Document:

ex10-2.htm

     
      
        

      

    

     

    Exhibit
      10.2

     

     

    BOARD
      OF DIRECTORS - RETAINER AGREEMENT

     

    This
      agreement made as of September 6, 2007 between Sequiam Corporation, with its
      principal place of business at 300 Sunport Lane, Orlando, FL 32809 (“Sequiam”)
      and Jake Smith, with an address of 17367 Cardinal Drive, Lake Oswego, OR 97034,
      provides for director services, according to the following:

     

    I.     
      Services Provided

     

    Sequiam
      agrees to engage Jake Smith to serve as a member of the Board of Directors
      (the
“Director”) and to provide those services required of a director under Sequiam’s
      Articles of Incorporation and Bylaws (“Articles and Bylaws”), as both may be
      amended from time to time and under the General Corporation Law of California,
      the federal securities laws and other state and federal laws and regulations,
      as
      applicable. In addition, Sequiam agrees to engage Jake Smith to serve as the
      Chairman of the Audit Committee and as a member of the Compensation
      Committee.

     

    II.     
      Nature of Relationship

     

    The
      Director is an independent contractor and will not be deemed an employee of
      Sequiam for purposes of employee benefits, income tax withholding, F.I.C.A.
      taxes, unemployment benefits or otherwise.  The Director shall not enter
      into any agreement or incur any obligations on Sequiam’s behalf.

     

    Sequiam
      will supply, at no cost to the Director:  periodic briefings on the
      business, director packages for each board and committee meeting, copies of
      minutes of meetings and any other materials that are required under Sequiam’s
      Articles and Bylaws or the charter of any committee of the board on which the
      director serves and any other materials which may, by mutual agreement, be
      necessary for performing the services requested under this
      contract.

     

    III.     
      Director’s Warranties

     

    The
      Director warrants that no other party has exclusive rights to his services
      in
      the specific areas described and that the Director is in no way compromising
      any
      rights or trust between any other party and the Director or creating a conflict
      of interest.  The Director also warrants that no other agreement will be
      entered into that will create a conflict of interest with this agreement. 
The Director further warrants that he will comply with all applicable state
      and
      federal laws and regulations, including Sections 10 and 16 of the Securities
      and
      Exchange Act of 1934.

     

    Throughout
      the term of this agreement and for a period of six months thereafter, the
      Director agrees he will not, without obtaining Sequiam’s prior written consent,
      directly or indirectly engage or prepare to engage in any activity in
      competition with any Sequiam business or product, including products in the
      development stage, accept employment or provide services to (including service
      as a member of a board of directors), or establish a business in competition
      with Sequiam.

     

    IV.     
      Compensation

     

    A. 
      Retainer

     

    Sequiam
      shall pay the Director a nonrefundable retainer of $52,000.00 per year during
      the term of this agreement (prorate for the first year $17,333.33) to provide
      the services described in Section I which shall compensate him for all time
      spent preparing for, traveling to (if applicable) and attending board of
      director meetings during the year.  The retainer shall be provided for
      portions of the term less than a full calendar year.  This retainer may be
      revised by action of Sequiam’s Board of Directors from time to time.  Such
      revision shall be effective as of the date specified in the resolution for
      payments not yet made and need not be documented by an amendment to this
      agreement.

     

    B.   
      Stock Options

     

    Subject
      to approval by the Board of Directors, a grant of an option to purchase Sequiam
      common stock, par value $.001 per share, shall be made to the Director. 
The grant shall consist of an option to purchase a specified number of shares
      under the term of Sequiam’s 2003 Non-Employee Directors and Consultants Stock
      Plan or then effective incentive plan.  The specified number of shares for
      a new appointment to the Board shall be 500,000 shares in 2007, which grant
      has
      already been made.  Thirty-three percent of the option shall vest on each
      anniversary of the date of grant.  The amount and terms of the annual
      option grant may be revised by action of Sequiam’s Board of Directors from time
      to time.  Such revision shall be effective as of the date specified in the
      resolution for any grants not yet made and need not be documented by an
      amendment to this agreement.

     

    C.   
      Stock Grant

     

    Subject
      to approval by the Board of Directors, a grant of Sequiam common stock, par
      value $.001 per share, shall be made to the Director.  The 2007 grant shall
      consist of 500,000 shares, which grant has already been made.

     

    D.   
      Payment

     

    Retainer
      payments shall be made quarterly in cash in advance on the first day of each
      accounting quarter.  Additional payments shall be made in arrears.  No
      invoices need be submitted by the Director for payment of the
      retainer. 

     

    E.   
      Expenses

     

    Sequiam
      will reimburse the Director for reasonable expenses approved in advance, such
      approval not to be unreasonably withheld.  Invoices for expenses, with
      receipts attached, shall be submitted. Such invoices must be approved by
      Sequiam’s Chief Financial Officer as to form and completeness.

     

    V.     
      Indemnification and Insurance

     

    Sequiam
      will execute an indemnity agreement in favor of the Director substantially
      in
      the form of the agreement attached hereto as Exhibit B.  In addition,
      Sequiam will provide directors and officers’ liability insurance with minimum
      liability coverage of $5 million.

     

    VI.     
      Term of Agreement

     

    This
      agreement shall be in effect from September 6, 2007 through the last date of
      the
      Director’s current term as a member of Sequiam’s Board of Directors.  This
      agreement shall be automatically renewed on the date of the Director’s
      reelection as a member of Sequiam’s Board of Director’s for the period of such
      new term unless the Board of Directors determines not to renew this
      agreement.   Any amendment to this agreement must be approved by a
      written action of Sequiam’s Board of Directors.  Amendments to Section IV
      Compensation hereof do not require the Director’s consent to be effective. This
      agreement is subject to shareholder approval.

     

    VII.     
      Termination

     

    This
      agreement shall automatically terminate upon the death of the Director or upon
      his resignation or removal from, or failure to win election or reelection to,
      the Sequiam Board of Directors.

     

    In
      the
      event of any termination of this agreement, the Director agrees to return any
      materials transferred to the Director under this agreement except as may be
      necessary to fulfill any outstanding obligations hereunder.  The Director
      agrees that Sequiam has the right of injunctive relief to enforce this
      provision.

     

    Sequiam’s
      obligation in the event of such termination shall be to pay the Director the
      retainer and other payments due through the date of termination.

     

    Termination
      shall not relieve either party of its continuing obligation under this agreement
      with respect to confidentiality of proprietary information.

     

    VIII.     
      Limitation of Liability

     

    Under
      no
      circumstances shall Sequiam be liable to the Director for any consequential
      damages claimed by any other party as a result of representations made by the
      Director with respect to Sequiam which are different from any to those made
      in
      writing by Sequiam.

     

    Furthermore,
      except for the maintenance of confidentiality, neither party shall be liable
      to
      the other for delay in any performance, or for failure to render any performance
      under this agreement when such delay or failure is caused by Government
      regulations (whether or not valid), fire, strike, differences with workmen,
      illness of employees, flood, accident, or any other cause or causes beyond
      reasonable control of such delinquent party.

     

    IX.     
      Confidentiality

     

    The
      Director agrees to sign and abide by Sequiam’s Board of Directors Proprietary
      Information and Inventions Agreement, a copy of which is attached hereto as
      Exhibit A.

