Document:

EXHIBIT 10.28

June 27, 2007 Amendment and Allonge to the Convertible Line of Credit Note
dated as of
 June 8, 2006 from Brightec, Inc., f/k/a Advanced Lumitech, Inc.
to Ross/Fialkow Capital
 Partners LLP, Trustee of Brightec Capital
Trust

This Amendment and Allonge is made as of this 27 day of June, 2007 to a certain
$750,000 Convertible Credit Note dated as of June 8, 2006 (the “Note”)
from Brightec, Inc., f/k/a Advanced, Lumitech, Inc., a Nevada corporation with a
place of business at 8C Pleasant St S, Natick, Massachusetts 01760 (the
“Borrower”) to Ross/Fialkow Capital Partners, LLP, Trustee of Brightec
Capital Trust, a Massachusetts nominee trust established under Declaration of
Trust dated June 8, 2006 and with a place of business at 38 Glen Avenue, Newton,
Massachusetts 02459 (the “Lender”)

For good and valuable consideration, the receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

	
  
 
  	
  
1.
  	
  

The Note shall be and is hereby amended to reflect the Lender’s agreement
to extend the Maturity Date of Note July 15, 2007 to December 31, 2007 by
deleting the phrase “on or before the date which is twelve (12) months from
the date hereof (“Maturity Date”).
 
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
2.
  	
  

The Borrower certifies that there are no defenses, offsets or counterclaims as
of the date hereof to its obligations under the Note. The Borrower further
agrees and acknowledges that the Note as amended herby shall continue to be
secured pursuant to the Loan Agreement and that the Note as so amended shall
remain enforceable against the Borrower in accordance with its terms.

	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
3.
  	
  

This Amendment and Allonge shall be executed in two or more original
counterparts, and an original counterpart shall be appended to the Note. Except
as stated herein and/or amended hereby, all other terms, conditions and
provisions of the Note shall remain in full force and effect.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
4.
  	
  

A renewal fee of $5,000 will be charged to the Borrower for the extension of the
Maturity Date.
 

EXECUTED as a sealed instrument as of the date first above written.

	
  
 
  	
  
BRIGHTEC,   INC.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Patrick   Planche
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Patrick   Planche
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
ROSS/FIALKOW   PARTNERS LLP,
  
	
  
 
  	
  
TRUSTEE OF   BRIGHTEC CAPITAL TRUST
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Jeffrey   P. Ross
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Jeffrey P.   Ross, Manager
  

        
        

        
        

GUARANTOR CONSENT AND RATIFICATION OF GUARANTY

The undersigned Guarantor hereby this 27 day of June, 2007 consents to the
aforesaid Amendment and ratifies, reaffirms and confirms its unlimited Guaranty
of the payment and performance of all obligations of Brightec, Inc., to
Ross/Fialkow Capital Partners LLP, Trustee of Brightec Capital Trust whether now
existing or hereafter arising, including all Obligations under the Loan
Agreement and Note as hereby amended, and further confirms that all collateral
granted to secure its Guaranty shall continue to secure all such
Obligations.

	
   
  	
  BRIGHTEC,   S.A.
  
	
   
  	
   
  
	
   
  	
   
  
	
   
  	
  By:
  	
  /s/ Patrick   Planche
  
	
   
  	
   
  	
  

  
	
   
  	
   
  	
  Patrick   Planche, President and DirectorStock Purchase Agr

    Exhibit
      10.41

    

      STOCK
        PURCHASE AGREEMENT

      

      

      THIS
        STOCK PURCHASE AGREEMENT is entered into as of June 29, 2007, by and among
        BPO
        Management Services, Inc., a Delaware corporation (the “Buyer”),
        Human
        Resource Micro-Systems, Inc., a California corporation (the “Target”
or
        the
“Company”),
        and
        Donald C. Helt and Bridget B. Helt, as trustees of the Donald C. and Bridget
        B.
        Helt Revocable Trust dated April 24, 2003 (collectively, the “Sellers”).
        The
        Company, the Buyer and the Sellers are referred to collectively herein as
        the
“Parties.”
The
        Parties hereto agree as follows:

      

      RECITALS

      

      
        	 	
                A.

              	
                The
                  Sellers own all of the outstanding capital stock of the Target.
                  

              

      

      

      
        	 	
                B.

              	
                Subject
                  to the terms and conditions of this Agreement, the Buyer will purchase
                  from the Sellers, and the Sellers will sell to the Buyer, all of
                  the
                  outstanding capital stock of the Target in return for cash and
                  the
                  issuance of shares of Buyer Stock, as defined
                  below.

              

      

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual promises herein
        made,
        and in consideration of the representations, warranties, and covenants herein
        contained, the Parties agree as follows.

      

      1. Definitions.

      

      “Accredited
        Investor”
has
        the
        meaning set forth in Regulation D promulgated under the Securities
        Act.

      

      “Adverse
        Consequences”
means
        all actions, suits, proceedings, hearings, investigations, charges, complaints,
        claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
        dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
        obligations, Taxes, liens, losses, expenses, and fees, including court costs
        and
        reasonable attorneys’ fees and expenses
        provided, however,
        that in
        no event shall Adverse Consequences mean or include consequential, indirect,
        special or punitive damages.

      

      “Affiliate”
has
        the
        meaning set forth in Rule 12b-2 of the regulations promulgated under the
        Securities Exchange Act.

      

      “Buyer”
has
        the
        meaning set forth in the preface above.

      

      “Buyer
        Stock”
means
        the stock issued by the Buyer as provided for in Section 2(b)
        herein.

      

      “Closing”
has
        the
        meaning set forth in Section 2(c) below.

      

      “Closing
        Date”
has
        the
        meaning set forth in Section 2(c) below.

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      
 

      “Code”
means
        the Internal Revenue Code of 1986, as amended.

      

      “Confidential
        Information”
means
        any proprietary information concerning the businesses and affairs of the
        Target
        that is not already generally available to the public or in the human resources
        information systems industry; for clarification, “Confidential Information”
shall not include “know-how” that is useful in the human resources information
        systems industry but either
        (i) is
        not
        proprietary to Target or (ii)
        does
        not
contain
        any
        confidential information of Target.

      

      “Consulting
        Agreement”
means
        the Consulting Agreement in the form attached hereto as Exhibit
        A.

      

      “Disclosure
        Schedule”
        means
        the
        disclosure schedule delivered by the Sellers to the Buyer on the date
        hereof.

      

      “Employee
        Benefit Plan”
means
        any “employee benefit plan” (as such term is defined in ERISA §3(3)) and any
        other material employee benefit plan, program or arrangement of any
        kind.

      

      “Employee
        Pension Benefit Plan”
has
        the
        meaning set forth in ERISA §3(2).

      

      “Employee
        Welfare Benefit Plan”
has
        the
        meaning set forth in ERISA §3(1).

      

      “Environmental,
        Health, and Safety Requirements”
shall
        mean all federal, state, local and foreign statutes, regulations, ordinances
        and
        other provisions having the force or effect of law, all judicial and
        administrative orders and determinations, all contractual obligations and
        all
        common law concerning public health and safety, worker health and safety,
        and
        pollution or protection of the environment, including without limitation
        all
        those relating to the presence, use, production, generation, handling,
        transportation, treatment, storage, disposal, distribution, labeling, testing,
        processing, discharge, release, threatened release, control, or cleanup of
        any
        hazardous materials, substances or wastes, chemical substances or mixtures,
        pesticides, pollutants, contaminants, toxic chemicals, petroleum products
        or
        byproducts, asbestos, polychlorinated biphenyls, noise or radiation, each
        as
        amended and as now or hereafter in effect.

       

      “Escrow
        Agreement”
means
        the Escrow Agreement in the form attached hereto as Exhibit
        C.

      

      “Excluded
        Loans”
means
        all loans owed to Sellers and any former shareholders of Target, all accrued
        bonuses and shareholder distributions payable to Sellers and all other
        obligations owed to any Sellers or any other shareholders of Target (but
        not
        including standard payroll payable in the Ordinary Course of Business).

      

      “Financial
        Statements”
        has the
        meaning set forth in Section 4(d) below.

      

      “Indemnified
        Party”
has
        the
        meaning set forth in Section 8(e) below.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
 

      “Indemnifying
        Party”
has
        the
        meaning set forth in Section 8(e) below.

      

      “Intellectual
        Property”
means
        (a) all inventions (whether patentable or unpatentable and whether or not
        reduced to practice), all improvements thereto, and all patents, patent
        applications, and patent disclosures, together with all reissuances,
        continuations, continuations-in-part, revisions, extensions, and reexaminations
        thereof, (b) all trademarks, service marks, trade dress, logos, trade names,
        and
        corporate names, together with all translations, adaptations, derivations,
        and
        combinations thereof and including all goodwill associated therewith, and
        all
        applications, registrations, and renewals in connection therewith, (c) all
        copyrightable works, all copyrights, and all applications, registrations,
        and
        renewals in connection therewith, (d) all mask works and all applications,
        registrations, and renewals in connection therewith, (e) all trade secrets
        and
        confidential business information (including ideas, research and development,
        know-how, formulas, compositions, manufacturing and production processes
        and
        techniques, technical data, designs, drawings, specifications, customer and
        supplier lists, pricing and cost information, and business and marketing
        plans
        and proposals), (f) all computer software, including, without limitation,
        all
        source code and data and related documentation, (g) all other proprietary
        rights, and (h) all copies and tangible embodiments thereof (in whatever
        form or
        medium).

      

      “Knowledge”
means
        actual knowledge.

      

      “Liability”
means
        any liability (whether known or unknown, whether asserted or unasserted,
        whether
        absolute or contingent, whether accrued or unaccrued, whether liquidated
        or
        unliquidated, and whether due or to become due), including any liability
        for
        Taxes. 

      

      “Material
        Adverse Effect”
means,
        with respect to the Target, a material adverse effect on the business, assets
        (including intangible assets), financial condition, or results of operations
        of
        the Target that is in excess of $25,000; provided, however, that “Material
        Adverse Effect” shall exclude the effects of (i) economic factors affecting the
        economy as a whole or the enterprise software industry generally, (ii) the
        announcement or pendency of the transactions contemplated by this Agreement,
        and
        (iii) Target’s and Sellers’ compliance with the terms of, or taking any action
        contemplated or permitted by, this Agreement.

      

      “Most
        Recent Balance Sheet”
means
        the balance sheet contained within the Most Recent Financial
        Statements.

      

      “Most
        Recent Financial Statements”
has
        the
        meaning set forth in Section 4(d) below.

      

      “Most
        Recent Fiscal Month End”
means
        May
        31,
        2007.

      

      “Ordinary
        Course of Business”
means
        the ordinary course of the Company’s business consistent with the Company’s past
        custom and practice.

      

      “Party”
has
        the
        meaning set forth in the preface above.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
 

      “Person”
means
        an individual, a partnership, a corporation, an association, a joint stock
        company, a trust, a joint venture, an unincorporated organization, or a
        governmental entity (or any department, agency, or political subdivision
        thereof).

      

      “Prohibited
        Transaction”
        has the
        meaning set forth in ERISA §406 and Code §4975.

      

      “Purchase
        Price”
has
        the
        meaning set forth in Section 2(b) below.

      

      “Registration
        Rights Agreement”
        means
        the Registration Rights Agreement in the form attached hereto as Exhibit
        B.
        

      

      “Reportable
        Event”
        has the
        meaning set forth in ERISA §4043.

      

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

      

      “Securities
        Exchange Act”
means
        the Securities Exchange Act of 1934, as amended.

      

      “Security
        Interest”
means
        any mortgage, pledge, lien, encumbrance, charge, or other security interest,
        other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens for Taxes
        not yet due and payable or for Taxes that the taxpayer is contesting in good
        faith through appropriate proceedings, (c) purchase money liens and liens
        securing rental payments under capital lease arrangements, and (d) other
        liens
        arising in the Ordinary Course of Business and not incurred in connection
        with
        the borrowing of money.

      

      “Seller”
or
        “Sellers”
has
        the
        meaning set forth in the preface above.

      

      “Target”
has
        the
        meaning set forth in the preface above.

      

      “Target
        Shares”
means
        the shares of the common stock of the Target.

      

      “Tax”
means
        any federal, state, provincial, local, or foreign income, gross receipts,
        license, payroll, employment, excise, severance, stamp, occupation, premium,
        windfall profits, environmental (including taxes under Code §59A), customs
        duties, capital stock, franchise, profits, withholding, social security (or
        similar), unemployment, disability, real property, personal property, sales,
        use, transfer, registration, value added, alternative or add-on minimum,
        estimated, or other tax of any kind whatsoever, including any interest, penalty,
        or addition thereto, whether disputed or not.

