Document:

Agreement

    Exhibit
      10.6

    

    ASSET
      PURCHASE AGREEMENT

    

    This
      Asset Purchase Agreement (“Agreement”) is dated August 14, 2006, by and among
      River Hawk Aviation, Inc., closely held Nevada corporation (“Seller” or the
“Company”); and Calvin Humphrey, a resident of Texas (“Humphrey” or the
“Shareholder”); and Viva International, Inc. a Nevada corporation (“Buyer”).

    

    

    RECITALS

    

    The
      Company is engaged in the business of selling or otherwise transacting in a
      broad range of aviation airframes, engines, parts, and components. 

    

    Shareholder
      owns 75,000,000 (par value $.001) shares of the common stock of Seller, no
      par
      value per share, which constitutes one hundred percent (100%) of the issued
      and
      outstanding shares of capital stock of Seller. Seller desires to sell, and
      Buyer
      desires to purchase, the Assets of Seller for the consideration and subject
      to
      the terms set forth in this Agreement. 

    

    The
      parties, intending to be legally bound, agree as follows: 

    

    

    SECTION
      1  DEFINITIONS
      AND USAGE

    

    1.1
      DEFINITIONS 

    For
      purposes of this Agreement, the following terms and variations thereof have
      the
      meanings specified or referred to in this Section 1.1: 

    

    “Accounts
      Receivable”--(a) all trade accounts receivable and other rights to payment from
      customers of Seller and the full benefit of all security for such accounts
      or
      rights to payment, including all trade accounts receivable representing amounts
      receivable in respect of goods shipped or products sold or services rendered
      to
      customers of Seller, (b) all other accounts or notes receivable of Seller and
      the full benefit of all security for such accounts or notes and (c) any claim,
      remedy or other right related to any of the foregoing. 

    

    “Accounts
      Receivable Assignment” - as defined in Section 2.11. 

    

    “Adjustment
      Amount”-- as defined in Section 2.8. 

    

    “Agreed
      Working Capital”-- as defined in Section 2.9(b). 

    

    “Allocation
      of Purchase Price” -- the agreed values of the Assets and Assumed Liabilities to
      be transferred from Seller to Buyer hereunder, which allocation shall be used
      by
      the parties for all Tax purposes and in all filings, declarations and reports
      with the IRS in respect thereof, including the reports required to be filed
      under Section 1060 of the Code. 

    “Assets”--
      as defined in Section 2.1. 

    

    “Assignment
      and Assumption Agreement”-- as defined in Section 2.7(a)(ii). 

    

    “Assumed
      Liabilities”--as defined in Section 2.4(a). 

    

    “Balance
      Sheet”-- as defined in Section 3.4.

    

    “Best
      Efforts”-- the efforts that a prudent Person desirous of achieving a result
      would use in similar circumstances to achieve that result as expeditiously
      as
      possible, provided, however, that a Person required to use Best Efforts under
      this Agreement will not be thereby required to take actions that would result
      in
      a material adverse change in the benefits to such Person of this Agreement
      and
      the Contemplated Transactions or to dispose of or make any change to its
      business, expend any material funds or incur any other material burden.

    

    “Bill
      of
      Sale”-- as defined in Section 2.7(a)(i). 

    

    “Breach”--
      any breach of, or any material inaccuracy in, any representation or warranty
      or
      any breach of, or failure to perform or comply with, any covenant or obligation,
      in or of this Agreement or any other Contract, or any event which with the
      passing of time or the giving of notice, or both, would constitute such a
      breach, inaccuracy or failure. 

    

    “Bulk
      Sales Laws”-- as defined in Section 5.10. 

    

    “Business
      of the Seller” -Seller is a stocking distributor of aircraft, engines, parts,
      and components, focusing on high-quality, domestically-manufactured products.
      The Company’s products are used primarily for aerospace and military
      applications and/or for industrial/commercial applications that require a high
      level of certified/assured quality.

    

    “Business
      Day”-- any day other than (a) Saturday or Sunday or (b) any other day on which
      banks in New York are permitted or required to be closed. 

    

    “Buyer”--
      as defined in the first paragraph of this Agreement. 

    

    “Buyer
      Indemnified Persons”-- as defined in Section 11.2. 

    

    “Closing”--as
      defined in Section 2.6.

    

    “Closing
      Date”-- the date on which the Closing actually takes place. 

    

    “Closing
      Financial Statements”--as defined in Section 3.9.

    

    “Closing
      Working Capital”-- as defined in Section 2.9(c). 

    

    “COBRA”--
      as defined in Section 3.14(f). 

    

    “Code”--
      the Internal Revenue Code of 1986. 

    

    “Confidential
      Information”--as defined in Section 12.1. 

    

    “Consent”--
      any approval, consent, ratification, waiver or other authorization.

    

    “Consulting
      Agreement”--as defined in Section 2.7(a)(v). 

    

    “Contemplated
      Transactions”-- all of the transactions contemplated by this Agreement.

    

    “Contract”--
      any agreement, contract, Lease, consensual obligation, promise or undertaking
      (whether written or oral and whether express or implied), 

    whether
      or not legally binding. 

    

    “Copyrights”--
      as defined in Section 3.23(a)(iii). 

    

    “Damages”--
      as defined in Section 11.2. 

    

    “Employee
      Plans”-- as defined in Section 3.14(a). 

    

    “Encumbrance”--any
      charge, claim, community or other marital property interest, condition,
      equitable interest, lien, option, pledge, security interest, mortgage, right
      of
      way, easement, encroachment, servitude, right of first option, right of first
      refusal or similar restriction, including any restriction on use, voting (in
      the
      case of any security or equity interest), transfer, receipt of income or
      exercise of any other attribute of ownership. 

    

    “Environment”--
      soil, land surface or subsurface strata, surface waters (including navigable
      waters and ocean waters), groundwaters, drinking water supply, stream sediments,
      ambient air (including indoor air), plant and animal life and any other
      environmental medium or natural resource. 

    

    “Environmental,
      Health and Safety Liabilities”-- any cost, damages, expense, liability,
      obligation or other responsibility arising from or under any Environmental
      Law
      or Occupational Safety and Health Law, including those consisting of or relating
      to: 

    

    
      	a.  	
              any
                environmental, health or safety matter or condition (including on-site
                or
                off-site contamination, occupational safety and health and regulation
                of
                any chemical substance or product);

            

    

    

    
      	b.  	
              any
                fine, penalty, judgment, award, settlement, legal or administrative
                proceeding,
                damages, loss, claim, demand or response, remedial or inspection
                cost or
                expense arising under any Environmental Law or Occupational Safety
                and
                Health Law; 

            

    

    

    
      	c.  	
              financial
                responsibility under any Environmental Law or Occupational Safety
                and
                Health Law for cleanup costs or corrective action, including any
                cleanup,
                removal,
                containment or other remediation or response actions (“Cleanup”)
                required
                by any Environmental Law or Occupational Safety and Health Law (whether
                or
                not such Cleanup has been required or requested by any Governmental
                Body
                or any other Person) and for any natural resource damages; or
                

            

    

    

    
      	d.  	
              any
                other compliance, corrective or remedial measure required under any
                Environmental Law or Occupational Safety and Health Law. The terms
                “removal,” “remedial” and “response action” include the types of
                activities covered by the United States Comprehensive Environmental
                Response, Compensation and Liability Act of 1980 (CERCLA).
                

            

    

    

    “Environmental
      Law”-- any Legal Requirement that requires or relates to: 

    

    
      	a.  	
              advising
                appropriate authorities, employees or the public of intended or actual
                Releases of pollutants or hazardous substances or materials, violations
                of
                discharge limits or other prohibitions and the commencement of activities,
                such as resource extraction or construction, that could have significant
                impact on the Environment; 

            

    

    

    
      	b.  	
              preventing
                or reducing to acceptable levels the Release of pollutants or hazardous
                substances or materials into the Environment;

            

    

    

    
      	c.  	
              reducing
                the quantities, preventing the Release or minimizing the hazardous
                characteristics of wastes that are generated;

            

    

    

    
      	d.  	
              assuring
                that products are designed, formulated, packaged and used so that
                they do
                not present unreasonable risks to human health or the Environment
                when
                used or disposed of; 

            

    

    

    
      	e.  	
              protecting
                resources, species or ecological amenities;

            

    

    

    
      	f.  	
              reducing
                to acceptable levels the risks inherent in the transportation of
                hazardous
                substances, pollutants, oil or other potentially harmful substances;
                

            

    

    

    
      	g.  	
              cleaning
                up pollutants that have been Released, preventing the Threat of Release
                or
                paying the costs of such clean up or prevention; or
                

            

    

    

    
      	h.  	
              making
                responsible parties pay private parties, or groups of them, for damages
                done to their health or the Environment or permitting self-appointed
                representatives of the public interest to recover for injuries done
                to
                public assets. 

            

    

    

    “ERISA”--
      the Employee Retirement Income Security Act of 1974. 

    

    “Escrow
      Agent”-- as defined in Section 2.3(b) 

    

    “Escrow
      Deposit” --as defined in Section 2.3(b). 

    

    “Exchange
      Act”-- the Securities Exchange Act of 1934. 

    

    “Excluded
      Assets”--as defined in Section 2.2. 

    

    “Facilities”--
      any real property, leasehold or other interest in real property currently owned
      or operated by Seller, including the Tangible Personal Property used or operated
      by Seller. Notwithstanding the foregoing, for purposes of the definitions of
      “Hazardous Activity” and “Remedial Action” and Sections 3.20 and 11.3,
“Facilities” shall mean any real property, leasehold or other interest in real
      property currently or formerly owned or 

    operated
      by Seller, including the Tangible Personal Property used or operated by Seller
      at the Facilities specified in Section 3.8. 

    

    “GAAP”--
      generally accepted accounting principles for financial reporting in the United
      States, applied on a basis consistent with the basis on which the Balance Sheet
      and the other financial statements referred to in Section 3.4 were prepared.
      

    

    “Governing
      Documents”--with respect to any particular entity, (a) if a corporation, the
      articles or certificate of incorporation and the bylaws; (b) if a general
      partnership, the partnership agreement and any statement of partnership; (c)
      if
      a limited partnership, the limited partnership agreement and the certificate
      of
      limited partnership; (d) if a limited liability company, the articles of
      organization and operating agreement; (e) if another type of Person, any other
      charter or similar document adopted or filed in connection with the creation,
      formation or organization of the Person; (f) all equity holders’ agreements,
      voting agreements, voting trust agreements, joint venture agreements,
      registration rights agreements or other agreements or documents relating to
      the
      organization, management or operation of any Person or relating to the rights,
      duties and obligations of the equity holders of any Person; and (g) any
      amendment or supplement to any of the foregoing. 

    

    “Governmental
      Authorization”--any Consent, license, registration or permit issued, granted,
      given or otherwise made available by or under the authority of any Governmental
      Body or pursuant to any Legal Requirement. 

    

    “Governmental
      Body”-- any: 

    

    
      	a.  	
              nation,
                state, county, city, town, borough, village, district or other
                jurisdiction; 

            

    

    

    
      	b.  	
              federal,
                state, local, municipal, foreign or other government;
                

            

    

    

    
      	c.  	
              governmental
                or quasi-governmental authority of any nature (including any agency,
                branch, department, board, commission, court, tribunal or other entity
                exercising governmental or quasi-governmental powers);
                

            

    

    

    
      	d.  	
              multinational
                organization or body; 

            

    

    

    
      	e.  	
              body
                exercising, or entitled or purporting to exercise, any administrative,
                executive, judicial, legislative, police, regulatory or taxing authority
                or power; or 

            

    

    

    
      	f.  	
              official
                of any of the foregoing. 

            

    

    

    “Hazardous
      Activity”-- the distribution, generation, handling, importing, management,
      manufacturing, processing, production, refinement, Release, storage, transfer,
      transportation, treatment or use (including any withdrawal or other use of
      groundwater) of Hazardous Material in, on, under, about or from any of the
      Facilities or any part thereof into the Environment and any other act, business,
      operation or thing that increases the danger, or risk of danger, or poses an
      unreasonable risk of harm, to persons or property on or off the Facilities.
      

    

    “Hazardous
      Material”-- any substance, material or waste which is or will foreseeably be
      regulated by any Governmental Body, including any material, substance or waste
      which is defined as a “hazardous waste,” “hazardous material,” “hazardous
      substance,” “extremely hazardous waste,” “restricted hazardous waste,”
“contaminant,” “toxic waste” or “toxic substance” under any provision of
      Environmental Law, and including petroleum, petroleum products, asbestos,
      presumed asbestos-containing material or asbestos-containing material, urea
      formaldehyde and polychlorinated biphenyls. 

    

    “Improvements”--
      all buildings, structures, fixtures and improvements located on the Land or
      included in the Assets, including those under construction. 

    

    “Income
      Tax Refunds”—as defined in Section 2.1(j)

    

    “Indemnified
      Person”--as defined in Section 11.9. 

    

    “Indemnifying
      Person”--as defined in Section 11.9. 

    

    “Intellectual
      Property Assets”-- as defined in Section 3.23(a). 

    

    “Interim
      Balance Sheet”-- as defined in Section 3.4.

    

    “Inventories”--
      all inventories of Seller, wherever located, including all finished goods,
      work
      in process, raw materials, spare parts and all other materials and supplies
      to
      be used or consumed by Seller in the ordinary course of its continuing business.
      

    

    “IRS”--
      the United States Internal Revenue Service and, to the extent relevant, the
      United States Department of the Treasury. 

    

    “Knowledge”--
      an individual will be deemed to have Knowledge of a particular fact or other
      matter if: 

    

    
      	a.  	
              that
                individual is actually aware of that fact or matter; or
                

            

    

    

    
      	b.  	
              a
                prudent individual could be expected to discover or otherwise become
                aware
                of that fact or matter in the course of conducting a reasonably
                comprehensive investigation regarding the accuracy of any representation
                or warranty contained in this Agreement.

            

    

    

    

    A
      Person
      (other than an individual) will be deemed to have Knowledge of a particular
      fact
      or other matter if any individual who is serving, or who has at any time served,
      as a director, officer, partner, executor or trustee of that Person (or in
      any
      similar capacity) has, or at any time had, Knowledge of that fact or other
      matter (as set forth in (a) and (b) above), and any such individual (and any
      individual party to this Agreement) will be deemed to have conducted a
      reasonably comprehensive investigation regarding the accuracy of the
      representations and warranties made herein by that Person or individual.

    

    “Lease”
-
      as defined in Section 2.7(a)(iv). 

    

    “Legal
      Requirement”-- any federal, state, local, municipal, foreign, international,
      multinational or other constitution, law, ordinance, principle of common law,
      code, regulation, statute or treaty. 

    

    “Liability”--
      with respect to any Person, any liability or obligation of such Person of any
      kind, character or description, whether known or unknown, absolute or
      contingent, accrued or unaccrued, disputed or undisputed, liquidated or
      unliquidated, secured or unsecured, joint or several, due or to become due,
      vested or unvested, executory, determined, determinable or otherwise, and
      whether or not the same is required to be accrued on the financial statements
      of
      such Person. 

    

    “Marks”--
      as defined in Section 3.23(a)(i). 

    

    “Material
      Consents”-- as defined in Section 7.3.

    

    “Occupational
      Safety and Health Law”-- any Legal Requirement designed to provide safe and
      healthful working conditions and to reduce occupational safety and health
      hazards, including the Occupational Safety and Health Act, and any program,
      whether governmental or private (such as those promulgated or sponsored by
      industry associations and insurance companies), designed to provide safe and
      healthful working conditions. 

    

    “Order”--
      any order, injunction, judgment, decree, ruling, assessment or arbitration
      award
      of any Governmental Body or arbitrator. 

    

    “Ordinary
      Course of Business”--an action taken by a Person will be deemed to have been
      taken in the Ordinary Course of Business only if that action: 

    

    
      	a.  	
              is
                consistent in nature, scope and magnitude with the past practices
                of such
                Person and is taken in the ordinary course of the normal, day-to-day
                operations of such Person;

            

    

     

    
      	b.  	
              does
                not require authorization by the board of directors or Shareholder
                of such
                Person (or by any Person or group of Persons exercising similar authority)
                and does not require any other separate or special authorization
                of any
                nature; and 

            

    

    

    
      	c.  	
              is
                similar in nature, scope and magnitude to actions customarily taken,
                without any separate or special authorization, in the ordinary course
                of
                the normal, day-to-day operations of other Persons that are in the
                same
                line of business as such Person. 

            

    

    

    “Patents”--
      as defined in Section 3.23(a)(ii). 

    

    “Permitted
      Encumbrances”-- as defined in Section 3.7. 

    

    “Person”--
      an individual, partnership, corporation, business trust, limited liability
      company, limited liability partnership, joint stock company, trust,
      unincorporated association, joint venture or other entity or a Governmental
      Body. 

    

    “Proceeding”--
      any action, arbitration, audit, hearing, investigation, litigation or suit
      (whether civil, criminal, administrative, judicial or investigative, whether
      formal or informal, whether public or private) commenced, brought, conducted
      or
      heard by or before, or otherwise involving, any Governmental Body or arbitrator.
      

    

    “Purchase
      Price”-- as defined in Section 2.3.

    

    “Record”--
      information that is inscribed on a tangible medium or that is stored in an
      electronic or other medium and is retrievable in perceivable form. 

    

    “Related
      Person”- With respect to a particular individual: 

    

    
      	a.  	
              each
                other member of such individual’s Family;

            

    

    

    
      	b.  	
              any
                Person that is directly or indirectly controlled by any one or more
                members of such individual’s Family;

            

    

    

    
      	c.  	
              any
                Person in which members of such individual’s Family hold (individually or
                in the aggregate) a Material Interest; and

            

    

    

    
      	d.  	
              any
                Person with respect to which one or more members of such individual’s
                Family serves as a director, officer, partner, executor or trustee
                (or in
                a similar capacity). 

            

    

    

    With
      respect to a specified Person other than an individual: 

    

    
      	a.  	
              any
                Person that directly or indirectly controls, is directly or indirectly
                controlled by or is directly or indirectly under common control with
                such
                specified Person; 

            

    

    

    
      	b.  	
              any
                Person that holds a Material Interest in such specified Person;
                

            

    

    

    
      	c.  	
              each
                Person that serves as a director, officer, partner, executor or trustee
                of
                such specified Person (or in a similar capacity);
                

            

    

    

    
      	d.  	
              any
                Person in which such specified Person holds a Material Interest;
                and
                

            

    

    

    
      	e.  	
              any
                Person with respect to which such specified Person serves as a general
                partner or a trustee (or in a similar capacity).
                

            

    

    

    For
      purposes of this definition, (a) “control” (including “controlling,” “controlled
      by,” and “under common control with”) means the possession, direct or indirect,
      of the power to direct or cause the direction of the management and policies
      of
      a Person, whether through the ownership of voting securities, by contract or
      otherwise, and shall be construed as such term is used in the rules promulgated
      under the Securities Act; (b) the “Family” of an individual includes (i) the
      individual, (ii) the individual’s spouse, (iii) any other natural person who is
      related to the individual or the individual’s spouse within the second degree
      and (iv) any other natural person who resides with such individual; and (c)
      “Material Interest” means direct or indirect beneficial ownership (as defined in
      Rule 13d-3 under the Exchange Act) of voting securities or other voting
      interests representing at least ten percent (10%) of the outstanding voting
      power of a Person or equity securities or other equity interests representing
      at
      least ten percent (10%) of the outstanding equity securities or equity interests
      in a Person. 

    

    “Release”--
      any release, spill, emission, leaking, pumping, pouring, dumping, emptying,
      injection, deposit, disposal, discharge, dispersal, leaching or migration on
      or
      into the Environment or into or out of any property. 

    

    “Remedial
      Action”--all actions, including any capital expenditures, required or
      voluntarily undertaken (a) to clean up, remove, treat or in any other way
      address any Hazardous Material or other substance; (b) to prevent the Release
      or
      Threat of Release or to minimize the further Release of any Hazardous Material
      or other substance so it does not migrate or endanger or threaten to endanger
      public health or welfare or the Environment; (c) to perform pre-remedial studies
      and investigations or post-remedial monitoring and care; or (d) to bring all
      Facilities and the operations conducted thereon into compliance with
      Environmental Laws and environmental Governmental Authorizations. 

    

    “Representative”--
      with respect to a particular Person, any director, officer, manager, employee,
      agent, consultant, advisor, accountant, financial advisor, legal counsel or
      other representative of that Person. 

    

    “Retained
      Liabilities”-- as defined in Section 2.4(b). 

    

    “SEC”--
      the United States Securities and Exchange Commission.

    

    “Secured
      Subordinated Promissory Note”--as defined in Section 2.7(b)(ii). 

    

    “Securities
      Act”--as defined in Section 3.3.

    

    “Security
      Agreement” - as defined in Section 2.7(b)(ii).

    

    “Seller”--
      as defined in the first paragraph of this Agreement. 

    

    “Seller
      Contract”--any Contract (a) under which Seller has or may acquire any rights or
      benefits; (b) under which Seller has or may become subject to any obligation
      or
      liability; or (c) by which Seller or any of the assets owned or used by Seller
      is or may become bound. 

    

    “Shareholder”--
      as defined in the first paragraph of this Agreement. 

    

    “Software”--
      all computer software and subsequent versions thereof, including source code,
      object, executable or binary code, objects, comments, screens, user interfaces,
      report formats, templates, menus, buttons and icons and all files, data,
      materials, manuals, design notes and other items and documentation related
      thereto or associated therewith.

    

    “Subsidiary”--
      with respect to any Person (the “Owner”), any corporation or other Person of
      which securities or other interests having the power to elect a majority of
      that
      corporation’s or other Person’s board of directors or similar governing body, or
      otherwise having the power to direct the business and policies of that
      corporation or other Person (other than securities or other interests having
      such power only upon the happening of a contingency that has not occurred),
      are
      held by the Owner or one or more of its Subsidiaries. 

    

    “Tangible
      Personal Property”-- all machinery, equipment, tools, furniture, office
      equipment, computer hardware, supplies, materials, vehicles and other items
      of
      tangible personal property (other than Inventories) of every kind owned or
      leased by Seller (wherever located and whether or not carried on Seller’s
      books), together with any express or implied warranty by the manufacturers
      or
      sellers or lessors of any item or component Part thereof and all maintenance
      records and other documents relating thereto. 

    

    “Tax”--
      any income, gross receipts, license, payroll, employment, excise, severance,
      stamp, occupation, premium, property, part environmental, windfall profit,
      customs, vehicle, airplane, boat, vessel or other title or registration, capital
      stock, franchise, employees’ income withholding, foreign or domestic
      withholding, social security, unemployment, disability, real property, personal
      property, sales, use, transfer, value added, alternative, add-on minimum and
      other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
      and any interest, penalty, addition or additional amount 

    thereon
      imposed, assessed or collected by or under the authority of any Governmental
      Body or payable under any tax-sharing agreement or any other Contract.

    

    “Tax
      Return”-- any return (including any information return), report, statement,
      schedule, notice, form, declaration, claim for refund or other document or
      information filed with or submitted to, or required to be filed with or
      submitted to, any Governmental Body in connection with the determination,
      assessment, collection or payment of any Tax or in connection with the
      administration, implementation or enforcement of or compliance with any Legal
      Requirement relating to any Tax. 

    

    “Third
      Party”--a Person that is not a party to this Agreement. 

    

    “Third-Party
      Claim”-- any claim against any Indemnified Person by a Third Party, whether or
      not involving a Proceeding. 

    

    “Threat
      of Release”-- a reasonable likelihood of a Release that may require action in
      order to prevent or mitigate damage to the Environment that may result from
      such
      Release. 

    

    “WARN
      Act”-- as defined in Section 3.21(d). 

    

    1.2
      USAGE

    

    
      	a.  	
              Interpretation.
                In this Agreement, unless a clear contrary intention appears:
                

            

    

    

    
      	(i)  	
              the
                singular number includes the plural number and vice versa;
                

            

    

    

    
      	(ii)  	
              reference
                to any Person includes such Person’s successors and assigns but, if
                applicable, only if such successors and assigns are not prohibited
                by this
                Agreement, and reference to a Person in a particular capacity excludes
                such Person in any other capacity or individually;
                

            

    

    

    
      	(iii)  	
              reference
                to any gender includes each other gender;

            

    

    

    
      	(iv)  	
              reference
                to any agreement, document or instrument means such agreement, document
                or
                instrument as amended or modified and in effect from time to time
                in
                accordance with the terms thereof; 

            

    

    

    
      	(v)  	
              reference
                to any Legal Requirement means such Legal Requirement as amended,
                modified, codified, replaced or reenacted, in whole or in part, and
                in
                effect from time to time, including rules and regulations promulgated
                thereunder, and reference to any section or other provision of any
                Legal
                Requirement means that provision of such Legal Requirement from time
                to
                time in effect and constituting the substantive amendment, modification,
                codification, replacement or reenactment of such section or other
                provision; 

            

    

    

    
      	(vi)  	
              “hereunder,”
                “hereof,” “hereto,” and words of similar import shall be deemed references
                to this Agreement as a whole and not to any particular Article, Section
                or
                other provision hereof; 

            

    

    

    
      	(vii)  	
              “including”
                (and with correlative meaning “include”) means including without limiting
                the generality of any description preceding such term;
                

            

    

    

    
      	(viii)  	
              “or”
                is used in the inclusive sense of “and/or”;

            

    

    

    
      	(ix)  	
              with
                respect to the determination of any period of time, “from” means “from and
                including” and “to” means “to and including;” and
                

            

    

    

    
      	(x)  	
              references
                to documents, instruments or agreements shall be deemed to refer
                as well
                to all addenda, exhibits, schedules or amendments thereto.
                

            

    

    

    
      	b.  	
              Accounting
                Terms and Determinations. Unless otherwise specified herein, all
                accounting terms used herein shall be interpreted and all accounting
                determinations hereunder shall be made in accordance with GAAP.
                

            

    

    

    
      	c.  	
              Legal
                Representation of the Parties. This Agreement was negotiated by the
                parties with the benefit of legal representation, and any rule of
                construction or interpretation otherwise requiring this Agreement
                to be
                construed or interpreted against any party shall not apply to any
                construction or interpretation hereof.

            

    

    

    

    SECTION
      2  SALE
      AND
      TRANSFER OF ASSETS; CLOSING

    

    2.1
      ASSETS TO BE SOLD

     

    Upon
      the
      terms and subject to the conditions set forth in this Agreement, at the Closing,
      Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer
      shall purchase and acquire from Seller, free and clear of any Encumbrances
      other
      than Permitted Encumbrances, all of Seller’s right, title and interest in and to
      all of Seller’s personal property and assets, tangible and intangible, of every
      kind and description, wherever located, including the following (but excluding
      the Excluded Assets): 

    

    
      	a.  	
              all
                Tangible Personal Property, including those items described in Exhibit
                “A”; 

            

    

    

    
      	b.  	
              all
                Inventories; including but not limited to Exhibit
                “A”

            

    

    

    
      	c.  	
              all
                Seller Contracts, including those listed in Exhibit “B”, and all
                outstanding offers or solicitations made by or to Seller to enter
                into any
                Contract; 

            

    

    

    
      	d.  	
              all
                Governmental Authorizations and all pending applications therefore
                or
                renewals thereof, in each case to the extent transferable to Buyer,
                including those listed in Exhibit “C”;

            

    

    

    
      	e.  	
              all
                data and Records related to the operations of Seller, including client
                and
                customer lists and Records, referral sources, research and development
                reports and Records, production reports and Records, service and
                warranty
                Records, equipment logs, operating guides and manuals, financial
                and
                accounting Records, creative materials, advertising materials, promotional
                materials, studies, reports, correspondence and other similar documents
                and Records and, subject to Legal Requirements, copies of all personnel
                Records and other Records described in Section 2.2 and certification
                documentation for the Inventory; 

            

    

    

    
      	f.  	
              all
                of the intangible rights and property of Seller, including Intellectual
                Property Assets, company name, going concern value, goodwill, telephone,
                telecopy and e-mail addresses and listings and those items listed
                in
                Exhibits “D”; 

            

    

    

    
      	g.  	
              all
                insurance benefits, including rights and proceeds, arising from or
                relating to the Assets or the Assumed Liabilities prior to the Closing,
                unless expended in accordance with this Agreement;
                

            

    

    

    
      	h.  	
              all
                claims of Seller against third parties relating to the Assets, whether
                choate or inchoate, known or unknown, contingent or noncontingent,
                including all such claims listed in Exhibit “E”; and
                

            

    

    

    
      	i.  	
              all
                rights of Seller relating to deposits and prepaid expenses, claims
                for
                refunds and rights to offset in respect thereof that are not listed
                in
                Exhibit “F”. As reflected in Exhibit “F”, Seller and the Shareholder may
                be entitled to certain Income Tax Refunds relating to the operations
                of
                Seller. Such Income Tax Refunds are not included in the Assets.
                

            

    

    

    All
      of
      the property and assets to be transferred to Buyer hereunder are herein referred
      to collectively as the “Assets.” 

    

    Notwithstanding
      the foregoing, the transfer of the Assets pursuant to this Agreement shall
      not
      include the assumption of any Liability related to the Assets unless Buyer
      expressly assumes that Liability pursuant to Section 2.4(a). 

    

    2.2
      EXCLUDED ASSETS 

    

    Notwithstanding
      anything to the contrary contained in Section 2.1 or elsewhere in this
      Agreement, the following assets of Seller (collectively, the “Excluded Assets”)
      are not part of the sale and purchase contemplated hereunder, are excluded
      from
      the Assets and shall remain the property of Seller after the Closing:

    

    
      	a.  	
              all
                cash, cash equivalents and short-term investments;
                

            

    

    

    
      	b.  	
              all
                minute books, stock Records and corporate seals;
                

            

    

    

    
      	c.  	
              the
                shares of capital stock of Seller held in treasury;
                

            

    

    

    
      	d.  	
              all
                Accounts Receivable;

            

    

    

    
      	e.  	
              all
                rights of Seller under this Agreement, the Bill of Sale, the Assignment
                and Assumption Agreement, the Secured Promissory Note, the Security
                Agreement and all other documents to be delivered in connection with
                the
                Contemplated Transactions; and 

            

    

    

    
      	f.  	
              the
                property and assets expressly designated in Exhibit “F”, including but not
                limited to the Income Tax Refunds and real property owned by Seller
                or its
                affiliates. 