     

    X.     
      Resolution of Dispute

     

    Any
      dispute regarding the agreement (including and without limitation to its
      validity, interpretation, performance, enforcement, termination and damages)
      shall be determined in accordance with the laws of the State of California,
      the
      United States of America.  Any action under this paragraph shall not
      preclude any party hereto from seeking injunctive or other legal relief to
      which
      each party may be entitled.

     

    XI.     
      Sole Agreement

     

    This
      agreement (including agreements executed substantially in the form of the
      exhibits attached hereto) supersedes all prior or contemporaneous written or
      oral understandings or agreements, and may not be added to, modified, or waived,
      in whole or in part, except by a writing signed by the party against whom such
      addition, modification or waiver is sought to be asserted.

     

    XII.     
      Assignment

     

    This
      agreement and all of the provisions hereof shall be binding upon and insure
      to
      the benefit of the parties hereto and their respective successors and permitted
      assigns and, except as otherwise expressly provided herein, neither this
      agreement, nor any of the rights, interests or obligations hereunder shall
      be
      assigned by either of the parties hereto without the prior written consent
      of
      the other party.

     

    XIII.     
      Notices

     

    Any
      and
      all notices, requests and other communications required or permitted hereunder
      shall be in writing, registered mail or by facsimile, to each of the parties
      at
      the addresses set forth above or the numbers set forth below:

     

    
      	
              The
                Director:

            	 	
              Attention:

            	 	
              Mr.
                Jake Smith

            	 
	 	 	
              Telephone:

            	 	
              503-699-2158

            	 
	 	 	
              Facsimile:

            	 	
              503-636-0825

            	 
	 	 	 	 	 	 
	
              Sequiam:

            	 	
              Attention:

            	 	
              Mr.
                Nicholas VandenBrekel

            	 
	 	 	
              Telephone:

            	 	
              407-541-0773

            	 
	 	 	
              Facsimile:

            	 	
              407-240-1431

            	 

    

     

    Any
      such
      notice shall be deemed given when received and notice given by registered mail
      shall be considered to have been given on the tenth (10th) day after having
      been
      sent in the manner provided for above.

     

    XIV.     
      Survival of Obligations

     

    Notwithstanding
      the expiration of termination of this agreement, neither party hereto shall
      be
      released hereunder from any liability or obligation to the other which has
      already accrued as of the time of such expiration or termination (including,
      without limitation, Sequiam’s obligation to make any fees and expense payments
      required pursuant to Article IV hereof) or which thereafter might accrue in
      respect of any act or omission of such party prior to such expiration or
      termination.

     

    XV.     
      Severability

     

    Any
      provision of this agreement which is determined to be invalid or unenforceable
      shall not affect the remainder of this agreement, which shall remain in effect
      as though the invalid or unenforceable provision had not been included herein,
      unless the removal of the invalid or unenforceable provision would substantially
      defeat the intent, purpose or spirit of this agreement.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
      by
      their duly authorized officers, as of the date first written above.

     

    
      	
              Signature:

            	
              ________________

            	 	
              Date:

            	
               _________

            
	 	 
	
              By:

            	 	
              Jake
                Smith

            
	
              Title:

            	 	
              Director

            
	 	 
	
              Sequiam
                Corporation

            
	 	 
	
              Signature:

            	
              ________________

            	 	
              Date:

            	
               _________

            
	 	 
	
              By:

            	 	
              Nicholas
                VandenBrekel

            
	
              Title:

            	 	
              Chairman,
                President and Chief Executive Officer

            
	 	 	 	 	 	 	 

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      A

     

     BOARD
      OF DIRECTORS PROPRIETARY
      INFORMATION

     

    AND
      INVENTIONS AGREEMENT

     

         
      WHEREAS, the parties desire to assure the confidential status of the information
      which may be disclosed by Sequiam to the Director; NOW THEREFORE, in reliance
      upon and in consideration of the following undertaking, the parties agree as
      follows:

     

         
      1.       Subject to the limitations set forth in
      Paragraph 2, all information disclosed by Sequiam to the Director shall be
      deemed to be "Proprietary Information".  In particular, Proprietary
      Information shall be deemed to include any information, process, technique,
      algorithm, program, design, drawing, formula or test data relating to any
      research project, work in process, future development, engineering,
      manufacturing, marketing, servicing, financing or personnel matter relating
      to
      Sequiam, its present or future products, sales, suppliers, customers, employees,
      investors, or business, whether or oral, written, graphic or electronic
      form.

     

         
      2.       The term "Proprietary Information" shall
      not be deemed to include information which the Director can demonstrate by
      competent written proof that; (i) is now, or hereafter becomes, through no
      act
      or failure to act on the part of the Director, generally known or available;
      (ii) is known by the Director at the time of receiving such information as
      evidenced by its records: (iii) is hereafter furnished to the Director by a
      third party, as a matter of right and without restriction on disclosure; or
      (iv)
      is the subject of a written permission to disclose provided by
      Sequiam.

     

         
      3.       The Director shall maintain in trust and
      confidence and not disclose to any third party or use for any unauthorized
      purpose any Proprietary Information received from Sequiam.  The Director
      may use such Proprietary Information only to the extent required to accomplish
      the purposes of this Agreement.  The Director shall not use Proprietary
      Information for any purpose or in any manner which would constitute a violation
      of any laws or regulations, including without limitation the export control
      laws
      of the United States.  No other rights of licenses to trademarks,
      inventions, copyrights, or patents are implied or granted under this
      Agreement.

     

         
      4.       Proprietary Information supplied shall
      not be reproduced in any form except as required to accomplish the intent of
      this Agreement.

     

         
      5.       The Director represents and warrants that
      he shall protect the Proprietary Information received with at least the same
      degree of care used to protect its own Proprietary Information from unauthorized
      use or disclosure.  The Director shall advise its employees or agents who
      might have access to such Proprietary Information of the confidential nature
      thereof and shall obtain from each of such employers and agents an agreement
      to
      abide by the terms of this Agreement.  The Director shall not disclose any
      Proprietary Information to any officer, employee or agent who does not have
      a
      need for such information.

     

         
      6.       All Proprietary Information (including
      all copies thereof) shall remain in the property of Sequiam, and shall be
      returned to Sequiam after Director's need for it has expired, or upon request
      of
      Sequiam, and in any event, upon completion or termination of this
      Agreement.

     

         
      7.       Notwithstanding any other provision of
      this Agreement, disclosure of Proprietary Information shall not be precluded
      if
      such disclosure:

     

    (a)  
      is in response to a valid order of a court or other governmental body of the
      United States or any political subdivision thereof; provided, however, that
      the
      responding party shall first have given notice to the other party hereto and
      shall have made a reasonable effort to obtain a protective order requiring
      that
      the Proprietary Information so disclosed be used only for the purpose for which
      the order was issued;

     

    (b)  
      is otherwise required by law; or

     

    (c)  
      is otherwise necessary to establish rights or enforced obligations under this
      Agreement, but only to the extent that any such disclosure is
      necessary.

     

         
      8.       This Agreement shall continue in full
      force and effect for so long as the Director continues to receive Proprietary
      Information.  This Agreement may be terminated at any time upon thirty (30)
      days written notice to the other party.  The termination of the Agreement
      shall not relieve the Director of the obligations imposed by Paragraphs 3,
      4, 5
      and 12 of this Agreement with respect to Proprietary information disclosed
      prior
      to the effective date of such termination and the provisions of these Paragraphs
      shall survive the termination of this Agreement for a period of five (5) years
      from the date of such termination.