      

      “Tax
        Return”
means
        any return, declaration, report, claim for refund, or information return
        or
        statement relating to Taxes, including any schedule or attachment thereto,
        and
        including any amendment thereof.

      

      2. Purchase
        and Sale of Target Shares.

      

      (a) Basic
        Transaction.
        On and
        subject to the terms and conditions of this Agreement, the Buyer agrees to
        purchase from each of the Sellers, and each of the Sellers agrees to sell
        to the
        Buyer, all of the Target Shares at the Closing, for the consideration specified
        below in this Section 2.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      
 

      (b) Purchase
        Price.
        The
        Buyer agrees to pay to the Sellers the following consideration for the sale
        of
        the Target Shares (the “Purchase
        Price”):
        (i)
        at the Closing, One Million One Hundred Thousand Dollars ($1,100,000), payable
        by wire transfer or delivery of other immediately available funds (the
“Closing
        Payment”);
        plus
        (ii) Five Hundred Thousand Dollars ($500,000), due and payable by wire transfer
        or delivery of other immediately available funds on the first anniversary
        of the
        Closing (the “Deferred
        Payment”);
        plus
        (iii) at the Closing, issuance of and delivery to Sellers of a stock certificate
        for Three Hundred Eighty-Four Thousand Nine Hundred Sixty-Eight (384,968)
        shares
        of restricted common stock of Buyer (the “Buyer
        Stock”),
        which
        the parties agree have an aggregate value of $400,000, based on the
        volume-weighted average of the OTC Bulletin Board closing bid price of the
        Buyer’s common stock, par value $0.01 per share (the “Common
        Stock”),
        during the ten (10) consecutive trading days immediately preceding, but not
        including, the Closing Date. The
        Purchase Price and the Closing
        Payment
        shall be
        reduced, dollar for dollar, to the extent that the Closing
        Net
        Equity of the Target is less than $80,000,
        and
        the Purchase Price and the Closing Payment shall be increased, dollar for
        dollar, to the extent that the Closing Net Equity of the Target is more than
        $140,000. By way of clarification, notwithstanding any provision in this
        Agreement to the contrary, there shall be no increase in the Purchase Price
        unless the Closing Net Equity of the Target exceeds $140,000 and in such
        case
        such increase shall only be the amount that is in excess of $140,000 (the
        “Limitations”).
        “Closing
        Net Equity” means, determined
        as
        of the
        Closing and using accounting principles consistent with those used in preparing
        the Financial Statements,
        the
        positive difference of
        (i) the
        sum
        of the
        Target’s
        cash
and
        cash
        equivalents,
        accounts
        receivable,
        inventory and prepaid expenses,
        less
(ii) the
        sum of the Target’s
        deferred
        maintenance, accounts payable, accrued payroll and payroll related
        expenses,
        loans
payable
        and
        all
        other liabilities
        except
        for Excluded
        Loans. The determination of Closing Net Equity for purposes of payment of
        the
        Closing Payment at the Closing shall be based upon Target’s estimated balance
        sheet as of the Closing, as delivered to Buyer by Target no later than the
        business day immediately preceding the Closing Date. No later than ten (10)
        days
        after the Closing, the Sellers shall deliver to Buyer a final balance sheet
        of
        Target as of the Closing (the “Updated
        Balance Sheet”).
        If
        the final balance sheet reflects any change in Closing Net Equity, then,
        within
        three (3) business days after the delivery of the final balance sheet, the
        parties shall “true up” the Closing Payment as follows: subject to the
        Limitations described above, if the Closing Net Equity is greater on the
        final
        balance sheet than on the estimated balance sheet, Buyer shall pay the Sellers
        the difference; and if the Closing Net Equity is lower on the final balance
        sheet than on the estimated balance sheet, the Sellers shall pay Buyer the
        difference. 

      

      No
        later
        than the business day prior to the Closing, the Sellers may request in writing
        that, at the Closing, Buyer pay a specific dollar amount from the Closing
        Payment as a contribution to the Target’s capital, in order to facilitate
        Target’s payment of obligations to be satisfied as of the Closing, including
        without limitation Excluded Loans. If the Sellers make such a request, then
        Buyer will make such capital contribution by wire transfer or delivery of
        other
        immediately available funds to Target, and the Closing Payment and the Purchase
        Price shall be reduced in the amount of the capital contribution. 

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      
 

      At
        the
        Closing, Buyer shall deposit cash in the amount of the Deferred Payment into
        an
        interest-bearing escrow (“Escrow”)
        to be
        held by U.S. Bank National Association (“Escrow
        Holder”)
        located in Los Angeles, California. All interest accruing in such Escrow
        shall
        be for the benefit of Buyer. Such Deferred Payment shall be held by Escrow
        Holder until the Deferred Payment is otherwise due hereunder, subject to
        Buyer’s
        right to offset and reduce the Deferred Payment in accordance with Section
        8(h)
        of this Agreement. The Escrow shall be governed by the Escrow Agreement,
        which
        the Buyer and Seller shall execute at the Closing, and the Buyer shall cause
        Escrow Holder to execute at the Closing. 

      

      (c) The
        Closing.
        The
        closing of the transactions contemplated by this Agreement (the “Closing”)
        shall
        take place upon the execution of this Agreement by the parties
        hereto.
        The
        actual date and time of the Closing shall be the “Closing
        Date.”
At
        the
        Closing, the
        Parties shall deliver the items described in Section 7 below.

      

      3. Representations
        and Warranties Concerning the Transaction.

      

      (a) Representations
        and Warranties of the Sellers and the Company.
        Each of
        the Sellers and the Company represent and warrant to the Buyer that the
        statements contained in this Section 3(a) are correct and complete as of
        the date of this Agreement,
        except
        as set forth in the Disclosure Schedule. 

      

      (i) Authorization
        of Transaction.
        The
        Sellers and the Company each have full power and authority, and the Company
        has
        full corporate power and authority, to execute and deliver this Agreement
        and to
        perform his, her or its obligations hereunder. The execution, delivery and
        performance of this Agreement and the Exhibits hereto have been authorized
        by
        all necessary action on behalf of the Company, including its board of directors
        and shareholders,
        and the
        Company has delivered to Buyer reasonably satisfactory evidence
        thereof.
        This
        Agreement and
        the
        Exhibits constitutes
        the
        valid
        and legally binding obligation of the Sellers and the Company, enforceable
        in
        accordance with their terms and conditions, except the enforceability of
        the
        Agreement and the Exhibits (A) may be subject to or limited by bankruptcy,
        insolvency, reorganization, arrangement, moratorium or other similar laws
        relating to or affecting the rights of creditors and (B) is subject to general
        principles of equity (including the possibility of unavailability of specific
        performance or injunctive relief), regardless of whether considered in a
        proceeding in equity or at law. 

      

      (ii) Noncontravention.
        Except
        as disclosed in Section 3(a)(ii) of the Disclosure Schedule, neither the
        execution and the delivery of this Agreement, nor the consummation of the
        transactions contemplated hereby, will (A) violate any constitution, statute,
        regulation, rule, injunction, judgment, order, decree, ruling, charge, or
        other
        restriction of any government, governmental agency, or court to which the
        Sellers or Company is subject or, any provision of the Company’s articles of
        incorporation or bylaws, or (B) conflict with, result in a breach of, constitute
        a default under, result in the acceleration of, create in any party the right
        to
        accelerate, terminate, modify, or cancel, or require any notice under any
        agreement, contract, lease, license, instrument, or other arrangement to
        which
        the Sellers or Company is a party or by which he, she or it is bound or to
        which
        any of his, her or its assets is subject. The Sellers and the Company do
        not
        need to give any notice to, make any filing with, or obtain any authorization,
        consent, or approval of any government or governmental agency in order for
        the
        Parties to consummate the transactions contemplated by this
        Agreement.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      
 

      (iii) Brokers’
        Fees.
        The
        Sellers and the Company have not engaged any broker, finder or similar agent,
        other than Corum Group Ltd. (represented by Ward Carter) (“Corum”),
        in
        connection with the transactions contemplated by this Agreement. The Sellers
        and
        the Company are not obligated to pay any commissions or brokers’ fees, other
        than the transaction fee owing to Corum, in connection with the transactions
        contemplated by this Agreement. The Buyer will not become responsible for
        any
        such fees or commissions based upon the actions or omissions of Sellers,
        the
        Company or their respective representatives.

      

      (iv) Investment.
        The
        Sellers (A) understand that the Buyer Stock has not been and, except as
        contemplated by the Registration Rights Agreement, will not be registered
        under
        the Securities Act, or any other securities laws or under any state or
        provincial securities laws, and are being offered and sold in reliance upon
        federal and state exemptions for transactions not involving any public offering,
        (B) are acquiring the Buyer Stock solely for their own account for investment
        purposes, and not with a view to the distribution thereof, (C) are sophisticated
        investors with knowledge and experience in business and financial matters,
        (D)
        have received certain information concerning the Buyer, and have had the
        opportunity to obtain additional information as desired in order to evaluate
        the
        merits and the risks inherent in holding the Buyer Stock, (E) are able to
        bear
        the economic risk and lack of liquidity inherent in holding the Buyer Stock;
        and
        (F) are Accredited Investors.

      

      (v) Target
        Shares.
        Sellers
        hold of record and own beneficially all of the Target Shares, free and clear
        of
        any restrictions on transfer (other than any restrictions under the Securities
        Act and state securities laws, Taxes, Security Interests, options, warrants,
        purchase rights, contracts, commitments, equities, claims, and demands).
        No
        Seller is a party to any option, warrant, purchase right, or other contract
        or
        commitment that could require such Seller to sell, transfer, or otherwise
        dispose of any capital stock of the Target (other than this Agreement). No
        Seller is a party to any voting trust, proxy, or other agreement or
        understanding with respect to the voting of any capital stock of the
        Target.

      

      (vi) Sellers’
        Investigation and Due Diligence.
        With
        respect to the purchase of the Buyer Stock by the Sellers as provided for
        in
        this Agreement, each of the Sellers:

      

      
        	 	
                (A)

              	
                are
                  knowledgeable and sophisticated investors experienced in business
                  matters;

              

      

       

      
        	 	
                (B)

              	
                are
                  not relying on any oral representation of any Buyer or Buyer’s agents,
                  attorneys or certified public accountants;
                  and

              

      

       

      
        	 	
                (C)

              	
                subject
                  to Buyer’s warranties, representations and indemnity obligations set forth
                  in this Agreement (which shall supersede this Section 3(a)(vi)(C)
                  in the
                  event of any conflict), shall rely upon their own investigation,
                  analysis
                  and due diligence concerning Buyer and Buyer’s business.
                  

              

      

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      
 

      (b) Representations
        and Warranties of the Buyer.
        The
        Buyer represents and warrants to the Sellers that the statements contained
        in
        this Section 3(b) are correct and complete as of the date of this
        Agreement.

      

      (i) Authorization
        of Transaction.
        The
        Buyer has full power and authority (including full corporate power and
        authority) to execute and deliver this Agreement and to perform its obligations
        hereunder. The execution, delivery and performance of this Agreement and
        the
        Exhibits hereto have been authorized by all necessary action on behalf of
        the
        Buyer, including its board of directors,
        and the
        Buyer has delivered to Sellers reasonably satisfactory evidence
        thereof.
        This
        Agreement and the Exhibits constitute the valid and legally binding obligation
        of the Buyer, enforceable in accordance with their terms and conditions.
        Except
        as provided for in the Registration
        Rights
        Agreement, and except as required under the
        Securities Act and applicable
        regulations thereunder, the Buyer need not give any notice to, make any filing
        with, or obtain any authorization, consent, or approval of any government
        or
        governmental agency in order to consummate the transactions contemplated
        by this
        Agreement.

      

      (ii) Noncontravention.
        Neither
        the execution and the delivery of this Agreement, nor the consummation of
        the
        transactions contemplated hereby, will (A) violate any constitution, statute,
        regulation, rule, injunction, judgment, order, decree, ruling, charge, or
        other
        restriction of any government, governmental agency, or court to which the
        Buyer
        is subject or any provision of its certificate of incorporation or bylaws,
        or
        (B) conflict with, result in a breach of, constitute a default under, result
        in
        the acceleration of, create in any party the right to accelerate, terminate,
        modify, or cancel, or require any notice under any agreement, contract, lease,
        license, instrument, or other arrangement to which the Buyer is a party or
        by
        which it is bound or to which any of its assets is subject.

      

      (iii) Brokers’
        Fees.
        The
        Buyer has not engaged any broker, finder or similar agent in connection with
        the
        transactions contemplated by this Agreement. The Buyer is not obligated to
        pay
        any fees or commissions to any broker, finder, or agent with respect to the
        transactions contemplated by this Agreement. Neither Sellers nor the Company
        will become responsible for any such fees or commissions based upon the actions
        or omissions of Buyer or its representatives.