            

    

    

    

    

    

    2.3
      CONSIDERATION 

    

    
      	a.  	
              The
                consideration for the Assets (the “Purchase Price”) will be (a) Two
                million five hundred thousand dollars ($2,500,000.00) plus or minus
                the
                Adjustment Amount and (b) the issuance of Three million five hundred
                thousand shares (3,500,000 shares) pursuant to Section 4(2) of the
                Securities Act of Buyer’s Preferred Stock, the subsequent transfer of
                which is restricted, in whole for a minimum of one year or in part
                for a
                minimum of two years, in accordance with Section 144 of the Securities
                Act
                and the assumption of the Assumed Liabilities. In accordance with
                Section
                2.7(b), at the Closing, the Purchase Price, prior to adjustment on
                account
                of the Adjustment Amount, shall be delivered by Buyer to Seller as
                follows: 

            

    

     

    
      	(i)  	
              One
                million dollars ($ 1,000,000.00) by means of one Secured Subordinated
                Promissory Note bearing an interest rate of eight percent (8%) per
                annum
                and shall mature on November 1, 2006; and will be retired as soon
                as
                practical through the receipt of funds raised through the sale of
                debentures or proceeds from a Private Placement Memorandum.
                

            

    

    

    
      	(ii)  	
              the
                balance as adjusted payable in the form of a second Secured Subordinated
                Promissory Note bearing an interest rate of eight percent (8%) per
                annum
                which
                shall mature no later than December 31, 2006 (Attached as Exhibit
“H”) and
                will be retired as soon as practical through the receipt of funds
                raised
                through the sale of debentures or proceeds from a Private Placement
                Memorandum. The security for the Secured Subordinated Promissory
                Note is
                defined in Section 2.7(b)(ii). The Adjustment Amount shall be paid
                in
                accordance with Section 2.8. 

            

    

    

    
      	(iii)  	
              Issued
                at the time of Closing, Three million five hundred thousand (3,500,000)
                shares of Preferred Stock (“Shares”), pursuant to Section 4(2) of the
                Securities Act of Buyer’s Preferred Stock, the subsequent transfer of
                which is restricted, in whole for a minimum of one year or in part
                for a
                minimum of two years, in accordance with Section 144 of the Securities
                Act, commencing from the date that consideration is provided for
                the
                Shares. After the Shares have been held for a minimum of one (1)
                year they
                shall become eligible for sale at the rate of one percent (1%) per
                quarter
                of the Company’s total outstanding shares provided that the Company and
                the eligible sale of Shares meet the conditions of Section 144 of
                the
                Securities Act. 

            

    

    

    b. Conditions
      Precedent to Finality of the Transfer of the Assets.
      Until
      the Buyer tenders full payment of the Secured Subordinated Promissory Note,
      in
      the amount of $1,000,000 principal plus interest in the amount of 8% per annum,
      as detailed in section 2.3(a)(i) above (“Payment Of The First Note”), the Assets
      shall remain in the complete domain and control of the Seller and Shareholder,
      and all corporate decisions or actions regarding the use or application of
      the
      Assts shall require the consent of the Shareholder. Upon Payment Of The First
      Note the Assets will transfer to the complete domain and control of the Buyer,
      subject to the remain conditions of this Agreement.

    

    2.4
      LIABILITIES 

    

    
      	a.  	
              Assumed
                Liabilities. On the Closing Date, but effective as of the Closing,
                Buyer
                shall assume and agree to discharge only the following Liabilities
                of
                Seller (the “Assumed Liabilities”):

            

    

    

    (i) any
      trade
      account payable reflected on the Interim Balance Sheet (other than a trade
      account payable to any Shareholder or a Related Person of Seller or any
      Shareholder) that remains unpaid at and is not delinquent as of the Closing;
      

    

    (ii) any
      trade
      account payable (other than a trade account payable to any Shareholder or a
      Related Person of Seller or any Shareholder) incurred by Seller in the Ordinary
      Course of Business between the date of the Interim Balance Sheet and the Closing
      that remains unpaid at and is not delinquent as of the Closing; 

    

    
      	(iv)  	
              any
                Liability to Seller’s customers incurred by Seller in the Ordinary Course
                of Business for nondelinquent orders outstanding as of the Closing
                reflected on Seller’s books (other than any Liability arising out of or
                relating to a Breach that occurred prior to the Closing); and
                

            

    

    

    
      	(v)  	
              any
                liability to Seller’s suppliers for unfilled purchase orders, provided
                that such unfilled purchase orders shall be for a quantity of parts
                that
                will be sold in the Ordinary Course of Business for a cost consistent
                with
                prevailing market cost. 

            

    

    

    
      	b.  	
              Retained
                Liabilities. The Retained Liabilities shall remain the sole responsibility
                of and shall be retained, paid, performed and discharged solely by
                Seller.
                “Retained Liabilities” shall mean every Liability of Seller other than the
                Assumed Liabilities, including: 

            

    

    

    
      	(i)  	
              any
                Liability arising out of or relating to products of Seller sold prior
                to
                the Closing other than to the extent assumed under Section 2.4(a)(iii);
                

            

    

    

    
      	(ii)  	
              any
                Liability under any Contract assumed by Buyer pursuant to Section
                2.4(a)
                that arises after the Closing but that arises out of or relates to
                any
                Breach that occurred prior to the Closing;

            

    

    

    
      	(iii)  	
              any
                Liability for Taxes, including (A) any Taxes arising as a result
                of
                Seller’s operation of its business or ownership of the Assets prior to the
                Closing, (B) any Taxes that will arise as a result of the sale of
                the
                Assets pursuant to this Agreement and (C) any deferred Taxes of any
                nature; 

            

    

    

    
      	(iv)  	
              (iv)
                any Liability under any Contract not assumed by Buyer under Section
                2.4(a), including any Liability arising out of or relating to Seller’s
                credit facilities or any security interest related thereto;
                

            

    

    

    
      	(v)  	
              any
                Environmental, Health and Safety Liabilities arising out of or relating
                to
                the operation of Seller’s business or Seller’s leasing, ownership or
                operation of real property; 

            

    

    

    
      	(vi)  	
              any
                Liability under the Employee Plans or relating to payroll, vacation,
                sick
                leave, workers’ compensation, unemployment benefits, pension benefits,
                employee stock option or profit-sharing plans, health care plans
                or
                benefits or any other employee plans or benefits of any kind for
                Seller’s
                employees or former employees or both;

            

    

    

    
      	(vii)  	
              any
                Liability under any employment, severance, retention or termination
                agreement with any employee of Seller or any of its Related Persons;
                

            

    

    

    
      	(viii)  	
              any
                Liability arising out of or relating to any employee grievance whether
                or
                not the affected employees are hired by Buyer;

            

    

    

    
      	(ix)  	
              any
                Liability of Seller to any Shareholder or Related Person of Seller
                or any
                Shareholder; 

            

    

    

    
      	(x)  	
              any
                Liability to indemnify, reimburse or advance amounts to any officer,
                director, employee or agent of Seller;

            

    

    

    
      	(xi)  	
              any
                Liability to distribute to Shareholder or otherwise apply all or
                any part
                of the consideration received hereunder;

            

    

    

    
      	(xii)  	
              any
                Liability arising out of any Proceeding pending as of the Closing;
                

            

    

    

    
      	(xiii)  	
              any
                Liability arising out of any Proceeding commenced after the Closing
                and
                arising out of or relating to any occurrence or event happening prior
                to
                the Closing; 

            

    

    

    
      	(xiv)  	
              any
                Liability arising out of or resulting from Seller’s compliance or
                noncompliance with any Legal Requirement or Order of any Governmental
                Body; 

            

    

    

    
      	(xv)  	
              any
                Liability of Seller under this Agreement or any other document executed
                in
                connection with the Contemplated Transactions; and
                

            

    

    

    
      	(xvi)  	
              any
                Liability of Seller based upon Seller’s acts or omissions occurring after
                the Closing. 

            

    

    

    2.5
      ALLOCATION 

    

    The
      Purchase Price shall be allocated as shall be agreed at Closing. After the
      Closing, the parties shall make consistent use of the allocation, fair market
      value and useful lives as agreed for all Tax purposes and in all filings,
      declarations and reports with the IRS in respect thereof, including the reports
      required to be filed under Section 1060 of the Code. Buyer shall prepare and
      deliver IRS Form 8594 to Seller within forty-five (45) days after the Closing
      Date to be filed with the IRS. In any Proceeding related to the determination
      of
      any Tax, neither Buyer nor Seller or Shareholder shall contend or represent
      that
      such allocation is not a correct allocation. 

    

    2.6
      CLOSING 

    

    The
      purchase and sale provided for in this Agreement (the “Closing”) will take place
      at the offices of ____________________, ________________, ________, ________,
      on
      or before October 6, 2006 subject to Due Diligence and respective Board of
      Directors approval, unless Buyer and Seller otherwise agree. Subject to the
      provisions of Article 9, failure to consummate the purchase and sale provided
      for in this Agreement on the date and time and at the place determined pursuant
      to this Section 2.6 will not result in the termination of this Agreement and
      will not relieve any party of any obligation under this Agreement. 

    

    In
      such a
      situation, the Closing will occur as soon as practicable, subject to Article
      9.

    

    2.7
      CLOSING OBLIGATIONS 

    

    
      	a.  	
              In
                addition to any other documents to be delivered under other provisions
                of
                this Agreement, at the Closing: 

            

    

    

    
      	(i)  	
              Seller
                and Shareholder, as the case may be, shall deliver to Buyer, together
                with
                funds sufficient to pay (i) all sales taxes, and (ii) all other Taxes
                necessary for the transfer, filing or recording thereof:
                

            

    

    

    
      	(ii)  	
              a
                bill of sale for all of the Assets that are Tangible Personal Property
                in
                the form of Exhibit 2.7(a)(i) (the “Bill of Sale”) executed by Seller;
                

            

    

    

    
      	(iii)  	
              assignments
                of all Intellectual Property Assets and separate assignments of all
                registered Marks, Patents and Copyrights in the form of Exhibit 2.7(a)(ii)
                executed by Seller;

            

    

    

    
      	(iv)  	
              such
                other deeds, bills of sale, assignments, certificates of title, documents
                and other instruments of transfer and conveyance as may reasonably
                be
                requested by Buyer, each in form and substance satisfactory to Buyer
                and
                its legal counsel and executed by Seller;

            

    

    

    
      	(v)  	
              the
                lease for the Premises in the form of Exhibit 2.7(a)(iv) (the “Lease”);
                

            

    

    

    
      	(vi)  	
              a
                certificate executed by Seller and the Shareholder as to the accuracy
                of
                their representations and warranties as of the date of this Agreement
                and
                as of the Closing in accordance with Section 7.1 and as to their
                compliance with and performance of their covenants and obligations
                to be
                performed or complied with at or before the Closing in accordance
                with
                Section 7.2 (Exhibit 2.7(a)(v)); 

            

    

    

    
      	(vii)  	
              an
                opinion of counsel for the Seller and the Shareholder in form and
                substance satisfactory to Buyer and its legal counsel (Exhibit 2.7(a)(vi))
                ; 

            

    

    

    
      	(viii)  	
              a
                certificate of the Secretary of Seller certifying, as complete and
                accurate as of the Closing (Exhibit 2.7(a)(vii)), attached copies
                of the
                Governing Documents of Seller, certifying and attaching all requisite
                resolutions or actions of Seller’s board of directors and Shareholder
                approving the execution and delivery of this Agreement and the
                consummation of the Contemplated Transactions and the change of name
                contemplated by Section 5.9 and certifying to the incumbency and
                signatures of the officers of Seller executing this Agreement and
                any
                other document relating to the Contemplated Transactions and accompanied
                by the requisite documents for amending the relevant Governing Documents
                of Seller required to effect such change of name in form sufficient
                for
                filing with the appropriate Governmental Body;

            

    

    

    
      	(ix)  	
              the
                Consulting Agreement in the form of Exhibit 2.7(b)(v);
                

            

    

    

    
      	(x)  	
              an
                assignment of all of the Assets that are intangible personal property
                in
                the form of Exhibit 2.7(a)(ix), which assignment shall also contain
                Buyer’s undertaking and assumption of the Assumed Liabilities (the
                “Assignment and Assumption Agreement”) executed by Seller; and
                

            

    

    

    
      	(xi)  	
              the
                Allocation of Purchase Price, in the form of Exhibit 2.7(a)(x).
                

            

    

    

    
      	b.  	
              Buyer
                shall deliver to Seller and Shareholder, as the case may be, documentation
                necessary for the Seller to pay all sales taxes necessary for the
                transfer, filing or recording thereof:

            

    

    

    
      	(i)  	
              a
                Promissory Note executed by Buyer and payable to Seller in the principal
                amount of One million dollars ($1,000,000.00) in the form of Exhibit
“G”
                (the “Secured Subordinated Promissory Note”). The Secured Subordinated
                Promissory Note shall be secured with a subordinated lien on the
                Assets,
                which subordinated lien will be evidenced by the Security Agreement.
                The
                Seller will agree to execute a commercially reasonable subordination
                agreement proffered by lenders to Buyer either contemporaneous with
                or
                subsequent to the Closing, and will execute whatever documents may
                be
                reasonably necessary to make Seller’s security interest in the Assets
                subordinate to Buyer’s lenders; 

            

    

    

    
      	(ii)  	
              the
                Security Agreement (Exhibit 2.7(b)(iii)) and Financing Statement
                necessary
                to perfect Seller’s security interest in the Assets, subject to the
                limitations in Section 2.7(b)(ii); 

            

    

    

    
      	(iii)  	
              the
                Assignment and Assumption Agreement, as such term is defined in Section
                2.7(a)(ix) above; 

            

    

    

    
      	(iv)  	
              the
                Employment Agreement in the form of Exhibit 2.7(b)(v);
                

            

    

    

    
      	(v)  	
              a
                certificate executed by Buyer as to the accuracy of its representations
                and warranties as of the date of this Agreement and as of the Closing
                in
                accordance with Section 8.1 and as to its compliance with and performance
                of its covenants and obligations to be performed or complied with
                at or
                before the Closing in accordance with Section 8.2 (Exhibit 2.7(b)(vi));
                

            

    

    

    
      	(vi)  	
              an
                opinion of counsel for the Buyer in form and substance satisfactory
                to
                Seller and Stockholder (Exhibit 2.7(b)(vii));

            

    

    

    
      	(vii)  	
              a
                certificate of the Secretary of Buyer certifying, as complete and
                accurate
                as of the Closing (Exhibit 2.7(b)(viii)), attached copies of the
                Governing
                Documents of Buyer and certifying and attaching all requisite resolutions
                or actions of Buyer’s board of directors approving the execution and
                delivery of this Agreement and the consummation of the Contemplated
                Transactions and certifying to the incumbency and signatures of the
                officers of Buyer executing this Agreement and any other document
                relating
                to the Contemplated Transactions; 

            

    

    

    
      	(viii)  	
              the
                executed Lease; and 

            

    

    

    
      	(ix)  	
              the
                Allocation of Purchase Price, in the form of Exhibit 2.7(a)(x).
                

            

    

    

    

    2.8
      ADJUSTMENT AMOUNT AND PAYMENT 

    

    The
      “Adjustment Amount” (which may be a positive or negative number) will be equal
      to the amount determined by subtracting the Closing Working Capital from the
      Agreed Working Capital. If the Adjustment Amount is positive, the Adjustment
      Amount shall be subtracted from the cash consideration PORTION OF THE Purchase
      price to be paid at Closing. If the Adjustment Amount is negative, the
      Adjustment Amount shall be added to the cash consideration to be paid at
      Closing. 

    

    2.9
      ADJUSTMENT PROCEDURE 

    

    
      	a.  	
              “Working
                Capital” as of a given date shall mean the amount calculated by
                subtracting the Assumed Liabilities as of that date from the sum
                of (i)
                all Accounts Receivable, regardless of the aging thereof, and (ii)
                Inventory included in the Assets as of that date.
                

            

    

    

    
      	b.  	
              The
                Agreed Working Capital Amount is $ _____________.00.
                

            

    

    

    
      	c.  	
              The
                day before Closing, Seller shall deliver to Buyer (i) a list of its
                Accounts Receivable as of that date showing the aging thereof, (ii)
                a
                statement of its Inventory value as of that date, and (iii) a list
                of the
                Assumed Liabilities as of that date. Buyer shall then determine the
                Working Capital as of the Closing by subtracting the Assumed Liabilities
                as of that date from the sum of the Accounts Receivable as of that
                date
                and the Inventory as of that date (the “Closing Working Capital”).
                

            

    

    

    
      	d.  	
              The
                Adjustment Amount shall be determined by subtracting the Closing
                Working
                Capital from the Agreed Working Capital.

            

    

    

    2.10
      CONSENTS 

    

    
      	a.  	
              If
                there are any Material Consents that (set forth in Schedule
                1)
                have not yet been obtained (or otherwise are not in full force and
                effect)
                as of the Closing, in the case of each Seller Contract as to which
                such
                Material Consents were not obtained (or otherwise are not in full
                force
                and effect) (the “Restricted Material Contracts”), Buyer may waive the
                closing conditions as to any such Material Consent and either:
                

            

    

    

    
      	(i)  	
              elect
                to have Seller continue its efforts to obtain the Material Consents;
                or
                

            

    

    

    
      	(ii)  	
              elect
                to have Seller retain that Restricted Material Contract and all
                Liabilities arising therefrom or relating thereto, on a cost neutral
                basis
                to Seller. 

            

    

    

    If
      Buyer
      elects to have Seller continue its efforts to obtain any Material Consents
      and
      the Closing occurs, notwithstanding Sections 2.1 and 2.4, neither this Agreement
      nor the Assignment and Assumption Agreement nor any other document related
      to
      the consummation of the Contemplated Transactions shall constitute a sale,
      assignment, assumption, transfer, conveyance or delivery or an attempted sale,
      assignment, assumption, transfer, conveyance or delivery of the Restricted
      Material Contracts, and following the Closing, the parties shall use Best
      Efforts, and cooperate with each other, to obtain the Material Consent relating
      to each Restricted Material Contract as quickly as practicable. Pending the
      obtaining of such Material Consents relating to any Restricted Material
      Contract, the parties shall cooperate with each other in any reasonable and
      lawful arrangements designed to provide to Buyer the benefits of use of the
      Restricted Material Contract for its term (or any right or benefit arising
      thereunder, including the enforcement for the benefit of Buyer of any and all
      rights of Seller against a third party thereunder). Once a Material Consent
      for
      the sale, assignment, assumption, transfer, conveyance and delivery of a
      Restricted Material Contract is obtained, Seller shall promptly assign,
      transfer, convey and deliver such Restricted Material Contract to Buyer, and
      Buyer shall assume the obligations under such Restricted Material Contract
      assigned to Buyer from and after the date of assignment to Buyer pursuant to
      a
      special-purpose assignment and assumption agreement substantially similar in
      terms to those of the Assignment and Assumption Agreement (which special-purpose
      agreement the parties shall prepare, execute and deliver in good faith at the
      time of such transfer, all at no additional cost to Buyer). 

    

    
      	b.  	
              If
                there are any Consents not listed on Exhibit 7.3 necessary for the
                assignment and transfer of any Seller Contracts to Buyer (the “Nonmaterial
                Consents”) which have not yet been obtained (or otherwise are not in full
                force and effect) as of the Closing, Buyer shall elect at the Closing,
                in
                the case of each of the Seller Contracts as to which such Nonmaterial
                Consents were not obtained (or otherwise are not in full force and
                effect)
                (the “Restricted Nonmaterial Contracts”), whether to:
                

            

    

    

    
      	(i)  	
              accept
                the assignment of such Restricted Nonmaterial Contract, in which
                case, as
                between Buyer and Seller, such Restricted Nonmaterial Contract shall,
                to
                the maximum extent practicable and notwithstanding the failure to
                obtain
                the applicable Nonmaterial Consent, be transferred at the Closing
                pursuant
                to the Assignment and Assumption Agreement as elsewhere provided
                under
                this Agreement; or 

            

    

    

    
      	(ii)  	
              reject
                the assignment of such Restricted Nonmaterial Contract, in which
                case,
                notwithstanding Sections 2.1 and 2.4, (A) neither this Agreement
                nor the
                Assignment and Assumption Agreement nor any other document related
                to the
                consummation of the Contemplated Transactions shall constitute a
                sale,
                assignment, assumption, conveyance or delivery or an attempted sale,
                assignment, assumption, transfer, conveyance or delivery of such
                Restricted Nonmaterial Contract, and (B) Seller shall retain such
                Restricted Nonmaterial Contract and all Liabilities arising therefrom
                or
                relating thereto. 

            

    

    

    2.11
      ASSIGNMENT OF ACCOUNTS RECEIVABLE FROM BUYER TO SELLER 

    

    In
      the
      event that Buyer shall not receive payment of any of the Accounts Receivable
      within 90 days of Closing, Buyer may assign such uncollected Accounts Receivable
      to Seller at any time within 180 days after Closing (an “Accounts Receivable
      Assignment”), provided, however, that if Buyer shall assign any of such Accounts
      Receivable to Seller after 120 days after Closing but before 180 days after
      Closing, Buyer shall provide Seller with whatever assistance Seller may
      reasonably request in the collection of such Accounts Receivable. Upon the
      occurrence of an Accounts Receivable Assignment, Buyer shall reduce the amount
      of its next payments due under the Secured Subordinated Promissory Note by
      the
      total amount of the Accounts Receivable assigned. This reduction shall not
      be
      subject to the escrow provisions of Section 11.8 regarding items proposed to
      be
      set off by Buyer against its liability to Seller, but shall be deemed to be
      agreed to by Seller. 

    

    

    SECTION
      3 REPRESENTATIONS
      AND WARRANTIES OF SELLER AND SHAREHOLDER

    

    Seller
      and the Shareholder represent and warrant, jointly and severally, to Buyer
      as
      follows: 

    

    

    
      	3.1.  	
              ORGANIZATION
                AND GOOD STANDING 

            

    

    
      	a.  	
              Exhibit
                3.1(a) contains a complete and accurate list of Seller’s jurisdiction of
                incorporation and any other jurisdictions in which it is qualified
                to do
                business as a foreign corporation. Seller is a corporation duly organized,
                validly existing and in good standing under the laws of its jurisdiction
                of incorporation, with full corporate power and authority to conduct
                its
                business as it is now being conducted, to own or use the properties
                and
                assets that it purports to own or use, and to perform all its obligations
                under the Seller Contracts. Seller is duly qualified to do business
                as a
                foreign corporation and is in good standing under the laws of each
                state
                or other jurisdiction in which either the ownership or use of the
                properties owned or used by it, or the nature of the activities conducted
                by it, requires such qualification.

            

    

    

    
      	b.  	
              Complete
                and accurate copies of the Governing Documents of Seller, as currently
                in
                effect, are attached to Exhibit 3.1(b).

            

    

    

    
      	c.  	
              Seller
                has no Subsidiary and, except as disclosed in Exhibit 3.1(c), does
                not own
                any shares of capital stock or other securities of any other Person.
                

            

    

    

    3.2
      ENFORCEABILITY; AUTHORITY; NO CONFLICT 

    

    
      	a.  	
              This
                Agreement constitutes the legal, valid and binding obligation of
                Seller
                and each Shareholder, enforceable against each of them in accordance
                with
                its terms. Upon the execution and delivery by Seller and Shareholder
                of
                the Consulting Agreement, the Noncompetition Agreement and each other
                agreement to be executed or delivered by any or all of Seller and
                Shareholder at the Closing (collectively, the “Seller’s Closing
                Documents”), each of Seller’s Closing Documents will constitute the legal,
                valid and binding obligation of each of Seller and the Shareholder,
                enforceable against each of them in accordance with its terms. Seller
                has
                the absolute and unrestricted right, power and authority to execute
                and
                deliver this Agreement and the Seller’s Closing Documents to which it is a
                party and to perform its obligations under this Agreement and the
                Seller’s
                Closing Documents, and such action has been duly authorized by all
                necessary action by the Shareholder and board of directors. Each
                Shareholder has all necessary legal capacity to enter into this Agreement
                and the Seller’s Closing Documents to which such Shareholder is a party
                and to perform his obligations hereunder and thereunder.
                

            

    

    

    
      	b.  	
              Except
                as set forth in Exhibit 3.2(b), neither the execution and delivery
                of this
                Agreement, nor the consummation or performance of any of the Contemplated
                Transactions will, directly or indirectly (with or without notice
                or lapse
                of time): 

            

    

    

    
      	(i)  	
              Breach
                (A) any provision of any of the Governing Documents of Seller or
                (B) any
                resolution adopted by the board of directors or the Shareholder;
                

            

    

    

    
      	(ii)  	
              Breach
                or give any Governmental Body or other Person the right to challenge
                any
                of the Contemplated Transactions or to exercise any remedy or obtain
                any
                relief under any Legal Requirement or any Order to which Seller or
                the
                Shareholder, or any of the Assets, may be subject;
                

            

    

    

    
      	(iii)  	
              contravene,
                conflict with or result in a violation or breach of any of the terms
                or
                requirements of, or give any Governmental Body the right to revoke,
                withdraw, suspend, cancel, terminate or modify, any Governmental
                Authorization that is held by Seller or that otherwise relates to
                the
                Assets or to the business of Seller;

            

    

    

    
      	(iv)  	
              cause
                Buyer to become subject to, or to become liable for the payment of,
                any
                Tax, other than one-half of all sales taxes necessary for the transfer,
                filing or recording of and of the Assets;

            

    

    

    
      	(v)  	
              Breach
                any provision of, or give any Person the right to declare a default
                or
                exercise any remedy under, or to accelerate the maturity or performance
                of, or payment under, or to cancel, terminate or modify, any Seller
                Contract; 

            

    

    

    
      	(vi)  	
              result
                in the imposition or creation of any Encumbrance upon or with respect
                to
                any of the Assets; or 

            

    

    

    
      	(vii)  	
              result
                in any shareholder of the Seller having the right to exercise dissenters’
                appraisal rights. 

            

    

    

    
      	c.  	
              Except
                as set forth in Exhibit 3.2(c), neither Seller nor the Shareholder
                is
                required to give any notice to or obtain any Consent from any Person
                in
                connection with the execution and delivery of this Agreement or the
                consummation or performance of any of the Contemplated Transactions.
                

            

    

    

    3.3
      CAPITALIZATION 

    

    The
      authorized equity securities of Seller consist of _75,000,000___________ (___)
      shares of common stock, _.001___ par value per share, of which
      __75,000,000_________ (______) shares are issued and outstanding, and all of
      which are owned by the Shareholder. Shareholder is and will be on the Closing
      Date the record and beneficial owner and holder of the shares owned by him,
      free
      and clear of all Encumbrances. There are no Contracts relating to the issuance,
      sale or transfer of any equity securities or other securities of Seller. None
      of
      the outstanding equity securities of Seller was issued in violation of the
      Securities Act of 1933, as amended (the “Securities Act”), or any other Legal
      Requirement. 

    

    

    

    

    

    

    3.4
      FINANCIAL STATEMENTS 

    

    Seller
      has delivered to Buyer: 

    

    
      	(a)  	
              an
                unaudited balance sheet of Seller as of 2005 (the “Balance Sheet”), and
                the related unaudited statement of income for the year then ended;
                

            

    

    

    
      	(b)  	
              unaudited
                balance sheets of Seller as of the year end 2005 in each of the fiscal
                years 2004 through 2005, and the related unaudited statement of income
                for
                each of the fiscal years then ended; and

            

    

    

    
      	(c)  	
              an
                unaudited balance sheet of Seller as of June 30, 2006, 2006, (the
“Interim
                Balance Sheet”) and the related unaudited statement of income for the
                three (3) months then ended. Such financial statements fairly present
                (and
                the financial statements delivered pursuant to Section 5.8 will fairly
                present) the financial condition and the results of operations of
                Seller
                as at the respective dates of and for the periods referred to in
                such
                financial statements. The financial statements referred to in this
                Section
                3.4 and delivered pursuant to Section 5.8 reflect and will reflect
                the
                consistent application of accounting principles throughout the periods
                involved, except as disclosed in the notes to such financial statements.
                The financial statements have been and will be prepared from and
                are in
                accordance with the accounting Records of Seller.
                

            

    

    

    3.5
      BOOKS
      AND RECORDS 

    

    The
      books
      of account and other financial Records of Seller, all of which have been made
      available to Buyer, are complete and correct and represent actual, bona fide
      transactions and have been maintained in accordance with sound business
      practices and maintenance of an adequate system of internal controls. The minute
      books of Seller, all of which have been made available to Buyer, contain
      accurate and complete Records of all meetings held of, and corporate action
      taken by, the Shareholder, the board of directors and committees of the board
      of
      directors of Seller, and no meeting of the Shareholder, board of directors
      or
      committee has been held for which minutes have not been prepared or are not
      contained in such minute books. 

    

    3.6
      SUFFICIENCY OF ASSETS 

    

    Except
      as
      set forth in Exhibit 3.6, the Assets (a) constitute all of the assets, tangible
      and intangible, of any nature whatsoever, necessary to operate Seller’s business
      in the manner presently operated by Seller and (b) include all of the operating
      assets of Seller. 

    

    

    

    3.7
      TITLE
      TO ASSETS; ENCUMBRANCES 

    

    Seller
      owns good and transferable title to all of the Assets free and clear of any
      Encumbrances other than those described in Exhibit 3.7 (“Encumbrances”). Seller
      warrants to Buyer that, at the time of Closing, all Assets shall be free and
      clear of all Encumbrances other than those identified on Exhibit 3.7 as
      acceptable to Buyer (“Permitted Encumbrances”). 

    

    
      	3.8  	
              CONDITION
                OF FACILITIES 

            

    

    

    
      	a.  	
              Use
                of the Facilities for the various purposes for which it is presently
                being
                used is permitted as of right under all applicable zoning legal
                requirements and is not subject to “permitted nonconforming” use or
                structure classifications. All Improvements are in compliance with
                all
                applicable Legal Requirements, including those pertaining to zoning,
                building and the disabled, are in good repair and in good condition,
                ordinary wear and tear excepted, and are free from latent and patent
                defects. No part of any Improvement encroaches on any real property
                not
                included in the Facilities, and there are no buildings, structures,
                fixtures or other Improvements primarily situated on adjoining property
                which encroach on any part of the Land. The Land for each owned Facility
                abuts on and has direct vehicular access to a public road or has
                access to
                a public road via a permanent, irrevocable, appurtenant easement
                benefiting such Land and comprising a part of the Facilities, is
                supplied
                with public or quasi-public utilities and other services appropriate
                for
                the operation of the Facilities located thereon and is not located
                within
                any flood plain or area subject to wetlands regulation or any similar
                restriction. To Seller’s knowledge, after reasonable investigation, there
                is no existing or proposed plan to modify or realign any street or
                highway
                or any existing or proposed eminent domain proceeding that would
                result in
                the taking of all or any part of any Facility or that would prevent
                or
                hinder the continued use of any Facility as heretofore used in the
                conduct
                of the business of Seller. 

