemblage. It is also assumed the assets are not allowed a
      normal level of exposure of their normal secondary market. Rather, the assets
      are permitted an abbreviated level of exposure to a market of the highest
      bidders present (who may or may not represent the collective demand side
      marketplace for such assets), such as in an auction environment.

    

    Due
      to
      the forced liquidation market transaction assumption, this premise assumes
      no
      contributory value (or other economic interrelationships) from the subject
      tangible assets to the subject intangible assets, or vice versa.

    

    Hence,
      liquidation value is usually determined using one of the following premises
      - a)
      Orderly liquidation that includes selling the assets over a reasonable time
      period to get the highest price for each; or b) Forced Liquidation that includes
      selling the assets as quickly as possible, such as at an auction. (Forced
      liquidation value is sometimes called auction value.)

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            31.

        

      

    

     

     

    Liquidation
      value considers not only the proceeds from selling the assts, but also the
      selling costs, the costs to hold the assets until their sale and other expenses.
      Typically, although not always, when valuing an interest with absolute control,
      a company's net liquidation value represents the lower limit of value. The
      Liquidation method should be considered when:

    

    a.
      The
      company is in liquidation such as Chapter 7 bankruptcy.

    

    b.
      The
      company's current and projected net cash flows from continuing operations are
      low compared to net assets, and the company is worth more dead than
      alive.
      Then,
      the company's liquidation value might be its maximum potential value and the
      only usable indicator of value to the owners.

    

    c.
      The
      company's current and projected cash flows from continuing operations are low
      enough that its liquidation value is almost equal to its going concern value.
      Some owners may prefer liquidation, while others may prefer continued operation.
      Then, both the liquidation value method and going-concern methods may be
      considered in valuing the business.

    

    d.
      The
      company is a multi-division or multi-subsidiary holding company where some
      divisions are profitable and others are not.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            32.

        

      

    

     

    

    NEXUS
      CORPORATE DEBT AND OBLIGATIONS - as
      of October 31, 2007

    

    

    

    The
      undersigned has been informed by Management and independent Corporate Counsel
      that the following table below represents the correct and most accurate listing
      (rounded to the nearest dollar) of principal and interest outstanding under
      the
      Assigned Documents as of October 31, 2007:

    

    

      
        	
                Total
                  Debentures (Principals)

              	 	
                $

              	
                8,907,620

              	 
	 	 	 	 	 
	
                Total
                  Debentures (Interest)

              	 	 	
                556,515

              	 
	 	 	 	 	 
	
                Term
                  Note (Principal)

              	 	 	
                520,000

              	 
	 	 	 	 	 
	
                Term
                  Note (Interest)

              	 	 	
                16,369

              	 
	 	 	 	 	 
	
                Revolving
                  Note (Principal)

              	 	 	
                1,207,342

              	 
	 	 	 	 	 
	
                Revolving
                  Note (Interest)

              	 	 	
                37,330

              	 
	 	 	 	 	 
	
                Total

              	 	
                $

              	
                11,245,
                  176

              	 

      

    
 

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            33.

        

      

    

     

    

    NEXUS
      CUSTOM ELECTRONICS, INC. - INITIAL APPRAISAL VALUATION

    

    

    Base
      upon
      data and appraisal reports supplied the undersigned, as of October 29, 2007
      the
      following is a listing of the Nexus Custom Electronics, Inc. Corporate
      Collateral. 

     

    

      
        	 	 	
                 Appraised
                  Value 

              
	 	 	 	 	 
	 	 	 	 	 
	PROPERTY:
                Plant and Equipment	 	 	 	 
	 	 	 	 	 
	
                Brandon
                  Machinery & Equipment (September 2007 appraisal)

              	 	
                $

              	
                896,000

              	 
	
                Woburn
                  Machinery & Equipment (September 2007 appraisal)

              	 	 	
                704,000

              	 
	
                Brandon
                  Land & Building (November 2006 appraisal)

              	 	 	
                1,200,000

              	 
	 	 	 	 	 
	
                 Total
                  Property - Plant and Equipment

              	 	
                $

              	
                2,800,000

              	 
	 	 	 	 	 
	
                Accounts
                  Receivable (Net of Contras)

              	 	
                $

              	
                870,211

              	 

      

     

    Inventory

    

      
        	
                Brandon
                  Inventory:

              	 	 	
                Active

              	 	
                $

              	
                1,480,822

              	 
	
                 

              	 	 	
                Slow
                  Moving

              	 	 	
                1,540,277

              	 
	