     

         
      9.       The Director agrees to indemnify Sequiam
      for any loss or damage suffered as a result of any breach by the Director of
      the
      terms of this Agreement, including any reasonable fees incurred by Sequiam
      in
      the collection of such indemnity.

     

         
      10.      This Agreement shall be governed by the laws
      of the State of California as those laws are applied to contracts entered into
      and to be performed entirely in California by California residents.

     

         
      11.      This Agreement contains the final, complete
      and exclusive agreement of the parties relative to the subject matter hereof
      and
      may not be changed, modified, amended or supplemented except by a written
      instrument signed by both parties.

     

         
      12.      Each party hereby acknowledges and agrees that
      in the event of any breach of this Agreement by the Director, including, without
      limitation, an actual or threatened disclosure of Proprietary Information
      without the prior express written consent of Sequiam, Sequiam will suffer an
      irreparable injury, such that no remedy at law will afford it adequate
      protection against, or appropriate compensation for, such injury. 
Accordingly, each party hereby agrees that Sequiam shall be entitled to specific
      performance of the Director's obligations under this Agreement, as well as
      such
      further injunctive relief as may be granted by a court of competent
      jurisdiction.

     

    
      	
              AGREED
                TO:

            	 	
              AGREED
                TO:

            
	
              Sequiam
                Corporation

            	 	
              Mr.
                Jake Smith

            
	
              300
                Sunport Lane

            	 	
              17367
                Cardinal Drive

            
	
              Orlando,
                FL 32809

            	 	
              Lake
                Oswego, OR 97034

            

    

    

    
      	
              By:

            	
              ________________

            	 	
              By:

            	
               _______________

            
	
              Name:

            	
              Nicholas
                VandenBrekel

            	 	
              Name:

            	
              Jake
                Smith

            
	
              Title:

            	
              Chairman,
                President & CEO

            	 	
              Title:

            	
              Director

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      B

     

    INDEMNITY
      AGREEMENT

     

    THIS
      AGREEMENT is made and entered into this 6th day of September, 2007 by
      and between SEQUIAM CORPORATION, a California corporation (the
“Corporation”), and Jake Smith (“Agent”).

     

    RECITALS

     

    WHEREAS,
      Agent performs a valuable service to the Corporation in his capacity
      as
      Director of the Corporation;

     

    WHEREAS,
      the stockholders of the Corporation have adopted bylaws (the “Bylaws”)
      providing for the indemnification of the directors, officers, employees and
      other agents of the Corporation, including persons serving at the request of
      the
      Corporation in such capacities with other corporations or enterprises, as
      authorized by the California General Corporation Law, as amended (the
“Code”);

     

    WHEREAS,
      the Bylaws and the Code, by their non-exclusive nature, permit
      contracts between the Corporation and its agents, officers, employees and other
      agents with respect to indemnification of such persons; and

     

    WHEREAS,
      in order to induce Agent to continue to serve as Director of the
      Corporation, the Corporation has determined and agreed to enter into this
      Agreement with Agent;

     

    NOW,
      THEREFORE, in consideration of Agent’s continued service as Director
      after the date hereof, the parties hereto agree as follows:

     

    AGREEMENT

     

    1.
      Services to the Corporation. Agent will serve, at the will of the
      Corporation or under separate contract, if any such contract exists, as Director
      of the Corporation or as a director, officer or other fiduciary of an affiliate
      of the Corporation (including any employee benefit plan of the Corporation)
      faithfully and to the best of his ability so long as he is duly elected and
      qualified in accordance with the provisions of the Bylaws or other applicable
      charter documents of the Corporation or such affiliate; provided, however,
that Agent may at anytime and for any reason resign from such position
      (subject to any contractual obligation that Agent may have assumed apart from
      this Agreement) and that the Corporation or any affiliate shall have no
      obligation under this Agreement to continue Agent in any such
      position.

     

    2.
      Indemnity of Agent. The Corporation hereby agrees to hold harmless and
      indemnify Agent to the fullest extent authorized or permitted by the provisions
      of the Bylaws and the Code, as the same may be amended from time to time (but,
      only to the extent that such amendment permits the Corporation to provide
      broader indemnification rights than the Bylaws or the Code permitted prior
      to
      adoption of such amendment).

     

    3.
      Additional Indemnity. In addition to and not in limitation of the
      indemnification otherwise provided for herein, and subject only to the
      exclusions set forth in Section 4 hereof, the Corporation hereby further agrees
      to hold harmless and indemnify Agent:

     

    (a)
      against any and all expenses (including attorneys’ fees), witness fees,
      damages, judgments, fines and amounts paid in settlement and any other amounts
      that Agent becomes legally obligated to pay because of any claim or claims
      made
      against or by him in connection with any threatened, pending or completed
      action, suit or proceeding, whether civil, criminal, arbitrational,
      administrative or investigative (including an action by or in the right of
      the
      Corporation) to which Agent is, was or at any time becomes a party, or is
      threatened to be made a party, by reason of the fact that Agent is, was or
      at
      any time becomes a director, officer, employee or other agent of Corporation,
      or
      is or was serving or at any time serves at the request of the Corporation as
      a
      director, officer, employee or other agent of another corporation, partnership,
      joint venture, trust, employee benefit plan or other enterprise;
      and

     

    (b)
      otherwise to the fullest extent as may be provided to Agent by the
      Corporation under the non-exclusivity provisions of the Code and Section 41
      of
      the Bylaws.

     

    4.
      Limitations on Additional Indemnity. No indemnity pursuant to Section 3
      hereof shall be paid by the Corporation:

     

    (a)
      on account of any claim against Agent solely for an accounting of
      profits made from the purchase or sale by Agent of securities of the Corporation
      pursuant to the provisions of Section 16(b) of the Securities Exchange Act
      of
      1934 and amendments thereto or similar provisions of any federal, state or
      local
      statutory law;

     

    (b)
      on account of Agent’s conduct that is established by a final judgment
      as knowingly fraudulent or deliberately dishonest or that constituted willful
      misconduct;

     

    (c)
      on account of Agent’s conduct that is established by a final judgment
      as constituting a breach of Agent’s duty of loyalty to the Corporation or
      resulting in any personal profit or advantage to which Agent was not legally
      entitled;

     

    (d)
      for which payment is actually made to Agent under a valid and
      collectible insurance policy or under a valid and enforceable indemnity clause,
      bylaw or agreement, except in respect of any excess beyond payment under such
      insurance, clause, bylaw or agreement;

     

    (e)
      if indemnification is not lawful (and, in this respect, both the
      Corporation and Agent have been advised that the Securities and Exchange
      Commission believes that indemnification for liabilities arising under the
      federal securities laws is against public policy and is, therefore,
      unenforceable and that claims for indemnification should be submitted to
      appropriate courts for adjudication); or

     

    (f)
      in connection with any proceeding (or part thereof) initiated by Agent,
      or any proceeding by Agent against the Corporation or its directors, officers,
      employees or other agents, unless (i) such indemnification is expressly required
      to be made by law, (ii) the proceeding was authorized by the Board of Directors
      of the Corporation, (iii) such indemnification is provided by the Corporation,
      in its sole discretion, pursuant to the powers vested in the Corporation under
      the Code, or (iv) the proceeding is initiated pursuant to Section 9
      hereof.