      

      (iv) Investment.
        The
        Buyer (A) understands that the Target Shares have not been, and will not
        be,
        registered under the Securities Act, or under any state securities laws,
        and are
        being offered and sold in reliance upon federal and state exemptions for
        transactions not involving any public offering, (B) is acquiring the Target
        Shares solely for its own account for investment purposes, and not with a
        view
        to the distribution thereof, (C) is a sophisticated investor with knowledge
        and
        experience in business and financial matters, (D) has received certain
        information concerning the Sellers and the Target and has had the opportunity
        to
        obtain additional information as desired in order to evaluate the merits
        and the
        risks inherent in holding the Target Shares, (E) is able to bear the economic
        risk and lack of liquidity inherent in holding the Target Shares and (F)
        is an
        Accredited Investor.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      
 

      (v) Buyer’s
        Investigation and Due Diligence.
        With
        respect to the purchase of the Target Shares by the Buyer as provided for
        in
        this Agreement, Buyer:

      

      (A) is
        a
        knowledgeable and sophisticated investor experienced in business
        matters;

       

      (B) is
        not
        relying on any oral representation of any Seller or any of Sellers’ or Target’s
        agents, attorneys or certified public accountants; and

       

      (C) subject
        to Sellers’ warranties, representations and indemnity obligations set forth in
        this Agreement (which shall supersede this Section 3(b)(v)(C) in the event
        of
        any conflict), shall rely upon its own investigation, analysis and due diligence
        concerning Seller and Seller’s business.

      

      4. Representations
        and Warranties Concerning the Target.
        The
        Sellers and the Company each represent and warrant to the Buyer that the
        statements contained in this Section 4 are correct and complete as of the
        date
        of this Agreement (except as to the statements as to the Updated Balance
        Sheet
        in Section 4(d), which shall be correct and complete as of the date the Updated
        Balance Sheet is delivered), except as set forth in the Disclosure
        Schedule.

      

      (a) Organization,
        Qualification, and Corporate Power.
        The
        Target is a corporation duly organized, validly existing, and in good standing
        under the laws of the State of California. The Target is not qualified to
        conduct business as a foreign corporation under the laws of any other
        jurisdiction.
        There
        is no other jurisdiction in which the Target is required to qualify to conduct
        business as a foreign corporation in which Target’s failure to so qualify has a
        Material Adverse
        Effect
        on the Company. The Target has full corporate power and authority and all
        licenses, permits, and authorizations necessary to carry on the businesses
        in
        which it is engaged and to own and use the properties owned and used by it.
        Section 4(a) of the Disclosure Schedule lists the directors and officers
        of the
        Target. Target has delivered to the Buyer correct and complete copies of
        the
        Target’s articles of incorporation and bylaws (as amended to date). The minute
        books (containing the records of meetings of the shareholders, the board
        of
        directors, and any committees of the board of directors), the stock certificate
        books, and the stock record books of Target are correct and complete in all
        material respects. Target is not in default under or in violation of any
        provision of its articles of incorporation or bylaws.

      

      (b) Capitalization.
        The
        entire authorized capital stock of the Target consists of 50,000 common shares,
        and no Target Shares are held in treasury. There are 50,000 Target Shares
        issued
        and outstanding, all of which are held of record by Sellers, have been duly
        authorized, and are validly issued, fully paid, and nonassessable. There
        are no
        outstanding or authorized options, warrants, purchase rights, subscription
        rights, conversion rights, exchange rights, or other contracts or commitments
        that could require the Target to issue, sell, or otherwise cause to become
        outstanding any of its capital stock. Except as set forth in Section 4(b)
        of the
        Disclosure Schedule, there are no outstanding or authorized stock appreciation,
        phantom stock, profit participation, or similar rights with respect to the
        Target. There are no voting trusts, proxies, or other agreements or
        understandings with respect to the voting of the capital stock of the
        Target.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      
 

      (c) Title
        to Assets.
        The
        Target has good and marketable title to, or a valid leasehold interest in,
        the
        properties and assets used by the Target that are either located on its
        premises, or shown on the Most Recent Balance Sheet or acquired after the
        date
        thereof, free of liens and encumbrances except (i)
        as
        disclosed in Section 4(c) of the Disclosure Schedule, and (ii) properties
        and assets disposed of by the Target in the Ordinary Course of Business since
        the date of the Most Recent Balance Sheet.

      

      (d) Financial
        Statements.
        Section
        4(d) of the Disclosure Schedule contains the following unaudited financial
        statements (collectively, the “Financial
        Statements”):
        (i)
        unaudited balance sheets and statements of income as of and for the fiscal
        years
        ended May 31, 2005 and May 31, 2006 for Target; and (ii) unaudited balance
        sheets and statements of income as of and for the fiscal year ended May 31,
        2007
        for the
        Target (the “Most
        Recent Financial Statements”).
        The
        Financial Statements present fairly the financial condition of the Target
        as of
        such dates and the results of operations of the Target for such periods and
        have
        been prepared using a consistent method of accounting. The Updated Balance
        Sheet
        will, when delivered to the Buyer, present fairly the financial condition
        of the
        Target as of the Closing Date and will have been prepared using a method
        of
        accounting consistent with the method used in preparation of the Financial
        Statements.

      

      (e) Events
        Subsequent to May 31, 2007.
        Except
        as indicated in Section 4(e) of the Disclosure Schedule, to the Sellers’
Knowledge, since May 31, 2007, no event has occurred, or condition has existed,
        that has caused or constituted a Material Adverse Effect. Without limiting
        the
        generality of the foregoing, since that date:

      

      (i) Target
        has not sold, leased, transferred, or assigned any of its assets, tangible
        or
        intangible, other than in the Ordinary Course of Business;

      

      (ii) Target
        has not entered into any agreement, contract, lease, or license (or series
        of
        related agreements, contracts, leases, and licenses) either (A) involving
        more
        than $25,000
        or (B)
        outside the Ordinary Course of Business;

      

      (iii) No
        party
        (including the Target) has accelerated, terminated, modified, or cancelled
        any
        agreement, contract, lease, or license (or series of related agreements,
        contracts, leases, and licenses) involving more than $25,000
        to which
        Target is a party or is bound;

      

      (iv) Target
        has not imposed any Security Interest upon any of its assets, tangible or
        intangible;

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      
 

      (v) Target
        has not made any capital expenditure (or series of related capital expenditures)
        either (A) in the amount of more than $25,000 or
        (B)
        outside the Ordinary Course of Business;

      

      (vi) Target
        has not made any capital investment in, any loan to, or any acquisition of
        the
        securities or assets of, any other Person (or series of related capital
        investments, loans, and acquisitions) either (A) in the amount of more than
        $25,000,
        or
        (B)
        outside the Ordinary Course of Business;

      

      (vii) Target
        has not issued any note, bond, or other debt security or created, incurred,
        assumed, or guaranteed any indebtedness for borrowed money or capitalized
        lease
        obligation in the amount of more than $25,000
        in the
        aggregate;

      

      (viii) Target
        has not delayed or postponed the payment of accounts payable and other
        Liabilities outside the Ordinary Course of Business;

      

      (ix) Target
        has not cancelled, compromised, waived, or released any right or claim (or
        series of related rights and claims) either (A) in the amount of more than
        $25,000
        or (B)
        outside the Ordinary Course of Business;

      

      (x) Target
        has not granted any license or sublicense of any rights under or with respect
        to
        any Intellectual Property outside the Ordinary Course of Business; 

      

      (xi) There
        has
        been no change made or authorized in the articles of incorporation or bylaws
        of
        Target;

      

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

      

      (xiii) Target
        has not declared, set aside, or paid any dividend or made any distribution
        with
        respect to its capital stock,
        or
        redeemed, purchased, or otherwise acquired any of its capital stock
        for
        consideration other than cash; 

      

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

      

      (xv) Other
        than Excluded Loans, an accurate and complete list of which is set forth
        in
        Section 4(e)
        of the
        Disclosure Schedule, all of which shall be paid in full by Target prior to
        the
        Closing, Target has not made any loan to, or entered into any other transaction
        with, any of its directors, officers, or employees outside the Ordinary Course
        of Business;

      

      (xvi) Target
        has not entered into any employment contract or collective bargaining agreement,
        written or oral, or modified the terms of any such existing contract or
        agreement;

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      
 

      (xvii) Target
        has not granted any increase in the base compensation of any of its directors,
        officers, or employees outside the Ordinary Course of Business, provided,
        however, that Target may pay bonuses to the Sellers prior to the
        Closing;

      

      (xviii) Other
        than as contemplated by this Agreement, Target has not adopted, amended,
        modified, or terminated any bonus, profit-sharing, incentive, severance,
        or
        other plan, contract, or commitment for the benefit of any of its directors,
        officers, and employees (or taken any such action with respect to any other
        Employee Benefit Plan);

      

      (xix) Target
        has not made any other change in employment terms for any of its directors,
        officers, or employees outside the Ordinary Course of Business;

      

      (xx) Target
        has not made or pledged to make any charitable or other capital contribution
        outside the Ordinary Course of Business;

      

      (xxi) other
        than the transactions contemplated by this Agreement, there has not been
        any
        other material occurrence, event, incident, action, failure to act, or
        transaction outside the Ordinary Course of Business involving Target;
        and

      

      (xxii) Target
        has not committed to any of the foregoing.

      

      (f) Undisclosed
        Liabilities.
        Except
        as set forth in Section 4(f) of the Disclosure Schedule, Target does not
        have
        any Liabilities except for (A) Liabilities set forth in the Most Recent Balance
        Sheet, and
        (B)
        Liabilities that have arisen after the Most Recent Fiscal Month End in the
        Ordinary Course of Business.

      

      (g) Legal
        Compliance.
        Target
        has complied with all applicable laws (including rules, regulations, codes,
        plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
        of federal, state, local, and foreign governments (and all agencies thereof),
        and no investigation, charge, complaint, claim, has been filed or commenced
        against it alleging any failure so to comply. No action, suit, proceeding,
        hearing, demand, or notice has been filed or commenced,
        and
        served,
        against
        Target alleging any failure so to comply. 

      

      (h) Tax
        Matters.
        Except
        as indicated in Section 4(h) of the Disclosure Schedule:

      

      (i) Target
        has filed all Tax Returns that it was required to file. All such Tax Returns
        were correct and complete in all material respects. All Taxes owed by Target
        (whether or not shown on any Tax Return) have been paid or adequate reserves
        for
        such Taxes have been recorded on the Target’s books and records. Target
        currently is not the beneficiary of any extension of time within which to
        file
        any Tax Return. To the Sellers’ Knowledge, no claim has ever been made by an
        authority in a jurisdiction where Target does not file Tax Returns that it
        is or
        may be subject to taxation by that jurisdiction. There are no Security Interests
        on any of the assets of Target that arose in connection with any failure
        (or
        alleged failure) to pay any Tax.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      
 

      (ii) Target
        has withheld and paid all Taxes required to have been withheld and paid in
        connection with amounts paid or owing to any employee or independent
        contractor.

      

      (iii) Sellers
        do not have Knowledge that any Tax authority will assess any additional Taxes
        for any period for which Tax Returns have been filed. There is no dispute
        or
        claim concerning any Tax Liability of Target either (A) asserted in writing
        to
        the Target or the Sellers by any Tax authority, or (B) as to which any of
        the
        Sellers has Knowledge based upon personal contact with any agent of such
        authority. The Sellers have delivered to the Buyer correct and complete copies
        of all federal income Tax Returns, examination reports, and statements of
        deficiencies assessed against or agreed to by Target since December 31,
        1999.

      

      (iv) Target
        has not waived any statute of limitations in respect of Taxes or agreed to
        any
        extension of time with respect to a Tax assessment or deficiency.