                 

              	 	 	
                Total

              	 	
                $

              	
                3,021,099

              	 

      

    

    

      
        	
                Woburn
                  Inventory Total

              	 	
                $

              	
                683,989

              	 
	 	 	 	 	 
	
                 Total
                  Inventory

              	 	
                $

              	
                3,705,088

              	 
	 	 	 	 	 
	
                Total
                  of Assets Excluding Cash

              	 	
                $

              	
                7,375,299

              	 

      

    

     

    

    Combining
      all of the above data into a succinct economic scenario affords the undersigned
      the opportunity to appropriately determine a Fair Market Forced Liquidation
      Value of the Nexus Custom Electronics Corporation as of October 31,
      2007.

    

    In
      order
      to determine this valuation in an orderly and scholarly manner, each of the
      items above will be recalculated into a Forced Liquidation Value and then
      retotalled in order to present a summarized forced liquidation value of the
      organization.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
         
          
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            34.

        

      

    

     

     

    Machinery
      and Equipment

    

    Corporate
      machinery and equipment have been independently appraised via a desktop orderly
      liquidation appraisal report dated September 4, 2007, with an effective date
      of
      August 31, 2007. In that report "leased equipment" was included. This leased
      equipment constitutes approximately $395,000 of the $1,600,000 of machinery
      and
      equipment. Presuming that those who foreclosed on the existing Nexus Custom
      Electronics, Inc. ongoing corporation do not assume or honor the existing leased
      equipment obligations, then the value of the machinery and equipment per the
      orderly liquidation value appraisal becomes $1,205,000.

    

    In
      as
      much as the appraisal was denoted as in orderly liquidation valuation, wherein
      the appraiser Paul J. Finn of Joseph Finn Co., Inc. of Newton, Massachusetts
      defines Orderly Liquidation Value as:

    

    Orderly
      Liquidation Value
      as a
      professional opinion of the estimated most probable price expressed in terms
      of
      currency which the subject equipment could typically realize at a privately
      negotiated sale, properly advertised and professionally managed, by a seller
      obligated to sell over an extended period of time, usually within six to twelve
      months, as of the effective date of the appraisal report. Further, the ability
      of the asset group to draw sufficient prospective buyers to insure competitive
      offers is considered. All assets are to be sold on a piecemeal basis "as is"
      with purchases responsible for removal of assets at their own risk and expense.
      Any deletions or additions to the total assets appraised could change the
      psychological and/or monetary appeal necessary to gain the value
      indicated.

    

    

    As
      clearly noted, the value is for an orderly liquidation as opposed to a forced
      liquidation value. Translating an orderly liquidation value into a forced
      liquidation value, the undersigned denoted that significant selling and
      administrative expenses need to be deducted, as well as a significant discount
      that buyers would place on the value of the assets noting that the liquidation
      was forced and needs to be concluded in a timely manner. Thus, it is the opinion
      of the undersigned that the Fair Market Forced Liquidation value of the
      machinery and equipment excluding
      the
      leased equipment
      is
      valued at $785,000.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
         
          
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            35.

        

      

    

     

    
 

    Corporate
      Real Estate

    

    Corporate
      real estate has been independently appraised via a summary limited appraisal
      report dated November 21, 2006, with an effective date of November 17, 2006.
      In
      that report, the appraisal is denoted as the Fair Market Value of the fee simple
      title of the real estate property located at 402 Prospect Street in Brandon,
      Vermont. The appraised property consists of a one-story steel-framed building
      of
      approximately 30,418 square feet located upon a 5.7 acre parcel of
      land.

    

    In
      as
      much as the real estate appraisal was a fair market value of the fee simple
      title of the real estate and allowing normal market exposure of up to one year,
      the appraiser did not take into account the components and forces for a Fair
      Market Forced Liquidation Value of the real estate. Translating a fair market
      value real estate appraiser report into a forced liquidation value, the
      undersigned denotes that significant selling and administrative expenses need
      to
      be deducted, as well as a significant discount that buyers would place on the
      value of the real estate noting that the liquidation was forced and the property
      needs to be sold and concluded in a timely manner. Thus, it is the opinion
      of
      the undersigned the Fair Market Forced Liquidation value of the real estate
      is
      valued at $840,000,
      under
      a forced liquidation of the property.

    

    

    CORPORATE
      INVENTORY (REGULAR INVENTORY)

    

    Corporate
      inventory (both Brandon inventory and Woburn inventory) is carried on the
      corporate books according to GAAP policies, practices, and procedures. Such
      GAAP
      policies, practices, and procedures do not take into account a forced
      liquidation.