     

    5.
      Continuation of Indemnity. All agreements and obligations of the
      Corporation contained herein shall continue during the period Agent is a
      director, officer, employee or other agent of the Corporation (or is or was
      serving at the request of the Corporation as a director, officer, employee
      or
      other agent of another corporation, partnership, joint venture, trust, employee
      benefit plan or other enterprise) and shall continue thereafter so long as
      Agent
      shall be subject to any possible claim or threatened, pending or completed
      action, suit or proceeding, whether civil, criminal, arbitrational,
      administrative or investigative, by reason of the fact that Agent was serving
      in
      the capacity referred to herein.

     

    6.
      Partial Indemnification. Agent shall be entitled under this Agreement
      to indemnification by the Corporation for a portion of the expenses (including
      attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in
      settlement and any other amounts that Agent becomes legally obligated to pay
      in
      connection with any action, suit or proceeding referred to in Section 3 hereof
      even if not entitled hereunder to indemnification for the total amount thereof,
      and the Corporation shall indemnify Agent for the portion thereof to which
      Agent
      is entitled.

     

    7.
      Notification and Defense of Claim. Not later than thirty (30) days
      after receipt by Agent of notice of the commencement of any action, suit or
      proceeding, Agent will, if a claim in respect thereof is to be made against
      the
      Corporation under this Agreement, notify the Corporation of the commencement
      thereof; but the omission so to notify the Corporation will not relieve it
      from
      any liability which it may have to Agent otherwise than under this Agreement.
      With respect to any such action, suit or proceeding as to which Agent notifies
      the Corporation of the commencement thereof:

     

    (a)  
      the Corporation will be entitled to participate therein at its own
      expense;

     

    (b)  
      except as otherwise provided below, the Corporation may, at its option
      and jointly with any other indemnifying party similarly notified and electing
      to
      assume such defense, assume the defense thereof, with counsel reasonably
      satisfactory to Agent. After notice from the Corporation to Agent of its
      election to assume the defense thereof, the Corporation will not be liable
      to
      Agent under this Agreement for any legal or other expenses subsequently incurred
      by Agent in connection with the defense thereof except for reasonable costs
      of
      investigation or otherwise as provided below. Agent shall have the right to
      employ separate counsel in such action, suit or proceeding but the fees and
      expenses of such counsel incurred after notice from the Corporation of its
      assumption of the defense thereof shall be at the expense of Agent unless (i)
      the employment of counsel by Agent has been authorized by the Corporation,
      (ii)
      Agent shall have reasonably concluded, and so notified the Corporation, that
      there is an actual conflict of interest between the Corporation and Agent in
      the
      conduct of the defense of such action or (iii) the Corporation shall not in
      fact
      have employed counsel to assume the defense of such action, in each of which
      cases the fees and expenses of Agent’s separate counsel shall be at the expense
      of the Corporation. The Corporation shall not be entitled to assume the defense
      of any action, suit or proceeding brought by or on behalf of the Corporation
      or
      as to which Agent shall have made the conclusion provided for in clause (ii)
      above; and

     

    (c)  
      the Corporation shall not be liable to indemnify Agent under this
      Agreement for any amounts paid in settlement of any action or claim effected
      without its written consent, which shall not be unreasonably withheld. The
      Corporation shall be permitted to settle any action except that it shall not
      settle any action or claim in any manner which would impose any penalty or
      limitation on Agent without Agent’s written consent, which may be given or
      withheld in Agent’s sole discretion.

     

    8.
      Expenses. The Corporation shall advance, prior to the final disposition
      of any proceeding, promptly following request therefor, all expenses incurred
      by
      Agent in connection with such proceeding upon receipt of an undertaking by
      or on
      behalf of Agent to repay said amounts if it shall be determined ultimately
      that
      Agent is not entitled to be indemnified under the provisions of this Agreement,
      the Bylaws, the Code or otherwise.

     

    9.
      Enforcement. Any right to indemnification or advances granted by this
      Agreement to Agent shall be enforceable by or on behalf of Agent in any court
      of
      competent jurisdiction if (i) the claim for indemnification or advances is
      denied, in whole or in part, or (ii) no disposition of such claim is made within
      ninety (90) days of request therefor. Agent, in such enforcement action, if
      successful in whole or in part, shall be entitled to be paid also the expense
      of
      prosecuting his claim. It shall be a defense to any action for which a claim
      for
      indemnification is made under Section 3 hereof (other than an action brought
      to
      enforce a claim for expenses pursuant to Section 8 hereof, provided that
the required undertaking has been tendered to the Corporation) that
      Agent
      is not entitled to indemnification because of the limitations set forth in
      Section 4 hereof. Neither the failure of the Corporation (including its Board
      of
      Directors or its stockholders) to have made a determination prior to the
      commencement of such enforcement action that indemnification of Agent is proper
      in the circumstances, nor an actual determination by the Corporation (including
      its Board of Directors or its stockholders) that such indemnification is
      improper shall be a defense to the action or create a presumption that Agent
      is
      not entitled to indemnification under this Agreement or otherwise.

     

    10.
      Subrogation. In the event of payment under this Agreement, the
      Corporation shall be subrogated to the extent of such payment to all of the
      rights of recovery of Agent, who shall execute all documents required and shall
      do all acts that may be necessary to secure such rights and to enable the
      Corporation effectively to bring suit to enforce such rights.

     

    11.
      Non-Exclusivity of Rights. The rights conferred on Agent by this
      Agreement shall not be exclusive of any other right which Agent may have or
      hereafter acquire under any statute, provision of the Corporation’s Certificate
      of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
      otherwise, both as to action in his official capacity and as to action in
      another capacity while holding office.

     

    12.
      Survival of Rights.

     

    (a)  
      The rights conferred on Agent by this Agreement shall continue after
      Agent has ceased to be a director, officer, employee or other agent of the
      Corporation or to serve at the request of the Corporation as a director,
      officer, employee or other agent of another corporation, partnership, joint
      venture, trust, employee benefit plan or other enterprise and shall inure to
      the
      benefit of Agent’s heirs, executors and administrators.

     

    (b)  
      The Corporation shall require any successor (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business or assets of the Corporation, expressly to
      assume and agree to perform this Agreement in the same manner and to the same
      extent that the Corporation would be required to perform if no such succession
      had taken place.

     

    13.
      Separability. Each of the provisions of this Agreement is a separate
      and distinct agreement and independent of the others, so that if any provision
      hereof shall be held to be invalid for any reason, such invalidity or
      unenforceability shall not affect the validity or enforceability of the other
      provisions hereof. Furthermore, if this Agreement shall be invalidated in its
      entirety on any ground, then the Corporation shall nevertheless indemnify Agent
      to the fullest extent provided by the Bylaws, the Code or any other applicable
      law.

     

    14.
      Governing Law. This Agreement shall be interpreted and enforced in
      accordance with the laws of the State of Florida.

     

    15.
      Amendment and Termination. No amendment, modification, termination or
      cancellation of this Agreement shall be effective unless in writing signed
      by
      both parties hereto.