      

      (i) Real
        Property. The
        Company does not own any real property. Section 4(i) of the Disclosure Schedule
        contains a list of all leases for real property to which the Company is a
        party,
        the square footage leased with respect to each lease and the expiration date
        of
        each lease. These leases are valid and enforceable and are not in default.
        The
        Company does not sublease to any other person any of the real property that
        the
        Company leases. To the Seller’s Knowledge, the real property leased or occupied
        by the Company, the improvements located thereon, and the furniture, fixtures
        and equipment relating thereto (including plumbing, heating, air conditioning
        and electrical systems), conform to any and all applicable health, fire,
        safety,
        zoning, land use and building laws, ordinances and regulations. There are
        no
        outstanding contracts made by the Company for any improvements made to the
        real
        property leased or occupied by the Company that have not been paid for. The
        Sellers have delivered to the Buyer correct and complete copies of the leases
        listed in Section 4(i) of the Disclosure Schedule (as amended to date). With
        respect to each lease listed in Section 4(i) of the Disclosure
        Schedule:

      

      (A) to
        the
        Sellers’ Knowledge, the lease is legal, valid, binding, enforceable, and in full
        force and effect, except for the following (the “Exception”):
        the
        enforceability of the lease (1) may be subject to or limited by bankruptcy,
        insolvency, reorganization, arrangement, moratorium or other similar laws
        relating to or affecting the rights of creditors and (2) is subject to general
        principles of equity (including the possibility of unavailability of specific
        performance or injunctive relief), regardless of whether considered in a
        proceeding in equity or at law;

      

      (B) to
        the
        Sellers’ Knowledge, the lease will continue to be legal, valid, binding,
        enforceable, and in full force and effect on identical terms following the
        consummation of the transactions contemplated hereby, subject to the
        Exception;

      

      (C) to
        the
        Sellers’ Knowledge, no party to the lease is in breach or default, and no event
        has occurred which, with notice or lapse of time, would constitute a breach
        or
        default or permit termination, modification, or acceleration
        thereunder;

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      
 

      (D) no
        party
        to the lease has repudiated any provision thereof;

      

      (E) there
        are
        no disputes, oral agreements, or forbearance programs in effect as to the
        lease;
        and

      

      (F) Target
        has not assigned, transferred, conveyed, mortgaged, deeded in trust, or
        encumbered any interest in the leasehold.

      

      (j) Intellectual
        Property.
        Except
        as indicated on Section 4(j) of the Disclosure Schedule:

      

      (i) Target
        owns or has the right to use pursuant to license, sublicense, agreement,
        or
        permission all Intellectual Property used in the operation of the businesses
        of
        the Target as presently conducted. Each item of Intellectual Property owned
        or
        used by Target immediately prior to the Closing will be owned or available
        for
        use by the Target on identical terms and conditions immediately subsequent
        to
        the Closing hereunder. To Sellers’ Knowledge, Target has taken reasonable action
        to maintain and protect each item of Intellectual Property that it owns or
        uses.

       

      (ii) Target
        has not interfered with, infringed upon, misappropriated, or otherwise come
        into
        conflict with any Intellectual Property rights of third parties. The Sellers
        have not received any charge, complaint, claim, demand, or notice alleging
        any
        such interference, infringement, misappropriation, or violation (including
        any
        claim that Target must license or refrain from using any Intellectual Property
        rights of any third party). To the Sellers’ Knowledge, no third party has
        interfered with, infringed upon, misappropriated, or otherwise come into
        conflict with any Intellectual Property rights of Target.

      

      (iii) Section
        4(j)(iii) of the Disclosure Schedule identifies each patent or registration
        which has been issued to Target with respect to any of its Intellectual
        Property, identifies each pending patent application or application for
        registration which Target has made with respect to any of its Intellectual
        Property, and identifies each license, agreement, or other permission which
        Target has granted to any third party with respect to any of its Intellectual
        Property (together with any exceptions). The Sellers have delivered to the
        Buyer
        correct and complete copies of all such patents, registrations, applications,
        licenses, agreements, and permissions (as amended to date). Section 4(j)(iii)
        of
        the Disclosure Schedule also identifies each trade name or unregistered
        trademark used by Target in connection with any of its businesses. With respect
        to each item of Intellectual Property required to be identified in Section
        4(j)(iii) of the Disclosure Schedule:

      

      (A) with
        respect to owned Intellectual Property, the Target possess all right, title,
        and
        interest in and to the item, free and clear of any Security Interest, license,
        or other restriction;

      

      (B) the
        item
        is not subject to any outstanding injunction, judgment, order, decree, ruling,
        or charge;

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      
 

      (C) no
        action, suit, proceeding, hearing, investigation, charge, complaint, claim,
        or
        demand is pending or, to the Sellers’ Knowledge, is threatened that challenges
        the legality, validity, enforceability, use, or ownership of the item;
        and

      

      (D) other
        than pursuant to standard software licenses entered into in the Ordinary
        Course
        of Business, the Target has not agreed to indemnify any Person for or against
        any interference, infringement, misappropriation, or other conflict with
        respect
        to the item.

      

      (iv) Section
        4(j)(iv) of the Disclosure Schedule identifies each item of Intellectual
        Property that any third party owns and that Target uses pursuant to license,
        sublicense, agreement, or permission. The Sellers have delivered to the Buyer
        correct and complete copies of all such licenses, sublicenses, agreements,
        and
        permissions (as amended to date). With respect to each item of Intellectual
        Property required to be identified in Section 4(j)(iv) of the Disclosure
        Schedule:

      

      (A) The
        license, sublicense, agreement, or permission covering the item is legal,
        valid,
        binding, enforceable against Target, and in full force and effect;

       

      (B) The
        license, sublicense, agreement, or permission will continue to be legal,
        valid,
        binding, enforceable against Target, and in full force and effect on identical
        terms following the consummation of the transactions contemplated
        hereby;

       

      (C) To
        Sellers’ Knowledge, no party to the license, sublicense, agreement, or
        permission is in breach or default, and no event has occurred which with
        notice
        or lapse of time would constitute a breach or default or permit termination,
        modification, or acceleration thereunder;

       

      (D) no
        party
        to the license, sublicense, agreement, or permission has repudiated any
        provision thereof;

       

      (E) With
        respect to each sublicense, the representations and warranties set forth
        in
        subsections (A) through (D) above are true and correct with respect to the
        underlying license;

       

      (F) the
        underlying item of Intellectual Property is not subject to any outstanding
        injunction, judgment, order, decree, ruling, or charge;

       

      (G) no
        action, suit, proceeding, hearing, investigation, charge, complaint, claim,
        or
        demand is pending or, to the Sellers’ Knowledge, is threatened that challenges
        the legality, validity, or enforceability of the underlying item of Intellectual
        Property; and

       

      (H) Target
        has not granted any sublicense or similar right with respect to the license,
        sublicense, agreement, or permission.

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

      
 

      (v) Target
        will not interfere with, infringe upon, misappropriate, or otherwise come
        into
        conflict with, any Intellectual Property rights of third parties as a result
        of
        the continued operation of its businesses as presently conducted.

      

      (k) Tangible
        Assets.
        The
        Target owns or leases all machinery, equipment, and other tangible assets
        necessary for the conduct of its business as presently conducted. Each such
        tangible asset has been maintained in accordance with Target’s normal practices,
        and is in good operating condition and repair (subject to normal wear and
        tear).

      

      (l) Contracts.
        Section
        4(l) of the Disclosure Schedule lists the following contracts and other
        agreements to which the
        Target
        is
        a party:

      

      (i) any
        agreement (or group of related agreements) for the lease of personal property
        including without limitation software to or from any Person providing for
        lease
        payments in excess of $15,000 per annum;

      

      (ii) any
        agreement (or group of related agreements) for the purchase or sale of supplies,
        products or other personal property, or for the furnishing or receipt of
        services, the performance of which will extend over a period of more than
        one
        year, result in a material loss to the
        Target,
        or involve consideration in excess of $15,000;

      

      (iii) any
        agreement concerning a partnership or joint venture (which terms are understood
        not to including any so-called “partnering” arrangements that are referral
        relationships);

      

      (iv) any
        agreement (or group of related agreements) under which it has created, incurred,
        assumed, or guaranteed any indebtedness for borrowed money, or any capitalized
        lease obligation, in excess of $15,000 or under which it has imposed a Security
        Interest on any of its assets, tangible or intangible;

      

      (v) any
        agreement under
        which the Target has incurred noncompetition obligations or, outside
        of the ordinary course of business, has incurred
        confidentiality obligations;

      

      (vi) any
        agreement with any of the Sellers and their Affiliates;

      

      (vii) any
        profit sharing, stock option, stock purchase, stock appreciation, deferred
        compensation, severance, or other plan or arrangement for the benefit of
        its
        current or former directors, officers, and employees;

      

      (viii) any
        collective bargaining agreement;

      

      (ix) any
        agreement with
        an
        employee (whether
        full-time
        or
        part-time)
        or
consultant
        that
(i)
        either provides
        for
        severance benefits upon
        termination or
        is not
        terminable at-will by the Target,
        or
(ii)
        provides
        for
        annual
        compensation
        of
        more
        than $100,000;

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      
 

      (x) any
        agreement under which the Target has advanced or loaned any amount to any
        of its
        directors, officers, and employees outside the Ordinary Course of
        Business;

      

      (xi) any
        agreement under which the consequences of a default or termination would
        reasonably be expected to have a Material Adverse Effect on Target;
        or

      

      (xii) any
        other
        agreement (or group of related agreements) the performance of which involves
        consideration in excess of $15,000.

      

      The
        Sellers have delivered to the Buyer a correct and complete copy of each written
        agreement listed in Section 4(l) of the Disclosure Schedule (as amended to
        date), and to Sellers’ Knowledge, a written summary of the terms of all oral
        agreements referred to therein. With respect to each such agreement: (A)
        the
        agreement is legal, valid, binding, enforceable, and in full force and effect,
        subject to the Exception; (B) the agreement will continue to be legal, valid,
        binding, enforceable, and in full force and effect on identical terms following
        the consummation of the transactions contemplated hereby, except for the
        Exception; (C) to Sellers’ Knowledge, no party is in breach or default, and no
        event has occurred which with notice or lapse of time would constitute a
        breach
        or default, or permit termination, modification, or acceleration, under the
        agreement; and (D) to Sellers’ Knowledge, no party has repudiated any provision
        of the agreement.

      

      (m) Notes
        and Accounts Receivable.
        All
        notes and accounts receivable of the Target are fairly reflected on Target’s
        books and records.

      

      (n) Powers
        of Attorney.
        There
        are no outstanding powers of attorney executed on behalf of Target.

       

      (o) Insurance.
        Section
        4(o) of the Disclosure Schedule lists each insurance policy (including policies
        providing property, casualty, liability, and workers’ compensation coverage and
        bond and surety arrangements) that Target currently maintains. With respect
        to
        each such insurance policy: (A) the policy is legal, valid, binding,
        enforceable, and in full force and effect; (B) to the Sellers’ Knowledge, the
        policy will continue to be legal, valid, binding, enforceable, and in full
        force
        and effect on identical terms following the consummation of the transactions
        contemplated hereby; (C) neither Target nor, to Sellers’ Knowledge, any other
        party to the policy is in breach or default (including with respect to the
        payment of premiums or the giving of notices), and no event has occurred
        which,
        with notice or the lapse of time, would constitute such a breach or default,
        or
        permit termination, modification, or acceleration, under the policy; and
        (D) to
        Sellers’ Knowledge, no party to the policy has repudiated any provision thereof.

      

      (p) Litigation.
        Section
        4(p) of the Disclosure Schedule sets forth each instance in which Target
        (i) is
        subject to any outstanding injunction, judgment, order, decree, ruling, or
        charge or (ii) is a party or, to the Knowledge of any of the Sellers, has
        been
        overtly threatened to be made a party to any action, suit, proceeding, hearing,
        or investigation of, in, or before any court or quasi-judicial or administrative
        agency of any federal, state, local, or foreign jurisdiction or before any
        arbitrator.

       

      
        
          
          

        

        
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      (q) Product
        Warranty.
        To
        Sellers’ Knowledge, each product or service developed, sold, leased, licensed,
        or delivered by Target has been in material conformity with all applicable
        contractual commitments and all express and implied warranties, and Target
        does
        not have any Liability for replacement or repair thereof or other damages
        in
        connection therewith, subject only to the reserve for warranty claims, if
        any,
        set forth in the Most Recent Balance Sheet, as adjusted for the passage of
        time
        through the Closing Date in the Ordinary Course of Business. No product or
        service manufactured, sold, leased, licensed or delivered by Target is subject
        to any guaranty, warranty, or other indemnity beyond the applicable terms
        and
        conditions of sale or lease. The Target has delivered to Buyer complete and
        correct copies of the standard terms and conditions of sale or lease or
        licensing of or providing of services by or for Target (containing applicable
        guaranty, warranty, and indemnity provisions).

      

      (r) Product
        Liability.
        To
        Sellers’ Knowledge, Target does not have any Liability arising out of any injury
        to individuals or property as a result of the ownership, possession, or use
        or
        license of any product manufactured, sold, leased, licensed or delivered
        by
        Target.

      

      (s) Employees.
        Except
        (i) for the termination of Donald C. Helt’s employment by Target, effective as
        of the Closing, and (ii) as indicated in Section 4(s) of the Disclosure
        Schedule, to the Knowledge of the Sellers, no executive, key employee, or
        group
        of employees has any plans to terminate employment with Target. Target is
        not a
        party to or bound by any collective bargaining agreement. Target has not
        experienced any strikes, grievances, claims of unfair labor practices, or
        other
        collective bargaining disputes. To Sellers’ Knowledge, Target has not committed
        any unfair labor practice. To Sellers’ Knowledge, there is no organizational
        effort presently being made or threatened by or on behalf of any labor union
        with respect to employees of Target.