            

    

    

    
      	b.  	
              Each
                item of Tangible Personal Property is in repair and operating condition,
                ordinary wear and tear excepted, is suitable for immediate use in
                the
                Ordinary Course of Business and is free from latent and patent defects.
                No
                item of Tangible Personal Property is in need of repair or replacement
                other than as part of routine maintenance in the Ordinary Course
                of
                Business. Except as disclosed in Exhibit 3.8(b), all Tangible Personal
                Property used in Seller’s business is in the possession of Seller.
                

            

    

    

    
      	3.9  	
              ACCOUNTS
                RECEIVABLE 

            

    

    

    All
      Accounts Receivable that are reflected on the Balance Sheet or the Interim
      Balance Sheet or on the accounting Records of Seller as of the Closing Date
      represent or will represent valid obligations arising from sales actually made
      or services actually performed by Seller in the Ordinary Course of Business.
      Except to the extent paid prior to the Closing Date, such Accounts Receivable
      are or will be as of the Closing Date current and collectible net of the
      respective reserves shown on the Balance Sheet or the Interim Balance Sheet
      or
      as included in the Closing Working Capital (which reserves are adequate and
      calculated consistent with past practice and, in the case of the reserve in
      the
      Accounts Receivable included in the Closing Working Capital, will not represent
      a greater percentage of the Accounts Receivable reflected in the Accounts
      Receivable included in the Closing Working Capital than the reserve reflected
      on
      the Interim Balance Sheet represented of the Accounts Receivable reflected
      thereon and will not represent a material adverse change in the composition
      of
      such Accounts Receivable in terms of aging). Subject to such reserves, each
      of
      such Accounts Receivable either has been or will be collected in full, without
      any setoff, within ninety (90) days after the day on which it first becomes
      due
      and payable. There is no contest, claim, defense or right of setoff, other
      than
      returns in the Ordinary Course of Business of Seller, under any Contract with
      any account debtor of an Account Receivable relating to the amount or validity
      of such Account Receivable. Exhibit 3.9 contains a complete and accurate list
      of
      all Accounts Receivable as of the date of the Interim Balance Sheet, which
      list
      sets forth the aging of each such Account Receivable. 

    

    
      	3.10  	
              INVENTORIES
                

            

    

    

    All
      items
      included in the Inventories consist of a quality saleable in the Ordinary Course
      of Business of Seller except for items of below-standard quality, all of which
      have been written off or written down to net realizable value in the Balance
      Sheet or the Interim Balance Sheet or on the accounting Records of Seller as
      of
      the Closing Date, as the case may be. Seller is not in possession of any
      inventory not owned by Seller, including goods already sold. Inventories now
      on
      hand that were purchased after the date of the Balance Sheet or the Interim
      Balance Sheet were purchased in the Ordinary Course of Business of Seller at
      a
      cost not exceeding market prices prevailing at the time of purchase. All items
      of Inventory meet the original quality specifications of the respective
      manufacturers. The Seller has on file, and such information is included in
      the
      Assets, proper certification documentation for the Inventory. 

    

    3.11
      NO
      UNDISCLOSED LIABILITIES 

    

    Except
      as
      set forth in Exhibit 3.11, Seller has no Liability except for Liabilities
      reflected or reserved against in the Balance Sheet or the Interim Balance Sheet
      and current liabilities incurred in the Ordinary Course of Business of Seller
      since the date of the Interim Balance Sheet. 

    

    3.12
      TAXES 

    

    
      	a.  	
              Tax
                Returns Filed and Taxes Paid. Seller has filed or caused to be filed
                on a
                timely basis all Tax Returns and all reports with respect to Taxes
                that
                are or were required to be filed pursuant to applicable Legal
                Requirements. All Tax Returns and reports filed by Seller are true,
                correct and complete, subject to amendments thereof in connection
                with the
                Income Tax Refunds. Seller has paid, or made provision for the payment
                of,
                all Taxes that have or may have become due for all periods covered
                by the
                Tax Returns or otherwise, or pursuant to any assessment received
                by
                Seller, except such Taxes, if any, as are listed in Exhibit 3.12(a)
                and
                are being contested in good faith and as to which adequate reserves
                (determined in accordance with GAAP) have been provided in the Balance
                Sheet and the Interim Balance Sheet. Except as provided in Exhibit
                3.12(a), Seller currently is not the beneficiary of any extension
                of time
                within which to file any Tax Return. No claim has ever been made
                or is
                expected to be made by any Governmental Body in a jurisdiction where
                Seller does not file Tax Returns that it is or may be subject to
                taxation
                by that jurisdiction. There are no Encumbrances on any of the Assets
                that
                arose in connection with any failure (or alleged failure) to pay
                any Tax,
                and Seller has no Knowledge of any basis for assertion of any claims
                attributable to Taxes which, if adversely determined, would result
                in any
                such Encumbrance. 

            

    

    

    
      	b.  	
              Delivery
                of Tax Returns and Information Regarding Audits and Potential Audits.
                Seller has delivered or made available to Buyer copies of, and Exhibit
                3.12(b) contains a complete and accurate list of, all Tax Returns
                filed
                since 2002. 

            

    

    

    
      	c.  	
              Proper
                Accrual. The charges, accruals and reserves with respect to Taxes
                on the
                Records of Seller are adequate (determined in accordance with GAAP)
                and
                are at least equal to Seller’s liability for Taxes. There exists no
                proposed tax assessment or deficiency against Seller except as disclosed
                in the Balance Sheet or in Exhibit 3.12(c).

            

    

    

    
      	d.  	
              Specific
                Potential Tax Liabilities and Tax Situations.

            

    

    

    
      	(i)  	
              Withholding.
                All Taxes that Seller is or was required by Legal Requirements to
                withhold, deduct or collect have been duly withheld, deducted and
                collected and, to the extent required, have been paid to the proper
                Governmental Body or other Person. 

            

    

    

    
      	(ii)  	
              Tax
                Allocation and Indemnity Agreement. Neither Seller nor any Affiliate
                has
                any liability or has Knowledge of any facts or circumstances that
                might
                give rise to any liability, specifically for withholding (Payroll
                Taxes)
                taxes and any failure to withhold or pay any withheld taxes will
                not
                result in any liability whatsoever to Buyer. Seller hereby further
                agrees
                and shall remain responsible for any Payroll Taxes that may have
                accrue
                prior to the Closing Date and pay the same. Seller further agrees
                to hold
                harmless, indemnify, and defend Buyer against any liabilities that
                accrued
                prior to Closing Date which arising from all Taxes that Seller is
                or was
                required by Legal Requirements to withhold, deduct or collect.
                

            

    

    

    
      	(iii)  	
              Tax
                Sharing or Similar Agreements. There is no tax sharing agreement,
                obligation or similar written or unwritten agreement, arrangement,
                understanding or practice with respect to Taxes (including any advance
                pricing agreement, closing agreement or other arrangement relating
                to
                Taxes) that will require any payment by Buyer.

            

    

    

    
      	(iv)  	
              Consolidated
                Group. Seller (A) has not been a member of an affiliated group within
                the
                meaning of Code Section 1504(a) (or any similar group defined under
                a
                similar provision of state, local or foreign law) and (B) has no
                liability
                for Taxes of any person (other than Seller and its Subsidiaries)
                under
                Treas. Reg. sect. 1.1502-6 (or any similar provision of state, local
                or
                foreign law), as a transferee or successor by contract or otherwise.
                

            

    

    

    
      	(v)  	
              S
                Corporation. Seller is an S corporation as defined in Code Section
                1361,
                and Seller is not and has not been subject to either the built-in-gains
                tax under Code Section 1374 or the passive income tax under Code
                Section
                1375. Exhibit 3.12(d)(iv) lists all the states and localities with
                respect
                to which Seller is required to file any corporate, income or franchise
                tax
                returns and sets forth whether Seller is treated as the equivalent
                of an S
                corporation by or with respect to each such state or locality. Seller
                has
                properly filed Tax Returns with and paid and discharged any liabilities
                for taxes in any states or localities in which it is subject to Tax.
                

            

    

    

    
      	(vi)  	
              Substantial
                Understatement Penalty. Seller has disclosed on its federal income
                Tax
                Returns all positions taken therein that could give rise to a substantial
                understatement of federal income Tax within the meaning of Code Section
                6662, if any. 

            

    

    

    3.13
      NO
      MATERIAL ADVERSE CHANGE 

    

    Since
      the
      date of the Balance Sheet, there has not been any material adverse change in
      the
      business, operations, prospects, assets, results of operations or condition
      (financial or other) of Seller, and, to Seller’s Knowledge, after reasonable
      investigation, no event has occurred or circumstance exists that may result
      in
      such a material adverse change. 

    

    3.14
      EMPLOYEE BENEFITS 

    

    
      	a.  	
              Set
                forth in Exhibit 3.14(a) is a complete and correct list of all “employee
                benefit plans” as defined by Section 3(3) of ERISA, all specified fringe
                benefit plans as defined in Section 6039D of the Code, and all other
                bonus, incentive-compensation, deferred-compensation, profit-sharing,
                stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
                employee-stock-ownership, savings, severance, change-in-control,
                supplemental-unemployment, layoff, salary-continuation, retirement,
                pension, health, life-insurance, disability, accident, group-insurance,
                vacation, holiday, sick-leave, fringe-benefit or welfare plan, and
                any
                other employee compensation or benefit plan, agreement, policy, practice,
                commitment, contract or understanding (whether qualified or nonqualified,
                currently effective or terminated, written or unwritten) and any
                trust,
                escrow or other agreement related thereto that (i) is maintained
                or
                contributed to by Seller or any other corporation or trade or business
                controlled by, controlling or under common control with Seller (within
                the
                meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b)
                of
                ERISA) (“ERISA Affiliate”) or has been maintained or contributed to in the
                last six (6) years by Seller or any ERISA Affiliate, or with respect
                to
                which Seller or any ERISA Affiliate has or may have any liability,
                and
                (ii) provides benefits, or describes policies or procedures applicable
                to
                any current or former director, officer, employee or service provider
                of
                Seller or any ERISA Affiliate, or the dependents of any thereof,
                regardless of how (or whether) liabilities for the provision of benefits
                are accrued or assets are acquired or dedicated with respect to the
                funding thereof (collectively the “Employee Plans”). Exhibit 3.14(a)
                identifies as such any Employee Plan that is (w) a “Defined Benefit Plan”
                (as defined in Section 414(l) of the Code); (x) a plan intended to
                meet
                the requirements of Section 401(a) of the Code; (y) a “Multiemployer Plan”
                (as defined in Section 3(37) of ERISA); or (z) a plan subject to
                Title IV
                of ERISA, other than a Multiemployer Plan. Also set forth on Exhibit
                3.14(a) is a complete and correct list of all ERISA Affiliates of
                Seller
                during the last six (6) years. 

            

    

    

    
      	b.  	
              Seller
                has delivered to Buyer true, accurate and complete copies of (i)
                the
                documents comprising each Employee Plan (or, with respect to any
                Employee
                Plan which is unwritten, a detailed written description of eligibility,
                participation, benefits, funding arrangements, assets and any other
                matters which relate to the obligations of Seller or any ERISA Affiliate);
                (ii) all trust agreements, insurance contracts or any other funding
                instruments related to the Employee Plans; (iii) all rulings,
                determination letters, no-action letters or advisory opinions from
                the
                IRS, the U.S. Department of Labor, the Pension Benefit Guaranty
                Corporation (“PBGC”) or any other Governmental Body that pertain to each
                Employee Plan and any open requests therefore; (iv) the most recent
                actuarial and financial reports (audited and/or unaudited) and the
                annual
                reports filed with any Government Body with respect to the Employee
                Plans
                during the current year and each of the three preceding years; (v)
                all
                collective bargaining agreements pursuant to which contributions
                to any
                Employee Plan(s) have been made or obligations incurred (including
                both
                pension and welfare benefits) by Seller or any ERISA Affiliate, and
                all
                collective bargaining agreements pursuant to which contributions
                are being
                made or obligations are owed by such entities; (vi) all securities
                registration statements filed with respect to any Employee Plan;
                (vii) all
                contracts with third-party administrators, actuaries, investment
                managers,
                consultants and other independent contractors that relate to any
                Employee
                Plan, (viii) with respect to Employee Plans that are subject to Title
                IV
                of ERISA, the Form PBGC-1 filed for each of the three most recent
                plan
                years; and (ix) all summary plan descriptions, summaries of material
                modifications and memoranda, employee handbooks and other written
                communications regarding the Employee Plans.

            

    

    

    
      	c.  	
              Except
                as disclosed in Exhibit 3.14(c), full payment has been made of all
                amounts
                that are required under the terms of each Employee Plan to be paid
                as
                contributions with respect to all periods prior to and including
                the last
                day of the most recent fiscal year of such Employee Plan ended on
                or
                before the date of this Agreement and all periods thereafter prior
                to the
                Closing Date, and no accumulated funding deficiency or liquidity
                shortfall
                (as those terms are defined in Section 302 of ERISA and Section 412
                of the
                Code) has been incurred with respect to any such Employee Plan, whether
                or
                not waived. The value of the assets of each Employee Plan exceeds
                the
                amount of all benefit liabilities (determined on a plan termination
                basis
                using the actuarial assumptions established by the PBGC as of the
                Closing
                Date) of such Employee Plan. Seller is not required to provide security
                to
                an Employee Plan under Section 401(a)(29) of the Code. The funded
                status
                of each Employee Plan that is a Defined Benefit Plan is disclosed
                on
                Exhibit 3.14(c) in a manner consistent with the Statement of Financial
                Accounting Standards No. 87. Seller has paid in full all required
                insurance premiums, subject only to normal retrospective adjustments
                in
                the ordinary course, with regard to the Employee Plans for all policy
                years or other applicable policy periods ending on or before the
                Closing
                Date. 

            

    

    

    
      	d.  	
              Except
                as disclosed in Exhibit 3.14(d), no Employee Plan, if subject to
                Title IV
                of ERISA, has been completely or partially terminated, nor has any
                event
                occurred nor does any circumstance exist that could result in the
                partial
                termination of such Employee Plan. The PBGC has not instituted or
                threatened a Proceeding to terminate or to appoint a trustee to administer
                any of the Employee Plans pursuant to Subtitle 1 of Title IV of ERISA,
                and
                no condition or set of circumstances exists that presents a material
                risk
                of termination or partial termination of any of the Employee Plans
                by the
                PBGC. None of the Employee Plans has been the subject of, and no
                event has
                occurred or condition exists that could be deemed, a reportable event
                (as
                defined in Section 4043 of ERISA) as to which a notice would be required
                (without regard to regulatory monetary thresholds) to be filed with
                the
                PBGC. Seller has paid in full all insurance premiums due to the PBGC
                with
                regard to the Employee Plans for all applicable periods ending on
                or
                before the Closing Date. 

            

    

    

    
      	e.  	
              Neither
                Seller nor any ERISA Affiliate has any liability or has Knowledge
                of any
                facts or circumstances that might give rise to any liability, and
                the
                Contemplated Transactions will not result in any liability, (i) for
                the
                termination of or withdrawal from any Employee Plan under Sections
                4062,
                4063 or 4064 of ERISA, (ii) for any lien imposed under Section 302(f)
                of
                ERISA or Section 412(n) of the Code, (iii) for any interest payments
                required under Section 302(e) of ERISA or Section 412(m) of the Code,
                (iv)
                for any excise tax imposed by Section 4971 of the Code, (v) for any
                minimum funding contributions under Section 302(c)(11) of ERISA or
                Section
                412(c)(11) of the Code or (vi) for withdrawal from any Multiemployer
                Plan
                under Section 4201 of ERISA. 

            

    

    

    
      	f.  	
              Seller
                has, at all times, complied, and currently complies, in all material
                respects with the applicable continuation requirements for its welfare
                benefit plans, including (1) Section 4980B of the Code (as well as
                its
                predecessor provision, Section 162(k) of the Code) and Sections 601
                through 608, inclusive, of ERISA, which provisions are hereinafter
                referred to collectively as “COBRA” and (2) any applicable state statutes
                mandating health insurance continuation coverage for employees.
                

            

    

    

    
      	g.  	
              The
                form of all Employee Plans is in compliance with the applicable terms
                of
                ERISA, the Code, and any other applicable laws, including the Americans
                with Disabilities Act of 1990, the Family Medical Leave Act of 1993
                and
                the Health Insurance Portability and Accountability Act of 1996,
                and such
                plans have been operated in compliance with such laws and the written
                Employee Plan documents. Neither Seller nor any fiduciary of an Employee
                Plan has violated the requirements of Section 404 of ERISA. All required
                reports and descriptions of the Employee Plans (including Internal
                Revenue
                Service Form 5500 Annual Reports, Summary Annual Reports and Summary
                Plan
                Descriptions and Summaries of Material Modifications) have been (when
                required) timely filed with the IRS, the U.S. Department of Labor
                or other
                Governmental Body and distributed as required, and all notices required
                by
                ERISA or the Code or any other Legal Requirement with respect to
                the
                Employee Plans have been appropriately given.

            

    

    

    
      	h.  	
              Each
                Employee Plan that is intended to be qualified under Section 401(a)
                of the
                Code has received a favorable determination letter from the IRS,
                and
                Seller has no Knowledge of any circumstances that will or could result
                in
                revocation of any such favorable determination letter. Each trust
                created
                under any Employee Plan has been determined to be exempt from taxation
                under Section 501(a) of the Code, and Seller is not aware of any
                circumstance that will or could result in a revocation of such exemption.
                Each Employee Welfare Benefit Plan (as defined in Section 3(1) of
                ERISA)
                that utilizes a funding vehicle described in Section 501(c)(9) of
                the Code
                or is subject to the provisions of Section 505 of the Code has been
                the
                subject of a notification by the IRS that such funding vehicle qualifies
                for tax-exempt status under Section 501(c)(9) of the Code or that
                the plan
                complies with Section 505 of the Code, unless the IRS does not, as
                a
                matter of policy, issue such notification with respect to the particular
                type of plan. With respect to each Employee Plan, no event has occurred
                or
                condition exists that will or could give rise to a loss of any intended
                tax consequence or to any Tax under Section 511 of the Code.
                

            

    

    

    
      	i.  	
              There
                is no material pending or threatened Proceeding relating to any Employee
                Plan, nor is there any basis for any such Proceeding. Neither Seller
                nor
                any fiduciary of an Employee Plan has engaged in a transaction with
                respect to any Employee Plan that, assuming the taxable period of
                such
                transaction expired as of the date hereof, could subject Seller or
                Buyer
                to a Tax or penalty imposed by either Section 4975 of the Code or
                Section
                502(l) of ERISA or a violation of Section 406 of ERISA. The Contemplated
                Transactions will not result in the potential assessment of a Tax
                or
                penalty under Section 4975 of the Code or Section 502(l) of ERISA
                nor
                result in a violation of Section 406 of ERISA.

            

    

    

    
      	j.  	
              Seller
                has maintained workers’ compensation coverage as required by applicable
                state law through purchase of insurance and not by self-insurance
                or
                otherwise except as disclosed to Buyer on Exhibit 3.14(j).
                

            

    

    

    
      	k.  	
              Except
                as required by Legal Requirements and as provided in Section 10.1(d),
                the
                consummation of the Contemplated Transactions will not accelerate
                the time
                of vesting or the time of payment, or increase the amount, of compensation
                due to any director, employee, officer, former employee or former
                officer
                of Seller. There are no contracts or arrangements providing for payments
                that could subject any person to liability for tax under Section
                4999 of
                the Code. 

            

    

    

    
      	l.  	
              Except
                for the continuation coverage requirements of COBRA, Seller has no
                obligations or potential liability for benefits to employees, former
                employees or their respective dependents following termination of
                employment or retirement under any of the Employee Plans that are
                Employee
                Welfare Benefit Plans. 

            

    

    

    
      	m.  	
              None
                of the Contemplated Transactions will result in an amendment, modification
                or termination of any of the Employee Plans. No written or oral
                representations have been made to any employee or former employee
                of
                Seller promising or guaranteeing any employer payment or funding
                for the
                continuation of medical, dental, life or disability coverage for
                any
                period of time beyond the end of the current plan year (except to
                the
                extent of coverage required under COBRA). No written or oral
                representations have been made to any employee or former employee
                of
                Seller concerning the employee benefits of Buyer.
                

            

    

    

    
      	n.  	
              With
                respect to any Employee Plan that is a “multiemployer plan” within the
                meaning of Section 4001(a)(3) of ERISA (“Multiemployer Plan”), and any
                other Multiemployer Plan to which Seller has at any time had an obligation
                to contribute:

            

    

    

    
      	(i)  	
              all
                contributions required by the terms of such Multiemployer Plan and
                any
                collective bargaining agreement have been made when due; and
                

            

    

    

    
      	(ii)  	
              Seller
                would not be subject to any withdrawal liability under Part 1 of
                Subtitle
                E of Title IV of ERISA if, as of the date hereof, Seller were to
                engage in
                a “complete withdrawal” (as defined in ERISA Section 4203) or a “partial
                withdrawal” (as defined in ERISA Section 4205) from such Multiemployer
                Plan. 

            

    

    

    3.15
      COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS 

    

    
      	a.  	
              Except
                as set forth in Exhibit “C”: 

            

    

    

    
      	(i)  	
              Seller
                is, and at all times since January 1, 2001, has been, in full compliance
                with each Legal Requirement that is or was applicable to it or to
                the
                conduct or operation of its business or the ownership or use of any
                of its
                assets; 

            

    

    

    
      	(ii)  	
              no
                event has occurred or circumstance exists that (with or without notice
                or
                lapse of time) (A) may constitute or result in a violation by Seller
                of,
                or a failure on the part of Seller to comply with, any Legal Requirement
                or (B) may give rise to any obligation on the part of Seller to undertake,
                or to bear all or any portion of the cost of, any remedial action
                of any
                nature; and 

            

    

    

    
      	(iii)  	
              Seller
                has not received, at any time since _________, 200_, any notice or
                other
                communication (whether oral or written) from any Governmental Body
                or any
                other Person regarding (A) any actual, alleged, possible or potential
                violation of, or failure to comply with, any Legal Requirement or
                (B) any
                actual, alleged, possible or potential obligation on the part of
                Seller to
                undertake, or to bear all or any portion of the cost of, any remedial
                action of any nature. 

            

    

    

    
      	b.  	
              Exhibit
                “C” contains a complete and accurate list of each Governmental
                Authorization that is held by Seller or that otherwise relates to
                Seller’s
                business or the Assets. Each Governmental Authorization listed or
                required
                to be listed in Exhibit “C” is valid and in full force and effect. Except
                as set forth in Exhibit “C”: 

            

    

    

    
      	(i)  	
              Seller
                is, and at all times since January 1, 2001, has been, in full compliance
                with all of the terms and requirements of each Governmental Authorization
                identified or required to be identified in Exhibit “C”;
                

            

    

    

    
      	(ii)  	
              no
                event has occurred or circumstance exists that may (with or without
                notice
                or lapse of time) (A) constitute or result directly or indirectly
                in a
                violation of or a failure to comply with any term or requirement
                of any
                Governmental Authorization listed or required to be listed in Exhibit
“C”
                or (B) result directly or indirectly in the revocation, withdrawal,
                suspension, cancellation or termination of, or any modification to,
                any
                Governmental Authorization listed or required to be listed in Exhibit
“C”;
                

            

    

    

    
      	(iii)  	
              Seller
                has not received, at any time since January 1, 2001, any notice or
                other
                communication (whether oral or written) from any Governmental Body
                or any
                other Person regarding (A) any actual, alleged, possible or potential
                violation of or failure to comply with any term or requirement of
                any
                Governmental Authorization or (B) any actual, proposed, possible
                or
                potential revocation, withdrawal, suspension, cancellation, termination
                of
                or modification to any Governmental Authorization; and
                

            

    

    

    
      	(iv)  	
              all
                applications required to have been filed for the renewal of the
                Governmental Authorizations listed or required to be listed in Exhibit
“C”
                have been duly filed on a timely basis with the appropriate Governmental
                Bodies, and all other filings required to have been made with respect
                to
                such Governmental Authorizations have been duly made on a timely
                basis
                with the appropriate Governmental Bodies. The Governmental Authorizations
                listed in Exhibit “C” collectively constitute all of the Governmental
                Authorizations necessary to permit Seller to awfully conduct and
                operate
                its business in the manner in which it currently conducts and operates
                such business and to permit Seller to own and use its assets in the
                manner
                in which it currently owns and uses such assets.
                

            

    

    

    

    

    

    3.16
      LEGAL PROCEEDINGS; ORDERS 

    

    
      	a.  	
              Except
                as set forth in Exhibit 3.16(a), there is no pending or, to Seller’s
                Knowledge, threatened Proceeding: 

            

    

    

    
      	(i)  	
              by
                or against Seller or that otherwise relates to or may affect the
                business
                of, or any of the assets owned or used by, Seller; or
                

            

    

    

    
      	(ii)  	
              (ii)
                that challenges, or that may have the effect of preventing, delaying,
                making illegal or otherwise interfering with, any of the Contemplated
                Transactions. 

            

    

    To
      the
      Knowledge of Seller, no event has occurred or circumstance exists that is
      reasonably likely to give rise to or serve as a basis for the commencement
      of
      any such Proceeding. Seller has delivered to Buyer copies of all pleadings,
      correspondence and other documents relating to each Proceeding listed in Exhibit
      3.16(a). There are no Proceedings listed or required to be listed in Exhibit
      3.16(a) that could have a material adverse effect on the business, operations,
      assets, condition or prospects of Seller or upon the Assets. 

    

    
      	b.  	
              Except
                as set forth in Exhibit 3.16(b): 

            

    

    

    
      	(i)  	
              there
                is no Order to which Seller, its business or any of the Assets is
                subject;
                and 

            

    

    

    
      	(ii)  	
              to
                the Knowledge of Seller, no officer, director, agent or employee
                of Seller
                is subject to any Order that prohibits such officer, director, agent
                or
                employee from engaging in or continuing any conduct, activity or
                practice
                relating to the business of Seller.

            

    

    

    
      	c.  	
              Except
                as set forth in Exhibit 3.16(c): 

            

    

    

    
      	(i)  	
              Seller
                is, and has been in compliance with all of the terms and requirements
                of
                each Order to which it or any of the Assets is or has been subject;
                

            

    

    

    
      	(ii)  	
              no
                event has occurred or circumstance exists that is reasonably likely
                to
                constitute or result in (with or without notice or lapse of time)
                a
                violation of or failure to comply with any term or requirement of
                any
                Order to which Seller or any of the Assets is subject; and
                

            

    

    

    
      	(iii)  	
              Seller
                has not received any notice or other communication (whether oral
                or
                written) from any Governmental Body or any other Person regarding
                any
                actual, alleged, possible or potential violation of, or failure to
                comply
                with, any term or requirement of any Order to which Seller or any
                of the
                Assets is or has been subject. 

            

    

    

    3.17
      ABSENCE OF CERTAIN CHANGES AND EVENTS 

    

    Except
      as
      set forth in Exhibit 3.17, since the date of the Balance Sheet, Seller has
      conducted its business only in the Ordinary Course of Business and there has
      not
      been any: 

    

    
      	a.  	
              change
                in Seller’s authorized or issued capital stock, grant of any stock option
                or right to purchase shares of capital stock of Seller or issuance
                of any
                security convertible into such capital stock;

            

    

    

    
      	b.  	
              amendment
                to the Governing Documents of Seller;

            

    

    

    
      	c.  	
              payment
                (except in the Ordinary Course of Business) or increase by Seller
                of any
                bonuses, salaries or other compensation to any shareholder, director,
                officer or employee or entry into any employment, severance or similar
                Contract with any director, officer or employee;
                

            

    

    

    
      	d.  	
              adoption
                of, amendment to or increase in the payments to or benefits under,
                any
                Employee Plan; 

            

    

    

    
      	e.  	
              damage
                to or destruction or loss of any Asset, whether or not covered by
                insurance; 

            

    

    

    
      	f.  	
              entry
                into, termination of or receipt of notice of termination of (i) any
                license, distributorship, dealer, sales representative, joint venture,
                credit or similar Contract to which Seller is a party, or (ii) any
                Contract or transaction involving a total remaining commitment by
                Seller;
                

            

    

    

    
      	g.  	
              sale
                (other than sales of Inventories in the Ordinary Course of Business),
                lease or other disposition of any Asset or property of Seller (including
                the Intellectual Property Assets) or the creation of any Encumbrance
                on
                any Asset; 

            

    

    

    
      	h.  	
              cancellation
                or waiver of any claims or rights with a value to Seller;
                

            

    

    

    
      	i.  	
              indication
                by any customer or supplier of an intention to discontinue or change
                the
                terms of its relationship with Seller;

            

    

    

    
      	j.  	
              material
                change in the accounting methods used by Seller; or
                

            

    

    

    
      	k.  	
              Contract
                by Seller to do any of the foregoing.

            

    

    

    3.18
      CONTRACTS; NO DEFAULTS 

    

    
      	a.  	
              Exhibit
                “B” contains an accurate and complete list, and Seller has delivered
                to
                Buyer accurate and complete copies, of:

            

    

    

    
      	(i)  	
              each
                Seller Contract that involves performance of services or delivery
                of goods
                or materials by Seller; 

            

    

    

    
      	(ii)  	
              each
                Seller Contract that involves performance of services or delivery
                of goods
                or materials to Seller; 

            

    

    

    
      	(iii)  	
              each
                Seller Contract that was not entered into in the Ordinary Course
                of
                Business and that involves expenditures or receipts of Seller;
                

            

    

    

    
      	(iv)  	
              each
                Seller Contract affecting the ownership of, leasing of, title to,
                use of
                or any leasehold or other interest in any real or personal;
                

            

    

    

    
      	(v)  	
              each
                Seller Contract with any labor union or other employee representative
                of a
                group of employees relating to wages, hours and other conditions
                of
                employment; 

            

    

    

    
      	(vi)  	
              each
                Seller Contract (however named) involving a sharing of profits, losses,
                costs or liabilities by Seller with any other Person;
                

            

    

    

    
      	(vii)  	
              each
                Seller Contract containing covenants that in any way purport to restrict
                Seller’s business activity or limit the freedom of Seller to engage in any
                line of business or to compete with any Person;

            

    

    

    
      	(viii)  	
              each
                Seller Contract providing for payments to or by any Person based
                on sales,
                purchases or profits, other than direct payments for goods;
                

            

    

    

    
      	(ix)  	
              each
                power of attorney of Seller that is currently effective and outstanding;
                

            

    

    

    
      	(x)  	
              each
                Seller Contract entered into other than in the Ordinary Course of
                Business
                that contains or provides for an express undertaking by Seller to
                be
                responsible for consequential damages;

            

    

    

    
      	(xi)  	
              each
                Seller Contract for capital expenditures;

            

    

    

    
      	(xii)  	
              each
                Seller Contract not denominated in U.S. dollars;
                

            

    

    

    
      	(xiii)  	
              each
                written warranty, guaranty and/or other similar undertaking with
                respect
                to contractual performance extended by Seller other than in the Ordinary
                Course of Business; and 

            

    

    

    
      	(xiv)  	
              each
                amendment, supplement and modification (whether oral or written)
                in
                respect of any of the foregoing. Exhibit “B” sets forth reasonably
                complete details concerning such Contracts, including the parties
                to the
                Contracts, the amount of the remaining commitment of Seller under
                the
                Contracts and the location of Seller’s office where details relating to
                the Contracts are located. 