     

    16.
      Identical Counterparts. This Agreement may be executed in one or more
      counterparts, each of which shall for all purposes be deemed to be an original
      but all of which together shall constitute but one and the same Agreement.
      Only
      one such counterpart need be produced to evidence the existence of this
      Agreement.

     

    17.
      Headings. The headings of the sections of this Agreement are inserted
      for convenience only and shall not be deemed to constitute part of this
      Agreement or to affect the construction hereof.

     

    18.
      Notices. All notices, requests, demands and other communications
      hereunder shall be in writing and shall be deemed to have been duly given (i)
      upon delivery if delivered by hand to the party to whom such communication
      was
      directed or (ii) upon the third business day after the date on which such
      communication was mailed if mailed by certified or registered mail with postage
      prepaid:

     

    (a)  
      If to Agent, to:  17367 Cardinal Drive, Lake Oswego, OR
      97034

     

    (b)  
      If to the Corporation, to:

     

    SEQUIAM
      CORPORATION

     

    300
      Sunport Lane, Orlando, FL 32809

     

    or
      to
      such other address as may have been furnished to Agent by the
      Corporation.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement on and
      as of the day and year first above written.

     

    
      	
              SEQUIAM
                CORPORATION

            	 
	 	 
	
              By:

            	
               ____________________

            	 
	
              Name:
                Nicholas VandenBrekel

            	 
	
              Title
                President & CEO

               

               

            	 
	
              AGENT

            	 
	 	 
	
               _____________________

            	 
	
              Name:
                Jake SmithUntitled Page

		

			

			

			Exhibit 10.1

				

			

			

			

			

			

			

			

			

			

		

		
			ACQUISITION AGREEMENT

						

						AMONG

						

						MATERIAL TECHNOLOGIES, INC.,

						

						BRIDGE TESTING CONCEPTS, INC.,

						

						AND

						

						BRENT PHARES

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
			TABLE OF CONTENTS

					

				

			

				
						
							ARTICLE 1

							SALE AND PURCHASE OF THE SHARES

					
	  		
						

						

					
	1.1	Issuance of the Shares...................................................................................	
						
							1

					
	1.2	Consideration................................................................................................	
						
							1

					
	1.3	Lockup ........................................................................................................	
						
							2

					
	  		
						

						

					
	
						
							ARTICLE 2

							REPRESENTATIONS AND WARRANTIES

					
	  		
						

						

					
	2.1	Representations and Warranties of the Parties................................................	
						
							2

					
		2.1.1    Organization, Standing, Power...........................................................	
						
							2

					
		2.1.2    Authority...........................................................................................	
						
							3

					
		2.1.3    Capitalization of the Parties................................................................	
						
							3

					
		2.1.4    Subsidiaries.......................................................................................	
						
							4

					
		2.1.5    No Defaults......................................................................................	
						
							4

					
		2.1.6    Governmental Consents.....................................................................	
						
							5

					
		2.1.7    Financial Statements..........................................................................	
						
							5

					
		2.1.8    Absence of Undisclosed Liabilities.....................................................	
						
							5

					
		2.1.9    Absence of Changes.........................................................................	
						
							5

					
		2.1.10  Patents and Trademarks....................................................................	
						
							6

					
		2.1.11  Certain Agreements...........................................................................	
						
							6

					
		2.1.12  Compliance with Other Instruments...................................................	
						
							6

					
		2.1.1.13  Employee Benefit Plans..................................................................	
						
							7

					
		2.1.14  Other Personal Property....................................................................	
						
							7

					
		2.1.15  Properties and Liens..........................................................................	
						
							7

					
		2.1.16  Inventory..........................................................................................	
						
							7

					
		2.1.17  Major Contracts...............................................................................	
						
							7

					
		2.1.18  Questionable Payments.....................................................................	
						
							8

					
		2.1.19  Recent Transactions..........................................................................	
						
							9

					
		2.1.20  Leases in Effect.................................................................................	
						
							9

					
		2.1.21  Taxes................................................................................................	
						
							9

					
		2.1.22  Disputes and Litigation......................................................................	
						
							9

					
		2.1.23  Compliance with Laws......................................................................	
						
							10

					
		2.1.24  Related Party Transactions................................................................	
						
							10

					
		2.1.25  Minute Books...................................................................................	
						
							10

					
		2.1.26  Disclosure.........................................................................................	
						
							10

					
		2.1.27  Reliance............................................................................................	
						
							11

					
	2.2	Representations and Warranties of Seller.......................................................	
						
							11

					
	2.3	Representations and Warranties of Buyer.......................................................	
						
							11

					

			

			

			

			

			

			

			

			

			

				
						
							ARTICLE 3

							CONDITIONS PRECEDENT

					
	  		
						

						

					
	3.1	Conditions to Each Party’s Obligations..........................................................	
						
							12

					
	3.2	Conditions to Seller's Obligations...................................................................	
						
							12

					
	3.3	Conditions to Buyer's Obligations..................................................................	
						
							13

					
	  		
						

						

					
	
						
							ARTICLE 4

							CLOSING AND DELIVERY OF DOCUMENTS

					
	  		
						

						

					
	4.1	Time and Place.............................................................................................	
						
							14

					
	4.2	Deliveries by Seller........................................................................................	
						
							14

					
	4.3	Deliveries by the Company............................................................................	
						
							14

					
	4.4	Deliveries by Buyer.......................................................................................	
						
							15

					
	  		
						

						

					
	
						
							ARTICLE 5

							INDEMNIFICATION

					
	  		
						

						

					
	5.1	Seller and the Company's Indemnity Obligations............................................	
						
							15

					
	5.2	Buyer's Indemnity Obligations........................................................................	
						
							15

					
	  		
	
						
							ARTICLE 6

							DEFAULT, AMENDMENT AND WAIVER

					
	  		
						

						

					
	6.1	Default..........................................................................................................	
						
							16

					
	6.2	Waiver and Amendment................................................................................	
						
							16

					
	  		
						

						

					
	
						
							ARTICLE 7

							MISCELLANEOUS

					
	  		
						

						

					
	7.1	Expenses......................................................................................................	
						
							17

					
	7.2	Notices.........................................................................................................	
						
							17

					
	7.3	Entire Agreement..........................................................................................	
						
							18

					
	7.4	Survival of Representations............................................................................	
						
							18

					
	7.5	Incorporated by Reference............................................................................	
						
							18

					
	7.6	Remedies Cumulative....................................................................................	
						
							18

					
	7.7	Execution of Additional Documents...............................................................	
						
							18

					
	7.8	Costs and Fees.............................................................................................	
						
							18

					
	7.9	Choice of Law..............................................................................................	
						
							19

					
	7.10	Jurisdiction....................................................................................................	
						
							19

					
	7.11	Attorneys’ Fees............................................................................................	
						
							19

					
	7.12	Binding Effect and Assignment.......................................................................	
						
							19

					
	7.13	Counterparts; Facsimile Signatures................................................................	
						
							19

					
	7.14	Conflict Waiver.............................................................................................	
						
							19

					

			

			

			

			

			

			

			

			

			

			

			Table of Contents

			Table of Schedules and Exhibits

				

			

		
			Exhibit A                      Intellectual Property of the Company

				

				Exhibit B                      Material Technologies, Inc. Disclosure Schedule

				

				Exhibit C                      Bridge Testing Concepts, Inc. Disclosure Schedule

				

				Exhibit D                      Brent Phares Disclosure Schedule

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

				

			

		

		

		

		

		

		

		
			ACQUISITION AGREEMENT

				

			

		

		
			THIS ACQUISITION AGREEMENT (the “Agreement”), dated September 28, 2007, is by and among MATERIAL TECHNOLOGIES, INC., a Delaware corporation (the “Buyer”), BRIDGE TESTING CONCEPTS, INC., a California corporation (the “Company”), and BRENT PHARES, an individual (the “Seller”) (individually, a “Party”; collectively, the “Parties”).