      

      (t) Employee
        Benefits.
        

      

      (i) Section
        4(t) of the Disclosure Schedule lists each Employee Benefit Plan that Target
        maintains, to which Target contributes or has any obligation to contribute,
        or
        with respect to which Target has any material actual or potential
        Liability.

      

      (A)
        To
        Sellers’ Knowledge, each such Employee Benefit Plan (and each related trust,
        insurance contract, or fund) has been maintained, funded and administered
        in
        accordance with the terms of such Employee Benefit Plan and complies in form
        and
        in operation in all material respects with the applicable requirements of
        ERISA,
        the Code, and all other applicable laws, rules and regulations (collectively,
        “Benefit Laws”).

      

      (B) All
        required reports and descriptions (including annual reports to the applicable
        governmental agency, summary annual reports, and summary plan descriptions)
        have
        been timely filed and/or distributed in accordance with the applicable Benefit
        Laws with respect to each such Employee Benefit Plan. The requirements of
        COBRA
        have been met with respect to each such Employee Benefit Plan which is an
        Employee Welfare Benefit Plan subject to COBRA.

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      
 

      (C) All
        contributions (including all employer contributions and employee salary
        reduction contributions) which are due have been made within the time period
        prescribed by ERISA to each such Employee Benefit Plan that is an Employee
        Pension Benefit Plan and all contributions for any period ending on or before
        the Closing Date which are not yet due have been made to each such Employee
        Pension Benefit Plan or accrued in accordance with the past custom and practice
        of the Target. All premiums or other payments for all periods ending on or
        before the Closing Date have been paid with respect to each such Employee
        Benefit Plan which is an Employee Welfare Benefit Plan.

      

      (D) Each
        such
        Employee Benefit Plan which is intended to meet the requirements of a “qualified
        plan” under Code §401(a) has received a determination from the Internal Revenue
        Service that such Employee Benefit Plan is so qualified, and nothing has
        occurred since the date of such determination that could adversely affect
        the
        qualified status of any such Employee Benefit Plan.

      

      (E) The
        market value of assets under each such Employee Benefit Plan which is an
        Employee Pension Benefit Plan (other than any Multiemployer Plan) equals
        or
        exceeds the present value of all vested and nonvested Liabilities thereunder
        determined in accordance with PBGC methods, factors, and assumptions applicable
        to an Employee Pension Benefit Plan terminating on the date for
        determination.

      

      (F) The
        Sellers have delivered to the Buyer correct and complete copies of the plan
        documents and summary plan descriptions, the most recent determination letter
        received from the Internal Revenue Service, the most recent annual report
        (IRS
        Form 5500, with all applicable attachments) filed with the applicable
        governmental agency if any with respect to all Employee Benefit Plans, and
        all
        related trust agreements, insurance contracts, and other funding arrangements
        which implement each such Employee Benefit Plan.

      

      (ii) With
        respect to each Employee Benefit Plan that Target maintains, to which Target
        contributes or has any obligation to contribute, or with respect to which
        Target
        has any material actual or potential Liability:

      

      (A) No
        such
        Employee Benefit Plan which is an Employee Pension Benefit Plan (other than
        any
        Multiemployer Plan) has been completely or partially terminated or been the
        subject of a “Reportable
        Event”.
        No
        proceeding by the PBGC to terminate any such Employee Pension Benefit Plan
        (other than any Multiemployer Plan) has been instituted or, to the
        Sellers’ Knowledge, overtly threatened.

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

      
 

      (B) There
        have been no “Prohibited
        Transactions”
with
        respect to any such Employee Benefit Plan. No fiduciary for any such Employee
        Benefit Plan has any Liability for breach of fiduciary duty or any other
        failure
        to act or comply in connection with the administration or investment of the
        assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing,
        or investigation with respect to the administration or the investment of
        the
        assets of any such Employee Benefit Plan (other than routine claims for
        benefits) is pending or, to the Sellers’ Knowledge, overtly threatened.

      

      (C) Target
        has not incurred any Liability to the PBGC (other than with respect to PBGC
        premium payments not yet due) or otherwise under Title IV of ERISA (including
        any withdrawal liability as defined in ERISA §4201) or under the Code with
        respect to any such Employee Benefit Plan which is an Employee Pension Benefit
        Plan, or under COBRA with respect to any such Employee Benefit Plan which
        is an
        Employee Welfare Benefit Plan.

      

      (D) Target
        does not contribute to, have any obligation to contribute to, or have any
        Liability (including withdrawal liability as defined in ERISA §4201) under or
        with respect to any Multiemployer Plan. 

      

      (iii) Target
        does not maintain, contribute to or have an obligation to contribute to,
        or have
        any actual or potential Liability with respect to, any Employee Welfare Benefit
        Plan providing medical, health, or life insurance or other welfare-type benefits
        for current or future retired or terminated employees, their spouses, or
        their
        dependents (other than in accordance with COBRA).

      

      (u) Guaranties.
        Target
        is neither a guarantor nor is otherwise liable for any Liability or obligation
        (including indebtedness) of any other Person.

      

      (v) Environmental,
        Health, and Safety Matters.
        To the
        Sellers’ Knowledge:

       

      (i) Target
        and its respective predecessors and Affiliates have materially complied and
        are
        in compliance with all Environmental, Health, and Safety
        Requirements.

      

      (ii) Without
        limiting the generality of the foregoing, Target has obtained and materially
        complied with, and is in material compliance with, all permits, licenses
        and
        other authorizations that are required pursuant to Environmental, Health,
        and
        Safety Requirements for the occupation of its facilities and the operation
        of
        its business.

      

      (iii) Neither
        the Target nor its respective predecessors or Affiliates has received any
        written or oral notice, report or other information regarding any actual
        or
        alleged violation of Environmental, Health, and Safety Requirements, or any
        liabilities or potential liabilities (whether accrued, absolute, contingent,
        unliquidated or otherwise), including any investigatory, remedial or corrective
        obligations, relating to any of them or its facilities arising under
        Environmental, Health, and Safety Requirements.

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

      
 

      (iv) Neither
        Target nor its respective predecessors or Affiliates has treated, stored,
        disposed of, arranged for or permitted the disposal of, transported, handled,
        or
        released any substance, including without limitation any hazardous substance,
        or
        owned or operated any property or facility (and no such property or facility
        is
        contaminated by any such substance) in a manner that has given or would give
        rise to liabilities, including any liability for response costs, corrective
        action costs, personal injury, property damage, natural resources damages
        or
        attorney fees, pursuant to the Comprehensive Environmental Response,
        Compensation and Liability Act of 1980, as amended (“CERCLA”), the Solid Waste
        Disposal Act, as amended (“SWDA”) or any other Environmental, Health, and Safety
        Requirements. 

      

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

      

      (vi) The
        Target has not, either expressly or by operation of law, assumed or undertaken
        any liability, including without limitation any obligation for corrective
        or
        remedial action, of any other Person relating to Environmental, Health, and
        Safety Requirements.

      

      (vi) No
        facts,
        events or conditions relating to the past or present facilities, properties
        or
        operations of Target will prevent, hinder or limit continued compliance with
        Environmental, Health, and Safety Requirements, give rise to any investigatory,
        remedial or corrective obligations pursuant to Environmental, Health, and
        Safety
        Requirements, or give rise to any other liabilities (whether accrued, absolute,
        contingent, unliquidated or otherwise) pursuant to Environmental, Health,
        and
        Safety Requirements, including without limitation any relating to onsite
        or
        offsite releases or threatened releases of hazardous materials, substances
        or
        wastes, personal injury, property damage or natural resources
        damage.

      

      (w) Disclosure.
        The
        representations and warranties contained in this Section 4 do not contain
        any
        untrue statement of a material fact. No representation or warranty contained
        in
        this Section 4 omits to state any material fact necessary in order to make
        the
        statements therein, in light of the circumstances in which they were made,
        not
        misleading. 

      

      5. Representations
        And Warranties Concerning Buyer.
        The
        Buyer represents and warrants to the Sellers that the statements contained
        in
        this Section 5 are correct and complete as of the date of this
        Agreement.

      

      (a) Organization,
        Qualification, and Corporate Power.
        The
        Buyer is a corporation duly organized, validly existing, and in good standing
        under the laws of the State of Delaware, and is qualified to do business
        as a
        foreign corporation and in good standing under the laws of the State of
        California. The Buyer has full corporate power and authority and all licenses,
        permits, and authorizations necessary to carry on the businesses in which
        it is
        engaged and to own and use the properties owned and used by it. Correct and
        complete copies of the Buyer’s certificate of incorporation and bylaws (as
        amended to date) are filed as exhibits to the Buyer’s periodic and/or current
        reports filed with the U.S. Securities and Exchange Commission (“SEC”).

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

      
 

      (b) Buyer
        Stock.
        All
        shares of Buyer Stock issued to Seller upon the Closing will have been duly
        authorized, be validly issued, fully paid and nonassessable, and be free
        and
        clear of any restrictions on transfer (other than any restrictions under
        the
        Securities Act and state securities laws). 

      

      (c) Capitalization.
        The
        entire authorized capital stock of the Buyer consists of: (i) 150,000,000
        shares of Common Stock, par value $0.01 per share, of which 8,619,400 are
        issued
        and outstanding, and (ii) 29,795,816 shares of Preferred Stock, par value
        $0.01
        per share, of which (A) 1,608,612 shares are designated Series A Preferred
        Stock, of which 1,605,598
        are
        issued and outstanding, (B) 1,449,204 shares are designated Series B Preferred
        Stock, of which 1,449,204
        are
        issued and outstanding, (C) 21,738,000 shares of Series C Preferred Stock,
        of
        which 916,667
        are
        issued and outstanding, (D) 1,500,000 shares of Series D Convertible Preferred
        Stock, of which 1,458,333.60 shares are issued and outstanding, 1,500,000
        shares
        of Series D-2 Convertible Preferred Stock, none of which is issued or
        outstanding, and (E) 2,000,000 shares are undesignated Preferred Stock,
        none of which are issued and outstanding. Except as disclosed in any
reports
        filed by
        the
        Buyer with
        the
        SEC since December 15, 2006,
        there
        are no outstanding or authorized options, warrants, purchase rights,
        subscription rights, conversion rights, exchange rights, or other contracts
        or
        commitments that could require the Buyer to issue, sell, or otherwise cause
        to
        become outstanding any of its capital stock, and no outstanding or authorized
        stock appreciation, phantom stock, profit participation, or similar rights
        with
        respect to the Buyer. 

      

      (d) SEC
        Reporting.
        The
        Buyer is in material compliance with all reporting requirements under the
        Securities Act and the Securities Exchange Act. All documents filed by the
        Buyer
        with the SEC on or after December 15, 2006 are in material compliance with
        such
        Acts and SEC regulations promulgated thereunder, and do not contain any untrue
        statement of a material fact or omit to state any material fact necessary
        in
        order to make the statements and information contained therein not misleading.
        

      

      (e) Disclosure.
        The
        representations and warranties contained in this Section 5 do not contain
        any
        untrue statement of a material fact. No representation or warranty contained
        in
        this Section 5 omits
        to
        state any material fact necessary in order to make the statements therein,
        in
        light of the circumstances in which they were made, not misleading.

      

      6. Post-Closing
        Covenants.
        The
        Parties agree as follows with respect to the period following the
        Closing.

      

      (a) General.
        In case
        at any time after the Closing any further action is necessary to carry out
        the
        purposes of this Agreement, each of the Parties will take such further action
        (including the execution and delivery of such further instruments and documents)
        as any other Party reasonably may request, all at the sole cost and expense
        of
        the requesting Party (unless the requesting Party is entitled to indemnification
        therefor under Section 8 below). The Sellers acknowledge and agree that from
        and
        after the Closing the Buyer will be entitled to possession of all documents,
        books, records (including Tax records), agreements, and financial data of
        any
        sort relating to the Target in Sellers’ possession. Buyer shall provide Sellers
        with reasonable access to such records as Sellers may reasonably
        require.

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

      
 

      (b) Litigation
        Support.
        In the
        event and for so long as any Party actively is contesting or defending against
        any action, suit, proceeding, hearing, investigation, charge, complaint,
        claim,
        or demand in connection with (i) any transaction contemplated under this
        Agreement or (ii) any fact, situation, circumstance, status, condition,
        activity, practice, plan, occurrence, event, incident, action, failure to
        act,
        or transaction on or prior to the Closing Date involving Target, each of
        the
        other Parties will cooperate with such Party and such Party’s counsel in the
        contest or defense, make available such Party’s personnel, and provide such
        testimony and access to such Party’s books and records as shall be necessary in
        connection with the contest or defense, all at the sole cost and expense
        of the
        contesting or defending Party (unless the contesting or defending Party is
        entitled to indemnification therefor under Section 8 below).