    

    

    As
      clearly noted, the value for the inventory is accounted for under GAAP as
      opposed to the economics and finance of a forced liquidation value. Translating
      regular / standard inventory accounted for under GAAP value into a forced
      liquidation value, the undersigned denotes that significant selling and
      administrative expenses need to be deducted, as well as a significant discount
      that buyers would place on the value of the inventory noting that the
      liquidation was forced and needs to be concluded in a timely manner. Thus,
      it is
      the opinion of the undersigned that the Fair Market Forced Liquidation value
      of
      the regular inventory (also referred to as active inventory) under a forced
      liquidation should be valued at $1,515,000.

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
         
          
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            36.

        

      

    

     

     

    CORPORATE
      INVENTORY (SLOW MOVING / OBSOLETE)

    

    Corporate
      inventory (both Brandon inventory and Woburn inventory) as noted above, is
      carried on the corporate books according to GAAP policies, practices, and
      procedures. Such GAAP policies, practices, and procedures do not take into
      account a combination of obsolescence and / or a forced
      liquidation.

    

    As
      clearly noted, the value for the inventory is accounted for under GAAP as
      opposed to the economics and finance of a combination of obsolescence and /
      or a
      forced liquidation. Translating obsolete / slow moving inventory accounted
      for
      under GAAP value into a forced liquidation value, the undersigned denotes that
      significant selling and administrative expenses need to be deducted, as well
      as
      a significant discount that buyers would place on the value of the obsolete
      /
      slow moving inventory noting that the liquidation was forced and needs to be
      concluded in a timely manner. 

    

    Thus,
      it
      is the opinion of the undersigned that the Fair Market Forced Liquidation value
      of the obsolete / slow moving inventory (also referred to as "written down"
      or
      "written off" inventory) under a forced liquidation should be valued at
$150,000.

    

    

    CORPORATE
      ACCOUNTS RECEIVABLE 

    

    Corporate
      accounts receivable (both Brandon inventory and Woburn inventory) are carried
      on
      the corporate books according to GAAP policies, practices, and procedures.
      Such
      GAAP policies, practices, and procedures do not take into account a forced
      corporate liquidation. However, it is well documented that when ongoing
      organizations are foreclosed upon and / or cease to operate, a significant
      percentage of organizations that owe the foreclosed organization equitable
      funds
      either fail to pay, settle at a reduced rate, or otherwise negotiate a discount.
      

    

    As
      clearly noted, the value for accounts receivable is accounted for under GAAP
      as
      opposed to the economics and finance of a forced liquidation. Translating
      accounts receivable accounted for under GAAP value into a forced liquidation
      value, the undersigned denotes that significant recordkeeping and administrative
      expenses need to be deducted, as well as a discount that would accumulate based
      upon those who owe funds who either fail to pay, pay significantly late, and
      those who negotiate a settlement for their account, based upon the fact that
      the
      corporation was liquidated via a forced liquidation and needs to be concluded
      in
      a timely manner. 

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
         
          
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            37.

        

      

    

     

     

    Thus,
      it
      is the opinion of the undersigned that the Fair Market Forced Liquidation value
      of the accounts receivable (also referred to as "written down" or "written
      off"
      accounts receivable inventory) under a forced liquidation should be valued
      at
$695,000.

    

    

    OTHER
      CORPORATE ASSETS

    

    Based
      upon information provided the undersigned, other than cash, Nexus Custom
      Electronics, Inc. does not own any significant assets not accounted for in
      this
      analysis. An entry denoted as "Identifiable intangibles" contains a variety
      of
      items, but does not contain any specific patents, trademarks, or other
      significant income producing items. Without the ongoing economic fiber of the
      existing corporation, and without specific documented legal protection; the
      "Identifiable intangibles" would have a greatly diminished value. 

    

    While
      the
      "Identifiable Intangibles" are accounted for under GAAP, this accounting does
      not take into account the economics and finances of a forced liquidation.
      Translating certain "Intangibles" accounted for under GAAP value into a forced
      liquidation value, without an ongoing master corporate entity to hold these
      "intangibles" into an agglomerated entity, the undersigned denotes that a
      significant discount should accrue to these items, as buyers, if any could
      be
      located, would place on the value of the "intangibles" noting that the
      liquidation was forced and needs to be concluded in a timely manner.