				

			

		

		
			RECITALS

						

					

		

		
			          A.       The capital stock of the Company consists of 10,000,000 authorized shares of Common Stock, of which 5,100,000 are currently issued and outstanding and held by Seller (the “Shares”).

				

				          B.       Upon the terms and conditions set forth below, Seller desires to sell all of the Company Shares to Buyer, such that, following such transaction, the Company will be a 100% owned subsidiary of Buyer.

				

				          C.       For United States federal income tax purposes, the Parties to this Agreement intend that the transactions described in this Agreement shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall be, and is hereby, adopted as a “plan of reorganization” for purposes of Section 368(a) of the Code.

				

				          NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the Parties hereto agree as follows:

				

			

		

		
			ARTICLE 1

				SALE AND PURCHASE OF THE SHARES

					

				

		

		
			          1.1       Issuance of the Shares.  Subject to the terms and conditions herein set forth, and on the basis of the representations, warranties and agreements herein contained, Seller shall sell and transfer to Buyer the Shares which constitute 100% of the issued and outstanding common stock of the Company.

				

				          1.2       Consideration.  In consideration for this Agreement, the Parties shall provide the following:

				

				                      1.2.1.   Buyer Assumption of Liabilities.  Any indebtedness of the Company incurred through the Closing (as defined in Article 4 of this Agreement) shall be the responsibility of Seller.  Any indebtedness of the Company incurred after the Closing shall be the responsibility of Buyer.

				

				                      1.2.2.   Buyer Acquisition of Intellectual Property.  Subject to the terms and conditions herein set forth, and on the basis of the representations, warranties and agreements herein contained, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, for the purchase price as set forth in Section 1.2.3, any and all intellectual property of Seller and the 

				

				

				

				

			

		

		
			1

		

		
			

			

			

			

			

			Company, including but not limited to the intellectual property described on Exhibit A, and all intellectual property used in the business of the Company, including all graphics and logos; all domain names and URL’s; any proprietary software and its source code; all existing content and HTML files; all branding and trademarks; all trade names; all services marks; all copywritten material; all patents; and all products and proceeds of the foregoing, in any form whatsoever and wheresoever located (collectively the “Intellectual Property”).

			

			                      1.2.3    Purchase Price.  The purchase price for the Shares shall be:

			

			                                  (a)       1,500,000 shares of common stock of Buyer (the “Buyer’s Stock”); and

			

			                                  (b)       $37,500 payable in cash.

			

			          1.3       Lockup.  Seller hereby agrees (i) not to sell, assign, transfer, convey, hypothecate, alienate or otherwise dispose of any of the Buyer’s Stock, or any right or interest therein, voluntarily or involuntarily, by operation of law or otherwise, or make any offer or agreement relating to any of the foregoing, for a period of two years from the date of this Agreement (the “Lockup Period”), and (ii) authorizes the Buyer during the Lockup Period to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on the transfer books and records of the Buyer with respect to the Buyer’s Stock, and, in the case of any such Buyer’s Stock for which Seller is the beneficial but not the record holder, agrees to cause the record holder to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on such books and records with respect to such Buyer’s Stock.

			

		

		
			ARTICLE 2

				REPRESENTATIONS AND WARRANTIES

					

				

		

		
			          2.1       Representations and Warranties of the Parties.  Except as disclosed in a document referring specifically to the representations and warranties in this Agreement that identifies by section number the section and subsection to which such disclosure relates and is delivered by each Party to the others prior to the execution of this Agreement (the “Disclosure Schedules”), the Parties represent and warrant each to the other, as of the date hereof and as of the Closing, as follows:

				

				                      2.1.1    Organization, Standing, Power.

				

				                                  (a)       Buyer.  Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the state of Delaware.  It has all requisite corporate power, franchises, licenses, permits, and authority to own its properties and assets and to carry on its business as it has been and is being conducted.  Buyer is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a Material Adverse Effect (as defined below) on Buyer.  For purposes of this Agreement, the term “Material Adverse Effect” means any change or effect that, individually or when taken together with all other such changes or effects which have occurred prior to the date of determination of the occurrence of the Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, assets (including intangible assets), financial condition, or results of operations of the entity.

				

				

				

				

			

		

		                                                                   
		
			2

		

		

		

		

		

		

		                                  (b)       The Company.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of the state of California.  It has all requisite corporate power, franchises, licenses, permits, and authority to own its properties and assets and to carry on its business as it has been and is being conducted. The Company is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a Material Adverse Effect (as defined above) on the Company.

		

		                      2.1.2    Authority.  The Parties have all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Parties of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the parts of the Parties, including the approval of the Board of Directors of each Party.  This Agreement has been duly executed and delivered by the Parties to each other and constitutes a valid and binding obligation of each Party enforceable in accordance with its terms, except that such enforceability may be subject to: (a) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors’ rights generally; and (b) general equitable principles.  Subject to the satisfaction of the conditions set forth in Article 3 below, the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation, or acceleration of any obligation, or to loss of a material benefit under, or the creation of a lien, pledge, security interest, charge, or other encumbrance on any assets of any of the Parties (any such conflict, violation, default, right, loss, or creation being referred to herein as a “Violation”) pursuant to: (i) any provision of the organization documents of the Parties; or  (ii) any loan or credit agreement, note, bond, mortgage, indenture, contract, lease, or other agreement, or instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule, or regulation applicable to each of the Parties’ respective properties or assets, other than in the case of  any such Violation which individually or in the aggregate would not have a Material Adverse Effect on any of the Parties.

		

		                      2.1.3    Capitalization of the Parties.

			

		                                  (a)       The Company.  The capital stock of the Company consists of 10,000,000 authorized shares of Common Stock, of which 5,100,000 are currently issued and outstanding and held by Seller.

		

		                                  (b)       Upon issuance pursuant to the terms of this Agreement, the Shares will be duly and validly issued, fully paid and nonassessable, and issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended (the “Act”), and any relevant state securities laws or pursuant to valid exemptions therefrom.  The Shares are free of restrictions on transfer other than restrictions on transfer as set forth in the Disclosure Schedules and under applicable state and federal securities laws.  The Shares shall be issued in a private transaction and consequently will be deemed to be “Restricted Securities” as set forth in Rule 144 promulgated under the Act.

		

		                                  (c)       Except as set forth on the Disclosure Schedules, there are no options, warrants, rights, calls, commitments, plans, contracts, or other agreements of any character granted or issued by any of the Parties which provide for the purchase, issuance, or transfer of any additional shares of the capital stock of the Parties nor are there any outstanding securities

		

		

		

		

		
			3

		

		

		

		

		

		

		granted or issued by any of the Parties that are convertible into any shares of the equity securities of the Parties, and none is authorized. None of the Parties have outstanding any bonds, debentures, notes, or other indebtedness the holders of which have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of the Parties' capital stock on any matter.