            

    

    

    
      	b.  	
              Except
                as set forth in Exhibit “B”, Shareholder does not have nor may he acquire
                any rights under, and Shareholder does not have nor may he become
                subject
                to any obligation or liability under, any Contract that relates to
                the
                business of Seller or any of the Assets.

            

    

    

    
      	c.  	
              Except
                as set forth in Exhibit “B”: 

            

    

    

    
      	(i)  	
              each
                Contract identified or required to be identified in Exhibit “B” and which
                is to be assigned to or assumed by Buyer under this Agreement is
                in full
                force and effect and is valid and enforceable in accordance with
                its
                terms; 

            

    

    

    
      	(ii)  	
              each
                Contract identified or required to be identified in Exhibit “B” and which
                is being assigned to or assumed by Buyer is assignable by Seller
                to Buyer
                without the consent of any other Person; and

            

    

    

    
      	(iii)  	
              to
                the Knowledge of Seller, no Contract identified or required to be
                identified in Exhibit “B” and which is to be assigned to or assumed by
                Buyer under this Agreement will upon completion or performance thereof
                have a material adverse affect on the business, assets or condition
                of
                Seller or the business to be conducted by Buyer with the Assets.
                

            

    

    

    
      	d.  	
              Except
                as set forth in Exhibit “B”: 

            

    

    

    
      	(i)  	
              Seller
                is and, has been, in compliance with all applicable terms and requirements
                of each Seller Contract which is being assumed by Buyer;
                

            

    

    

    
      	(ii)  	
              each
                other Person that has or had any obligation or liability under any
                Seller
                Contract which is being assigned to Buyer is and, has been, in full
                compliance with all applicable terms and requirements of such Contract;
                

            

    

    

    
      	(iii)  	
              no
                event has occurred or circumstance exists that (with or without notice
                or
                lapse of time) may contravene, conflict with or result in a Breach
                of, or
                give Seller or other Person the right to declare a default or exercise
                any
                remedy under, or to accelerate the maturity or performance of, or
                payment
                under, or to cancel, terminate or modify, any Seller Contract that
                is
                being assigned to or assumed by Buyer;

            

    

    

    
      	(iv)  	
              no
                event has occurred or circumstance exists under or by virtue of any
                Contract that (with or without notice or lapse of time) would cause
                the
                creation of any Encumbrance affecting any of the Assets; and
                

            

    

    

    
      	(v)  	
              Seller
                has not given to or received from any other Person, at any time since
                January 1, 2001, any notice or other communication (whether oral
                or
                written) regarding any actual, alleged, possible or potential violation
                or
                Breach of, or default under, any Contract which is being assigned
                to or
                assumed by Buyer. 

            

    

    

    
      	e.  	
              There
                are no renegotiations of, attempts to renegotiate or outstanding
                rights to
                renegotiate any material amounts paid or payable to Seller under
                current
                or completed Contracts with any Person having the contractual or
                statutory
                right to demand or require such renegotiation and no such Person
                has made
                written demand for such renegotiation.

            

    

    

    
      	f.  	
              Each
                Contract relating to the sale, design, manufacture or provision of
                products or services by Seller has been entered into in the Ordinary
                Course of Business of Seller and has been entered into without the
                commission of any act alone or in concert with any other Person,
                or any
                consideration having been paid or promised, that is or would be in
                violation of any Legal Requirement.

            

    

    

    3.19
      INSURANCE 

    

    
      	a.  	
              Seller
                has delivered to Buyer: 

            

    

    
      	(i)  	
              accurate
                and complete copies of all policies of insurance (and correspondence
                relating to coverage thereunder) to which Seller is a party or under
                which
                Seller is covered, a list of which is included in Exhibit 3.19(a);
                and
                

            

    

    

    
      	(ii)  	
              (ii)
                accurate and complete copies of all pending applications by Seller
                for
                policies of insurance. 

            

    

    

    
      	b.  	
              Exhibit
                3.19(b) describes: 

            

    

    

    
      	(i)  	
              any
                self-insurance arrangement by or affecting Seller, including any
                reserves
                established thereunder; 

            

    

    

    
      	(ii)  	
              any
                Contract or arrangement, other than a policy of insurance, for the
                transfer or sharing of any risk to which Seller is a party or which
                involves the business of Seller; and

            

    

    

    
      	(iii)  	
              all
                obligations of Seller to provide insurance coverage to Third Parties
                (for
                example, under Leases or service agreements) and identifies the policy
                under which such coverage is provided.

            

    

    

    
      	c.  	
              Except
                as set forth in Exhibit 3.19(c): 

            

    

    

    
      	(i)  	
              all
                policies of insurance to which Seller is a party or that provide
                coverage
                to Seller: 

            

    

    
      	(A)  	
              are
                valid, outstanding and enforceable;

            

    

    

    
      	(B)  	
              are
                issued by an insurer that is financially sound and reputable;
                

            

    

    

    
      	(C)  	
              taken
                together, provide adequate insurance coverage for the Assets and
                the
                operations of Seller for all risks normally insured against by a
                Person
                carrying on the same business or businesses as Seller in the same
                location; and 

            

    

    

    
      	(D)  	
              are
                sufficient for compliance with all Legal Requirements and Seller
                Contracts; 

            

    

    
      	(ii)  	
              Seller
                has not received (A) any refusal of coverage or any notice that a
                defense
                will be afforded with reservation of rights or (B) any notice of
                cancellation or any other indication that any policy of insurance
                is no
                longer in full force or effect or that the issuer of any policy of
                insurance is not willing or able to perform its obligations thereunder;
                

            

    

    

    
      	(iii)  	
              Seller
                has paid all premiums due, and has otherwise performed all of its
                obligations, under each policy of insurance to which it is a party
                or that
                provides coverage to Seller; and 

            

    

    

    
      	(iv)  	
              Seller
                has given notice to the insurer of all claims that may be insured
                thereby.
                

            

    

    

    3.20
      ENVIRONMENTAL MATTERS 

    

    Except
      as
      disclosed in Exhibit 3.20: 

    

    
      	a.  	
              Seller
                is, and at all times has been, in full compliance with, and has not
                been
                and is not in violation of or liable under, any Environmental Law.
                Neither
                Seller nor the Shareholder has any basis to expect, nor has any of
                them or
                any other Person for whose conduct they are or may be held to be
                responsible received, any actual or threatened order, notice or other
                communication from (i) any Governmental Body or private citizen acting
                in
                the public interest or (ii) the current or prior owner or operator
                of any
                Facilities, of any actual or potential violation or failure to comply
                with
                any Environmental Law, or of any actual or threatened obligation
                to
                undertake or bear the cost of any Environmental, Health and Safety
                Liabilities with respect to any Facility or other property or asset
                (whether real, personal or mixed) in which Seller has or had an interest,
                or with respect to any property or Facility at or to which Hazardous
                Materials were generated, manufactured, refined, transferred, imported,
                used or processed by Seller or any other Person for whose conduct
                it is or
                may be held responsible, or from which Hazardous Materials have been
                transported, treated, stored, handled, transferred, disposed, recycled
                or
                received. 

            

    

    

    
      	b.  	
              There
                are no pending or, to the Knowledge of Seller, threatened claims,
                Encumbrances, or other restrictions of any nature resulting from
                any
                Environmental, Health and Safety Liabilities or arising under or
                pursuant
                to any Environmental Law with respect to or affecting any Facility
                or any
                other property or asset (whether real, personal or mixed) in which
                Seller
                has or had an interest. 

            

    

    

    
      	c.  	
              Neither
                Seller nor the Shareholder has any Knowledge of or any basis to expect,
                nor has any of them, or any other Person for whose conduct they are
                or may
                be held responsible, received, any citation, directive, inquiry,
                notice,
                Order, summons, warning or other communication that relates to Hazardous
                Activity, Hazardous Materials, or any alleged, actual, or potential
                violation or failure to comply with any Environmental Law, or of
                any
                alleged, actual, or potential obligation to undertake or bear the
                cost of
                any Environmental, Health and Safety Liabilities with respect to
                any
                Facility or property or asset (whether real, personal or mixed) in
                which
                Seller has or had an interest, or with respect to any property or
                facility
                to which Hazardous Materials generated, manufactured, refined,
                transferred, imported, used or processed by Seller or any other Person
                for
                whose conduct it is or may be held responsible, have been transported,
                treated, stored, handled, transferred, disposed, recycled or received.
                

            

    

    

    
      	d.  	
              Neither
                Seller nor any other Person for whose conduct it is or may be held
                responsible has any Environmental, Health and Safety Liabilities
                with
                respect to any Facility or, to the Knowledge of Seller, with respect
                to
                any other property or asset (whether real, personal or mixed) in
                which
                Seller (or any predecessor) has or had an interest or at any property
                geologically or hydrologically adjoining any Facility or any such
                other
                property or asset. 

            

    

    

    
      	e.  	
              There
                are no Hazardous Materials present on or in the Environment at any
                Facility or, to Seller’s Knowledge, after reasonable investigation, at any
                geologically or hydrologically adjoining property, including any
                Hazardous
                Materials contained in barrels, aboveground or underground storage
                tanks,
                landfills, land deposits, dumps, equipment (whether movable or fixed)
                or
                other containers, either temporary or permanent, and deposited or
                located
                in land, water, sumps, or any other part of the Facility or such
                adjoining
                property, or incorporated into any structure therein or thereon.
                Neither
                Seller nor any Person for whose conduct it is or may be held responsible,
                or to the Knowledge of Seller, any other Person, has permitted or
                conducted, or is aware of, any Hazardous Activity conducted with
                respect
                to any Facility or any other property or assets (whether real, personal
                or
                mixed) in which Seller has or had an interest except in full compliance
                with all applicable Environmental Laws.

            

    

    

    
      	f.  	
              There
                has been no Release or, to the Knowledge of Seller, Threat of Release,
                of
                any Hazardous Materials at or from any Facility or at any other location
                where any Hazardous Materials were generated, manufactured, refined,
                transferred, produced, imported, used, or processed from or by any
                Facility, or from any other property or asset (whether real, personal
                or
                mixed) in which Seller has or had an interest, or to the Knowledge
                of
                Seller any geologically or hydrologically adjoining property, whether
                by
                Seller or any other Person. 

            

    

    

    
      	g.  	
              Seller
                has delivered to Buyer true and complete copies and results of any
                reports, studies, analyses, tests, or monitoring possessed or initiated
                by
                Seller pertaining to Hazardous Materials or Hazardous Activities
                in, on,
                or under the Facilities, or concerning compliance, by Seller or any
                other
                Person for whose conduct it is or may be held responsible, with
                Environmental Laws. 

            

    

    

    

    3.21
      EMPLOYEES 

    

    
      	a.  	
              Exhibit
                “J” contains a complete and accurate list of the following information
                for
                each employee, director, independent contractor, consultant and agent
                of
                Seller, including each employee on leave of absence or layoff status:
                name; job title; date of hiring or engagement; current compensation
                paid
                or payable and any change in compensation since; sick and vacation
                leave
                that is accrued but unused; and service credited for purposes of
                vesting
                and eligibility to participate under any Employee Plan, or any other
                employee or director benefit plan. 

            

    

    

    
      	b.  	
              Exhibit
                3.21(b) contains a complete and accurate list of the following information
                for each retired employee or director of Seller, or their dependents,
                receiving benefits or scheduled to receive benefits in the future:
                name;
                pension benefits; pension option election; retiree medical insurance
                coverage; retiree life insurance coverage; and other benefits.
                

            

    

    

    
      	c.  	
              Exhibit
                3.21(c) states the number of employees terminated by Seller and contains
                a
                complete and accurate list of the following information for each
                employee
                of Seller who has been terminated or laid off, or whose hours of
                work have
                been reduced by more than fifty percent (50%) by Seller, in the six
                (6)
                months prior to the date of this Agreement: (i) the date of such
                termination, layoff or reduction in hours; and (ii) the reason for
                such
                termination, layoff or reduction in hours.

            

    

    

    
      	d.  	
              Seller
                has not violated the Worker Adjustment and Retraining Notification
                Act
                (the “WARN Act”) or any similar state or local Legal Requirement. Seller
                has terminated no employees during the ninety (90) day period prior
                to the
                date of this Agreement. 

            

    

    

    
      	e.  	
              To
                the Knowledge of Seller, no officer, director, agent, employee,
                consultant, or contractor of Seller is bound by any Contract that
                purports
                to limit the ability of such officer, director, agent, employee,
                consultant, or contractor (i) to engage in or continue or perform
                any
                conduct, activity, duties or practice relating to the business of
                Seller
                or (ii) to assign to Seller or to any other Person any rights to
                any
                invention, improvement, or discovery. No former or current employee
                of
                Seller is a party to, or is otherwise bound by, any Contract that
                in any
                way adversely affected, affects, or will affect the ability of Seller
                or
                Buyer to conduct the business as heretofore carried on by Seller.
                

            

    

    

    3.22
      LABOR DISPUTES; COMPLIANCE 

    

    
      	a.  	
              Seller
                has complied in all respects with all Legal Requirements relating
                to
                employment practices, terms and conditions of employment, equal employment
                opportunity, nondiscrimination, immigration, wages, hours, benefits,
                collective bargaining, the payment of social security and similar
                Taxes
                and occupational safety and health. Seller is not liable for the
                payment
                of any Taxes, fines, penalties, or other amounts, however designated,
                for
                failure to comply with any of the foregoing Legal Requirements.
                

            

    

    

    
      	b.  	
              Except
                as disclosed in Exhibit 3.22(b), (i) Seller has not been, and is
                not now,
                a party to any collective bargaining agreement or other labor contract;
                (ii) there has not been, there is not presently pending or existing,
                and
                to Seller’s Knowledge there is not threatened, any strike, slowdown,
                picketing, work stoppage or employee grievance process involving
                Seller;
                (iii) to Seller’s Knowledge no event has occurred or circumstance exists
                that could provide the basis for any work stoppage or other labor
                dispute;
                (iv) there is not pending or, to Seller’s Knowledge, threatened against or
                affecting Seller any Proceeding relating to the alleged violation
                of any
                Legal Requirement pertaining to labor relations or employment matters,
                including any charge or complaint filed with the National Labor Relations
                Board or any comparable Governmental Body, and there is no organizational
                activity or other labor dispute against or affecting Seller or the
                Facilities; (v) no application or petition for an election of or
                for
                certification of a collective bargaining agent is pending; (vi) no
                grievance or arbitration Proceeding exists that might have an adverse
                effect upon Seller or the conduct of its business; (vii) there is
                no
                lockout of any employees by Seller, and no such action is contemplated
                by
                Seller; and (viii) to Seller’s Knowledge there has been no charge of
                discrimination filed against or threatened against Seller with the
                Equal
                Employment Opportunity Commission or similar Governmental Body.
                

            

    

    

    3.23
      INTELLECTUAL PROPERTY ASSETS 

    

    
      	a.  	
              The
                term “Intellectual Property Assets” means all intellectual property owned
                or licensed (as licensor or licensee) by Seller in which Seller has
                a
                proprietary interest, including: 

            

    

    

    
      	(i)  	
              Seller’s
                name, all assumed fictional business names, trade names, registered
                and
                unregistered trademarks, service marks and applications (collectively,
                “Marks”); 

            

    

    

    
      	(ii)  	
              (ii)
                all patents, patent applications and inventions and discoveries that
                may
                be patentable (collectively, “Patents”);

            

    

    

    
      	(iii)  	
              (iii)
                all registered and unregistered copyrights in both published works
                and
                unpublished works (collectively, “Copyrights”);

            

    

    

    
      	(iv)  	
              (iv)
                all rights in mask works; 

            

    

    

    
      	(v)  	
              (v)
                all know-how, trade secrets, confidential or proprietary information,
                customer lists, Software, technical information, data, process technology,
                plans, drawings and blue prints (collectively, “Trade Secrets”); and
                

            

    

    

    
      	(vi)  	
              (vi)
                all rights in internet web sites and internet domain names presently
                used
                by Seller (collectively “Net Names”).

            

    

    

    
      	b.  	
              Exhibit
                “D” contains a complete and accurate list and summary description,
                including any royalties paid or received by Seller, and Seller has
                delivered to Buyer accurate and complete copies, of all Seller Contracts
                relating to the Intellectual Property Assets, except for any license
                implied by the sale of a product and perpetual, paid-up licenses
                for
                commonly available Software programs under which Seller is the licensee.
                There are no outstanding and, to Seller’s Knowledge, no threatened
                disputes or disagreements with respect to any such Contract.
                

            

    

    

    
      	c.  	
              Except
                as set forth in Exhibit “D”, the Intellectual Property Assets are all
                those necessary for the operation of Seller’s business as it is currently
                conducted. Seller is the owner or licensee of all right, title and
                interest in and to each of the Intellectual Property Assets, free
                and
                clear of all Encumbrances, and has the right to use without payment
                to a
                Third Party all of the Intellectual Property Assets, other than in
                respect
                of licenses listed in Exhibit “D”. 

            

    

    

    
      	d.  	
              Marks
                

            

    

    
      	(i)  	
              Exhibit
                “D” contains a complete and accurate list and summary description of
                all
                Marks. 

            

    

    

    
      	(ii)  	
              Except
                as identified in Exhibit “D”, all Marks have been registered with the
                United States Patent and Trademark Office, are currently in compliance
                with all formal Legal Requirements (including the timely post-registration
                filing of affidavits of use and incontestability and renewal
                applications), are valid and enforceable and are not subject to any
                maintenance fees or taxes or actions falling due within ninety (90)
                days
                after the Closing Date. 

            

    

    

    
      	(iii)  	
              (iii)
                No Mark has been or is now involved in any opposition, invalidation
                or
                cancellation Proceeding and, to Seller’s Knowledge, no such action is
                threatened with respect to any of the Marks.

            

    

    

    
      	(iv)  	
              To
                Seller’s Knowledge, there is no potentially interfering trademark or
                trademark application of any other Person.

            

    

    

    
      	(v)  	
              No
                Mark is infringed or, to Seller’s Knowledge, has been challenged or
                threatened in any way. None of the Marks used by Seller infringes
                or is
                alleged to infringe any trade name, trademark or service mark of
                any other
                Person. 

            

    

    

    
      	(vi)  	
              All
                products and materials containing a Mark bear the proper federal
                registration notice where permitted by law.

            

    

    

    

    
      	e.  	
              Trade
                Secrets 

            

    

    

    
      	(i)  	
              With
                respect to each Trade Secret, the documentation relating to such
                Trade
                Secret, if any, is current, accurate and sufficient in detail and
                content
                to identify and explain it and to allow its full and proper use without
                reliance on the knowledge or memory of any individual.
                

            

    

    

    
      	(ii)  	
              Seller
                has taken all reasonable precautions to protect the secrecy,
                confidentiality and value of all Trade Secrets (including the enforcement
                by Seller of a policy requiring each employee or contractor to execute
                proprietary information and confidentiality agreements substantially
                in
                Seller’s standard form, and all current and former employees and
                contractors of Seller have executed such an agreement).
                

            

    

    

    
      	(iii)  	
              Seller
                has good title to and an absolute right to use the Trade Secrets.
                The
                Trade Secrets are not part of the public knowledge or literature
                and, to
                Seller’s Knowledge, have not been used, divulged or appropriated either
                for the benefit of any Person (other than Seller) or to the detriment
                of
                Seller. No Trade Secret is subject to any adverse claim or has been
                challenged or threatened in any way or infringes any intellectual
                property
                right of any other Person. 

            

    

    

    
      	f.  	
              Net
                Names 

            

    

    

    
      	(i)  	
              Exhibit
                3.23(f) contains a complete and accurate list and summary description
                of
                all Net Names. 

            

    

    

    
      	(ii)  	
              All
                Net Names have been registered in the name of Seller and are in compliance
                with all formal Legal Requirements.

            

    

    

    
      	(iii)  	
              No
                Net Name has been or is now involved in any dispute, opposition,
                invalidation or cancellation Proceeding and, to Seller’s Knowledge, no
                such action is threatened with respect to any Net Name.
                

            

    

    

    
      	(iv)  	
              (iv)
                To Seller’s Knowledge, there is no domain name application pending of any
                other person which would or would potentially interfere with or infringe
                any Net Name. 

            

    

    

    
      	(v)  	
              (v)
                No Net Name is infringed or, to Seller’s Knowledge, has been challenged,
                interfered with or threatened in any way. No Net Name infringes,
                interferes with or is alleged to interfere with or infringe the trademark,
                copyright or domain name of any other Person.

            

    

    

    3.24
      COMPLIANCE WITH THE FOREIGN CORRUPT PRACTICES ACT AND EXPORT CONTROL AND
      ANTIBOYCOTT LAWS 

    

    
      	a.  	
              Seller
                and its Representatives have not, to obtain or retain business, directly
                or indirectly offered, paid or promised to pay, or authorized the
                payment
                of, any money or other thing of value (including any fee, gift, sample,
                travel expense or entertainment with a value in excess of one hundred
                dollars ($100.00) in the aggregate to any one individual in any year)
                or
                any commission payment, to: 

            

    

    

    
      	(i)  	
              any
                person who is an official, officer, agent, employee or representative
                of
                any Governmental Body or of any existing or prospective customer
                (whether
                government owned or non-government owned);

            

    

    

    
      	(ii)  	
              any
                political party or official thereof;

            

    

    

    
      	(iii)  	
              any
                candidate for political or political party office; or
                

            

    

    

    
      	(iv)  	
              any
                other individual or entity; 

            

    

    

    while
      knowing or having reason to believe that all or any portion of such money or
      thing of value would be offered, given, or promised, directly or indirectly,
      to
      any such official, officer, agent, employee, representative, political party,
      political party official, candidate, individual, or any entity affiliated with
      such customer, political party or official or political office. 

    

    
      	b.  	
              Except
                as set forth in Exhibit 3.24(b), Seller has made all payments to
                Third
                Parties by check mailed to such Third Parties’ principal place of business
                or by wire transfer to a bank located in the same jurisdiction as
                such
                party’s principal place of business.

            

    

    

    
      	c.  	
              Each
                transaction is properly and accurately recorded on the books and
                Records
                of Seller, and each document upon which entries in Seller’s books and
                Records are based is complete and accurate in all respects. Seller
                maintains a system of internal accounting controls adequate to insure
                that
                Seller maintains no off-the-books accounts and that Seller’s assets are
                used only in accordance with Seller’s management directives.
                

            

    

    

    
      	d.  	
              Seller
                has at all times been in compliance with all Legal Requirements relating
                to export control and trade embargoes. No product sold or service
                provided
                by Seller during the last five (5) years has been, directly or indirectly,
                sold to or performed on behalf of Cuba, Iraq, Iran, Libya or North
                Korea.
                

            

    

    

    
      	e.  	
              Except
                as set forth in Exhibit 3.24(e), Seller has not violated the antiboycott
                prohibitions contained in 50 U.S.C. sect. 2401 et seq. or taken any
                action
                that can be penalized under Section 999 of the Code. Except as set
                forth
                in Exhibit 3.24(e), during the last five (5) years, Seller has not
                been a
                party to, is not a beneficiary under and has not performed any service
                or
                sold any product under any Seller Contract under which a product
                has been
                sold to customers in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya,
                Oman,
                Qatar, Saudi Arabia, Sudan, Syria, United Arab Emirates or the Republic
                of
                Yemen. 

            

    

    

    3.25
      RELATIONSHIPS WITH RELATED PERSONS 

    

    Except
      as
      disclosed in Exhibit 3.25, neither Seller nor the Shareholder nor any Related
      Person of any of them has, or has had, any interest in any property (whether
      real, personal or mixed and whether tangible or intangible) used in or
      pertaining to Seller’s business. Neither Seller, Shareholder nor any Related
      Person of any of them owns, or has owned, of record or as a beneficial owner,
      an
      equity interest or any other financial or profit interest in any Person that
      has
      (a) had business dealings or a material financial interest in any transaction
      with Seller other than business dealings or transactions disclosed in Exhibit
      3.25, each of which has been conducted in the Ordinary Course of Business with
      Seller at substantially prevailing market prices and on substantially prevailing
      market terms or (b) engaged in competition with Seller with respect to any
      line
      of the products or services of Seller (a “Competing Business”) in any market
      presently served by Seller, except for ownership of less than one percent (1%)
      of the outstanding capital stock of any Competing Business that is publicly
      traded on any recognized exchange or in the over-the-counter market. Except
      as
      set forth in Exhibit 3.25, neither Seller, Shareholder nor any Related Person
      of
      either of them is a party to any Contract with, or has any claim or right
      against, Seller. 

    

    3.26
      BROKERS OR FINDERS 

    

    Neither
      Seller nor any of its Representatives have incurred any obligation or liability,
      contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
      or other similar payments in connection with the sale of Seller’s business or
      the Assets or the Contemplated Transactions. Seller and the Shareholder
      indemnify Buyer, its Shareholder, directors, officers, employees and agents
      from
      any liability for payment any brokerage or finders’ fees or agents’ commission
      or other similar payments. 

    

    3.27
      SECURITIES LAW MATTERS 

    

    Seller
      is
      acquiring the Secured Subordinated Promissory Notes for its own account and
      not
      with a view to its distribution within the meaning of Section 2(11) of the
      Securities Act. The Seller hereby understands and acknowledges that in absence
      of the registration of these securities on a registration statement that SEC’s
      declares to be effective under Rule 5 of the Securities Act that no interest
      in
      these securities may be sold, distributed, assigned, offered or pledged unless
      such transaction is exempt from Rule 5.

    

    

    

    3.28
      SOLVENCY 

    

    
      	a.  	
              Seller
                is not now insolvent and will not be rendered insolvent by any of
                the
                Contemplated Transactions. As used in this section, “insolvent” means that
                the sum of the debts and other probable Liabilities of Seller exceeds
                the
                present fair saleable value of Seller’s assets.

            

    

    

    
      	b.  	
              Immediately
                after giving effect to the consummation of the Contemplated Transactions:
                (i) Seller will be able to pay its Liabilities as they become due
                in the
                usual course of its business; (ii) Seller will not have unreasonably
                small
                capital with which to conduct its present or proposed business; (iii)
                Seller will have assets (calculated at fair market value) that exceed
                its
                Liabilities; and (iv) taking into account all pending and threatened
                litigation, final judgments against Seller in actions for money damages
                are not reasonably anticipated to be rendered at a time when, or
                in
                amounts such that, Seller will be unable to satisfy any such judgments
                promptly in accordance with their terms (taking into account the
                maximum
                probable amount of such judgments in any such actions and the earliest
                reasonable time at which such judgments might be rendered) as well
                as all
                other obligations of Seller. The cash available to Seller, after
                taking
                into account all other anticipated uses of the cash, will be sufficient
                to
                pay all such debts and judgments promptly in accordance with their
                terms.
                

            

    

    

    3.29
      DISCLOSURE 

    

    
      	a.  	
              No
                representation or warranty or other statement made by Seller or the
                Shareholder in this Agreement, any Exhibit hereto, the certificates
                delivered pursuant to Section 2.7(a) or otherwise in connection with
                the
                Contemplated Transactions contains any untrue statement or omits
                to state
                a material fact necessary to make any of them, in light of the
                circumstances in which it was made, not misleading.
                

            

    

    

    
      	b.  	
              Seller
                does not have Knowledge of any fact, after reasonable investigation,
                that
                has specific application to Seller (other than general economic or
                industry conditions) and that may materially adversely affect the
                assets,
                business, prospects, financial condition or results of operations
                of
                Seller that has not been set forth in this Agreement.
                

            

    

    

    

    SECTION
      4  REPRESENTATIONS
      AND WARRANTIES OF BUYER

    

    Buyer
      represents and warrants to Seller and Shareholder as follows: 

    

    4.1
      ORGANIZATION AND GOOD STANDING 

    

    Buyer
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Delaware, with full corporate power and authority to
      conduct its business as it is now conducted. 

    

    

    

    

    4.2
      AUTHORITY; NO CONFLICT 

    

    
      	a.  	
              This
                Agreement constitutes the legal, valid and binding obligation of
                Buyer,
                enforceable against Buyer in accordance with its terms. Upon the
                execution
                and delivery by Buyer of the Assignment and Assumption Agreement,
                the
                Consulting Agreement, the Secured Subordinated Promissory Note, the
                Security Agreement, the Lease and each other agreement to be executed
                or
                delivered by Buyer at losing (collectively, the “Buyer’s Closing
                Documents”), each of the Buyer’s Closing Documents will constitute the
                legal, valid and binding obligation of Buyer, enforceable against
                Buyer in
                accordance with its respective terms. Buyer has the absolute and
                unrestricted right, power and authority to execute and deliver this
                Agreement and the Buyer’s Closing Documents and to perform its obligations
                under this Agreement and the Buyer’s Closing Documents, and such action
                has been duly authorized by all necessary corporate action.
                

            

    

    

    
      	b.  	
              Neither
                the execution and delivery of this Agreement by Buyer nor the consummation
                or performance of any of the Contemplated Transactions by Buyer will
                give
                any Person the right to prevent, delay or otherwise interfere with
                any of
                the Contemplated Transactions pursuant to:

            

    

    

    (i)
      any
      provision of Buyer’s Governing Documents; 

    

    (ii)
      any
      resolution adopted by the board of directors or the Shareholder of Buyer;

    

    (iii)
      any
      Legal Requirement or Order to which Buyer may be subject; or 

    

    (iv)
      any
      Contract to which Buyer is a party or by which Buyer may be bound. 

    

    Buyer
      is
      not and will not be required to obtain any Consent from any Person in connection
      with the execution and delivery of this Agreement or the consummation or
      performance of any of the Contemplated Transactions. 

    

    4.3
      CERTAIN PROCEEDINGS 

    

    There
      is
      no pending Proceeding that has been commenced against Buyer and that challenges,
      or may have the effect of preventing, delaying, making illegal or otherwise
      interfering with, any of the Contemplated Transactions. To Buyer’s Knowledge, no
      such Proceeding has been threatened. 