      

      (c) Transition.
        For a
        period of three years commencing on the Closing, Sellers will not take any
        action designed or intended to discourage any lessor, licensor, licensee,
        customer, supplier, or other business associate of Target from maintaining
        the
        same business relationships with the Target after the Closing as it maintained
        with the Target prior to the Closing, and Sellers will refer to the Buyer
        any
        customer inquiries relating to the business of developing and reselling human
        resources information systems software, as conducted by the Target as of
        the
        Closing. Nothing herein is intended to limit or reduce any of Donald C. Helt’s
        obligations under the Consulting Agreement.

      

      (d) Confidentiality.
        Each of
        the Sellers will treat and hold as such all of the Confidential Information,
        refrain from using any of the Confidential Information except in connection
        with
        this Agreement, and deliver promptly to the Buyer or destroy, at the request
        and
        option of the Buyer, all tangible embodiments (and all copies) of the
        Confidential Information which are in his possession. Upon receipt of a written
        request by Target or Buyer, Sellers agree to surrender and return to Target
        all
        documents, records, memoranda, notebooks and similar repositories of
        Confidential Information of every character or description. In the event
        that
        any of the Sellers is requested or required (by oral question or request
        for
        information or documents in any legal proceeding, interrogatory, subpoena,
        civil
        investigative demand, or similar process) to disclose any Confidential
        Information, that Seller will notify the Buyer promptly of the request or
        requirement so that the Buyer may seek an appropriate protective order or
        waive
        compliance with the provisions of this Section 6(d). If, in the absence of
        a
        protective order or the receipt of a waiver hereunder, any of the Sellers
        is, on
        the advice of counsel, compelled to disclose any Confidential Information
        to any
        tribunal, that Seller may disclose the Confidential Information to the tribunal;
        provided,
        however,
        that
        the disclosing Seller shall use his or her reasonable efforts to cooperate
        with
        any effort by the Buyer to obtain, at the request and expense of the Buyer,
        an
        order or other assurance that confidential treatment will be accorded to
        such
        portion of the Confidential Information required to be disclosed as the Buyer
        shall designate. The foregoing provisions shall not apply to any Confidential
        Information which is generally available to the public immediately prior
        to the
        time of disclosure, or which becomes generally available to the public other
        than by breach by any Seller of his or her obligations under this Section
        6(d).

       

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

      
 

      (e) Non-solicitation.
        Commencing on the Closing Date and for a period of three (3) years from the
        Closing Date, no Seller shall directly or indirectly, personally or through
        others, solicit or attempt to solicit (on the Sellers’ or any of the Sellers’
own behalf or on behalf of any other person or entity) the
        employment,
        consulting
        or independent contractor services of any employee of the Company or Buyer
        or
        any of the Company’s or Buyer’s affiliates or subsidiaries (solely to the extent
        such employee was known to such Seller as of the Closing).
        Nothing
        in this paragraph is intended to limit or reduce any of
        Donald
        C.
        Helt’s obligations under the
        Consulting Agreement.

      

      (f) Non-competition.
        The
        Sellers agree and covenant that, except as set forth in this Agreement, for
        a
        period of three (3) years from the Closing Date, they will not directly or
        indirectly (whether as a representative, agent, partner, owner, stockholder
        of
        otherwise), (i) engage in any software
        products business
        that
        is
        competitive with the business of developing and reselling human resources
        information system software products conducted by the Target as of the Closing,
        or (ii) solicit business (with respect to any human resources information
        system
        software product)
        from,
        or
        market any such product to, any customer or prospective customer of the Target,
        the Buyer or any Affiliates of Buyer as of the Closing Date. A “prospective
        customer” for purposes of this paragraph means: a potential customer that was
        actively negotiating with the Target, the Buyer or any Affiliates of Buyer
        on or
        within 120 days prior to the Closing Date. Nothing in this paragraph is intended
        to limit or reduce any of Donald C. Helt’s obligations under the Consulting
        Agreement. Further, the Consulting Agreement shall not reduce, limit or modify
        the obligations of Donald C. Helt under Section 6 of this Agreement.

      

      (g) Acknowledgements.
        

      

      (i) Sellers
        hereby acknowledge and agree that (A) Target has expended considerable and
        substantial time, effort and capital resources to develop the confidential
        information of Target (the “Proprietary
        Information”);
        (B)
        the Proprietary Information is innovative and must receive confidential
        treatment to protect Buyer’s competitive position in the market and Buyer’s
        proprietary interest therein from irreparable damage and (C) the Proprietary
        Information and all physical embodiments or other repositories of the same
        shall
        be and at all times remain the sole and exclusive property of Target.

      

      (ii) The
        parties hereto acknowledge and agree that (A) the covenants contained in
        Sections 6(d) through 6(f) are incidental to the sale of the Target’s stock to
        Buyer; (B) the covenants contained therein are reasonably necessary to protect
        the interest of Buyer in whose favor said covenants are imposed; (C) the
        restrictions imposed thereby are not greater than are necessary for the
        protection of Target and Buyer in light of the substantial harm that Target
        and
        Buyer will suffer should there be a breach of any such covenant; (D) the
        period
        of restriction and extent of restriction contained therein are fair and
        reasonable in that Target’s business is national in scope and in that they are
        reasonably required for the protection of Target and Buyer; (E) the nature,
        kind
        and character of the activities the Sellers are prohibited to engage in as
        described therein are reasonable and necessary to protect Target and Buyer
        and
        shall not be interpreted or construed as prohibiting the Sellers from rendering
        any other services or performing any other activities not referenced therein,
        and (F) the covenants and agreements of the Sellers contained therein have
        been
        specifically negotiated by the parties and are material inducements to Buyer
        to
        enter into this Agreement, and, but for such covenants made by the Sellers
        herein, Buyer would not have entered into this Agreement.

       

      
        
          
          

        

        
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      (iii) The
        Sellers acknowledge and agree that each of the covenants and agreements
        contained in Sections 6(d) through 6(f) is made in consequence of and as
        a
        specific inducement to Buyer to enter into this Agreement and to protect
        and
        preserve the benefit of this Agreement to Target and Buyer; that each of
        the
        covenants contained therein is reasonable and necessary to protect and preserve
        the benefits to be received by Buyer under this Agreement; irreparable loss
        and
        damage will be suffered by Target and Buyer should the Sellers breach any
        of
        such covenants and agreements; each of such covenants and agreements is
        separate, distinct and severable not only from the other of such covenants
        and
        agreements but also from the other and remaining provisions of this Agreement;
        and that the unenforceability of any such covenant or agreement shall not
        affect
        the validity or enforceability of any other such covenant or agreements or
        any
        other provision or provisions of this Agreement. In the event Target or Buyer
        should seek an injunction hereunder, the Seller hereby waives any requirement
        that Target or Buyer submit proof of the economic value of any Proprietary
        Information. 

      

      (iv) If
        the
        provisions of Sections 6(d) through 6(f) should ever be adjudicated to exceed
        the time, geographic or other limitations permitted by applicable law in
        any
        jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
        to the maximum time, geographic or other limitation permitted by applicable
        law.

      

      (v) Nothing
        contained in this Article 6 shall restrict any Seller from being a less than
        five percent (5%) stockholder of any corporation that directly or indirectly
        competes with Target, Buyer or any Affiliate of Buyer, provided the stock
        of
        such competing corporation is publicly held and such Seller is not otherwise
        involved as an officer, director, employee, consultant or agent of such
        corporation. 

      

      (vi)
        The
        Sellers’ obligations under the Sellers’
        covenants and agreements contained
        in Section 6(f) are
        conditioned upon Buyer’s performance of its obligations under Section 2 within
        30 days after written notice of non-performance from Sellers but otherwise
        all
        of
        Sellers’ obligations contained in this Section 6 shall
        be
        construed as agreements independent of any other agreement between Buyer,
        Target
        and
        Sellers to Buyer. The Buyer’s failure to perform its obligations under Section 2
        for 30 days after written notice of non-performance from Sellers to Buyer
        shall
        constitute a defense to Buyer’s enforcement of Sellers’ covenants and agreements
        contained in Section 6(f) ; and otherwise the existence of any other claim
        or
        cause of action of the Sellers
        against
        Buyer
        or
        Target,
        whether
        predicated on this Agreement or otherwise, shall not constitute a defense
        to the
        enforcement by Buyer or
        Target
of
        any of
        such covenants and agreements. 

      

      (h) Severability.
        It is
        the parties’ express intention that if a court of competent jurisdiction finds
        or holds any provision of Sections 6(d) through 6(f) to be excessively broad
        as
        to time, duration, geographical scope, activity or subject, such provision
        shall
        then be construed by limiting or reducing it so as to comport with then
        applicable law. In the event any such provision cannot be limited or reduced
        so
        as to comport with then applicable law, then such provision of Sections 6(d)
        through 6(f) shall be severable from all other provisions of Sections 6(d)
        through 6(f), and the other provisions of Sections 6(d) through 6(f) shall
        continue to be enforceable to the fullest extent allowable. 

       

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

      
 

      (i) Injunctive
        Relief.
        It is
        hereby acknowledged and agreed by the parties that the Sellers’ violation of any
        of their covenants in Sections 6(d) through 6(f) would cause damages to the
        Company and Buyer that would be difficult or impossible to ascertain or
        quantify. Therefore, it is expressly agreed that the Buyer, in addition to
        any
        other remedies it may have, shall be entitled to seek injunctive relief against
        the Sellers in the event of any such breach or threatened breach. 

      

      (j) Award
        of Fees to Prevailing Party.
        In any
        court action relating to Sections 6(d) through 6(f), the court may make a
        determination regarding which party’s legal position in such matter is the more
        substantially correct (the “Prevailing
        Party”)
        and
        require the other party to pay the reasonable legal and other professional
        fees
        and costs incurred by the Prevailing Party in connection with such action.
        

      

      7. Items
        Delivered at Closing.

      

      (a) Items
        Delivered to Buyer.
        At
        Closing, Sellers shall deliver to Buyer the following:

      

      (i) stock
        certificates representing all of the Target Shares, endorsed in blank or
        accompanied by duly executed assignment documents;

      

      (ii) all
        of
        the third party consents specified in Section 3(a)(ii) of the Disclosure
        Schedule; provided, however, if any consents have not been obtained, the
        Closing
        shall not be delayed and Buyer and Sellers will use all reasonable efforts
        to
        obtain such consents after the Closing;

      

      (iii) counterparts
        of the Consulting Agreement,
        executed by Donald C. Helt;

      

      (iv) evidence
        reasonably satisfactory to the Buyer that the Excluded Loans have been fully
        satisfied or terminated;

      

      (v) resignations,
        effective as of the Closing, of each director and officer of the
        Target;

      

      (vi) Donald
        C.
        Helt’s resignation from employment with the Company; 

      

      (vii) counterparts
        of the Registration Rights Agreement,
        executed by the Sellers;
        and

      

      (viii) counterparts
        of the Escrow
        Agreement, executed by Sellers.

      

      (b) Items
        Delivered to Sellers.
        At
        Closing, Buyer shall deliver to Sellers the following:

       

      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

      
 

      (i) the
        Closing Payment and the Buyer Stock, as specified in Section 2(b)
        above;

      

      (ii) counterparts
        of the Consulting Agreement, executed by the Buyer; and 

      

      (iii) counterparts
        of the Registration Rights Agreement, executed by the Buyer. 

      

      (iv) counterparts
        of the Escrow Agreement, executed by Buyer and Escrow Holder.

      

      (c) Items
        Delivered to Don Helt.
        Immediately prior to the Closing, Target shall deliver to Donald C. Helt
        payment
        in full for all accrued salary, bonuses, unused vacation and other employment
        compensation through the day
        immediately preceding
        the
        Closing Date, in each case subject to mandatory payroll taxes and withholdings.
        Additionally, Target shall transfer ownership to Mr. Helt of the portable
        computer workstation regularly used by Mr. Helt in performing services for
        the
        Target prior to the Closing, including without limitation, the laptop computer,
        monitor, printer, docking station and all related accessories, peripherals
        and
        software. For clarification only, Mr. Helt owns, and shall be entitled to
        retain
        from and after the Closing, all of his personal items, such as artwork, books
        and awards, notwithstanding that such items are currently located at the
        Target’s office.