    

    Thus,
      it
      is the opinion of the undersigned that the Fair Market Forced Liquidation value
      of the "Identifiable Intangibles" under a forced liquidation should be valued
      at
$120,000.

     

    
Lehrer
      Financial Economic Advisory
      ServiceS /
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
         
          
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            38.

        

      

    

    

    

    CORPORATE
      FINANCIAL SUPPORT

    

    In
      addition and in support for the liquidation valuation approach, the undersigned
      examined the Income Statement for Nexus Custom Electronics, Inc. for the period
      July 1, 2007 to September 30, 2007, as well as other prior years income
      documentation. Simply stated, the organization has almost consistently failed
      to
      produce a profit and without significant outside financing will soon become
      totally insolvent and unable to meet its financial obligations. As of September
      30, 2007, the corporation, in addition had a negative working capital ratio
      with
      total current liabilities exceeding total current assets by $2.0 million. Thus,
      an overall corporate financial analysis review denotes and supports that the
      liquidation valuation method is appropriate at this time.

    

    Lastly,
      note is made of the fact that as of September 30, 2007, the corporation had
      a
      negative total equity of $7,521,000. This when combined with a negative working
      capital ratio and the inability to produce an ongoing profit, not only supports
      the liquidation valuation method, but supports the significant probability
      that
      the corporation would be unable to obtain independent third party financing
      in
      order to continue to carry out its functions and remain an ongoing business
      concern.

    

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            39.

        

      

    

     

     

    NEXUS
      CUSTOM ELECTRONICS, INC. - FORCED LIQUIDATION VALUATION

    

    Based
      upon data and appraisal reports supplied the undersigned, as of October 29,
      2007
      the following detailed the Force Liquidation Valuation of the Nexus Custom
      Electronics, Inc. 

     

    

      
        	 	 	
                Liquidation
                  Value

              	 
	 	 	 	 
	 	 	 	 
	
                PROPERTY:
                  Plant and Equipment

              	 	 	 
	 	 	 	 
	
                Brandon
                  and Woburn Machinery & Equipment

              	 	
                $

              	
                785,000

              	 
	
                Brandon
                  Land and Building

              	 	 	
                840,000

              	 
	 	 	 	 	 
	
                Total
                  Property - Plant and Equipment

              	 	
                $

              	
                1,625,000

              	 
	 	 	 	 	 
	
                Accounts
                  Receivable (Net of Contras)

              	 	
                $

              	
                695,000

              	 
	 	 	 	 	 
	
                Inventory

              	 	 	 	 
	 	 	 	 	 
	
                Brandon
                  and Woburn (Active
                  Inventory)            
                  $1,515,000

              	 	
                 

              	
                 

              	 
	
                (Slow
                  Moving Inventory) 
                     150,000

              	 	 	
                 

              	 
	 	 	 	 	 
	
                Total
                  Inventory

              	 	
                $

              	
                1,665,000

              	 
	 	 	 	 	 
	
                Identifiable
                  Intangibles

              	 	
                $

              	
                120,000

              	 
	 	 	 	 	 
	
                Total
                  of Assets Excluding Cash (Rounded)

              	 	
                $

              	
                4.100,000

              	 
	
                (Forced
                  Liquidation Valuation)

              	 	 	 	 

      

    

    The
      above
      total of $4,100,000 appropriately represents the Fair Market Forced Liquidation
      Value of the Nexus Custom Electronics Corporation as of October 31, 2007, on
      a
      category by category basis, aside from cash that might be held by the
      organization.

    

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            40.

        

      

    

    

    

    Forced
      Liquidation Value in Relation to Corporate Debt

    

    Special
      note is made of the fact that when comparing the Fair Market Force Liquidation
      value of the organization to the TOTAL debt under the Assignment Documents
      as of
      October 31, 2007, the Assigned Debt of the organization is approximately
      $7,145,000 greater
      than the
      Liquidation Value of Nexus Custom Electronics, Inc., as of October 31,
      2007.

    

    

     

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del
      Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          RE:
            In the Matter of Nexus Custom Electronics - Fair Market Forced Liquidation
            Valuation continued
            ...../.....

           

          Page
            41.

        

      

    

    

    RECONCILIATION
      AND FINAL VALUE ESTIMATES

    

    CORPORATE
      FORCED LIQUIDATION VALUATION

    

    Nexus
      Custom Electronics, Inc.