    

    

    4.4
      BROKERS OR FINDERS 

    Neither
      Buyer nor any of its Representatives have incurred any obligation or liability,
      contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
      or other similar payment in connection with the Contemplated Transactions.
      

    

    

    SECTION
      5 COVENANTS
      OF SELLER PRIOR TO CLOSING

    

    5.1
      ACCESS AND INVESTIGATION 

    

    Between
      the date of this Agreement and the Closing Date, and upon reasonable advance
      notice received from Buyer, Seller shall (and Shareholder shall cause Seller
      to)
      (a) afford Buyer and its Representatives and prospective lenders and their
      Representatives (collectively, “Buyer Group”) full and free access, during
      regular business hours, to Seller’s personnel, properties (including subsurface
      testing), Contracts, Governmental Authorizations, books and Records and other
      documents and data, such rights of access to be exercised in a manner that
      does
      not unreasonably interfere with the operations of Seller; (b) furnish Buyer
      Group with copies of all such Contracts, Governmental Authorizations, books
      and
      Records and other existing documents and data as Buyer may reasonably request;
      (c) furnish Buyer Group with such additional financial, operating and other
      relevant data and information as Buyer may reasonably request; and (d) otherwise
      cooperate and assist, to the extent reasonably requested by Buyer, with Buyer’s
      investigation of the properties, assets and financial condition related to
      Seller. In addition, Buyer shall have the right to have the Real Property and
      Tangible Personal Property inspected by Buyer Group, at Buyer’s sole cost and
      expense, for purposes of determining the physical condition and legal
      characteristics of the Real Property and Tangible Personal Property. In the
      event subsurface or other destructive testing is recommended by any of Buyer
      Group, Buyer shall be permitted to have the same performed. Buyer shall restore
      the Real Property as close to its pre-test condition as is reasonably
      practicable. 

    

    5.2
      OPERATION OF THE BUSINESS OF SELLER 

    

    Between
      the date of this Agreement and the Closing, Seller shall (and Shareholder shall
      cause Seller to): 

    

    
      	a.  	
              conduct
                its business only in the Ordinary Course of Business;
                

            

    

    

    
      	b.  	
              except
                as otherwise directed by Buyer in writing, and without making any
                commitment on Buyer’s behalf, use its Best Efforts to preserve intact its
                current business organization, keep available the services of its
                officers, employees and agents and maintain its relations and good
                will
                with suppliers, customers, landlords, creditors, employees, agents
                and
                others having business relationships with it;

            

    

    

    
      	c.  	
              confer
                with Buyer prior to implementing operational decisions of a material
                nature, other than in the Ordinary Course of Business;
                

            

    

    

    
      	d.  	
              otherwise
                report periodically to Buyer concerning the status of its business,
                operations and finances; 

            

    

    

    
      	e.  	
              make
                no material changes in management personnel without prior consultation
                with Buyer; 

            

    

    

    
      	f.  	
              maintain
                the Assets in a state of repair and condition that complies with
                Legal
                Requirements and is consistent with the requirements and normal conduct
                of
                Seller’s business; 

            

    

    

    
      	g.  	
              keep
                in full force and effect, without amendment, all material rights
                relating
                to Seller’s business; 

            

    

    

    
      	h.  	
              comply
                with all Legal Requirements and contractual obligations applicable
                to the
                operations of Seller’s business; 

            

    

    

    
      	i.  	
              continue
                in full force and effect the insurance coverage under the policies
                set
                forth in Exhibit 3.19 or substantially equivalent policies;
                

            

    

    

    
      	j.  	
              except
                as required to comply with ERISA or to maintain qualification under
                Section 401(a) of the Code, not amend, modify or terminate any Employee
                Plan without the express written consent of Buyer, and except as
                required
                under the provisions of any Employee Plan, not make any contributions
                to
                or with respect to any Employee Plan without the express written
                consent
                of Buyer, provided that Seller shall contribute that amount of cash
                to
                each Employee Plan necessary to fully fund all of the benefit liabilities
                of such Employee Plan on a plan-termination basis as of the Closing
                Date;
                

            

    

    

    
      	k.  	
              cooperate
                with Buyer and assist Buyer in identifying the Governmental Authorizations
                required by Buyer to operate the business from and after the Closing
                Date
                and either transferring existing Governmental Authorizations of Seller
                to
                Buyer, where permissible, or obtaining new Governmental Authorizations
                for
                Buyer; 

            

    

    

    
      	l.  	
              upon
                request from time to time, execute and deliver all documents, make
                all
                truthful oaths, testify in any Proceedings and do all other acts
                that may
                be reasonably necessary or desirable in the opinion of Buyer to consummate
                the Contemplated Transactions, all without further consideration;
                and
                

            

    

    

    
      	m.  	
              maintain
                all books and Records of Seller relating to Seller’s business in the
                Ordinary Course of Business. 

            

    

    

    5.3
      NEGATIVE COVENANT 

    

    Except
      as
      otherwise expressly permitted herein, between the date of this Agreement and
      the
      Closing Date, Seller shall not, and Shareholder shall not permit Seller to,
      without the prior written Consent of Buyer, (a) take any affirmative action,
      or
      fail to take any reasonable action within its control, as a result of which
      any
      of the changes or events listed in Sections 3.13 or 3.17 would be likely to
      occur; (b) make any modification to any material Contract or Governmental
      Authorization, other than in the Ordinary Course of Business; (c) allow the
      levels of finished goods, supplies or other materials included in the
      Inventories to vary materially from the levels customarily maintained; or (d)
      enter into any compromise or settlement of any litigation, proceeding or
      governmental investigation relating to the Assets, the business of Seller or
      the
      Assumed Liabilities. 

    

    

    5.4
      REQUIRED APPROVALS 

    

    As
      promptly as practicable after the date of this Agreement, Seller shall make
      all
      filings required by Legal Requirements to be made by it in order to consummate
      the Contemplated Transactions. Seller and Shareholder also shall cooperate
      with
      Buyer and its Representatives with respect to all filings that Buyer elects
      to
      make or, pursuant to Legal Requirements, shall be required to make in connection
      with the Contemplated Transactions. Seller and Shareholder also shall cooperate
      with Buyer and its Representatives in obtaining all Material Consents (including
      taking all actions requested by Buyer to cause early termination of any
      applicable waiting period under the HSR Act). 

    

    5.5
      NOTIFICATION 

    

    Between
      the date of this Agreement and the Closing, Seller and Shareholder shall
      promptly notify Buyer in writing if any of them becomes aware of 

    

    
      	(a)  	
              any
                fact or condition that causes or constitutes a Breach of any of Seller’s
                representations and warranties made as of the date of this Agreement
                or
                

            

    

    

    
      	(b)  	
              the
                occurrence after the date of this Agreement of any fact or condition
                that
                would or be reasonably likely to (except as expressly contemplated
                by this
                Agreement) cause or constitute a Breach of any such representation
                or
                warranty had that representation or warranty been made as of the
                time of
                the occurrence of, or Seller’s or the Shareholder’s discovery of, such
                fact or condition. Such delivery shall not affect any rights of Buyer
                under Section 9.2 and Article 11. During the same period, Seller
                and
                Shareholder also shall promptly notify Buyer of the occurrence of
                any
                Breach of any covenant of Seller or Shareholder in this Article 5
                or of
                the occurrence of any event that may make the satisfaction of the
                conditions in Article 7 impossible or unlikely.

            

    

    

    5.6
      NO
      NEGOTIATION 

    

    Until
      such time as this Agreement shall be terminated pursuant to Section 9.1, neither
      Seller nor the Shareholder shall directly or indirectly solicit, initiate,
      encourage or entertain any inquiries or proposals from, discuss or negotiate
      with, provide any nonpublic information to or consider the merits of any
      inquiries or proposals from any Person (other than Buyer) relating to any
      business combination transaction involving Seller, including the sale by
      Shareholder of Seller’s stock, the merger or consolidation of Seller or the sale
      of Seller’s business or any of the Assets (other than in the Ordinary Course of
      Business). Seller and Shareholder shall notify Buyer of any such inquiry or
      proposal within twenty-four (24) hours of receipt or awareness of the same
      by
      Seller or the Shareholder. 

    

    5.7
      BEST
      EFFORTS 

    

    Seller
      and Shareholder shall use their Best Efforts to cause the conditions in Article
      7 and Section 8.3 to be satisfied. 

    

    5.8
      INTERIM FINANCIAL STATEMENTS 

    

    Until
      the
      Closing Date, Seller shall deliver to Buyer within ten (10) days after the
      end
      of each month a copy of the balance sheet and income statement for such month
      prepared in a manner and containing information consistent with Seller’s current
      accountant-prepared, unaudited financial statements. 

    

    5.9
      USE
      OF NAME 

    

    In
      the
      event that Seller shall assume from the Buyer an uncollectible account
      receivable and then collect such account receivable, Buyer shall cooperate
      with
      Seller to enable it to negotiate for Seller’s benefit a check that may be
      payable to “River Hawk Aviation, Inc.” or similar name. 

    

    5.10
      PAYMENT OF LIABILITIES 

    

    Seller
      shall pay or otherwise satisfy in the Ordinary Course of Business all of its
      Liabilities and obligations. Buyer and Seller hereby waive compliance with
      the
      bulk-transfer provisions of the Uniform Commercial Code (or any similar law)
      (“Bulk Sales Laws”) in connection with the Contemplated Transactions.

    

    5.11
      INCORPORATION OF SELLER

    

    Seller
      agrees to cooperate in the post Closing incorporation of Seller in the State
      of
      Nevada.

    

    

    SECTION
      6 
COVENANTS
      OF BUYER PRIOR TO CLOSING

    

    6.1
      REQUIRED APPROVALS 

    

    As
      promptly as practicable after the date of this Agreement, Buyer shall make,
      or
      cause to be made, all filings required by Legal Requirements to be made by
      it to
      consummate the Contemplated Transactions. Buyer also shall cooperate, and cause
      its Related Persons to cooperate, with Seller (a) with respect to all filings
      Seller shall be required by Legal Requirements to make and (b) in obtaining
      all
      Consents identified in Exhibit 3.2(c), provided, 

    however,
      that Buyer shall not be required to dispose of or make any change to its
      business, expend any material funds or incur any other burden in order to comply
      with this Section 6.1. 

    

    6.2
      BEST
      EFFORTS 

    

    Buyer
      shall use its Best Efforts to cause the conditions in Article 8 and Section
      7.3
      to be satisfied. 

     

    SECTION
      7  CONDITIONS
      PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

    

    Buyer’s
      obligation to purchase the Assets and to take the other actions required to
      be
      taken by Buyer at the Closing is subject to the satisfaction, at or prior to
      the
      Closing, of each of the following conditions (any of which may be waived by
      Buyer, in whole or in part): 

    

    
      	(i)  	
              delivery
                of the Closing Documents and transfer of Assets;
                

            

    

    

    

    

    7.1
      ACCURACY OF REPRESENTATIONS 

    

    
      	a.  	
              All
                of Seller’s and Shareholder’s representations and warranties in this
                Agreement (considered collectively), and each of these representations
                and
                warranties (considered individually), shall have been accurate in
                all
                material respects as of the date of this Agreement, and shall be
                accurate
                in all material respects as of the time of the Closing as if then
                made.
                

            

    

    

    
      	b.  	
              Each
                of the representations and warranties in Sections 3.2(a) and 3.4,
                and each
                of the representations and warranties in this Agreement that contains
                an
                express materiality qualification, shall have been accurate in all
                respects as of the date of this Agreement, and shall be accurate
                in all
                respects as of the time of the Closing as if then made.
                

            

    

    

    7.2
      SELLER’S PERFORMANCE 

    

    All
      of
      the covenants and obligations that Seller and Shareholder are required to
      perform or to comply with pursuant to this Agreement at or prior to the Closing
      (considered collectively), and each of these covenants and obligations
      (considered individually), shall have been duly performed and complied with
      in
      all material respects. 

    

    7.3
      CONSENTS 

    

    Each
      of
      the Consents identified in Exhibit 7.3 (the “Material Consents”) shall have been
      obtained and shall be in full force and effect. 

    
 

    7.4
      ADDITIONAL DOCUMENTS

     

    Seller
      and Shareholder shall have caused the documents and instruments required by
      Section 2.7(a) and the following documents to be delivered (or tendered subject
      only to Closing) to Buyer: 

    

    
      	a.  	
              an
                opinion of _____________, Esquire, dated the Closing Date, in the
                form of
                Exhibit 7.4(a); 

            

    

    

    
      	b.  	
              The
                articles of incorporation and all amendments thereto of Seller, duly
                certified as of a recent date by the Secretary of State of the
                jurisdiction of Seller’s incorporation (Exhibit 7.4(b));
                

            

    

    

    
      	c.  	
              If
                requested by Buyer, any Consents or other instruments that may be
                required
                to permit Buyer’s qualification in each jurisdiction in which Seller is
                licensed or qualified to do business as a foreign corporation under
                the
                name “River Hawk Aviation” or any derivative thereof;
                

            

    

    

    
      	d.  	
              Releases
                of all Encumbrances on the Assets, other than Permitted Encumbrances;
                

            

    

    

    
      	e.  	
              Certificates
                dated as of a date not earlier than the third business day prior
                to the
                Closing as to the good standing of Seller and payment of all applicable
                State Taxes by Seller, executed by the appropriate officials of the
                State
                of _Texas and each jurisdiction in which Seller is licensed or qualified
                to do business as a foreign corporation as specified in Exhibit 3.1(a);
                and 

            

    

    

    
      	f.  	
              Such
                other documents as Buyer may reasonably request for the purpose of:
                

            

    

    

    
      	(i)  	
              evidencing
                the accuracy of any of Seller’s representations and warranties;
                

            

    

    

    
      	(ii)  	
              evidencing
                the performance by Seller or the Shareholder of, or the compliance
                by
                Seller or the Shareholder with, any covenant or obligation required
                to be
                performed or complied with by Seller or such Shareholder;
                

            

    

    

    
      	(iii)  	
              evidencing
                the satisfaction of any condition referred to in this Article 7;
                or
                

            

    

    

    
      	(iv)  	
              otherwise
                facilitating the consummation or performance of any of the Contemplated
                Transactions. 

            

    

    

    7.5
      NO
      PROCEEDINGS 

    

    Since
      the
      date of this Agreement, there shall not have been commenced or threatened
      against Buyer, or against any Related Person of Buyer, any Proceeding (a)
      involving any challenge to, or seeking Damages or other relief in connection
      with, any of the Contemplated Transactions or (b) that may have the effect
      of
      preventing, delaying, making illegal, imposing limitations or conditions on
      or
      otherwise interfering with any of the Contemplated Transactions. 

    

    7.6
      NO
      CONFLICT 

    

    Neither
      the consummation nor the performance of any of the Contemplated Transactions
      will, directly or indirectly (with or without notice or lapse of time),
      contravene or conflict with or result in a violation of or cause Buyer or any
      Related Person of Buyer to suffer any adverse consequence under (a) any
      applicable Legal Requirement or Order or (b) any Legal Requirement or Order
      that
      has been published, introduced or otherwise proposed by or before any
      Governmental Body, excluding Bulk Sales Laws. 

    

    7.7
      GOVERNMENTAL AUTHORIZATIONS 

    

    Buyer
      shall have received such Governmental Authorizations as are necessary or
      desirable to allow Buyer to operate the Assets from and after the Closing.
      

    

    7.8
      ENVIRONMENTAL REPORT 

    

    Buyer
      shall have received an environmental site assessment report, with respect to
      Seller’s Facilities, if any, which report shall be acceptable in form and
      substance to Buyer in its sole discretion. 

    

    7.9
      WARN
      ACT NOTICE PERIODS AND EMPLOYEES 

    

    
      	a.  	
              All
                requisite notice periods under the Warn Act shall have expired.
                

            

    

    

    
      	b.  	
              Substantially
                all employees of Seller shall be available for hiring by Buyer, in
                its
                sole discretion, on and as of the Closing
                Date.

            

    

     

    

    SECTION
      8  CONDITIONS
      PRECEDENT TO SELLER’S OBLIGATION TO CLOSE

    

    Seller’s
      obligation to sell the Assets and to take the other actions required to be
      taken
      by Seller at the Closing is subject to the satisfaction, at or prior to the
      Closing, of each of the following conditions (any of which may be waived by
      Seller in whole or in part):

    

    
      	(i)  	
              deliver
                of the Purchase Price consistent with the terms of Section
                2.3

            

    

    

    

    8.1
      ACCURACY OF REPRESENTATIONS 

    

    All
      of
      Buyer’s representations and warranties in this Agreement (considered
      collectively), and each of these representations and warranties (considered
      individually), shall have been accurate in all material respects as of the
      date
      of this Agreement and shall be accurate in all material respects as of the
      time
      of the Closing as if then made. 

    

    

    8.2
      BUYER’S PERFORMANCE 

    All
      of
      the covenants and obligations that Buyer is required to perform or to comply
      with pursuant to this Agreement at or prior to the Closing (considered
      collectively), and each of these covenants and obligations (considered
      individually), shall have been performed and complied with in all material
      respects. 

    

    8.3
      CONSENTS 

    

    Each
      of
      the Consents identified in Exhibit 8.3 shall have been obtained and shall be
      in
      full force and effect. 

    

    8.4
      ADDITIONAL DOCUMENTS 

    Buyer
      shall have caused the documents and instruments required by Section 2.7(b)
      and
      the following documents to be delivered (or tendered subject only to Closing)
      to
      Seller and Shareholder: 

    

    
      	a.  	
              an
                opinion of The Law Offices of Thomas C. Cook, Ltd., dated the Closing
                Date, in the form of Exhibit 2.7(b)(vii); and

            

    

    

    
      	b.  	
              such
                other documents as Seller may reasonably request for the purpose
                of
                

            

    

    
      	(i)  	
              evidencing
                the accuracy of any representation or warranty of Buyer,
                

            

    

    

    
      	(ii)  	
              evidencing
                the performance by Buyer of, or the compliance by Buyer with, any
                covenant
                or obligation required to be performed or complied with by Buyer
                or

            

    

    

    
      	(iii)  	
              evidencing
                the satisfaction of any condition referred to in this Article 8.
                

            

    

    

    8.5
      NO
      INJUNCTION 

    

    There
      shall not be in effect any Legal Requirement or any injunction or other Order
      that (a) prohibits the consummation of the Contemplated Transactions and (b)
      has
      been adopted or issued, or has otherwise become effective, since the date of
      this Agreement. 

    

    

    SECTION
      9  TERMINATION

    

    9.1
      TERMINATION EVENTS

     

    By
      fifteen (15) days notice without cure by the deficient party, given prior to
      or
      at the Closing, subject to Section 9.2, this Agreement may be terminated as
      follows: 

    

    
      	a.  	
              by
                Buyer if a material Breach of any provision of this Agreement has
                been
                committed by Seller or Shareholder and such Breach has not been waived
                by
                Buyer; 

            

    

    

    
      	b.  	
              by
                Seller if a material Breach of any provision of this Agreement has
                been
                committed by Buyer and such Breach has not been waived by Seller;
                

            

    

    

    
      	c.  	
              by
                Buyer if any condition in Article 7 has not been satisfied as of
                the date
                specified for Closing in the first sentence of Section 2.6 or if
                satisfaction of such a condition by such date is or becomes impossible
                (other than through the failure of Buyer to comply with its obligations
                under this Agreement), and Buyer has not waived such condition on
                or
                before such date; 

            

    

    

    
      	d.  	
              by
                Seller if any condition in Article 8 has not been satisfied as of
                the date
                specified for Closing in the first sentence of Section 2.6 or if
                satisfaction of such a condition by such date is or becomes impossible
                (other than through the failure of Seller or the Shareholder to comply
                with their obligations under this Agreement), and Seller has not
                waived
                such condition on or before such date;

            

    

    

    
      	e.  	
              by
                mutual consent of Buyer and Seller;

            

    

    

    
      	f.  	
              by
                Buyer if the Closing has not occurred on or before October 6, 2006,
                or
                such later date as the parties may agree upon, unless the Buyer is
                in
                material Breach of this Agreement; or

            

    

    

    
      	g.  	
              by
                Seller if the Closing has not occurred on or before October 6, 2006,
                or
                such later date as the parties may agree upon, unless the Seller
                or
                Shareholder are in material Breach of this Agreement.
                

            

    

    

    9.2
      EFFECT OF TERMINATION 

    

    
      	a.  	
              Each
                party’s right of termination under Section 9.1 is in addition to any other
                rights it may have under this Agreement or otherwise, and the exercise
                of
                such right of termination will not be an election of remedies. If
                this
                Agreement is terminated pursuant to Section 9.1, all obligations
                of the
                parties under this Agreement will terminate, except that the obligations
                of the parties in this Section 9.2 and Articles 12 and 13 (except
                for
                those in Section 13.5) will survive, provided, however, that, if
                this
                Agreement is terminated because of a Breach of this Agreement by
                the
                nonterminating party or because one or more of the conditions to
                the
                terminating party’s obligations under this Agreement is not satisfied as a
                result of the party’s failure to comply with its obligations under this
                Agreement, the terminating party’s right to pursue all legal remedies will
                survive such termination unimpaired.

            

    

    

    
      	b.  	
              In
                the event the Agreement shall be terminated by Buyer under Sections
                9.1(a)
                or 9.1(c), the Escrow Deposit, if any, and all interest earned thereon,
                shall be returned to Buyer. In this event, all obligations of the
                Escrow
                Agent shall cease.

            

    

    

    
      	c.  	
              In
                the event the Agreement shall be terminated for any other reason,
                the
                Escrow Deposit, and all interest earned thereon, shall be paid to
                Seller
                as liquidated damages. In this event, all obligations of the Escrow
                Agent
                shall cease. 

            

    

    

    SECTION
      10  ADDITIONAL
      COVENANTS

    

    10.1
      EMPLOYEES AND EMPLOYEE BENEFITS 

    
      	a.  	
              Information
                on Active Employees. For the purpose of this Agreement, the term
“Active
                Employees” shall mean all employees employed on the Closing Date by Seller
                for its business who are: 

            

    

    

    
      	(i)  	
              bargaining
                unit employees currently covered by a collective bargaining agreement;
                or
                

            

    

    

    
      	(ii)  	
              employed
                exclusively in Seller’s business as currently conducted, including
                employees on temporary leave of absence, including family medical
                leave,
                military leave, temporary disability or sick leave, but excluding
                employees on long-term disability leave.

            

    

    

    
      	b.  	
              Employment
                of Active Employees by Buyer. 

            

    

    

    
      	(i)  	
              Buyer
                is not obligated to hire any additional Active Employee other than
                those
                listed in Exhibit “J”, but may interview all Active Employees. Buyer will
                provide Seller with a list of Active Employees to whom Buyer has
                made an
                offer of employment that has been accepted to be effective on the
                Closing
                Date (the “Hired Active Employees”). Subject to Legal Requirements, Buyer
                will have reasonable access to the Facilities and personnel Records
                (including performance appraisals, disciplinary actions, grievances
                and
                medical Records) of Seller for the purpose of preparing for and conducting
                employment interviews with all Active Employees and will conduct
                the
                interviews as expeditiously as possible prior to the Closing Date.
                Access
                will be provided by Seller upon reasonable prior notice during normal
                business hours. Effective immediately before the Closing, Seller
                will
                terminate the employment of all of its Hired Active Employees that
                are not
                listed in Exhibit “J”. 

            

    

    

    
      	(ii)  	
              Neither
                Seller nor the Shareholder nor their Related Persons shall solicit
                the
                continued employment of any Active Employee (unless and until Buyer
                has
                informed Seller in writing that the particular Active Employee will
                not
                receive any employment offer from Buyer) or the employment of any
                Hired
                Active Employee after the Closing. Buyer shall inform Seller promptly
                of
                the identities of those Active Employees to whom it will not make
                employment offers, and Seller shall assist Buyer in complying with
                the
                WARN Act as to those Active
                Employees.

            

    

    

    
      	(iii)  	
              It
                is understood and agreed that (A) Buyer’s expressed intention to extend
                offers of employment as set forth in this section shall not constitute
                any
                commitment, Contract or understanding (expressed or implied) of any
                obligation on the part of Buyer to a post-Closing employment relationship
                of any fixed term or duration or upon any terms or conditions other
                than
                those that Buyer may establish pursuant to individual offers of
                employment, and (B) employment offered by Buyer is “at will” and may be
                terminated by Buyer or by an employee at any time for any reason
                (subject
                to any written commitments to the contrary made by Buyer or an employee
                and Legal Requirements). Nothing in this Agreement shall be deemed
                to
                prevent or restrict in any way the right of Buyer to terminate, reassign,
                promote or demote any of the Hired Active Employees after the Closing
                or
                to change adversely or favorably the title, powers, duties,
                responsibilities, functions, locations, salaries, other compensation
                or
                terms or conditions of employment of such employees.
                

            

    

    

    
      	c.  	
              Salaries
                and Benefits. 

            

    

    

    
      	(i)  	
              Seller
                shall be responsible for (A) the payment of all wages and other
                remuneration due to Active Employees with respect to their services
                as
                employees of Seller through the close of business on the Closing
                Date,
                including pro rata bonus payments and all vacation pay earned prior
                to the
                Closing Date; (B) the payment of any termination or severance payments
                and
                the provision of health plan continuation coverage in accordance
                with the
                requirements of COBRA and Sections 601 through 608 of ERISA; and
                (C) any
                and all payments to employees required under the WARN
                Act.

            

    

    

    
      	(ii)  	
              Seller
                shall be liable for any claims made or incurred by Active Employees
                and
                their beneficiaries through the Closing Date under the Employee Plans.
                For
                purposes of the immediately preceding sentence, a charge will be
                deemed
                incurred, in the case of hospital, medical or dental benefits, when
                the
                services that are the subject of the charge are performed and, in
                the case
                of other benefits (such as disability or life insurance), when an
                event
                has occurred or when a condition has been diagnosed that entitles
                the
                employee to the benefit. 

            

    

    

    
      	d.  	
              Seller’s
                Retirement Plans. All Hired Active Employees who are participants
                in
                Seller’s retirement plans shall retain their accrued benefits, if any,
                under Seller’s retirement plans as of the Closing Date, and Seller (or
                Seller’s retirement plans) shall retain sole liability for the payment of
                such benefits as and when such Hired Active Employees become eligible
                thereforee under such plans. All Hired Active Employees shall become
                fully
                vested in their accrued benefits under Seller’s retirement plans as of the
                Closing Date, and Seller will so amend such plans if necessary to
                achieve
                this result. Seller shall cause the assets of each Employee Plan
                to equal
                or exceed the benefit liabilities of such Employee Plan on a
                plan-termination basis as of the Closing.

            

    

    

    
      	e.  	
              No
                Transfer of Assets. Neither Seller nor Shareholder nor their respective
                Related Persons will make any transfer of pension or other employee
                benefit plan assets to Buyer. 

            

    

    

    

    
      	f.  	
              General
                Employee Provisions. 

            

    

    

    
      	(i)  	
              Seller
                and Buyer shall give any notices required by Legal Requirements and
                take
                whatever other actions with respect to the plans, programs and policies
                described in this Section 10.1 as may be necessary to carry out the
                arrangements described in this Section 10.1.

            

    

    

    
      	(ii)  	
              Seller
                and Buyer shall provide each other with such plan documents and summary
                plan descriptions, employee data or other information as may be reasonably
                required to carry out the arrangements described in this Section
                10.1.
                

            

    

    

    
      	(iii)  	
              If
                any of the arrangements described in this Section 10.1 are determined
                by
                the IRS or other Governmental Body to be prohibited by law, Seller
                and
                Buyer shall modify such arrangements to as closely as possible reflect
                their expressed intent and retain the allocation of economic benefits
                and
                burdens to the parties contemplated herein in a manner that is not
                prohibited by law. 

            

    

    

    
      	(iv)  	
              Seller
                shall provide Buyer with completed I-9 forms and attachments with
                respect
                to all Hired Active Employees, except for such employees as Seller
                certifies in writing to Buyer are exempt from such requirement.
                

            

    

    

    
      	(v)  	
              Buyer
                shall not have any responsibility, liability or obligation, whether
                to
                Active Employees, former employees, their beneficiaries or to any
                other
                Person, with respect to any employee benefit plans, practices, programs
                or
                arrangements (including the establishment, operation or termination
                thereof and the notification and provision of COBRA coverage extension)
                maintained by Seller. 

            

    

    

    10.2
      PAYMENT OF ALL TAXES RESULTING FROM SALE OF ASSETS BY SELLER 

    

    Seller
      shall pay in a timely manner all Taxes resulting from or payable in connection
      with the sale of the Assets pursuant to this Agreement, regardless of the Person
      on whom such Taxes are imposed by Legal Requirements, except that Buyer shall
      pay one-half of all sales taxes imposed on the transfer of the Assets.

    

    10.3
      PAYMENT OF OTHER RETAINED LIABILITIES 

    

    In
      addition to payment of Taxes pursuant to Section 10.2, Seller shall pay, or
      make
      adequate provision for the payment, in full all of the Retained Liabilities
      and
      other Liabilities of Seller under this Agreement. If any such Liabilities are
      not so paid or provided for, or if Buyer reasonably determines that failure
      to
      make any payments will impair Buyer’s use or enjoyment of the Assets or conduct
      of the business previously conducted by Seller with the Assets, Buyer may,
      at
      any time after the Closing Date, elect to make all such payments directly (but
      shall have no obligation to do so) and set off and deduct the full amount of
      all
      such payments from the first maturing installments of the unpaid principal
      balance of the Secured Subordinated Promissory Notes pursuant to Section 11.8.
      Buyer shall receive full credit under the Secured Subordinated Promissory Notes
      and this Agreement for all payments so made. 

    

    10.4
      REMOVING EXCLUDED ASSETS 

    

    On
      or
      before the Closing Date, Seller shall remove all Excluded Assets from all
      Facilities and other Real Property to be occupied by Buyer. Such removal shall
      be done in such manner as to avoid any damage to the Facilities and other
      properties to be occupied by Buyer and any disruption of the business operations
      to be conducted by Buyer after the Closing. Any damage to the Assets or to
      the
      Facilities resulting from such removal shall be paid by Seller at the Closing.
      Should Seller fail to remove the Excluded Assets as required by this Section,
      Buyer shall have the right, but not the obligation, (a) to remove the Excluded
      Assets at Seller’s sole cost and expense; (b) to store the Excluded Assets and
      to charge Seller all storage costs associated 

    therewith;
      (c) to treat the Excluded Assets as unclaimed and to proceed to dispose of
      the
      same under the laws governing unclaimed property; or (d) to exercise any other
      right or remedy conferred by this Agreement or otherwise available at law or
      in
      equity. Seller shall promptly reimburse Buyer for all costs and expenses
      incurred by Buyer in connection with any Excluded Assets not removed by Seller
      on or before the Closing Date. 