      

      8. Remedies
        for Breaches of This Agreement; Covenants.

      

      (a) Survival
        of Representations and Warranties.
        All of
        the representations and warranties of the Sellers and Target contained in
        Sections 4(d), (e), (f), and (g) and Sections 4(i) through 4(w) above shall
        survive the Closing hereunder and continue in full force and effect for a
        period
        of one (1) year thereafter; provided, however, that such representations
        and
        warranties
        shall
        survive forever to the extent of a warranty or representation of Sellers
        that
        any Seller knew was untrue at the time this Agreement was executed by the
        Sellers. Buyer’s
        representations and warranties contained in Section 5(d) and 5(e) shall survive
        the Closing hereunder and continue in full force and effect for a period
        of one
        (1) year thereafter; provided, however, that any such representation and
        warranty shall survive indefinitely to the extent that Buyer knew it was
        inaccurate at the date of this Agreement. All
        of
        the other representations and warranties of the Parties contained in this
        Agreement (including the representations and warranties of the Sellers contained
        in Sections 4(a), (b), (c) and (h) above) shall survive the Closing and continue
        in full force and effect subject to any applicable statutes of
        limitations.

       

      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

      

      
 

      (b) Indemnification
        Provisions for Benefit of the Buyer.

      

      (i) In
        the
        event any of the Sellers breaches any of his or her representations, warranties,
        and covenants contained herein (other than the covenants in Section 2(a)
        above
        and the representations and warranties in Section 3(a) above), and, if there
        is
        an applicable survival period pursuant to Section 8(a) above, provided that
        the
        Buyer makes a written claim for indemnification against any of the Sellers
        pursuant to Section 8(e) by delivering a Claim Notice within such survival
        period, then the Sellers shall jointly and severally indemnify the Buyer
        and
        Target from and against any Adverse Consequences the Buyer or Target suffers
        resulting from, arising out of, or caused by the breach; provided, however,
        that
        the Sellers shall have no obligation to so indemnify the Buyer and Target
        from
        and against any Adverse Consequences resulting from, arising out of, or caused
        by the breach of any representation or warranty of the Sellers or Target
        contained in Sections 4(d), (e), (f), and (g) and Sections 4(i) through 4(w)
        above, so long as such breach was not a willful breach or a breach arising
        out
        of a fraudulent warranty or representation by a Seller or Target (collectively,
        the “Limited
        Coverage Claims”),
        until
        Buyer or Target has suffered Adverse Consequences by reason of all such breaches
        in excess of a $25,000.00 aggregate
        threshold, and then only to the extent that Buyer’s or Target’s Adverse
        Consequences from Limited Coverage Claims exceed such threshold. 

      

      (ii) In
        the
        event any of the Sellers or Target breaches any of his, her or its covenants
        contained herein or any of his, her or its representations and warranties
        in
        Section 3(a) above, and, if there is an applicable survival period pursuant
        to
        Section 8(a) above, provided that the Buyer makes a written claim for
        indemnification against any of the Sellers pursuant to Section 8(e) below
        by
        delivering a Claim Notice within such survival period, then the Sellers shall
        indemnify the Buyer and Target from and against any Adverse Consequences
        the
        Buyer or Target suffers resulting from, arising out of, or caused by the
        breach.

      

      (iii) Without
        deduction for the $25,000 threshold described in Section 8(b)(i)
        above, each Seller agrees to jointly and severally indemnify the Buyer and
        Target from and against any Adverse Consequences the Buyer or Target may
        suffer
        resulting from, arising out of, or caused by (A) any Liability of Target
        for any
        Taxes of the Target with respect to any Tax year or other time period ending
        on
        the Closing Date or on any day preceding the Closing Date, (B) 
        the matters described in Schedule 3(a)(v) of the Disclosure Schedule and
        any
        claims, liabilities or obligations related thereto or arising thereunder,
        or
        (C)
        the matters described in Schedule 4(f) of the Disclosure Schedule and any
        claims
        or lawsuits related thereto or arising thereunder (the “Customer
        Matters”).
        Any
        claim by Buyer or Target seeking indemnification from Sellers with respect
        to
        any of the Customer Matters must be made by such party submitting a Claim
        Notice
        to Sellers within the two-year period commencing on the date hereof (the
        “Claim
        Period”),
        and
        Sellers shall have no obligation to indemnify Buyer or Target with respect
        to
        any of the Customer Matters as to which a Claim Notice is not submitted to
        Sellers by Buyer or Target during the Claim Period. Sellers’ indemnity
        obligations shall continue, and shall not terminate at the end of the Claim
        Period, with respect to any of the Customer Matters that is the subject of
        a
        Claim Notice submitted by the Buyer or Target to Sellers during the Claim
        Period. 

       

      
        
          
          

        

        
          -28-

          
            

          

        

        
          
          

        

      

      
 

      Buyer
        agrees not to initiate communications regarding the Customer Matters with
        the
        customers involved in the Customer Matters or their representatives. Buyer
        shall
        promptly provide to Sellers any written communications (or notify Sellers
        in
        writing regarding any oral communications) received by Target’s management from
        such customers or their representatives and shall not respond to such
        communications without the prior approval, not to be unreasonably withheld,
        delayed or conditioned, by Sellers. Further, Buyer shall notify Sellers promptly
        in writing when Buyer becomes aware of any claim asserted against Buyer and/or
        the Target with respect to any Customer Matter, and Sellers shall then be
        entitled to control any efforts to settle or compromise such claim with the
        adverse party (a “Claimant”),
        for a
        120-day period from such written notice; provided, however, that Sellers
        shall
        promptly inform Buyer of all oral communications between Sellers and such
        Claimant and promptly provide copies to Buyer of all written communications
        between Sellers and Claimant. During such period, Sellers shall be entitled
        to
        settle or compromise such claim with the Claimant if: (i) Sellers obtain a
        complete release of Target and/or Buyer, as applicable, from such claim,
        in a
        form reasonably acceptable to Buyer; (ii) Sellers pay any consideration
        payable to the Claimant required by such settlement or compromise; and
        (iii) such settlement or compromise does not include any terms that
        restrict Target’s or Buyer’s business or impose any performance obligations on
        Target or Buyer. During such period, Buyer shall reasonably cooperate with
        Sellers’ efforts to settle or compromise such claim, and shall not communicate
        with the Claimant, except that Buyer may take any action reasonably necessary
        to
        defend against such claim or to preserve any rights it may have against Sellers
        or claimant or any other person or entity.

      

      (iv) The
        right
        to indemnification based upon representations, warranties, covenants and
        obligations shall not be affected by any examination, inspection, audit or
        other
        investigation conducted by Buyer with respect to, or any Knowledge acquired
        at
        any time with respect to, the accuracy or inaccuracy of or compliance with
        any
        such representation, warranty, covenant or obligation.
        Buyer
        represents and warrants to the Sellers that it does not have Knowledge of
        any
        inaccuracy of any representation or warranty of Sellers or the Target set
        forth
        in this Agreement.

       

      (c) Indemnification
        Provisions for Benefit of the Sellers.
        

       

      (i) In
        the
        event the Buyer breaches any of its representations, warranties, and covenants
        contained herein, then the Buyer agrees to indemnify each of the Sellers
        from
        and against any Adverse Consequences the Sellers suffer resulting from, arising
        out of, or caused by the breach.

       

      (ii) Buyer
        agrees to indemnify the Sellers from and against any Adverse Consequences
        any
        Seller may suffer resulting from, arising out of, or caused by any Liability
        of
        Target for any Taxes of the Target with respect to any Tax year (or shorter
        Tax
        period) ending after the Closing Date.

       

      (iii) The
        right
        to indemnification based upon representations, warranties, covenants and
        obligations shall not be affected by any examination, inspection, audit or
        other
        investigation conducted by the Sellers with respect to, or any Knowledge
        acquired at any time with respect to, the accuracy or inaccuracy of or
        compliance with any such representation, warranty, covenant or obligation.
        Sellers represent and warrant to the Buyer that they do not have Knowledge
        of
        any inaccuracy of any representation, or warranty of Buyer set forth in this
        Agreement.

       

      
        
          
          

        

        
          -29-

          
            

          

        

        
          
          

        

      

       

      (d) Adjustment
        to Purchase Price.
        All
        indemnification payments under this Section 8 shall be deemed adjustments
        to the
        Purchase Price. 

      

      (e) Claim
        Notice; Notice of a Disputed Claim.

      

      (i) Any
        Party
        seeking indemnification hereunder (an “Indemnified
        Party”)
        shall
        deliver to the Party from whom indemnification is sought (the “Indemnifying
        Party”)
        a
        written notice (“Claim
        Notice”)
        that
        the Indemnified Party has suffered Adverse Consequences and providing the
        facts
        alleged as the basis for such claim and the section or sections of this
        Agreement alleged to have been violated and the estimated total dollar amount
        of
        the Adverse Consequences claimed. In the event that the Indemnifying Party
        disputes liability for, or the amount of, the Adverse Consequences set forth
        in
        the Claim Notice, the Indemnifying Party shall notify the Indemnified Party
        in
        writing of such dispute (“Notice
        of a Disputed Claim”)
        and
        specify the amount disputed and basis therefor and the amount the Indemnifying
        Party believes to be the correct amount, if any, within thirty (30) days
        notice
        after receipt of the Claim Notice. Failure to give a timely objection hereunder
        shall not constitute a waiver of the right to dispute such Claim Notice,
        except
        if and to the extent that such failure results in Adverse Consequences to
        the
        Indemnified Party.

       

      (ii) If
        a
        written Notice of a Disputed Claim is sent pursuant to paragraph (i) above,
        the
        Indemnified Party and Indemnifying Party shall, during the thirty (30) days
        following the date of such delivery, negotiate in good faith to resolve the
        Disputed Claim and reach a resolution of the matter on an expedited basis.
        If,
        during such resolution period, the Parties are unable to reach agreement,
        either
        Sellers or Buyer may pursue resolution of such Disputed Claim in accordance
        with
        Section 10(o).

       

      (iii) With
        respect to a Claim Notice that relates to a claim by a third party, the
        Indemnified Party shall provide such Claim Notice within ten (10) days after
        it
        becomes aware of the assertion of such a claim, provided that failure to
        give
        timely notice shall not be a bar to indemnification except if and to the
        extent
        that such failure is prejudicial to the defense of such claim. The Indemnifying
        Party shall have the right to assume the defense of such claim and to settle
        or
        compromise such claim with the consent of the Indemnified Party, such consent
        not to be unreasonably withheld, and provided that no consent shall be required
        if the settlement or compromise includes a complete release of the Indemnified
        Party by the claimant. The Indemnified Party shall fully cooperate in the
        defense of such third party claim, as may be reasonably requested by the
        Indemnifying Party.

      

      (f) Limitations
        on Seller
        Indemnification by
        Target.
        Except
        to the extent of available insurance coverage and provided Buyer consents
        to
        allow such claim to be tendered to the applicable insurance company in Buyer’s
        sole discretion (and with the intent that no insurance coverage will
benefit
        any
        Seller
with
        respect to a breach of
        a
        warranty, representation or covenant of such
        Seller
        under
        this Agreement), each of the Sellers hereby agrees that he or she will not
        make
        any claim for indemnification against Target by reason of the fact that he
        or
        she was a director, officer, employee, or agent of Target
        or was
        serving at the request of Target
        as a
        partner, trustee, director, officer, employee, or agent of another entity
        (whether such claim is for judgments, damages, penalties, fines, costs, amounts
        paid in settlement, losses, expenses, or otherwise and whether such claim
        is
        pursuant to any statute, charter document, bylaw, agreement, or otherwise)
        with
        respect to any action, suit, proceeding, complaint, claim, or demand brought
        after
        the
        Closing by
        the
        Buyer against such Seller pursuant
        to this Agreement or
        the
        Exhibits hereto.
        

       

      
        
          
          

        

        
          -30-

          
            

          

        

        
          
          

        

      

      
 

      (g) Limit
        on Liability.
        Anything
        herein notwithstanding, except for (i)
        Adverse Consequences
        due to
fraud
        or
        fraudulent or intentional misrepresentation by
        Sellers,
        (ii)
indemnification
        claims
        arising under
        Section
        8(b)(i) regarding the representations set forth in Section 3(a)(iii)
        and
        Section
        4(a), (b), (c) and (h), and
        (iii)
        indemnification
        claims
        arising under Section 8(b)(ii)
        or Section 8(b)(iii)(A)
        or (B), Sellers’
        aggregate liability to Buyer under this Section 8 shall
        not
        exceed $500,000.00.

      

      Anything
        herein notwithstanding, except for Adverse
        Consequences
        due to
        fraud or fraudulent or intentional misrepresentation by Sellers, Sellers’
aggregate liability to Buyer under this Section 8 solely with respect to
        any
        Adverse Consequences suffered by Target or Buyer due to or with respect to
        the
        Customer Matters shall not exceed $250,000.00 (the “Customer
        Cap”);
        provided, however, that the Customer Cap shall not reduce Sellers’ obligations
        under this Section 8 except as expressly provided for in this subparagraph
        with
        respect to the Customer Matters.