		

		                                  (d)       Except as set forth on the Disclosure Schedules, none of the Parties are a party or subject to any agreement or understanding, and, to the best of the Parties' knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a shareholder or director of any of the Parties.

		

		                                  (e)       Except as set forth on the Disclosure Schedules, none of the Parties have granted or agreed to grant any registration rights, including piggyback rights, to any person or entity.

		

		                      2.1.4    Subsidiaries.  “Subsidiary” or “Subsidiaries” means all corporations, trusts, partnerships, associations, joint ventures, or other Persons, as defined below, of which any of the Parties or any Subsidiary of any of the Parties owns not less than 20% of the voting securities or other equity or of which any of the Parties or any Subsidiary of any of the Parties possesses, directly or indirectly, the power to direct or cause the direction of the management and policies, whether through ownership of voting shares, management contracts, or otherwise.  “Person” means any individual, corporation, trust, association, partnership, proprietorship, joint venture, or other entity.  Prior to the Closing of this Agreement, there are no Subsidiaries of any of the Parties other than as disclosed herein or disclosed on the Disclosure Schedules.

		

		                      2.1.5    No Defaults.  None of the Parties has received notice that they would be, with the passage of time, in default or violation of any term, condition, or provision of: (i) their Articles of Incorporation or Bylaws; (ii) any judgment, decree, or order applicable to any of the Parties; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, or other instrument to which any of the Parties is now a party or by which they or any of their properties or assets may be bound, except for defaults and violations which, individually or in the aggregate, would not have a Material Adverse Effect on any of the Parties.

		

		                      2.1.6    Governmental Consents.  Any consents, approvals, orders, or authorizations of or registrations, qualifications, designations, declarations, or filings with or exemptions by (collectively “Consents”), any court, administrative agency, or commission, or other federal, state, or local governmental authority or instrumentality, whether domestic or foreign (each a “Governmental Entity”), which may be required by or with respect to any of the Parties in connection with the execution and delivery of this Agreement or the consummation by the Parties of the transactions contemplated hereby, except for such Consents which if not obtained or made would not have a Material Adverse Effect on any of the Parties for the transactions contemplated by this Agreement, are the responsibility of the respective Party.  Each of the Parties hereby represents and warrants that such Consents have been obtained by them, if necessary.

		

		

		

		

		
			4

		

		

		

		

		

		

		                      2.1.7    Financial Statements.  The Company does not have an outside independent auditing firm.  The Company will furnish Buyer with any copies it may have, if there be any, of its financial statements (the “Financial Statements”), which will fairly present the financial positions of the Company as at the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring audit adjustments not material in scope or amount).  To the best of the Company's directors' knowledge and belief, there has been no change in the Company's accounting policies or the methods of making accounting estimates or changes in estimates that are material to the Financial Statements, except as described in the notes thereto.

		

		                      2.1.8    Absence of Undisclosed Liabilities.  To the best of their knowledge and belief, none of the Parties have any liabilities or obligations (whether absolute, accrued, or contingent) except: (i) liabilities that are accrued or reserved against in their respective Balance Sheets; or (ii) additional liabilities reserved against since the date of the Financial Statements that (x) have arisen in the ordinary course of business; (y) are accrued or reserved against on their books and records; and (z) amount in the aggregate to less than $10,000.

		

		                      2.1.9    Absence of Changes.  To the best of their knowledge and belief, since the date of the Financial Statements, the Parties have conducted their businesses in the ordinary course and there has not been: (i) any Material Adverse Effect on the business, financial condition, liabilities, or assets of the Parties or any development or combination of developments of which management of the Parties has knowledge which is reasonably likely to result in such an effect; (ii) any damage, destruction, or loss, whether or not covered by insurance, having a Material Adverse Effect on the Parties; (iii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock, or property) with respect to the capital stock of the Parties; (iv) any increase or change in the compensation or benefits payable or to become payable by the Parties to any of their employees, except in the ordinary course of business consistent with past practice; (v) any sale, lease, assignment, disposition, or abandonment of a material amount of property of the Parties, except in the ordinary course of business; (vi) any increase or modification in any bonus, pension, insurance, or other employee benefit plan, payment, or arrangement made to, for, or with any of their employees; (vii) the granting of stock options, restricted stock awards, stock bonuses, stock appreciation rights, and similar equity based awards; (viii) any resignation or termination of employment of any office of the Parties; and the Parties, to the best of their knowledge, do not know of the impending resignation or termination of employment of any such office; (ix) any merger or consolidation with another entity, or acquisition of assets from another entity except in the ordinary course of business; (x) any loan or advance by the Parties to any person or entity, or guaranty by the Parties of any loan or advance; (xi) any amendment or termination of any contract, agreement, or license to which any of the Parties is a party, except in the ordinary course of business; (xii) any mortgage, pledge, or other encumbrance of any asset of any of the Parties; (xiii) any waiver or release of any right or claim of the Parties, except in the ordinary course of business; (xiv) any write off as uncollectible any note or account receivable or portion thereof; or (xv) any agreement by any of the Parties to do any of the things described in this Section 2.1.9.

		

		                      2.1.10  Intellectual Property.  The Parties each have sufficient title and ownership of all patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights, and processes (collectively, the “Entitlements”) necessary for their businesses as now conducted without any conflict with or infringement of the rights of others.  There are no

		

		

		

		

		
			5

		

		

		

		

		

		

		outstanding options, licenses, or agreements of any kind relating to the Entitlements, nor are any of the Parties bound by or a party to any options, licenses, or agreements of any kind with respect to the Entitlements of any other person or entity.  None of the Parties has received any communications alleging that they have violated or, by conducting their businesses as proposed, would violate any of the Entitlements of any other person or entity.  None of the Parties are aware that any of their employees is obligated under any contract (including licenses, covenants, or commitments of any nature) or other agreement, or subject to any judgment, decree, or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Parties or that would conflict with each of the Parties' respective business as proposed to be conducted.  Neither the execution or delivery of this Agreement, nor the carrying on of each of the Parties' respective business by their respective employees, nor the conduct of each of the Parties' respective business as proposed, will, to the best of the Parties' knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant, or instrument under which any of such employees is now obligated.  None of the Parties believe that it is or will be necessary to utilize any inventions of any of its employees (or people it currently intends to hire) made prior to their employment by any of the Parties.

		

		                      2.1.11  Certain Agreements.  To the best of the Parties' knowledge and belief, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (i) result in any payment (including, without limitation, severance, unemployment compensation, parachute payment, bonus, or otherwise), becoming due to any director, employee, or independent contractor of any of the Parties, from any other Party under any agreement or otherwise; (ii) materially increase any benefits otherwise payable under any agreement; or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

		

		                      2.1.12  Compliance with Other Instruments.  To the best of the Parties' knowledge and belief, none of the Parties are in violation or default of any provision of their respective articles of incorporation or bylaws, or of any instrument, judgment, order, writ, decree, or contract to which they are a party or by which they are bound, or, to the best of their knowledge, of any provision of any federal or state statute, rule, or regulation which may be applicable to them. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree, or contract, or an event that results in the creation of any lien, charge, or encumbrance upon any assets of any Party or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to any Party, its businesses, or operations, or any of its assets or properties.