    

    Fair
      Market Forced Liquidation Valuation

    

    

    

    Four
      (4)
      separate approaches to value (comparative market approach, discounted net cash
      flow, excess earnings approach and liquidation approach) were potentially
      utilized in estimating the Fair Market Forced Liquidation Valuation of - Nexus
      Custom Electronics, Inc. that is under analysis. The following is a brief
      summary of each method and the value indication provided by the analysis of
      each.

    

    

      
        	 	 	
                Fair
                  Market Values

              	 
	
                Valuation
                  Approach

              	 	
                ($
                  Dollars)

              	 
	 	 	 	 
	
                Comparative
                  Market Approach

              	 	 	
                N/A

              	 
	 	 	 	 	 
	
                Discounted
                  Net Cash Flow

              	 	 	
                N/A

              	 
	 	 	 	 	 
	
                Excess
                  Earnings Approach

              	 	 	
                N/A

              	 
	 	 	 	 	 
	
                Liquidation
                  Approach - Forced Liquidation 

              	 	
                $

              	
                4,100,000

              	 
	 	 	 	 	 
	
                Final
                  Reconciled Force Liquidation Valuation - October 31,
                  2007

              	 	 	
                -$4,100,000

              	 
	
                 

              	 	
                 (United
                  States
                  Dollars) 

              

      

    

    
      	 	
              The
                final corporate valuation amount noted above is based upon the valuation
                methods utilized in this valuation report. The factors that are brought
                to
                bear in determining the final valuation are - quantity and quality
                of the
                individual information available, the experience, judgment and education
                of the appraiser, Dr. Kenneth Eugene Lehrer, and the degree of confidence
                placed on each valuation technique by the appraiser in regard to
                the
                specific organization under analysis.

            	 
	 	 	 
	 	 	 
	 	
              Valuation
                by:  _______________________________

              Dr.
                Kenneth Eugene Lehrer

              November,
                2007

            	 

    

    

     

    Lehrer
      Financial Economic Advisory ServiceS
/
      5555 Del Monte Dr. - St. 802 / Houston, Tx.
      77056 /
      (713) 972-7912; FAX (713) 964-0444December
      10, 2007

     

    Dave
      Dallam

    907
      Hayes
      Avenue

    Oak
      Park,
      IL 60302

     

    Dear
      David:

     

    It
      has
      been a pleasure meeting with you and discussing the opportunities currently
      available with Synergetics. The position we currently have available is
      Executive Vice President of Sales and Marketing. I believe you would be an
      asset
      to our Company and would be able to help us to continue to grow at the pace
      Synergetics has set for itself. 

    

    After
      careful consideration of your compensation requirements, I would like to offer
      the following: 

    

    
      	 	
              ·

            	
              Compensation
                plan as attached 

            

    

    
      	 	
              ·

            	
              Bonus
                plan as attached

            

    

    
      	 	
              ·

            	
              4
                weeks vacation

            

    

    
      	 	
              ·

            	
              Health,
                Life and Dental Insurance per our Company Plans

            

    

    
      	 	
              ·

            	
              Decision
                point at one year about movement from Chicago to St.
                Louis

            

    

    

    
      	 	
              1)

            	
              “Rabbi
                Trust”: 

            

    

    
      	 	
              2)

            	
              Change
                of Control:
                We
                will grant you a severance package of 1 year’s salary in the event that
                there is a change in control event at Synergetics and Mr. Hank Smith
                would
                end up in your chain of command. 

            

    

    
      	 	
              3)

            	
              Average
                % to Objective:
                Over the last 12 months, please find attached schedule A. Schedule
                A will
                give our monthly performance to objective as an overall company.
                

            

    

    
      	 	
              4)

            	
              Comp
                Plan:
                Per your suggestion, a factor based on the company’s performance to a GP%
                number has been added. Schedule B outlines this change. Please call
                me if
                you need further explanation. 

            

    

    
      	 	
              5)

            	
              St.
                Louis:
                I
                believe that I may need you in St. Louis more at first than you have
                proposed. I believe that we have some mission and corporate strategy
                work
                to do. I therefore propose that attached schedule C as approximate
                times
                for St. Louis office attendance. Please let me know your thoughts.
                

            

    

    

    During
      your visits to St. Louis, the company will reimburse your residency costs at
      our
      next-door Staybridge Suites, for the estimated one-year period that it will
      take
      for you to establish residency in St. Louis. 

    

    
      	 	
              6)

            	
              Our
                expense
                procedures
                are attached as requested. 

            

    

    

    Sincerely,

    

    

    Gregg
      D.
      Scheller

    CEO
      and
      President

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