    

    10.5
      REPORTS AND RETURNS 

    

    Seller
      shall promptly after the Closing prepare and file all reports and returns
      required by Legal Requirements relating to the business of Seller as conducted
      using the Assets, to and including the Closing. 

    

    10.6
      ASSISTANCE IN PROCEEDINGS 

    

    Seller
      will cooperate with Buyer and its counsel in the contest or defense of, and
      make
      available its personnel and provide any testimony and access to its books and
      Records in connection with, any Proceeding involving or relating to (a) any
      Contemplated Transaction or (b) any action, activity, circumstance, condition,
      conduct, event, fact, failure to act, incident, occurrence, plan, practice,
      situation, status or transaction on or before the Closing Date involving Seller
      or its business or the Shareholder. 

    

    10.7
      NONCOMPETITION, NONSOLICITATION AND NONDISPARAGEMENT 

    

    
      	a.  	
              Noncompetition.
                For a period of two (2) years after the Closing Date, neither Seller
                nor
                Shareholder shall, anywhere in the United States, directly or indirectly
                invest in, own, manage, operate, finance, control, advise, render
                services
                to or guarantee the obligations of any Person engaged in or planning
                to
                become engaged in the Business of the Seller (“Competing Business”),
                provided, however, that Seller may purchase or otherwise acquire
                up to
                (but not more than) five percent (5%) of any class of the securities
                of
                any Person (but may not otherwise participate in the activities of
                such
                Person) if such securities are listed on any national or regional
                securities exchange or have been registered under Section 12(g) of
                the
                Exchange Act. 

            

    

    

    
      	b.  	
              Nonsolicitation.
                For a period of two (2) years after the Closing Date, neither Seller
                nor
                Shareholder shall, directly or indirectly:

            

    

    

    
      	(i)  	
              solicit
                the business of any Person who is a customer of Buyer;
                

            

    

    

    
      	(ii)  	
              cause,
                induce or attempt to cause or induce any customer, supplier, licensee,
                licensor, franchisee, employee, consultant or other business relation
                of
                Buyer to cease doing business with Buyer, to deal with any competitor
                of
                Buyer or in any way interfere with its relationship with Buyer;
                

            

    

    

    
      	(iii)  	
              cause,
                induce or attempt to cause or induce any customer, supplier, licensee,
                licensor, franchisee, employee, consultant or other business relation
                of
                Seller on the Closing Date or within the year preceding the Closing
                Date
                to cease doing business with Buyer, to deal with any competitor of
                Buyer
                or in any way interfere with its relationship with Buyer; or
                

            

    

    

    
      	(iv)  	
              hire,
                retain or attempt to hire or retain any employee or independent contractor
                of Buyer or in any way interfere with the relationship between Buyer
                and
                any of its employees or independent
                contractors.

            

    

    

     

    
      	c.  	
              Nondisparagement.
                After the Closing Date, neither Seller nor Shareholder shall disparage
                Buyer or any of Buyer’s shareholders, directors, officers, employees or
                agents. 

            

    

    

    
      	d.  	
              Modification
                of Covenant. If a final judgment of a court or tribunal of competent
                jurisdiction determines that any term or provision contained in Section
                10.7(a) through (c) is invalid or unenforceable, then the parties
                agree
                that the court or tribunal will have the power to reduce the scope,
                duration or geographic area of the term or provision, to delete specific
                words or phrases or to replace any invalid or unenforceable term
                or
                provision with a term or provision that is valid and enforceable
                and that
                comes closest to expressing the intention of the invalid or unenforceable
                term or provision. This Section 10.7 will be enforceable as so modified
                after the expiration of the time within which the judgment may be
                appealed. This Section 10.7 is reasonable and necessary to protect
                and
                preserve Buyer’s legitimate business interests and the value of the Assets
                and to prevent any unfair advantage conferred on Seller.
                

            

    

    

    10.8
      CUSTOMER AND OTHER BUSINESS RELATIONSHIPS 

    

    After
      the
      Closing, Seller and Shareholder will cooperate with Buyer in its efforts to
      continue and maintain for the benefit of Buyer those business relationships
      of
      Seller existing prior to the Closing and relating to the business to be operated
      by Buyer after the Closing, including relationships with lessors, employees,
      regulatory authorities, licensors, customers, suppliers and others, and Seller
      will satisfy the Retained Liabilities in a manner that is not detrimental to
      any
      of such relationships. Seller and Shareholder will refer to Buyer all inquiries
      relating to such business. Neither Seller nor any of its officers, employees,
      agents or the Shareholder shall take any action that would tend to diminish
      the
      value of the Assets after the Closing or that would interfere with the business
      of Buyer to be engaged in after the Closing, including disparaging the name
      or
      business of Buyer. 

    

    10.9
      RETENTION OF AND ACCESS TO RECORDS 

    

    After
      the
      Closing Date, Buyer shall retain for a period consistent with Buyer’s
      record-retention policies and practices those Records of Seller delivered to
      Buyer. Buyer also shall provide Seller and Shareholder and their Representatives
      reasonable access thereto, during normal business hours and on at least three
      days’ prior written notice, to enable them to prepare financial statements or
      tax returns or deal with tax audits. After the Closing Date, Seller shall
      provide Buyer and its Representatives reasonable access to Records that are
      Excluded Assets, during normal business hours and on at least three days’ prior
      written notice, for any reasonable business purpose specified by Buyer in such
      notice. 

    

    10.10
      FURTHER ASSURANCES 

    

    Subject
      to the proviso in Section 6.1, the parties shall cooperate reasonably with
      each
      other and with their respective Representatives in connection with any steps
      required to be taken as part of their respective obligations under this
      Agreement, and shall (a) furnish upon request to each other such further
      information; (b) execute and deliver to each other such other documents; and
      (c)
      do such other acts and things, all as the other party may reasonably request
      for
      the purpose of carrying out the intent of this Agreement and the Contemplated
      Transactions. 

    

    

    SECTION
      11  INDEMNIFICATION;
      REMEDIES

    

    11.1
      SURVIVAL 

    

    All
      representations, warranties, covenants and obligations in this Agreement, the
      certificates delivered pursuant to Section 2.7 and any other certificate or
      document delivered pursuant to this Agreement shall survive the Closing and
      the
      consummation of the Contemplated Transactions, subject to Section 11.7. The
      right to indemnification, reimbursement or other remedy based upon such
      representations, warranties, covenants and obligations shall not be affected
      by
      any investigation (including any environmental investigation or assessment)
      conducted with respect to, or any Knowledge acquired (or capable of being
      acquired) at any time, whether before or after the execution and delivery of
      this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
      of or compliance with any such representation, warranty, covenant or obligation.
      The waiver of any condition based upon the accuracy of any representation or
      warranty, or on the performance of or compliance with any covenant or
      obligation, will not affect the right to indemnification, reimbursement or
      other
      remedy based upon such representations, warranties, covenants and obligations.
      

    

    

    11.2
      INDEMNIFICATION AND REIMBURSEMENT BY SELLER AND SHAREHOLDER 

    

    Seller
      and each Shareholder, jointly and severally, will indemnify and hold harmless
      Buyer, and its Representatives, shareholders, subsidiaries and Related Persons
      (collectively, the “Buyer Indemnified Persons”), and will reimburse the Buyer
      Indemnified Persons for any loss, liability, claim, damage, expense (including
      costs of investigation and defense and reasonable attorneys’ fees and expenses)
      or diminution of value, whether or not involving a Third-Party Claim
      (collectively, “Damages”), arising from or in connection with: 

    

    
      	a.  	
              any
                Breach of any representation or warranty made by Seller or the Shareholder
                in (i) this Agreement (ii) the certificates delivered pursuant to
                Section
                2.7 (for this purpose, each such certificate will be deemed to have
                stated
                that Seller’s and the Shareholder’s representations and warranties in this
                Agreement fulfill the requirements of Section 7.1 as of the Closing
                Date
                as if made on the Closing Date), (iii) any transfer instrument or
                (iv) any
                other certificate, document, writing or instrument delivered by Seller
                or
                the Shareholder pursuant to this Agreement;

            

    

    

    
      	b.  	
              any
                Breach of any covenant or obligation of Seller or the Shareholder
                in this
                Agreement or in any other certificate, document, writing or instrument
                delivered by Seller or the Shareholder pursuant to this Agreement;
                

            

    

    

    
      	c.  	
              any
                Liability arising out of the ownership or operation of the Assets
                prior to
                the Closing other than the Assumed Liabilities;

            

    

    

    
      	d.  	
              any
                brokerage or finder’s fees or commissions or similar payments based upon
                any agreement or understanding made, or alleged to have been made,
                by any
                Person with Seller or the Shareholder (or any Person acting on their
                behalf) in connection with any of the Contemplated Transactions;
                

            

    

    

    
      	e.  	
              any
                product or component thereof manufactured by or shipped, or any services
                provided by, Seller, in whole or in part, prior to the Closing Date;
                

            

    

    

    
      	f.  	
              any
                noncompliance with any Bulk Sales Laws or fraudulent transfer law
                in
                respect of the Contemplated Transactions;

            

    

    

    
      	g.  	
              any
                liability under the WARN Act or any similar state or local Legal
                Requirement that may result from an “Employment Loss”, as defined by 29
                U.S.C. sect. 2101(a)(6), caused by any action of Seller prior to
                the
                Closing or by Buyer’s decision not to hire previous employees of Seller;
                

            

    

    

    
      	h.  	
              any
                Employee Plan established or maintained by Seller; or
                

            

    

    

    
      	i.  	
              any
                Retained Liabilities. 

            

    

    

    

    

    11.3
      INDEMNIFICATION AND REIMBURSEMENT BY SELLER-- ENVIRONMENTAL MATTERS

    

    In
      addition to the other indemnification provisions in this Article 11, Seller
      and
      each Shareholder, jointly and severally, will indemnify and hold harmless Buyer
      and the other Buyer Indemnified Persons, and will reimburse Buyer and the other
      Buyer Indemnified Persons, for any Damages (including costs of cleanup,
      containment or other remediation) arising from or in connection with:

    

    
      	a.  	
              any
                Environmental, Health and Safety Liabilities arising out of or relating
                to: (i) the ownership or operation by any Person at any time on or
                prior
                to the Closing Date of any of the Facilities, Assets or the business
                of
                Seller, or (ii) any Hazardous Materials or other contaminants that were
                present on the Facilities or Assets at any time on or prior to the
                Closing
                Date; or 

            

    

    

    
      	b.  	
              any
                bodily injury (including illness, disability and death, regardless
                of when
                any such bodily injury occurred, was incurred or manifested itself),
                personal injury, property damage (including trespass, nuisance, wrongful
                eviction and deprivation of the use of real property) or other damage
                of
                or to any Person or any Assets in any way arising from or allegedly
                arising from any Hazardous Activity conducted by any Person with
                respect
                to the business of Seller or the Assets prior to the Closing Date
                or from
                any Hazardous Material that was (i) present or suspected to be present
                on
                or before the Closing Date on or at the Facilities (or present or
                suspected to be present on any other property, if such Hazardous
                Material
                emanated or allegedly emanated from any Facility and was present
                or
                suspected to be present on any Facility, on or prior to the Closing
                Date)
                or (ii) Released or allegedly Released by any Person on or at any
                Facilities or Assets at any time on or prior to the Closing Date.
                Buyer
                will be entitled to control any Remedial Action, any Proceeding relating
                to an Environmental Claim and, except as provided in the following
                sentence, any other Proceeding with respect to which indemnity may
                be
                sought under this Section 11.3. The procedure described in Section
                11.9
                will apply to any claim solely for monetary damages relating to a
                matter
                covered by this Section 11.3. 

            

    

    

    11.4
      INDEMNIFICATION AND REIMBURSEMENT BY BUYER 

    

    Buyer
      will indemnify and hold harmless Seller, and will reimburse Seller, for any
      Damages arising from or in connection with: 

    

    
      	a.  	
              any
                Breach of any representation or warranty made by Buyer in this Agreement
                or in any certificate, document, writing or instrument delivered
                by Buyer
                pursuant to this Agreement; 

            

    

    

    
      	b.  	
              any
                Breach of any covenant or obligation of Buyer in this Agreement or
                in any
                other certificate, document, writing or instrument delivered by Buyer
                pursuant to this Agreement; 

            

    

    

    
      	c.  	
              any
                claim by any Person for brokerage or finder’s fees or commissions or
                similar payments based upon any agreement or understanding alleged
                to have
                been made by such Person with Buyer (or any Person acting on Buyer’s
                behalf) in connection with any of the Contemplated Transactions;
                

            

    

    

    
      	d.  	
              any
                Assumed Liabilities; or 

            

    

    

    
      	e.  	
              any
                liability arising out of the ownership or operation of the Assets
                after
                the Closing, other than the Retained Liabilities.
                

            

    

    

    11.5
      LIMITATIONS ON AMOUNT-- SELLER AND SHAREHOLDER 

    

    Seller
      and Shareholder shall have no liability (for indemnification or otherwise)
      with
      respect to claims under Section 11.2(a) until the total of all Damages with
      respect to such matters exceeds twenty-five thousand dollars ($25,000). Total
      damages shall not exceed the Purchase Price. However, this Section 11.5 will
      not
      apply to claims under Section 11.2(c) through (i) or to matters arising in
      respect of Sections 3.14, 3.20, 3.29, or to any Breach of any of Seller’s and
      Shareholder’s representations and warranties of which the Seller had Knowledge,
      after reasonable investigation, at any time prior to the date on which such
      representation and warranty is made or any intentional Breach by Seller or
      the
      Shareholder of any covenant or obligation, 

    and
      Seller and the Shareholder will be jointly and severally liable for all Damages
      with respect to such Breaches. 

    

    11.6
      LIMITATIONS ON AMOUNT-- BUYER 

    

    Buyer
      will have no liability (for indemnification or otherwise) with respect to claims
      under Section 11.4(a) until the total of all Damages with respect to such
      matters exceeds twenty-five thousand dollars ($25,000). However, this Section
      11.6 will not apply to claims under Section 11.4(c), 11.4(d), 11.4(e) or matters
      arising in respect of Section 4.4 or to any Breach of any of Buyer’s
      representations and warranties of which Buyer had Knowledge at any time prior
      to
      the date on which such representation and warranty is made or any intentional
      Breach by Buyer of any covenant or obligation, and Buyer will be liable for
      all
      Damages with respect to such Breaches. 

    

    11.7
      TIME
      LIMITATIONS 

    

    
      	(a)  	
              If
                the Closing occurs, Seller and Shareholder will have liability (for
                indemnification or otherwise) with respect to any Breach of (i) a
                covenant
                or obligation to be performed or complied with prior to the Closing
                Date
                (other than those in Sections 2.1 and 2.4(b) and Articles 10 and
                12, as to
                which a claim may be made at any time) or (ii) a representation or
                warranty, only if Buyer notifies Seller or Shareholder on or before
                October 6, 2009 of a claim specifying the factual basis of the claim
                in
                reasonable detail to the extent then known by Buyer.
                

            

    

    

    
      	(b)  	
              If
                the Closing occurs, Buyer will have liability (for indemnification
                or
                otherwise) with respect to any Breach of (i) a covenant or obligation
                to
                be performed or complied with prior to the Closing Date (other than
                those
                in Article 12, as to which a claim may be made at any time) or (ii)
                a
                representation or warranty, only if Seller or Shareholder notify
                Buyer on
                or before October 6, 2009 of a claim specifying the factual basis
                of the
                claim in reasonable detail to the extent then known by Seller or
                the
                Shareholder. 

            

    

    

    

    11.8
      RIGHT OF SETOFF 

    

    Upon
      notice to Seller specifying in reasonable detail the basis therefore, Buyer
      may
      propose to set off any amount to which it may be entitled under this Article
      11
      against amounts otherwise payable under the Secured Subordinated Promissory.
      Any
      amount so proposed shall be deposited by Buyer into an escrow account maintained
      by its attorney until such claim is agreed to by the parties or otherwise
      finally determined. The proposal to exercise such right of setoff by Buyer
      in
      good faith, whether or not ultimately determined to be justified, will not
      constitute an event of default under the Secured Subordinated Promissory Notes
      or any instrument securing the Secured Subordinated Promissory Notes. Neither
      the exercise of nor the failure to exercise such right of setoff or to give
      a
      notice of a claim will constitute an election of remedies or limit Buyer in
      any
      manner in the enforcement of any other remedies that may be available to it.
      

    

    11.9
      THIRD-PARTY CLAIMS 

    

    
      	a.  	
              Promptly
                after receipt by a Person entitled to indemnity under Section 11.2,
                11.3
                (to the extent provided in the last sentence of Section 11.3) or
                11.4 (an
                “Indemnified Person”) of notice of the assertion of a Third-Party Claim
                against it, such Indemnified Person shall give notice to the Person
                obligated to indemnify under such Section (an “Indemnifying Person”) of
                the assertion of such Third-Party Claim, provided that the failure
                to
                notify the Indemnifying Person will not relieve the Indemnifying
                Person of
                any liability that it may have to any Indemnified Person, except
                to the
                extent that the Indemnifying Person demonstrates that the defense
                of such
                Third-Party Claim is prejudiced by the Indemnified Person’s failure to
                give such notice. 

            

    

    

    
      	b.  	
              If
                an Indemnified Person gives notice to the Indemnifying Person pursuant
                to
                Section 11.9(a) of the assertion of a Third-Party Claim, the Indemnifying
                Person shall be entitled to participate in the defense of such Third-Party
                Claim and, to the extent that it wishes (unless (i) the Indemnifying
                Person is also a Person against whom the Third-Party Claim is made
                and the
                Indemnified Person determines in good faith that joint representation
                would be inappropriate or (ii) the Indemnifying Person fails to provide
                reasonable assurance to the Indemnified Person of its financial capacity
                to defend such Third-Party Claim and provide indemnification with
                respect
                to such Third-Party Claim), to assume the defense of such Third-Party
                Claim with counsel satisfactory to the Indemnified Person. After
                notice
                from the Indemnifying Person to the Indemnified Person of its election
                to
                assume the defense of such Third-Party Claim, the Indemnifying Person
                shall not, so long as it diligently conducts such defense, be liable
                to
                the Indemnified Person under this Article 11 for any fees of other
                counsel
                or any other expenses with respect to the defense of such Third-Party
                Claim, in each case subsequently incurred by the Indemnified Person
                in
                connection with the defense of such Third-Party Claim, other than
                reasonable costs of investigation. If the Indemnifying Person assumes
                the
                defense of a Third-Party Claim, (i) such assumption will conclusively
                establish for purposes of this Agreement that the claims made in
                that
                Third-Party Claim are within the scope of and subject to indemnification,
                and (ii) no compromise or settlement of such Third-Party Claims may
                be
                effected by the Indemnifying Person without the Indemnified Person’s
                Consent unless (A) there is no finding or admission of any violation
                of
                Legal Requirement or any violation of the rights of any Person; (B)
                the
                sole relief provided is monetary damages that are paid in full by
                the
                Indemnifying Person; and (C) the Indemnified Person shall have no
                liability with respect to any compromise or settlement of such Third-Party
                Claims effected without its Consent. If notice is given to an Indemnifying
                Person of the assertion of any Third-Party Claim and the Indemnifying
                Person does not, within ten (10) days after the Indemnified Person’s
                notice is given, give notice to the Indemnified Person of its election
                to
                assume the defense of such Third-Party Claim, the Indemnifying Person
                will
                be bound by any determination made in such Third-Party Claim or any
                compromise or settlement effected by the Indemnified Person.
                

            

    

    

    
      	c.  	
              Notwithstanding
                the foregoing, if an Indemnified Person determines in good faith
                that
                there is a reasonable probability that a Third-Party Claim may adversely
                affect it or its Related Persons other than as a result of monetary
                damages for which it would be entitled to indemnification under this
                Agreement, the Indemnified Person may, by notice to the Indemnifying
                Person, assume the exclusive right to defend, compromise or settle
                such
                Third-Party Claim, but the Indemnifying Person will not be bound
                by any
                determination of any Third-Party Claim so defended for the purposes
                of
                this Agreement or any compromise or settlement effected without its
                Consent (which may not be unreasonably withheld).
                

            

    

    

    

    
      	d.  	
              Notwithstanding
                the provisions of Section 13.4, Seller and each Shareholder hereby
                consent
                to the nonexclusive jurisdiction of any court in which a Proceeding
                in
                respect of a Third-Party Claim is brought against any Buyer Indemnified
                Person for purposes of any claim that a Buyer Indemnified Person
                may have
                under this Agreement with respect to such Proceeding or the matters
                alleged therein and agree that process may be served on Seller and
                Shareholder with respect to such a claim anywhere in the world.
                

            

    

    

    
      	e.  	
              With
                respect to any Third-Party Claim subject to indemnification under
                this
                Article 11: (i) both the Indemnified Person and the Indemnifying
                Person,
                as the case may be, shall keep the other Person fully informed of
                the
                status of such Third-Party Claim and any related Proceedings at all
                stages
                thereof where such Person is not represented by its own counsel,
                and (ii)
                the parties agree (each at its own expense) to render to each other
                such
                assistance as they may reasonably require of each other and to cooperate
                in good faith with each other in order to ensure the proper and adequate
                defense of any Third-Party Claim. 

            

    

    

    
      	f.  	
              With
                respect to any Third-Party Claim subject to indemnification under
                this
                Article 11, the parties agree to cooperate in such a manner as to
                preserve
                in full (to the extent possible) the confidentiality of all Confidential
                Information and the attorney-client and work-product privileges.
                In
                connection therewith, each party agrees that: (i) it will use its
                Best
                Efforts, in respect of any Third-Party Claim in which it has assumed
                or
                participated in the defense, to avoid production of Confidential
                Information (consistent with applicable law and rules of procedure),
                and
                (ii) all communications between any party hereto and counsel responsible
                for or participating in the defense of any Third-Party Claim shall,
                to the
                extent possible, be made so as to preserve any applicable attorney-client
                or work-product privilege. 

            

    

    

    11.10
      OTHER CLAIMS 

    

    A
      claim
      for indemnification for any matter not involving a Third-Party Claim may be
      asserted by notice to the party from whom indemnification is sought and shall
      be
      paid promptly after such notice. 

    

    

    SECTION
      12  CONFIDENTIALITY

    

    12.1
      DEFINITION OF CONFIDENTIAL INFORMATION 

    

    
      	a.  	
              As
                used in this Article 12, the term “Confidential Information” includes any
                and all of the following information of Seller, Buyer or Shareholder
                that
                has been or may hereafter be disclosed in any form, whether in writing,
                orally, electronically or otherwise, or otherwise made available
                by
                observation, inspection or otherwise by either party (Buyer on the
                one
                hand or Seller and Shareholder, collectively, on the other hand)
                or its
                Representatives (collectively, a “Disclosing Party”) to the other party or
                its Representatives (collectively, a “Receiving Party”):
                

            

    

    

    
      	(i)  	
              all
                information that is a trade secret under applicable trade secret
                or other
                law; 

            

    

    

    
      	(ii)  	
              all
                information concerning product specifications, data, know-how, formulae,
                compositions, processes, designs, sketches, photographs, graphs,
                drawings,
                samples, inventions and ideas, past, current and planned research
                and
                development, current and planned manufacturing or distribution methods
                and
                processes, customer lists, current and anticipated customer requirements,
                price lists, market studies, business plans, computer hardware, Software
                and computer software and database technologies, systems, structures
                and
                architectures; 

            

    

    

    
      	(iii)  	
              all
                information concerning the business and affairs of the Disclosing
                Party
                (which includes historical and current financial statements, financial
                projections and budgets, tax returns and accountants’ materials,
                historical, current and projected sales, capital spending budgets
                and
                plans, business plans, strategic plans, marketing and advertising
                plans,
                publications, client and customer lists and files, contracts, the
                names
                and backgrounds of key personnel and personnel training techniques
                and
                materials, however documented), and all information obtained from review
                of the Disclosing Party’s documents or property or discussions with the
                Disclosing Party regardless of the form of the communication; and
                

            

    

    

    
      	(iv)  	
              all
                notes, analyses, compilations, studies, summaries and other material
                prepared by the Disclosing Party to the extent containing or based,
                in
                whole or in part, upon any information included in the foregoing.
                

            

    

    

    
      	b.  	
              Any
                trade secrets of a Disclosing Party shall also be entitled to all
                of the
                protections and benefits under applicable trade secret law and any
                other
                applicable law. If any information that a Disclosing Party deems
                to be a
                trade secret is found by a court of competent jurisdiction not to
                be a
                trade secret for purposes of this Article 12, such information shall
                still
                be considered Confidential Information of that Disclosing Party for
                purposes of this Article 12 to the extent included within the definition.
                In the case of trade secrets, each of Buyer, Seller and Shareholder
                hereby
                waives any requirement that the other party submit proof of the economic
                value of any trade secret or post a bond or other security.
                

            

    

    

    12.2
      RESTRICTED USE OF CONFIDENTIAL INFORMATION 

    

    
      	a.  	
              Each
                Receiving Party acknowledges the confidential and proprietary nature
                of
                the Confidential Information of the Disclosing Party and agrees that
                such
                Confidential Information (i) shall be kept confidential by the Receiving
                Party; (ii) shall not be used for any reason or purpose other than
                to
                evaluate and consummate the Contemplated Transactions; and (iii)
                without
                limiting the foregoing, shall not be disclosed by the Receiving Party
                to
                any Person, except in each case as otherwise expressly permitted
                by the
                terms of this Agreement or with the prior written consent of an authorized
                representative of Seller with respect to Confidential Information
                of
                Seller or Shareholder (each, a “Seller Contact”) or an authorized
                representative of Buyer with respect to Confidential Information
                of Buyer
                (each, a “Buyer Contact”). Each of Buyer and Seller and Shareholder shall
                disclose the Confidential Information of the other party only to
                its
                Representatives who require such material for the purpose of evaluating
                the Contemplated Transactions and are informed by Buyer, Seller or
                Shareholder, as the case may be, of the obligations of this Article
                12
                with respect to such information. Each of Buyer, Seller and Shareholder
                shall (iv) enforce the terms of this Article 12 as to its respective
                Representatives; (v) take such action to the extent necessary to
                cause its
                Representatives to comply with the terms and conditions of this Article
                12; and (vi) be responsible and liable for any breach of the provisions
                of
                this Article 12 by it or its Representatives.

            

    

    

    
      	b.  	
              Unless
                and until this Agreement is terminated, Seller and each Shareholder
                shall
                maintain as confidential any Confidential Information (including
                for this
                purpose any information of Seller or Shareholder of the type referred
                to
                in Sections 12.1(a)(i), (ii) and (iii), whether or not disclosed
                to Buyer)
                of the Seller or Shareholder relating to any of the Assets or the
                Assumed
                Liabilities. Notwithstanding the preceding sentence, Seller may use
                any
                Confidential Information of Seller before the Closing in the Ordinary
                Course of Business in connection with the transactions permitted
                by
                Section 5.2. 

            

    

    

    
      	c.  	
              From
                and after the Closing, the provisions of Section 12.2(a) above shall
                not
                apply to or restrict in any manner Buyer’s use of any Confidential
                Information of the Seller or Shareholder relating to any of the Assets
                or
                the Assumed Liabilities. 

            

    

    

    12.3
      EXCEPTIONS 

    

    Sections
      12.2(a) and (b) do not apply to that part of the Confidential Information of
      a
      Disclosing Party that a Receiving Party demonstrates (a) was, is or becomes
      generally available to the public other than as a result of a breach of this
      Article 12 or the Confidentiality Agreement by the Receiving Party or its
      Representatives; (b) was or is developed by the Receiving Party independently
      of
      and without reference to any Confidential Information of the Disclosing Party;
      or (c) was, is or becomes available to the Receiving Party on a nonconfidential
      basis from a Third Party not bound by a confidentiality agreement or any legal,
      fiduciary or other obligation restricting disclosure. Neither Seller nor the
      Shareholder shall disclose any Confidential Information of Seller or Shareholder
      relating to any of the Assets or the Assumed Liabilities in reliance on the
      exceptions in clauses (b) or (c) above. 

    

    12.4
      LEGAL PROCEEDINGS 

    

    If
      a
      Receiving Party becomes compelled in any Proceeding or is requested by a
      Governmental Body having regulatory jurisdiction over the Contemplated
      Transactions to make any disclosure that is prohibited or otherwise constrained
      by this Article 12, that Receiving Party shall provide the Disclosing Party
      with
      prompt notice of such compulsion or request so that it may seek an appropriate
      protective order or other appropriate remedy or waive compliance with the
      provisions of this Article 12. In the absence of a protective order or other
      remedy, the Receiving Party may disclose that portion (and only that portion)
      of
      the Confidential Information of the Disclosing Party that, based upon advice
      of
      the Receiving Party’s counsel, the Receiving Party is legally compelled to
      disclose or that has been requested by such Governmental Body, provided,
      however, that the Receiving Party shall use reasonable efforts to obtain
      reliable assurance that confidential treatment will be accorded by any Person
      to
      whom any Confidential Information is so disclosed. The provisions of this
      Section 12.4 do not apply to any Proceedings between the parties to this
      Agreement. 

    

    12.5
      RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION 

    

    If
      this
      Agreement is terminated, each Receiving Party shall (a) destroy all Confidential
      Information of the Disclosing Party prepared or generated by the Receiving
      Party
      without retaining a copy of any such material; (b) promptly deliver to the
      Disclosing Party all other Confidential Information of the Disclosing Party,
      together with all copies thereof, in the possession, custody or control of
      the
      Receiving Party or, alternatively, with the written consent 

    of
      a
      Seller Contact or a Buyer Contact (whichever represents the Disclosing Party)
      destroy all such Confidential Information; and (c) certify all such destruction
      in writing to the Disclosing Party, provided, however, that the Receiving Party
      may retain a list that contains general descriptions of the information it
      has
      returned or destroyed to facilitate the resolution of any controversies after
      the Disclosing Party’s Confidential Information is returned. 