      

      From
        and
        after the Closing, except for damages arising out of fraud or fraudulent
        or
        intentional misrepresentation by
        a
        Seller, Buyer’s sole right to monetary damages against any Seller for any breach
        of any warranty or representation arising under this Agreement shall be under
        this Section 8. For
        clarification,
        Buyer’s
        remedies with respect to
        a breach
        of Seller’s obligation under Section 2 shall not be adversely affected or
        restricted by this Section 8(g). 

      

      (h)
         Right
        to Set-Off.
        Subject
        to and in accordance with the terms of the Escrow Agreement, Buyer
        may
        assert, in good faith, that it is entitled to set-off against the Deferred
        Payment any amount (“Claimed
        Amount”)
        to
        which it asserts,
        in good faith, that it is
        entitled
        under this Section 8.
        The
        exercise of a right of set-off by Buyer
        in
        good faith, whether or not ultimately determined to be justified, will not
        constitute a breach of Section 8 hereof. Neither the exercise of, nor the
        failure to exercise, such right of set-off will constitute an election of
        remedies or limit Buyer in any manner in the enforcement of any other remedies
        that may be available to Buyer.

       

      9. Tax
        Matters.
        The
        following provisions shall govern the allocation of responsibility as between
        Buyer and Sellers for certain Tax matters of Target following the Closing
        Date:

      

      (a) Tax
        Periods Ending on or Before the Closing Date.
        Sellers
        shall, at their expense, prepare or cause to be prepared and file or cause
        to be
        filed all Tax Returns for the Target for all Tax years (or shorter Tax periods)
        ending on the Closing Date or on any day preceding the Closing Date. Sellers
        shall pay all of Target’s Taxes for such time periods (collectively,
“Pre-Closing
        Taxes”),
        except for those Tax Liabilities that are included in the determination of
        Closing Net Equity as defined in Section 2 above.
        Sellers
        shall provide a copy of all such filed Tax Returns to Buyer when such returns
        are filed. If the Target is assessed any additional Pre-Closing Taxes by
        a Tax
        authority, Sellers shall either (i) elect, at Sellers’ sole cost, to have Target
        contest such assessment, in which case Sellers shall pay all amounts finally
        determined to be owing for Pre-Closing Taxes plus penalties and interest,
        if
        any, upon the conclusion of such contest; or (ii) pay on demand such assessed
        Pre-Closing Taxes plus penalties and interest, if any.

       

      
        
          
          

        

        
          -31-

          
            

          

        

        
          
          

        

      

      
 

      (b) Tax
        Periods Ending After the Closing Date.
        Buyer
        shall, at its expense, prepare or cause to be prepared and file or cause
        to be
        filed all Tax Returns of the Target for all Tax years (or shorter Tax periods)
        ending after the Closing Date. Buyer shall pay or cause to be paid all of
        Target’s Taxes for such time periods.

      

      (c) Cooperation
        on Tax Matters.
        Buyer,
        the Target and Sellers shall cooperate fully, as and to the extent reasonably
        requested by the other party, in connection with the filing of Tax Returns
        pursuant to this Section 9and any audit, litigation or other proceeding with
        respect to Taxes. Such cooperation shall include the retention and (upon
        the
        other Party’s request) the provision of records and information which are
        reasonably relevant to any such audit, litigation or other proceeding and
        making
        employees available on a mutually convenient basis to provide additional
        information and explanation of any material provided hereunder.

      

      10. Miscellaneous.

      

      (a) Nature
        of Certain Obligations.
        All of
        the representations, warranties and covenants of each of the Sellers in this
        Agreement are joint and several obligations. 

      

      (b) Press
        Releases and Public Announcements.
        No
        Party shall issue any press release or make any public announcement relating
        to
        the subject matter of this Agreement (“Press Release”) prior
        to
        the Closing without the prior written approval of the Buyer and the
        Sellers. Sellers
        may not issue any Press Release
        after the Closing without the prior
        approval
        of the Buyer,
        and
        Buyer may not issue any Press Release after the Closing without the prior
        approval of the Sellers, in each case, which approval shall not be unreasonably
        withheld or conditioned. 

      

      (c) No
        Third-Party Beneficiaries.
        This
        Agreement shall not confer any rights or remedies upon any Person other than
        the
        Parties and their respective successors and permitted assigns.

      

      (d) Entire
        Agreement.
        This
        Agreement (including the exhibits and schedules attached hereto) constitutes
        the
        entire agreement among the Parties and supersedes any prior understandings,
        agreements, or representations by or among the Parties, written or oral,
        to the
        extent they related in any way to the subject matter hereof.

      

      (e) Succession
        and Assignment.
        This
        Agreement shall be binding upon and inure to the benefit of the Parties named
        herein and their respective successors and permitted assigns. No Party may
        assign either this Agreement or any of his, her or its rights, interests,
        or
        obligations hereunder without the prior written approval of the Buyer and
        the
        Sellers; provided, however, that after the Closing, Buyer may assign this
        Agreement and its rights hereunder together with a sale of substantially
        all the
        assets or business of the Buyer to the assignee, or to the surviving corporation
        in a merger, reorganization or any other similar transaction with Buyer,
        so long
        as (i) the Deferred Payment already has been, or is concurrently with such
        assignment, paid in full to Sellers, and
        (ii)
        such assignee or surviving corporation agrees to assume all obligations of
        the
        Buyer hereunder.

       

      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

      

      
 

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

      

      (g) Headings.
        The
        section headings contained in this Agreement are inserted for convenience
        only
        and shall not affect in any way the meaning or interpretation of this
        Agreement.

      

      (h) Notices.
        All
        notices, requests, demands, claims, and other communications hereunder must
        be
        in writing. Any notice, request, demand, claim, or other communication hereunder
        shall be deemed duly given two business days after it is sent by registered
        or
        certified mail, return receipt requested, postage prepaid, and addressed
        to the
        intended recipient as set forth below:

      

        
          	 	
                  If
                    to the Sellers or the Company prior to the Closing:

                
	 	 	
                   

                  Donald
                    C. Helt

                
	 	 	
                  P.O.
                    Box 622

                
	 	 	
                  Kentfield,
                    CA 94914-0622

                
	 	 	 
	 	
                  with
                    a copy to:

                	
                  Steven
                    R. Harmon

                
	 	 	
                  Morgan
                    Miller Blair, a Law Corporation

                
	 	 	
                  1331
                    N. California Blvd., Suite 200

                
	 	 	
                  Walnut
                    Creek, CA 94596-4544

                
	 	 	
                  Fax:
                    (925) 274-7532

                   

                
	 	
                  If
                    to the Buyer or the Company after the Closing:

                
	 	 	 
	 	 	
                  BPO
                    MANAGEMENT SERVICES, INC. 

                
	 	 	
                  Attention:
                    Patrick Dolan and Jim Cortens

                
	 	 	
                  1290
                    N. Hancock Street, Suite 202

                
	 	 	
                  Anaheim
                    Hills, CA 92807

                
	 	 	
                  Fax:
                    (714) 974-4771

                
	 	 	 
	 	
                  With
                    a copy to:

                	
                  Jack
                    T. Cornman, Esq.

                
	 	
                   

                	
                  Cornman
                    & Swartz

                
	 	 	
                  19800
                    MacArthur Blvd., Suite 820

                
	 	 	
                  Irvine,
                    CA 92612

                
	 	 	
                  Fax:
                    (949) 224 1505

                

        

      

       

      Any
        Party
        may send any notice, request, demand, claim, or other communication hereunder
        to
        the intended recipient at the address set forth above using any other means
        (including personal delivery, expedited courier, messenger service, telecopy,
        telex, ordinary mail, or electronic mail), but no such notice, request, demand,
        claim, or other communication shall be deemed to have been duly given unless
        and
        until it actually is received by the intended recipient. Any Party may change
        the address to which notices, requests, demands, claims, and other
        communications hereunder are to be delivered by giving the other Parties
        notice
        in the manner herein set forth.

       

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

      

      
 

      (i) Governing
        Law. 
        This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of California, without giving effect to any choice or conflict
        of law provision or rule that would cause the application of the laws of
        any
        jurisdiction.

      

      (j) Amendments
        and Waivers.
        No
        amendment of any provision of this Agreement shall be valid unless the same
        shall be in writing and signed by the Buyer and the Sellers. No waiver by
        any
        Party of any default, misrepresentation, or breach of warranty or covenant
        hereunder, whether intentional or not, shall be deemed to extend to any prior
        or
        subsequent default, misrepresentation, or breach of warranty or covenant
        hereunder or affect in any way any rights arising by virtue of any prior
        or
        subsequent such occurrence.

      

      (k) Severability.
        Any
        term or provision of this Agreement that is invalid or unenforceable in any
        situation in any jurisdiction shall not affect the validity or enforceability
        of
        the remaining terms and provisions hereof or the validity or enforceability
        of
        the offending term or provision in any other situation or in any other
        jurisdiction.

      

      (l) Expenses.
        Buyer
        will bear its costs and expenses (including legal fees and expenses) incurred
        in
        connection with this Agreement and the transactions contemplated hereby.
        Target
        and Sellers will bear their respective costs and expenses (including legal
        fees
        and expenses) incurred in connection with this Agreement and the transactions
        contemplated hereby, it being understood that Sellers shall not bear any
        responsibility for any such costs or expenses of Target incurred after the
        Closing.

       

      (m) Construction.
        The
        Parties have participated jointly in the negotiation and drafting of this
        Agreement. In the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as if drafted jointly by the Parties
        and no presumption or burden of proof shall arise favoring or disfavoring
        any
        Party by virtue of the authorship of any of the provisions of this Agreement.
        Any reference to any federal, state, local, or foreign statute or law shall
        be
        deemed also to refer to all rules and regulations promulgated thereunder,
        unless
        the context requires otherwise. The word “including” shall mean including
        without limitation.

      

      (n) Specific
        Performance.
        Each of
        the Parties acknowledges and agrees that the other Parties would be damaged
        irreparably in the event any of the provisions of this Agreement are not
        performed in accordance with their specific terms or otherwise are breached.
        Accordingly, each of the Parties agrees that the other Parties shall be entitled
        to an injunction or injunctions to prevent breaches of the provisions of
        this
        Agreement and to enforce specifically this Agreement and the terms and
        provisions hereof in any action instituted in any court permitted under
        Section 10(o) below and having jurisdiction over the Parties and the
        matter, in addition to any other remedy to which they may be entitled, at
        law or
        in equity.

       

      
        
          
          

        

        
          -34-

          
            

          

        

        
          
          

        

      

      
 

      (o)  Submission
        to Jurisdiction.
        Except
        as provided otherwise in the Escrow Agreement, each of the Parties submits
        to
        the exclusive jurisdiction of any state or federal court sitting in the State
        of
        California located in Orange County, California, and
        San
        Francisco County, California, in any action or proceeding arising out of
        or
        relating to this Agreement, and agrees that any and all claims in respect
        of the
        action or proceeding may be heard and determined in any such court. Each
        Party
        also agrees not to bring any action or proceeding arising out of or relating
        to
        this Agreement in any other court. Each of the Parties waives any defense
        of
        inconvenient forum to the maintenance of any action or proceeding so brought
        and
        waives any bond, surety, or other security that might be required of any
        other
        Party with respect thereto. 

      

      

      SEE
        NEXT
        PAGE FOR SIGNATURES

      
        
           

          
          

        

        
          -35-

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
        date
        first above written.

      

      

        
          	 	
                  “Buyer”

                
	 	 
	 	
                  BPO
                    MANAGEMENT SERVICES, INC., a Delaware corporation

                
	 	 
	 	
                  By:
                    __________________________________________

                
	 	
                  Name:
                    ________________________________________

                
	 	
                  Title:
                    _________________________________________

                
	 	 
	 	
                  “Target”
                    or
                    “Company”

                
	 	 
	 	
                  HUMAN
                    RESOURCE MICRO-SYSTEMS, INC.,
                    a
                    California corporation

                
	 	 
	 	
                  By:
                    ________________________________________

                
	 	
                  Donald
                    C. Helt, President

                
	 	 
	 	
                  “Sellers”

                
	 	 
	 	 
	 	________________________________________
	 	
                  Donald
                    C. Helt, as trustee of the Donald C. and 

                  Bridget
                    B. Helt Revocable Trust dated April 24, 2003

                
	 	 
	 	________________________________________
	 	
                  Bridget
                    B. Helt, as trustee of the Donald C. and 

                  Bridget
                    B. Helt Revocable Trust dated April 24, 2003

                
	 	 
	 	 

        

      
        
           

          
          

        

        
          -36-

          
            

          

        

        
          
          

        

      

      STOCK
        PURCHASE AGREEMENT

      EXHIBIT
        LIST

      

      Exhibit
        A
        - Form of Consulting Agreement

      Exhibit
        B
        - Form of Registration Rights Agreement

      Exhibit
        C
        - Form of Escrow Agreement

       

       

       

       

       

      -37-

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