    

    12.6
      ATTORNEY-CLIENT PRIVILEGE 

    

    The
      Disclosing Party is not waiving, and will not be deemed to have waived or
      diminished, any of its attorney work product protections, attorney-client
      privileges or similar protections and privileges as a result of disclosing
      its
      Confidential Information (including Confidential Information related to pending
      or threatened litigation) to the Receiving Party, regardless of whether the
      Disclosing Party has asserted, or is or may be entitled to assert, such
      privileges and protections. The parties (a) share a common legal and commercial
      interest in all of the Disclosing Party’s Confidential Information that is
      subject to such privileges and protections; (b) are or may become joint
      defendants in Proceedings to which the Disclosing Party’s Confidential
      Information covered by such protections and privileges relates; (c) intend
      that
      such privileges and protections remain intact should either party become subject
      to any actual or threatened Proceeding to which the Disclosing Party’s
      Confidential Information covered by such protections and privileges relates;
      and
      (d) intend that after the Closing the Receiving Party shall have the right
      to
      assert such protections and privileges. No Receiving Party shall admit, claim
      or
      contend, in Proceedings involving either party or otherwise, that any Disclosing
      Party waived any of its attorney work-product protections, attorney-client
      privileges or similar protections and privileges with respect to any
      information, documents or other material not disclosed to a Receiving Party
      due
      to the Disclosing Party disclosing its Confidential Information (including
      Confidential Information related to pending or threatened litigation) to the
      Receiving Party. 

    

    

    SECTION
      13  GENERAL
      PROVISIONS

    

    13.1
      EXPENSES 

    

    Except
      as
      otherwise provided in this Agreement, each party to this Agreement will bear
      its
      respective fees and expenses incurred in connection with the preparation,
      negotiation, execution and performance of this Agreement and the Contemplated
      Transactions, including all fees and expense of its Representatives. If this
      Agreement is terminated, the obligation of each party to pay its own fees and
      expenses will be subject to any rights of such party arising from a Breach
      of
      this Agreement by another party. 

    

    13.2
      PUBLIC ANNOUNCEMENTS AND DISCLOSURES 

    

    Any
      public announcement, press release or similar publicity with respect to this
      Agreement or the Contemplated Transactions will be issued, if at all, at such
      time and in such manner as Buyer determines. Except with the prior consent
      of
      Buyer or as permitted by this Agreement, neither Seller, Shareholder nor any
      of
      their Representatives shall disclose to any Person (a) the fact that any
      Confidential Information of Seller or Shareholder has been disclosed to Buyer
      or
      its Representatives, that Buyer or its Representatives have inspected any
      portion of the Confidential Information of Seller or Shareholder, that any
      Confidential Information of Buyer has been disclosed to Seller, Shareholder
      or
      their Representatives or that Seller, Shareholder or
      their
      Representatives have inspected any portion of the Confidential Information
      of
      Buyer or (b) any information about the Contemplated Transactions, including
      the
      status of such discussions or negotiations, the execution of any documents
      (including this Agreement) or any of the terms of the Contemplated Transactions
      or the related documents (including this Agreement). Seller and Buyer will
      consult with each other concerning the means by which Seller’s employees,
      customers, suppliers and others having dealings with Seller will be informed
      of
      the Contemplated Transactions, and Buyer will have the right to be present
      for
      any such communication. Buyer retains the right to disclose this Agreement
      in
      its entirety in public filings with the U.S. Securities and Exchange Commission.
      

    

    13.3
      NOTICES 

    

    All
      notices, Consents, waivers and other communications required or permitted by
      this Agreement shall be in writing and shall be deemed given to a party when
      (a)
      delivered to the appropriate address by hand or by nationally recognized
      overnight courier service (costs prepaid); (b) sent by facsimile or e-mail
      with
      confirmation of transmission by the transmitting equipment; or (c) received
      or
      rejected by the addressee, if sent by certified mail, return receipt requested,
      in each case to the following addresses, facsimile numbers or e-mail addresses
      and marked to the attention of the person (by name or title) designated below
      (or to such other address, facsimile number, e-mail address or person as a
      party
      may designate by notice to the other parties): 

     

     

    Seller
      (before the Closing):      River
      Hawk Aviation, Inc. 

    1150
      N.
      Loop 1604 W.  Suite
      108-478

    San
      Antonio, TX 78248 

    Attention:
      Calvin Humphrey 

    Fax
      no.:
      (210) 496-6210 

    E-mail
      address: chumphrey@River Hawkaviation.com 

    

    with
      a
      mandatory copy to:      ___N/A_________________,
      Esquire 

    __________________
      

    __________________

    Fax
      no.:
      (___) _______________

    E-mail
      address: ______________

    

    

    Seller
      (after the Closing):      River
      Hawk Aviation, Inc. 

    954
      Business Park Drive, Suite 3

    Traverse
      City, MI 49686 

    Attention:
      ___________________ 

    Fax
      no.:
      (___) ________ 

    E-mail
      address: chumphrey@River Hawkaviation.com 

    

    with
      a
      mandatory copy to:      The
      Law
      Offices of Thomas C. Cook, Ltd.

    2921
      N.
      Tenaya Way, Suite 234

    Las
      Vegas, NV 89128

    Attention:
      Thomas C. Cook, Esq. 

    Fax
      no.:
      (___) ___-____ 

    E-mail
      address: ________@________ 

    

    

    Shareholder:        Calvin
      Humphrey 

    ___________________________

    ___________________________

    Fax
      no.:
      (210) 496-6210_______

    E-mail
      address: chumphrey@River Hawkaviation.com

    

    with
      a
      mandatory copy to:     ____________________,
      Esquire 

    __________________
      

    __________________

    Fax
      no.:
      (___) _______________

    E-mail
      address: ______________

    

    

    Buyer:       Viva
      International, Inc.

    954
      Business Park Drive, Suite 3

    Traverse
      City, MI 49686

    Attention:
      __________________

    Fax
      no.:
      (____)
      ______________

    E-mail
      address: info@flyviva.com

    

    with
      a
      mandatory copy to:      The
      Law
      Offices of Thomas C. Cook, Ltd.

    2921
      N.
      Tenaya Way, Suite 234

    Las
      Vegas, NV 89128

    Attention:
      Thomas C. Cook, Esq. 

    Fax
      no.:
      (___) ___-____ 

    E-mail
      address: ________@________ 

    

    

    13.4
      JURISDICTION; SERVICE OF PROCESS 

    

    Any
      Proceeding arising out of or relating to this Agreement or any Contemplated
      Transaction may be brought in the courts of the State of Michigan, County of
      ________, or, if it has or can acquire jurisdiction, in the United States
      District Court for the ________ District, and each of the parties
      irrevocably submits to the exclusive jurisdiction of each such court in any
      such
      proceeding, waives any objection it may now or hereafter have to venue or to
      convenience of forum, agrees that all claims in respect of the Proceeding shall
      be heard and determined only in any such court and agrees not to bring any
      Proceeding arising out of or relating to this Agreement or any Contemplated
      Transaction in any other court. The parties agree that either or both of them
      may file a copy of this paragraph with any court as written evidence of the
      knowing, voluntary and bargained agreement between the parties irrevocably
      to
      waive any objections to venue or to convenience of forum. Process in any
      Proceeding referred to in the first sentence of this section may be served
      on
      any party anywhere in the world. 

    

    13.5
      ENFORCEMENT OF AGREEMENT 

    

    Buyer,
      Seller and Shareholder acknowledge and agree that each respective party would
      be
      irreparably damaged if any of the provisions of this Agreement are not performed
      in accordance with their specific terms and that any Breach of this Agreement
      by
      either party could not be adequately compensated in all cases by monetary
      damages alone. Accordingly, in addition to any other right or remedy to which
      a
      party hereto may be entitled, at law or in equity, it shall be entitled to
      enforce any provision of this Agreement by a decree of specific performance
      and
      to temporary, preliminary and permanent injunctive relief to prevent Breaches
      or
      threatened Breaches of any of the provisions of this Agreement, without posting
      any bond or other undertaking. 

    

    13.6
      WAIVER; REMEDIES CUMULATIVE 

    

    The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither any failure nor any delay by any party in exercising any
      right, power or privilege under this Agreement or any of the documents referred
      to in this Agreement will operate as a waiver of such right, power or privilege,
      and no single or partial exercise of any such right, power or privilege will
      preclude any other or further exercise of such right, power or privilege or
      the
      exercise of any other right, power or privilege. To the maximum extent permitted
      by applicable law, (a) no claim or right arising out of this Agreement or any
      of
      the documents referred to in this Agreement can be discharged by one party,
      in
      whole or in part, by a waiver or renunciation of the claim or right unless
      in
      writing signed by the other party; (b) no waiver that may be given by a party
      will be applicable except in the specific instance for which it is given; and
      (c) no notice to or demand on one party will be deemed to be a waiver of any
      obligation of that party or of the right of the party giving such notice or
      demand to take further action without notice or demand as provided in this
      Agreement or the documents referred to in this Agreement. 

    

    13.7
      ENTIRE AGREEMENT AND MODIFICATION 

    

    This
      Agreement supersedes all prior agreements, whether written or oral, between
      the
      parties with respect to its subject matter (including any letter of intent
      and
      any confidentiality agreement between Buyer and Seller) and constitutes (along
      with the Exhibits and other documents delivered pursuant to this Agreement)
      a
      complete and exclusive statement of the terms of the agreement between the
      parties with respect to its subject matter. This Agreement may not be amended,
      supplemented, or otherwise modified except by a written agreement executed
      by
      the party to be charged with the amendment. 

    

    

    

    13.8
      ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS 

    

    No
      party
      may assign any of its rights or delegate any of its obligations under this
      Agreement without the prior written consent of the other parties, except that
      Buyer may assign any of its rights and delegate any of its obligations under
      this Agreement to any Subsidiary of Buyer and may collaterally assign its rights
      hereunder to any financial institution providing financing in connection with
      the Contemplated Transactions. Subject to the preceding sentence, this Agreement
      will apply to, be binding in all respects upon and inure to the benefit of
      the
      successors and permitted assigns of the parties. 

    Nothing
      expressed or referred to in this Agreement will be construed to give any Person
      other than the parties to this Agreement any legal or equitable right, remedy
      or
      claim under or with respect to this Agreement or any provision of this
      Agreement, except such rights as shall inure to a successor or permitted
      assignee pursuant to this Section 13.9. 

    

    13.9
      SEVERABILITY 

    

    If
      any
      provision of this Agreement is held invalid or unenforceable by any court of
      competent jurisdiction, the other provisions of this Agreement will remain
      in
      full force and effect. Any provision of this Agreement held invalid or
      unenforceable only in part or degree will remain in full force and effect to
      the
      extent not held invalid or unenforceable. 

    

    13.10
      CONSTRUCTION 

    

    The
      headings of Articles and Sections in this Agreement are provided for convenience
      only and will not affect its construction or interpretation. All references
      to
“Articles” and “Sections” refer to the corresponding Articles and Sections of
      this Agreement. 

    

    13.11
      TIME OF ESSENCE 

    

    With
      regard to all dates and time periods set forth or referred to in this Agreement,
      time is of the essence. 

    

    13.12
      GOVERNING LAW 

    

    This
      Agreement will be governed by and construed under the laws of the State of
      New
      York without regard to conflicts-of-laws principles that would require the
      application of any other law. 

    

    13.13
      EXECUTION OF AGREEMENT 

    

    This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement. The exchange
      of copies of this Agreement and of signature pages by facsimile transmission
      shall constitute effective execution and delivery of this Agreement as to the
      parties and may be used in lieu of the original Agreement for all purposes.
      Signatures of the parties transmitted by facsimile shall be deemed to be their
      original signatures for all purposes. 

    

    13.14
      SHAREHOLDER OBLIGATIONS 

    

    The
      liability of each Shareholder hereunder shall be joint and several with Seller
      and with the other Shareholder. Where in this Agreement provision is made for
      any action to be taken or not taken by Seller, Shareholder jointly and severally
      undertake to cause Seller to take or not take such action, as the case may
      be.
      Without limiting the generality of the foregoing, Shareholder shall be jointly
      and severally liable with Seller for the indemnities set forth in Article 11.
      

    

    13.15
      REPRESENTATIVE OF SELLER AND SHAREHOLDER 

    

    
      	a.  	
              Seller
                hereby constitutes and appoints Shareholder as its representative
                (“Selling Parties’ Representative”) and its true and lawful attorney in
                fact, with full power and authority in its name and on its behalf:
                

            

    

    
      	(i)  	
              to
                act in the absolute discretion of the Selling Parties Representative,
                but
                only with respect to the following provisions of this Agreement,
                with the
                power to: (A) designate the accounts for payment of the Purchase
                Price
                pursuant to Section 2.7(b)(i); (B) act pursuant to Section 2.9 with
                respect to any Purchase Price adjustment; (C) consent to the assignment
                of
                rights under this Agreement in accordance with Section 13.9; (D)
                give and
                receive notices pursuant to Section 13.3; (E) terminate this Agreement
                pursuant to Section 9.1 or waive any provision of this Agreement
                pursuant
                to Article 8, Section 9.1 and Section 13.6; (F) accept service of
                process
                pursuant to Section 13.4; and (G) act in connection with any matter
                as to
                which Seller and the Shareholder, jointly and severally, have obligations,
                or are Indemnified Persons, under Article 11; and
                

            

    

    

    
      	(ii)  	
              in
                general, to do all things and to perform all acts, including executing
                and
                delivering all agreements, certificates, receipts, instructions and
                other
                instruments contemplated by or deemed advisable to effectuate the
                provisions of this Section 13.15. This appointment and grant of power
                and
                authority is coupled with an interest and is in consideration of
                the
                mutual covenants made herein and is irrevocable and shall not be
                terminated by any act of either of the Shareholder or Seller or by
                operation of law, whether by the death or incapacity of the Shareholder
                or
                by the occurrence of any other event. Each Shareholder and Seller
                hereby
                consents to the taking of any and all actions and the making of any
                decisions required or permitted to be taken or made by the Selling
                Parties
                Representative pursuant to this Section 13.15. Each of the Shareholder
                and
                Seller agree that the Selling Parties Representative shall have no
                obligation or liability to any Person for any action or omission
                taken or
                omitted by the Selling Parties Representative in good faith hereunder,
                and
                each of the Shareholder shall, on a proportionate basis in accordance
                with
                his or her ownership interest in the Seller, indemnify and hold the
                Selling Parties Representative harmless from and against any and
                all loss,
                damage, expense or liability (including reasonable counsel fees and
                expenses) which the Selling Parties Representative may sustain as
                a result
                of any such action or omission by the Selling Parties Representative
                hereunder. 

            

    

    

    
      	c.  	
              Buyer
                shall be entitled to rely upon any document or other paper delivered
                by
                the Selling Parties Representative as (i) genuine and correct and
                (ii)
                having been duly signed or sent by the Selling Parties Representative,
                and
                the Buyer shall not be liable to either the Shareholder or Seller
                for any
                action taken or omitted to be taken by Buyer in such reliance.
                

            

    

    

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

    

    RIVER
      HAWK AVIATION, INC. 

    

    by:
      /s/
      ______________________

    Calvin
      Humphrey, _________

    

    

    SHAREHOLDER
      

    

    /s/
      _________________

    Calvin
      Humphrey

    

    

    VIVA
      INTERNATIONAL, INC.

    

    by:
      /s/
      _____________________

    Name:
      _____________________

    Title:
      ______________________

    

    

    ESCROW
      AGENT 

    

    /s/
      ________________

    ________________,
      Esquire, with regard to

    Sections
      2.3(b), 9.2(b) and 9.2(c) only

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      A”

    

    Inventory
      

    

    
      	
              Part
                No:

            	
              Description

            	
              Qty

            	
              CD

            	
              Tag

            	
              List
                Price

            	
              List
                Source

            	
              Total
                $

            
	
              3507002-1

            	
              BEARING

            	
              90

            	
              NE

            	
              *
                8130-3

            	
              1,319

            	
              HONEYWELL

            	
              118,710

            
	
              3214488-4

            	
              DUAL
                PRPS VLV

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	
              664411-2

            	
              PLATE

            	
              9

            	
              NE

            	
              *
                8130-3

            	
              6,900

            	
              HONEYWELL

            	
              62,100

            
	
              2101990-3

            	
              CONTROL

            	
              3

            	
              SV

            	
              TA,
                FORM 337

            	
              33,400

            	
              HONEYWELL

            	
              100,200

            
	
              103638-1

            	
              VALVE

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              5,096

            	
              HONEYWELL

            	
              5,096

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              3105700-4

            	
              PUMP

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              79,089

            	
              HONEYWELL

            	
              79,089

            
	
              2117420-1

            	
              COMPUTER

            	
              1

            	
              SV

            	
              **
                FORM 337

            	
              0.00

            	 	
              0.00

            
	
              692546-4

            	
              VALVE

            	
              6

            	
              NE

            	
              *
                PACK SLIP

            	
              7,701

            	
              HONEYWELL

            	
              46,206

            
	
              977250-11

            	
              PUMP
                ASSY

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              62,544

            	
              TENIX

            	
              62,544

            
	
              975975-2

            	
              HOUSING

            	
              1

            	
              OH

            	
              *
                FORM 337

            	
              56,616

            	
              TENIX

            	
              56,616

            
	
              968824-4

            	
              WHEEL

            	
              1

            	
              OH

            	
              *
                FORM 337

            	
              113,242

            	
              TENIX

            	
              113,242

            
	
              969233-2

            	
              LINER

            	
              1

            	
              OH

            	
              *
                8130-3

            	
              12,811

            	
              TENIX

            	
              12,811

            
	
              3104204-5

            	
              IMPELLER

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              71,000

            	
              HONEYWELL

            	
              71,000

            
	
              3104449-5

            	
              GEAR

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              24,797

            	
              HONEYWELL

            	
              24,797

            
	
              867918-3

            	
              HOUSING

            	
              1

            	
              OH

            	
              GT,
                FORM 337

            	
              82,400

            	
              TENIX

            	
              82,400

            
	
              868155-1

            	
              HOUSING,
                COMP

            	
              1

            	
              OH

            	
              *
                FORM 337

            	
              67,300

            	
              TENIX

            	
              67,300

            
	
              975975-2

            	
              HOUSING

            	
              1

            	
              OH

            	
              *
                FORM 337

            	
              56,616

            	
              TENIX

            	
              56,616

            
	
              976806-7

            	
              PLENUM

            	
              1

            	
              OH

            	
              *
                JAA FORM 1

            	
              137,098

            	
              TENIX

            	
              137.098

            
	
              3074953-1

            	
              NOZZLE,
                MIXER

            	
              2

            	
              SV

            	
              *
                8130-3

            	
              45,490

            	
              TENIX

            	
              90,980

            
	
              3104213-5

            	
              1st
                Stg DIFFUSER

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              24,388

            	
              HONEYWELL

            	
              24,388

            
	
              949592-4

            	
              LIMITER

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              18,764

            	
              TENIX

            	
              18,764

            
	
              897711-4

            	
              GOVERNOR

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              34,500

            	
              TENIX

            	
              34,500

            
	
              893731-12

            	
              DIAPHRAGM
                HSG

            	
              1

            	
              OH

            	
              *
                JAA FORM 1

            	
              31,150

            	
              TENIX

            	
              31,150

            
	
              3071523-4

            	
              STATOR,
                #4 LPC

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              37,895

            	
              TENIX

            	
              37,895

            
	
              868938-1

            	
              TANK

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              47,563

            	
              TENIX

            	
              47,563

            
	
              805501-1

            	
              TRANSDUCER

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              22,043

            	
              TENIX

            	
              22,043

            
	
              38847-1

            	
              TRANSDUCER

            	
              1

            	
              NE

            	
              *
                8130-3

            	
              42,197

            	
              TENIX

            	
              42,197

            
	
              3826563-1

            	
              DESWIRL

            	
              1

            	
              OH

            	
              *
                JAA FORM 1

            	
              29,218

            	
              TENIX

            	
              29,218

            
	
              378383-2

            	
              HOUSING
                1st

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              10,810

            	
              TENIX

            	
              10,810

            
	
              3600000-6

            	
              SCREEN

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              19,758

            	
              TENIX

            	
              19,758

            
	
              3500542-9

            	
              SCROLL
                HSG

            	
              1

            	
              OH

            	
              *
                8130-3

            	
              35,917

            	
              TENIX

            	
              35,917

            
	
              3230444-2

            	
              GEARSHAFT
                SHD

            	
              1

            	
              NE

            	
              *
                8130-3

            	
              27,460

            	
              TENIX

            	
              27,460

            
	
              3104602-1

            	
              HOUSING
                ASSY

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              20,157

            	
              TENIX

            	
              20,157

            
	
              103310-10

            	
              VALVE

            	
              1

            	
              SV

            	
              *
                PACK SLIP

            	
              24,720

            	
              TENIX

            	
              24,720.00

            
	
              109382-28-1

            	
              LOAD
                CNTL VLV

            	
              1

            	
              OH

            	
              PA,
                8130-3

            	
              33,280

            	
              TENIX

            	
              33,280.00

            
	
              158610-8-2

            	
              REGULATOR

            	
              1

            	
              NE

            	
              *
                8130-3

            	
              24,630

            	
              TENIX

            	
              24,630.00

            
	
              2101322-16

            	
              CONTROL

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              33,198

            	
              TENIX

            	
              33,198.00

            
	
              2101562-1

            	
              CABLE

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              25,848

            	
              TENIX

            	
              25,848.00

            
	
              2119886-3

            	
              SELECTOR

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              22,920

            	
              TENIX

            	
              22,920.00

            
	
              2118600-7

            	
              SRL
                CONTROLLER

            	
              1

            	
              NE

            	
              *
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	
              3234118-1

            	
              SHAFT

            	
              3

            	
              NE

            	
              *
                8130-3

            	
              4,536

            	
              TENIX

            	
              13,608.00

            
	
              319935-2

            	
              S/O
                VALVE ASSY 

            	
              2

            	
              NE

            	
              *
                8130-3

            	
              5,396

            	
              HONEYWELL

            	
              10,792.00

            
	
              3104881-1

            	
              CAP
                OIL TANK

            	
              2

            	
              NE

            	
              *
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	
              Part
                No:

            	
              Description

            	
              Qty

            	
              CD

            	
              Tag

            	
              List
                Price

            	
              List
                Source

            	
              Total
                $

            
	
              896808-1

            	
              GEAR

            	
              1

            	
              AR

            	
              *
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	
              379319

            	
              SEAL
                BRG

            	
              2

            	
              NE

            	
              *
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	
              6KE43CA

            	
              P6KE43CA

            	
              14

            	
              NE

            	
              EE,
                PACK SLIP

            	
              0.00

            	 	
              0.00

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	
              TOTAL

            	
              LIST
                PRICE

            	
              $2,568,511.00

            
	 	 	 	 	 	 	 	 

    

    

    Tag
      Certification Source:

    *
       Allied
      Signal

    ** Airsearch

    TA Tenix
      Aviation

    GT Garrett
      Turbine

    PA Piedmont
      Aviation 

    EE Electronic
      Expediter

    

    One
      (1)
      SAAB 340A Aircraft, Manufacturer’s Serial Number 340A-024, and Registration
      Number N111PX less core engines but with QEC and otherwise in serviceable
      condition. 

    

    Aircraft
      Specifications

    

    Aircraft
      Type A/C
      Serial No A/C
      Reg'n Build
      Date

    SAAB
      340A 340A-024 N111PX May
      1985

    

    Total
      Hrs Total
      Cycles Delivery
      Date 

    38,648.9 41,995 8
      - May -
      85

    

         

    Airframe
      Configuration and Features

    
      	o  	
              MTOW
                28,000 lbs.

            

    

    
      	o  	
              33
                passenger seats

            

    

    
      	o  	
              Dowty
                Propellers

            

    

    
      	o  	
              Collins/King
                Avionics

            

    

    
      	o  	
              no
                APU

            

    

    
      	o  	
              with
                TCAS

            

    

    
      	o  	
              CAT
                II approaches not approved

            

    

    
      	o  	
              Forward
                galley configuration

            

    

    
      	o  	
              Aft
                lav configuration

            

    

    
      	o  	
              DFDR
                FAR modified for increased parameters IAW SB340-31-028, 340-31-036,
                340-31-037, 340-31-038, 340-31-041 and 340-31-043 via PA
                00-003

            

    

    
      	o  	
              B
                & D digital engine instrumentation interchangeability approved IAW
                STC's SA2473CE, SA2494CE, SA2472CE, SA2470CE, SA2471CE and SA2493CE
                as
                documented on Comair 337 dated July 20,
                1989.

            

    

    
      	o  	
              Additional
                inner wing and vertical stab de-ice boots installed at build (SAAB
                Mod
                1099)    

            

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      B”

    

    Seller
      Contracts

    

    

    

    There
      are
      no present or recurring contracts that are part or parcel to the Asset Purchase
      Agreement. 

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      C”

    

    

    Governmental
      Authorizations and Approved Vendor List

    

    

    

    
      	I.  	
              River
                Hawk presently maintains the following Governmental
                Authorizations:

            

    

    

    
      	i.  	
              e.g.,
                NONE

            

    

    

    
      	II.  	
              River
                Hawk is presently certified as an approved vendor according to the
                Federal
                Aviation Regulations (FARs) and as audited by the
                following:

            

    

    

    
      	i.  	
              e.g.,
                Honeywell

            

    

    
      	ii.  	
              e.g.,
                Dallas Aerospace

            

    

    
      	iii.  	 

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      D”

    

    INTANGIBLE
      RIGHTS AND INTELLECTUAL 

    PROPERTY
      ASSETS OF SELLER 

    

    

    
      	I.  	
              The
                company name River Hawk Aviation, although not a registered
                trademark.

            

    

    

    
      	II.  	
              Goodwill
                associated with the ongoing commercial relationships of River Hawk
                Aviation and Calvin Humphrey.

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      E”

    

    CLAIMS
      OF SELLER AGAISNT THIRD PARTIES

    

    

    
      	I.  	
              There
                are no present or anticipated Third Party Claims against the Seller,
                Humphrey, or a Seller related
                party.

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      F”

    

    EXCLUDED
      ASSETS

    

    

    

    
      	I.  	
              Present
                lease of premises, if any;

            

    

    

    
      	II.  	
              Accounts
                Receivables as of the Date of Closing, see “Exhibit
                I”;

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      G”

    

    PROMISSORY
      NOTE IN THE AMOUNT OF $1,000,000

    

    

    [follows]

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    THE
      SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED
      STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER THE
      PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED
      BY
      THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
      STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE
      SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
      ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE
      1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT.

    

    

    SECURED
      SUBORDINATED PROMISSORY NOTE

    

    Principal
      Amount: $1,000,000 

    Date
      of
      Note: September _______, 2006

    

    FOR
      VALUE
      RECEIVED, VIVA INTERNATIONAL, INC., a Nevada corporation (the "Company"), hereby
      promises to pay to the order of Calvin Humphrey ("Lender" or “Holder”), the
      principal sum of One million dollars ($1,000,000) or such other greater or
      lesser amount as may be outstanding, together with interest at the rate of
      eight
      percent (8%) per annum on the unpaid outstanding principal due and payable
      as
      follows on November 1, 2006 (the “Closing Date”).

    

    1. Any
      payment not paid when due shall bear interest thereafter at the rate of ten
      percent (10%) per annum until paid. This note may be prepaid in whole or in
      part
      at any time.

    

    2.
       The
      indebtedness represented by this Note is secured pursuant to the Security
      Agreement dated as of the Closing Date in favor of Lender, a copy of which
      is
      attached hereto as Exhibit
      A.
      

    

    3.
       Acceptance
      by Lender of any partial payment shall not be deemed to constitute a waiver
      by
      Lender to require prompt payment of this Note upon demand. Any partial payment
      will be applied (a) first, to the payment of accrued interest, and (b) second,
      (to the extent that the amount of such prepayment exceeds the amount of all
      such
      accrued interest), to the payment of principal.

    

    4.  In
      Lender’s discretion, at any time prior to the consummation of the private
      placement for common stock of the company or securities convertible into common
      stock of the Company (a “Private Placement”), Lender may convert all or any
      portion of the outstanding principal amount of this Note into the securities
      offered by the Company in its next Private Placement following execution of
      this
      Note on the same terms as such securities are sold to the other investors in
      the
      Private Placement. In such event, any accrued by unpaid interest outstanding
      at
      the time of the conversion of this Note and any outstanding principal under
      this
      Note not so converted shall be paid in full by the Company simultaneously upon
      such conversion.

    

    5. Subordination.
      The indebtedness evidenced by this Note is hereby expressly subordinated, to
      the
      extent and in the manner hereinafter set forth, in right of payment to the
      prior
      payment in full of all the Company's Senior Indebtedness, as hereinafter
      defined.

    

    5.1
      Senior Indebtedness. As used in this Note, the term "Senior Indebtedness" shall
      mean the principal of and unpaid accrued interest on (i) indebtedness of the
      Company or with respect to which the Company is a guarantor to banks, insurance
      companies, lease financing institutions or other financial institutions
      regularly engaged in the business of lending money, which is for money borrowed
      (or purchase or lease of equipment in the case of lease financing) by the
      Company (whether or not secured) in the ordinary course of business, and (ii)
      any such indebtedness or any debentures, notes or other evidence of indebtedness
      issued in exchange for such Senior Indebtedness, or any indebtedness arising
      from the satisfaction of such Senior Indebtedness by a guarantor.

    

    5.2
      Default on Senior Indebtedness. If there should occur any receivership,
      insolvency, assignment for the benefit of creditors, bankruptcy, reorganization
      or arrangements with creditors (whether or not pursuant to bankruptcy or other
      insolvency laws) sale of all or substantially all of the assets, dissolution,
      liquidation or any other marshaling of the assets and liabilities of the
      Company, or if this Note shall be declared due and payable upon the occurrence
      of an event of default with respect to any Senior Indebtedness, then (i) no
      amount shall be paid by the Company in respect of the principal of or interest
      on this Note at the time outstanding, unless and until the principal of and
      interest on the Senior Indebtedness then outstanding shall be paid in full,
      except that the Lender shall have the right to proceed against and receive
      the
      Securities pledged by the Company as security for this Note pursuant to the
      Security Agreement between the Company and the Lender dated as of the same
      date
      as this Note, and (ii) no claim or proof of claim shall be filed with the
      Company by or on behalf of the Holder of this Note that shall assert any right
      to receive any payments in respect of the principal of and interest on this
      Note, except subject to the payment in full of the principal of and interest
      on
      all of the Senior Indebtedness then outstanding. If there occurs an event of
      default that has been declared in writing with respect to any Senior
      Indebtedness, or in the instrument under which any Senior Indebtedness is
      outstanding, permitting the lender of such Senior Indebtedness to accelerate
      the
      maturity thereof, then, unless and until such event of default shall have been
      cured or waived or shall have ceased to exist, or all Senior Indebtedness shall
      have been paid in full, no payment shall be made in respect of the principal
      of
      or interest on this Note, unless within 90 days after the happening of such
      event of default, the maturity of such Senior Indebtedness shall not have been
      accelerated.

    

    5.3
      Effect of Subordination. Subject to the rights, if any, of the lenders of Senior
      Indebtedness under this Section 5 to receive cash, securities or other
      properties otherwise payable or deliverable to the Holder of this Note, nothing
      contained in this Section 5 shall impair, as between the Company and the Lender,
      the obligation of the Company, subject to the terms and conditions hereof,
      to
      pay to the Lender the principal hereof and interest hereon as and when the
      same
      become due and payable, or shall prevent the Holder of this Note, upon default
      hereunder, from exercising all rights, powers and remedies otherwise provided
      herein or by applicable law.

    

    5.4
      Subrogation. Subject to the payment in full of all Senior Indebtedness and
      until
      this Note shall be paid in full, the Lender shall be subrogated to the rights
      of
      the lenders of Senior Indebtedness (to the extent of payments or distributions
      previously made to such lenders of Senior Indebtedness pursuant to the
      provisions of Section 5 above) to receive payments or distributions of assets
      of
      the Company applicable to the Senior Indebtedness. No such payments or
      distributions applicable to the Senior Indebtedness shall, as between the
      Company and its creditors, other than the lenders of Senior Indebtedness and
      the
      Lender, be deemed to be a payment by the Company to or on account of this Note;
      and for the purposes of such subrogation, no payments or distributions to the
      lenders of Senior Indebtedness to which the Lender would be entitled except
      for
      the provisions of this Section 5 shall, as between the company and its
      creditors, other than the lenders of Senior Indebtedness and the Lender, be
      deemed to be a payment by the Company to or on account of the Senior
      Indebtedness.

    

    5.5
      Undertaking. By its acceptance of this Note, the Lender agrees to execute and
      deliver such documents as may be reasonably requested from time to time by
      the
      Company or the lender of any Senior Indebtedness in order to implement the
      foregoing provisions of this Section 5.

    

    6.
      Non-Recourse. If the Company fails to pay when due the principal of or interest
      on this Note, or otherwise fails to comply with any of the provisions of this
      Note, the Lender's sole remedy shall be to retain the Collateral (as defined
      in
      the Security Agreement), and the Company shall have no further obligation to
      the
      Lender under this Note or otherwise.

    

    7.
       In
      the
      event of any action to enforce payment of this Note, in addition to all other
      relief, the prevailing party in such action shall be entitled to reasonable
      attorney's fees and expenses.

    

    8.
       The
      Company hereby waives presentment, protest and demand, notice of protest,
      demand, nonpayment or dishonor.

    

    9.
       The
      Company will be deemed to be in default under this Note and the outstanding
      unpaid principal balance of this Note, together with all interest accrued
      thereon, will immediately become due and payable in full, without the need
      for
      any further action on the part of Lender, upon the occurrence of any of the
      following events (each an "EVENT OF DEFAULT"): (a) upon the filing by or against
      the Company of any voluntary or involuntary petition in bankruptcy or any
      petition for relief under the federal bankruptcy code or any other state or
      federal law for the relief of debtors: provided, however, with respect to an
      involuntary petition in bankruptcy, such petition has not been dismissed within
      thirty (30) days after the filing of such petition; (b) upon the execution
      by
      the Company of an assignment for the benefit of creditors or the appointment
      of
      a receiver, custodian, trustee or similar party to take possession of the
      Company's assets or property; or (c) upon any material breach, default or
      violation by the Company of any term, condition, obligation, representation
      or
      covenant of any agreement between the Company and Lender or the Security
      Document. Notwithstanding anything in this Note to the contrary, in the Event
      of
      Default, the Company shall have the right for ten (15) days to cure any Event
      of
      Default.

    

    10.
       This
      Note
      is to be governed by and construed in accordance with the laws of the State
      of
      New York.

    

    11.
       As
      of the
      date of this Note, the Company hereby represents and warrants to Lender that
      the
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada and has all requisite corporate power
      and
      authority to (i) enter into this Note, and (ii) carry on its
      business.

    

    12.  Miscellaneous.

    

    12.1 Successors
      and Assigns. Subject to the exceptions specifically set forth in this Note,
      the
      terms and conditions of this Note shall inure to the benefit of and be binding
      upon the respective executors, administrators, heirs, successors and permitted
      assigns of the parties. This Note (or a portion hereof) may be assigned by
      Lender without the consent of Borrower.

     

    12.2 Loss
      or
      Mutilation of Note. Upon receipt by the Company of evidence satisfactory to
      Company of the loss, theft, destruction or mutilation of this Note, together
      with indemnity reasonably satisfactory to Company, in the case of loss, theft
      or
      destruction, or the surrender and cancellation of this Note, in the case of
      mutilation, Company shall execute and deliver to Lender a new promissory note
      of
      like tenor and denomination as this Note.

     

    12.3 Notices.
      Any notice, demand, offer, request or other communication required or permitted
      to be given pursuant to the terms of this Note shall be in writing and shall
      be
      deemed effectively given the earlier of (i) when received, (ii) when delivered
      personally, (iii) one business day after being delivered by facsimile (with
      receipt of appropriate confirmation), (iv) one business day after being
      deposited with an overnight courier service, or (v) four days after being
      deposited in the U.S. mail, First Class with postage prepaid, and addressed
      to
      the recipient at the addresses set forth below unless another address is
      provided to the other party in writing:

    

    If
      to
      the Company, to:

    

    Viva
      International, Inc.

    954
      Business Park Drive, Suite 3

    Traverse
      City, MI 49686

    Attention:
      __________________

    Fax
      no.:
      (____)
      ______________

    E-mail
      address: info@flyviva.com

    

    

    with
      a
      copy to:

    

    The
      Otto
      Law Group, PLLC

    601
      Union
      Street, Suite 4500

    Seattle,
      WA 98101

    Attn:
       Michael
      F. Johnson

    Fax: (206)
      262-9513

    

    if
      to
      Lender, to:

    

    River
      Hawk Aviation, Inc. 

    1150
      N.
      Loop 1604 W. 

    Suite
      108-478

    San
      Antonio, TX 78248 

    Attention:
      Calvin Humphrey 

    Fax
      no.:
      (210) 496-6210 

    E-mail
      address: chumphrey@River Hawkaviation.com

    

    

    Executed
      as of the date first set forth above:

    

    THE
      COMPANY:

    

    VIVA
      INTERNATIONAL, INC.

    

    

    ____________________________

    By:
      

    Its:
      _________________

    
      
        1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    SECURITY
      AGREEMENT

    

    This
      SECURITY AGREEMENT ("Security
      Agreement")
      is
      dated as of ________________, 2006 (the
      "Effective
      Date"),
      by and
between
      Viva
      International, Inc., a Nevada corporation (the
      "Company"),
      and Calvin
      Humphrey (the
      "Lender
      ").

    

    WHEREAS,
      on the Effective Date, the Company entered into a Secured Subordinated
      Promissory Note (the “Note”)
      with
      the Lender to evidence a loan made to the Company in the total amount of
      $1,000,000 (the "Loan");
      and

    

    WHEREAS,
      in order to induce Lender to make the Loan to the Company, the Company has
      agreed to grant to the Lender a security interest in the Company’s assets to
      secure the amounts currently owing, and any additional amounts which may be
      owing, by the Company pursuant to the Note and the terms hereof.

    

    NOW,
      THEREFOREE, for good and valuable consideration, the receipt of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

    

    1.  Defined
      Terms.
      The
      following terms shall have the following meanings, unless the context otherwise
      requires:

     

    “Code”
shall
      mean the Uniform Commercial Code as in effect in the State of New York on the
      Closing Date.

    

    “Collateral”
shall
      have the meaning given such term in Section 2. 

    

    “Event
      of Default”
shall
      have the meaning given such term in the Note.

    

    “Note”
shall
      mean the Secured Subordinated Promissory Note entered by and among the Company
      and the Lender on ______________________, 2006.

    

    “Obligations”
shall
      mean the unpaid Loan and all Interest thereon (as such terms are defined in
      the
      Note) pursuant to the Note and the Note, including all costs of
      collection.

    

    All
      of
      other capitalized terms used but not defined herein shall have the meanings
      assigned to such terms in the Note.

    

    2.  Grant
      of Security Interest.
      As
      collateral security for the prompt and complete payment and performance when
      due
      of all the Obligations, the Company hereby grants to the Lender a security
      interest in equal proportion in all of the Company's right, title and interest
      in, to and under the following, whether now existing or hereafter acquired
      (all
      of which collateral being hereinafter collectively called the "Collateral"):

     

    (a)
        Accounts.
      All
      present and future accounts owned by the Company, including and together with
      any and all contract rights, accounts receivable, security deposits (where
      not
      otherwise prohibited by law or agreement), and other rights of any kind to
      receive payments for services rendered and goods supplied by the Company,
      together with agreements, customer lists, client lists, and accounts, invoices,
      agings, verification reports and other records relating in any way to such
      accounts.

     

    (b)
        Contracts.
      All
      contracts, contract rights, royalties, license rights, leases, instruments,
      undertakings, documents or other agreements in or under which the Company may
      now or hereafter have any right, title or interest whether now existing or
      hereinafter created and all forms of obligations owing to the Company arising
      out of the sale or lease of goods, the licensing of technology or the rendering
      of services by the Company, whether or not earned by performance, and any and
      all credit insurance, guaranties, and other security therefore, as well as
      all
      merchandise returned to or reclaimed by the Company.

     

    (c)
        Equipment,
      Furnishings and Miscellaneous Personal Property.
      All
      presently owned and hereafter acquired furniture, furnishings, equipment,
      machinery, vehicles (including motor vehicles and trailers) computer hardware
      and software, accounting or bookkeeping systems, client or customer lists and
      information, data sheets and other records of any kind, wherever located, stored
      or inventoried, which are used or which may be used in the Company’s business;

     

    (d)
        Fixtures.
      All
      materials used by the Company in connection with its business operations,
      including, but not limited to, supplies, trade equipment, appliances, apparatus
      and any other items, now owned or hereafter acquired by the Company, and now
      or
      hereafter attached to, or installed in (temporarily or permanently) any real
      property now or in the future owned or leased by the Company; 

     

    (e)
        General
      Intangibles.
      All
      general intangibles and other personal property of the Company, now owned or
      hereinafter acquired, including, without limitation, the following: (a) permits,
      authorizations and approvals presently and hereafter issued by any federal,
      state, municipal or local governmental or regulatory authority in favor of
      the
      Company; (b) all plans, specifications, renderings and other similar materials
      presently owned or hereafter acquired by the Company; (c) all presently existing
      and hereafter created contracts, leases, licenses and agreements to which the
      Company is a party; (d) all presently and hereafter existing policies and
      agreements of insurance in favor of the Company; (e) all presently and hereafter
      existing equity contribution agreements and other equity financing arrangements
      in favor of the Company; (f) all copyrights, chattel paper, electronic chattel
      paper, licenses, money, insurance proceeds, contract rights, subscription lists,
      mailing lists, licensing agreements, patents, trademarks, service marks, trade
      styles, patents, patent applications, franchise agreements, blueprints,
      drawings, purchase orders, customer lists, route lists, infringements, claims,
      computer programs, computer discs, computer tapes, literature, reports,
      catalogs, design rights, income tax refunds, payments of insurance and rights
      to
      payment of any kinds, trade names, refundable, returnable or reimbursable fees,
      deposits or other funds or evidences of credit or indebtedness deposited by
      or
      on behalf of the Company with any governmental agencies, boards, corporations,
      providers of utility services, public or private; (g) all presently existing
      and
      hereafter acquired computer programs, computer software and other electronic
      systems and materials of any kind of the Company; (h) goodwill; and (i) all
      other presently existing and hereafter acquired documents, accounts, general
      intangibles and intangible personal property of any kind.

     

    (f)
        Documents.
      All
      documents, cash, deposit accounts, securities, securities entitlements,
      securities accounts, investment property, financial assets, letters of credit,
      certificates of deposit, instruments, chattel paper, and electronic chattel
      paper now owned or hereafter acquired and the Company’s books relating to the
      foregoing.

     

    (g)
        Copyrights.
      All
      copyright rights, copyright applications, copyright registrations and like
      protections in each work of authorship and derivative work thereof, whether
      published or unpublished, now owned or hereafter acquired; all trade secret
      rights, including all rights to unpatented inventions, know-how, operating
      manuals, license rights and agreements and confidential information, now owned
      or hereafter acquired; all mask work or similar rights available for the
      protection of semiconductor chips, now owned or hereafter acquired; all claims
      for damages by way of any past, present and future infringement of any of the
      foregoing.

     

    (h)
        Proceeds.
      All of
      the Company’s books and records relating to the foregoing and any and all
      present and future accounts, general intangibles, chattel paper, electronic
      chattel paper, products, accessions, replacements, betterments and substitutions
      for any of the foregoing described property, and all proceeds arising from
      or by
      virtue of, or from the sale or disposition of, or collections with respect
      to,
      or insurance proceeds payable with respect to, or claims against any other
      persons, corporations or other entities with respect to, all or any part of
      the
      foregoing described property and interests.

     

    3.  Rights
      of Lender; Limitations on Lender Obligations.
      It is
      expressly agreed by the Company that, anything herein to the contrary
      notwithstanding, the Company shall remain liable under each of its contracts
      and
      documents to observe and perform all the conditions and obligations to be
      observed and performed by it thereunder, all in accordance with and pursuant
      to
      the terms and provisions of its contracts and documents. Lender shall have
      no
      obligation or liability under any of the Company’s contracts and documents by
      reason of or arising out of this Security Agreement or the granting to Lender
      of
      a security interest therein or the receipt by Lender of any payment relating
      to
      any of its contracts and documents pursuant hereto, nor shall Lender be required
      or obligated in any manner to perform or fulfill any of the obligations of
      the
      Company under or pursuant to any of its contracts and documents, or to make
      any
      payment, or to make any inquiry as to the nature or the sufficiency of any
      payment received by it or the sufficiency of any performance by any party under
      any of its contracts and documents, or to present or file any claim, or to
      take
      any action to collect or enforce any performance or the payment of any amounts
      which may have been assigned to it or to which it may be entitled at any time
      or
      times.

     

    4.  Representations
      and Warranties.
      The
      Company hereby represents and warrants that the chief executive office and
      chief
      place of business of the Company is Viva International, Inc., 954 Business
      Park
      Drive, Suite 3, Traverse City, MI 49686 and the Company will not change such
      chief executive office and chief place of business or remove such records unless
      the Company shall have given the Lender at least 10 days' prior written notice
      thereof.

     

    5.  Covenants.
      The
      Company covenants and agrees with the Lender that from and after the date of
      this Security Agreement and until the Obligations are fully
      satisfied:

     

    (a)
        Further
      Documentation.
      At any
      time and from time to time, upon the written request of the Lender, and at
      the
      sole expense of the Company, the Company will promptly and duly execute and
      deliver any and all such further documents and take such further action as
      Lender may reasonably request in carrying out the terms and conditions of this
      Security Agreement and the rights and powers herein granted, including, without
      limitation, the filing of any financing or continuation statements under the
      Uniform Commercial Code in effect in any jurisdiction with respect to the
      security interests granted hereby.

     

    (b)
        Continuous
      Perfection.
      The
      Company will not change its name, identity or corporate structure in any manner
      unless the Company shall have given the Lender at least 10 days' prior written
      notice thereof and shall have taken all action (or made arrangements to take
      such action substantially simultaneously with such change if it is impossible
      to
      take such action in advance) necessary or reasonably requested by the Lender
      to
      amend any financing statement or continuation statement filed with respect
      to
      the Collateral so that it is not misleading.

     

    (c)
        Insurance.
      The
      Company will insure the Collateral against such risks and hazards as other
      companies similarly situated insure against, in amounts and under policies
      which
      it currently holds and under such additional or substituted amounts or policies
      as it may from time to time determine, which shall be reasonably acceptable
      to
      the Lender (providing that no cancellation of such insurance shall be effective
      without 30 days written notice to the Lender and containing loss payable clauses
      to the Lender as its interest may appear) and all premiums thereon shall be
      paid
      by the Company.

     

    6.  Remedies,
      Rights Upon Default.
      (a) In
      addition to any other rights given to the Lender hereunder, if an Event of
      Default shall occur and be continuing and the Lender shall have declared the
      amounts owing under the Note to be due and payable (or such amounts shall have
      automatically, become due and payable), all payments received by the Company
      under or in connection with any of the Collateral shall be held by the Company
      in trust for the Lender, shall be segregated from other funds of the Company
      and
      shall, if requested by the Lender forthwith upon receipt by the Company be
      turned over to the Lender, in the same form as received by the Company (duly
      endorsed by the Company to the Lender, if required).

     

    (b) If
      any
      Event of Default shall occur and be continuing the Lender may exercise in
      addition to all other rights and remedies granted to it in this Security
      Agreement and in any other instrument or agreement securing, evidencing or
      relating to the Obligations, all rights and remedies of a secured party under
      the Code. Without limiting the generality of the foregoing, the Company
      expressly agrees that in any such event, the Lender, without demand of
      performance or other demand, (except the notice specified below of time and
      place of public or private sale) to or upon the Company or any other person
      may
      forthwith collect, receive, appropriate and realize upon the Collateral, or
      any
      part thereof, and/or may forthwith sell, lease, assign, give option or options
      to purchase, or sell or otherwise dispose of and deliver said Collateral (or
      contract to do so), or any part thereof, in one or more parcels at public or
      private sale or sales, at any exchange broker's board or at the Lender office
      or
      elsewhere at such prices as it may deem best, for cash or on credit or for
      future delivery without assumption of any credit risk. The Lender shall have
      the
      right upon any such public sale or sales, and, to the extent permitted by law,
      upon any such private sale or sales, to purchase the whole or any part of said
      Collateral so sold, free of any right or equity of redemption, which equity
      of
      redemption the Company hereby releases. The Company further agrees, at the
      Lender’s request, to assemble the Collateral, make it available to the Lender at
      places which the Lender shall reasonably select, whether at the Company's
      premises or elsewhere. The Lender shall apply the net proceeds of any such
      collection, recovery, receipt, appropriation, realization or sale, after
      deducting all reasonable costs and expenses of every kind incurred therein
      or
      incidental to the care, safe keeping or otherwise of any or all of the
      Collateral or in any way relating to the rights of the Lender hereunder,
      including reasonable attorneys' fees and legal expenses, to the payment in
      whole
      or in part of the Obligations, the Company remaining liable for any deficiency
      remaining unpaid after the application, and only after so paying over such
      net
      proceeds and after the payment by the Lender of any other amount required by
      any
      provision of law. To the extent permitted by applicable law, the Company waives
      all claims, damages and demands against the Lender or Lender arising out of
      the
      repossession, retention or sale of the Collateral. The Company agrees that
      the
      Lender need not give more than 10 days notice of the time and place of any
      public sale or of the time after which a private sale may take place and that
      such notice is reasonable notification of such matters. The Company shall remain
      liable for any deficiency if the proceeds of any sale or disposition of the
      Collateral are insufficient to pay all amounts to which Lender and Lender is
      entitled.

    

    (c)
       The
      Company hereby waives presentment, demand, protest or any notice (to the extent
      permitted by applicable law) of any kind in connection with this Security
      Agreement or any Collateral.

    

    7.  Application
      of Proceeds.
      The
      Proceeds of all sales and collections in respect of any Collateral shall be
      applied as follows:

     

    (a)
        First,
      to
      the payment of the costs and expenses of such sales and collections, the
      expenses of the Lender and the reasonable fees and expenses of its
      counsel;

     

    (b)
        Second,
      any surplus then remaining to the payment of the Obligations in such order
      and
      manner as the Lender may in its sole discretion determine; and

     

    (c)
        Third,
      any surplus then remaining shall be paid to the Company.

     

    8.  Limitation
      on Lender Duty in Respect of Collateral.
      Beyond
      the use of reasonable care in the custody thereof, the Lender shall not have
      any
      duty as to any Collateral in its possession or control or in the possession
      or
      control of any agent or nominee of it or any income thereon or as to the
      preservation of rights against prior parties or any other rights pertaining
      thereto.

     

    9.  Notices.
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be delivered personally or by facsimile (receipt confirmed
      electronically) or shall be sent by a reputable express delivery service or
      by
      certified mail, postage prepaid with return receipt requested, addressed as
      follows:

     

     

    

    

    

    If
      to
      the Company, to:

    

    Viva
      International, Inc.

    954
      Business Park Drive, Suite 3

    Traverse
      City, MI 49686

    Attention:
      __________________

    Fax
      no.:
      (____)
      ______________

    E-mail
      address: info@flyviva.com

    

    

    with
      a
      copy to:

    

    The
      Otto
      Law Group, PLLC

    601
      Union
      Street, Suite 4500

    Seattle,
      WA 98101

    Attn:
       David
      M.
      Otto

    Fax: (206)
      262-9513

    

    if
      to
      Lender, to:

    

    River
      Hawk Aviation, Inc. 

    1150
      N.
      Loop 1604 W. 

    Suite
      108-478

    San
      Antonio, TX 78248 

    Attention:
      Calvin Humphrey 

    Fax
      no.:
      (210) 496-6210 

    E-mail
      address: chumphrey@River Hawkaviation.com

    

    

     

    Either
      party hereto may change the above specified recipient or mailing address by
      notice to the other party given in the manner herein prescribed. All notices
      shall be deemed given on the day when actually delivered as provided above
      (if
      delivered personally or by facsimile, provided that any such facsimile is
      received during regular business hours at the recipient's location) or on the
      day shown on the return receipt (if delivered by mail or delivery
      service).

     

    10.  Severability.
      Any
      provision of this Security Agreement which is prohibited or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    11.  No
      Waiver; Cumulative Remedies.
      The
      Lender shall not by any act, delay, omission or otherwise be deemed to have
      waived any of its rights or remedies hereunder and no waiver shall be valid
      unless in writing, signed by the Lender, and then only to the extent therein
      set
      forth. A waiver by the Lender of any right or remedy hereunder on any one
      occasion shall not be construed as a bar to any right or remedy which the Lender
      would otherwise have had on any future occasion. No failure to exercise nor
      any
      delay in exercising on the part of the Lender, any right, power or privilege
      hereunder, shall operate as a waiver thereof, nor shall any single or partial
      exercise of any right, power or privilege hereunder preclude any other or future
      exercise thereof or the exercise or any other right, power or privilege. The
      rights and remedies hereunder provided are cumulative and may be exercised
      singly or concurrently, and are not exclusive of any rights and remedies
      provided by law. None of the terms or provisions of this Security Agreement
      may
      be waived, altered, modified or amended except by an instrument in writing,
      duly
      executed by the Company and the Lender.

     

    12.  Successors
      and Assigns.
      This
      Security Agreement and all obligations of the Company hereunder shall be binding
      upon the successors and permitted assigns of the Company, and shall, together
      with the rights and remedies of the Lender hereunder, inure to the benefit
      of
      the Lender and its successors and permitted assigns; provided that the Company
      may not assign any of its rights or obligations hereunder without the prior
      written consent of the Lender. This Security Agreement may be assigned by the
      Lender without the consent of the Company.

     

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

     

    14.  Counterparts.
      This
      Security Agreement may be executed in separate counterparts each of which will
      be an original and all of which taken together will constitute one and the
      same
      agreement.

     

    15.  Facsimile.
      This
      Security Agreement may be executed using facsimiles of signatures, and a
      facsimile of a signature shall be deemed to be the same, and equally
      enforceable, as an original of such signature.

     

    16.  Termination.
      At such
      time as the Obligations have been fully paid in cash, the security interest
      created hereby shall automatically terminate, the Lender shall take all such
      actions as may be requested by the Company to evidence such termination and
      to
      release the liens created hereby, at the Company's expense.

     

    

    *
      * * * *
      *

    
      
        1

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be signed in its
      name
      on the date first set forth above.

    

    

    VIVA
      INTERNATIONAL, INC, INC.

    

    

    By: ________________________ 

                Name:
      

      
                    Title: 

    

    

    

    LENDER:

    

     

    By: ________________________ 

                Name:
      Calvin Humphrey

                                    Title: 

    

    

    

     

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      H”

    

    PROMISSORY
      NOTE IN THE AMOUNT REQUIRED TO PAY FOR BALANCE OF THE CASH CONSIDERATION PORTION
      OF THE OF THE PURCHASE PRICE

    

    [follows]

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      I”

    

    ACCOUNTS
      RECEIVABLES

    

    

    There
      are
      no Accounts Receivables that will survive the Asset Purchase Agreement. All
      Accounts receivables shall remain with Seller and shall remain for account
      of
      Seller.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      J”

    

    ACTIVE
      EMPLOYEES AND INDEPENDENT CONTRACTORS

    

    

    A.
      EMPLOYEE
      NAME  SALARY DATE
      HIRED  LEAVE
      ACCRUED

    

    
      	1.  	
              Michael
                Humphrey

            

    

    

    

    

    B.
      CONTRACTOR
      NAME  TERMS TERMINATION
      DATE

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    “EXHIBIT
      K”

    

    NON-COMPETE
      AGREEMENT

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Schedule
      1

    

    MATERIAL
      CONSENTS

    

    

    There
      are
      no Material Consents in connection with the Asset Purchase Agreement.Exhibit 4.2.95

                                 AMENDMENT NO. 6
                                 ---------------
                                       TO
                                       --
                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

     This Amendment No. 6 (this "Amendment"), dated as of September 21, 2006, to
the Securities Purchase Agreement, dated as of June 4, 2004 (the "Purchase
Agreement"), as amended, is by and among Salon Media Group, Inc., a Delaware
corporation (the "Company"), and a majority of Purchasers who are signatories to
the Purchase Agreement, as Amended. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Purchase Agreement.

                                    RECITALS
                                    --------

     WHEREAS, the Company has held Five Closings of the sale of Shares and
issuance of the Warrants and wishes to sell additional Shares and issue
additional Warrants; and

     WHEREAS, Section 9.4 of the Purchase Agreement provides that any term
thereof may be amended with the written consent of the Company and the holders
of at least a majority of the Common Stock issued or issuable upon conversion of
the Shares then outstanding; and

     WHEREAS, the Company and the undersigned Purchasers who hold at least a
majority of the Common Stock issued or issuable upon conversion of the Shares
currently outstanding are in favor of and consent to this Amendment.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1.   Amendments.

     Schedule A of the Purchase Agreement is hereby amended and restated as
follows:

<TABLE>
<CAPTION>
                                              SCHEDULE A

     Series D-1 issuance on June 4, 2004
     Purchaser                                       Purchase Price    Shares         Warrants
     ----------------------------------------------- -------------- -------------  -------------
<S>                                                     <C>                  <C>        <C>
     John Warnock                                       249,600.00           208        402,580
     The Hambrecht 1980 Revocable Trust                 175,200.00           146        282,580
     HAMCO Capital Corporation                           50,400.00            42         81,290
     William E Mayer Holdings, Inc.                      25,200.00            21         40,645
                                                     -------------- -------------  -------------
                                                        500,400.00           417        807,095
                                                     ============== =============  =============
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
     Series D-2 issuance on September 30, 2004
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
<S>                                                     <C>                   <C>        <C>
     John Warnock                                       249,600.00            208        340,363
                                                     -------------- -------------- --------------
                                                        249,600.00            208        340,363
                                                     ============== ============== ==============

     Series D-2 issuance on February 2, 2005
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
     The Hambrecht 1980 Revocable Trust                 225,600.00            188        307,636
     HAMCO Capital Corporation                           25,200.00             21         34,363
                                                     -------------- -------------- --------------
                                                        250,800.00            209        341,999
                                                     ============== ============== ==============

     Series D-3 issuance on December 21, 2005
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
     Nancy and Timothy Armstrong                        250,800.00            209        404,516
                                                     -------------- -------------- --------------
                                                        250,800.00            209        404,516
                                                     ============== ============== ==============

     Series D-3 issuance on July 27, 2006
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
     The Hambrecht 1980 Revocable Trust                 150,000.00            125        181,940
     John E. and Marva M. Warnock                        99,600.00             83        120,808
                                                     -------------- -------------- --------------
                                                        249,600.00            208        302,748
                                                     ============== ============== ==============

     Series D-4 issuance on July 27, 2006
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
     John E. and Marva M. Warnock                        50,400.00             42         61,131
                                                     -------------- -------------- --------------
                                                         50,400.00             42         61,131
                                                     ============== ============== ==============

     Series D-4 issuance on September 21, 2006
     Purchaser                                       Purchase Price     Shares        Warrants
     ----------------------------------------------- -------------- -------------- --------------
     The Hambrecht 1980 Revocable Trust                 200,400.00            167        351,990
     John E. and Marva M. Warnock                       199,200.00            166        349,882
                                                     -------------- -------------- --------------
                                                        399,600.00            333        701,872
                                                     ============== ============== ==============
</TABLE>

     2.   General.

          (a) This Amendment shall be governed in all respects by the laws of
the State of California.

<PAGE>

          (b) This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument. This Amendment may be delivered by
facsimile or electronic transmission of the relevant signature pages hereof.

          (c) The Purchase Agreement, as amended by this Amendment, shall remain
in full force and effect.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by as of the date first written above.

                                    SALON MEDIA GROUP, INC.

                                    By: /s/ Elizabeth Hambrecht
                                            Elizabeth Hambrecht
                                            President & Chief Executive Officer

[Counterpart Signature Page to Amendment No. 6 to Securities Purchase Agreement]

<PAGE>

                                        PURCHASER

                                        By: /s/ John E. Warnock
                                            -------------------
                                                John E.Warnock

                                        By: /s/ Marva M. Warnock
                                            --------------------
                                                Marva M. Warnock

                                        Name: John E. Warnock & Marva M. Warnock

                                        Title:_______________________________

                                        Address:_____________________________

                                        _____________________________________

[Counterpart Signature Page to Amendment No. 6 to Securities Purchase Agreement]

<PAGE>

                                        PURCHASER
                                        The Hambrecht 1980 Revocable Trust

                                        By: /s/ William Hambrecht
                                            ---------------------

                                        Name:  William R. Hambrecht

                                        Title: Trustee
                                        Address: 539 Bryant St. Suite 100

                                        San Francisco, CA 94107
                                        -----------------------

[Counterpart Signature Page to Amendment No. 6 to Securities Purchase Agreement]

<PAGE>

                                         PURCHASER
                                         HAMCO Capital Corporation

                                         By: /s/ William Hambrecht
                                             ---------------------

                                         Name:  William R. Hambrecht

                                         Title:
                                         Address: 539 Bryant St. Suite 100

                                         San Francisco, CA 94107
                                         -----------------------

[Counterpart Signature Page to Amendment No. 6 to Securities Purchase Agreement]

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