		

		                      2.1.13  Employee Benefit Plans.  The Parties have no employee benefit plans (including without limitation all plans which authorize the granting of stock options, restricted stock, stock bonuses, or other equity based awards) covering active, former, or returned employees, other than as listed in the Disclosure Schedules.

		

		                      2.1.14  Other Personal Property.  The books and records of each of the Parties contain a complete and accurate description, and specify the location, of all trucks, automobiles,

		

		

		

		

		
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		machinery, equipment, furniture, supplies, and other tangible personal property owned by, in the possession of, or used by the Parties in connection with their businesses. Except as set forth in the Disclosure Schedules, no personal property used by the Parties in connection with their businesses is held under any lease, security agreement, conditional sales contract, or other title retention or security arrangement.

		

		                      2.1.15  Properties and Liens.  Except as reflected in the Financial Statements or as set forth in the Disclosure Schedules, and except for statutory mechanics’ and material men’s liens, liens for current taxes not yet delinquent, the Parties own, free and clear of any liens, claims, charges, options, or other encumbrances, all of their tangible and intangible property, real and personal, whether or not reflected in the Financial Statements (except that sold or disposed of in the ordinary course of business since the date of such statements) and all such property acquired since the date of such statements.  All real property and tangible personal property of the Parties is in good operating condition and repair, ordinary wear and tear excepted.

		

		                      2.1.16  Inventory.  In reliance upon their respective auditing firms, the inventories of the Parties shown on the Financial Statements and inventories acquired by them subsequent to the date of the Financial Statements consist solely of items of a quality and quantity usable and salable in the normal course of business, with the exception of obsolete materials and materials below standard quality, all of which have been written down in the books of the Parties to net realizable market value or have been provided for by adequate reserves.  Except for sales made in the ordinary course of business, all inventory is the property of the Parties.  No items are subject to security interests, except as set forth in the Disclosure Schedules.  The value of the inventories has been determined on a first-in, first-out basis consistent with prior years.

		

		                      2.1.17  Major Contracts.  Except as otherwise disclosed in the Disclosure Schedules, none of the Parties is a party or subject to:

		

		                                  (a)       Any union contract, or any employment contract or arrangement providing for future compensation, written or oral, with any officer, consultant, director, or employee which is not terminable by the Party on 30 days’ notice or less without penalty or obligations to make payments related to such termination;

		

		                                  (b)       Any joint venture contract, partnership agreement or arrangement or any other agreement which has involved or is expected to involve a sharing of revenues with other persons or a joint development of products with other persons;

		

		                                  (c)       Any manufacture, production, distribution, sales, franchise, marketing, or license agreement, or arrangement by which products or services of the Party are developed, sold, or distributed;

		

		                                  (d)       Any material agreement, license, franchise, permit, indenture, or authorization which has not been terminated or performed in its entirety and not renewed which may be, by its terms, accelerated, terminated, impaired, or adversely affected by reason of the execution of this Agreement, or the consummation of the transactions contemplated hereby or thereby;

		

		

		

		

		
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		                                  (e)       Any material agreement, contract, or commitment that requires the consent of another person for the Party to enter into or consummate the transactions contemplated by this Agreement;

		

		                                  (f)       Except for object code license agreements for any of the Party's executed in the ordinary course of business, any indemnification by the Party with respect to infringements of proprietary rights; or

		

		                                  (g)       Any contract containing covenants purporting to materially limit the Party's freedom to compete in any line of business in any geographic area.

		

		All contracts, plans, arrangements, agreements, licenses, franchises, permits, indentures, authorizations, instruments, and other commitments of the Parties are valid and in full force and effect and to the best of their knowledge, neither the Parties themselves nor any other party thereto, breached any material provisions of, or is in default in any material respect under the terms thereof.

		

		                      2.1.18  Questionable Payments.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, has: (i) made any payment or provided services or other favors in the United States or any foreign country in order to obtain preferential treatment or consideration by any Governmental Entity with respect to any aspect of the business of the Parties; or (ii) made any political contributions that would not be lawful under the laws of the United States, any foreign country or any jurisdiction within the United States or any foreign country.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, has been or is the subject of any investigation by any Governmental Entity in connection with any such payment, provision of services, or contribution.

		

		                      2.1.19  Recent Transactions.  None of the Parties, nor to their knowledge any director, officer, employee, or agent of any of the Parties, is participating in any discussions and do not intend to engage in any discussion: (i) with any representative of any corporation or corporations regarding the consolidation or merger of any of the Parties with or into any such corporation or corporations; (ii) with any corporation, partnership, association, or other business entity or any individual regarding the sale, conveyance, or disposition of all or substantially all of the assets of the Parties or a transaction or series of related transactions in which more than 50% of the voting power of any of the Parties is disposed of; or (iii) regarding any other form of acquisition, liquidation, dissolution, or winding up of the Parties.

		

		                      2.1.20  Leases in Effect.  All real property leases and subleases as to which any of the Parties is a party and any amendments or modifications thereof (each a “Lease” and, collectively, the “Leases”) are valid, in full force and effect and enforceable, and there are no existing defaults on the part of any Party and no Party has received nor given notice of default or claimed default with respect to any Lease, nor is there any event that with notice or lapse of time, or both, would constitute a default thereunder.  Except as set forth on the Disclosure Schedules, no consent is required from any Party under any Lease in connection with the completion of the transactions contemplated by this Agreement, and none of the Parties have received notice that any party to any Lease intends to cancel, terminate, or refuse to renew the same or to exercise any option or other right

		

		

		

		

		
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		thereunder, except where the failure to receive such consent, or where such cancellation, termination, or refusal would not have a Material Adverse Effect on the Parties.

		

		                      2.1.21  Taxes.  Except as set forth elsewhere in this Agreement or in the Disclosure Schedules:

		

		                                  (a)       All taxes, assessments, fees, penalties, interest, and other governmental charges with respect to the Parties which have become due and payable by April 15, 2007 have been paid in full or adequately reserved against by the Parties, and all taxes, assessments, fees, penalties, interest, and other governmental charges which have become due and payable subsequent to April 15, 2007 have been paid in full or adequately reserved against on their books of account and such books are sufficient for the payment of all unpaid federal, state, local, foreign, and other taxes, fees, and assessments (including without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees' income withholding, social security, and unemployment taxes), and all interest and penalties thereon with respect to the periods then ended and for all periods prior thereto;

		

		                                  (b)       There are no agreements, waivers, or other arrangements providing for an extension of time with respect to the assessment of any tax or deficiency against the Parties, nor are there any actions, suits, proceedings, investigations, or claims now pending against the Parties in respect of any tax or assessment, or any matters under discussion with any federal, state, local, or foreign authority relating to any taxes or assessments, or any claims for additional taxes or assessments asserted by any such authority; and

		

		                                  (c)       There are no liens for taxes upon the assets of the Parties except for taxes that are not yet payable.  The Parties have withheld all taxes required to be withheld in respect of wages, salaries, and other payments to all employees, officers, and directors and timely paid all such amounts withheld to the proper taxing authority.

		

		                      2.1.22  Disputes and Litigation  Except as disclosed in the Disclosure Schedules, there is no suit, claim, action, litigation, or proceeding pending or, to the knowledge of the Parties, threatened against or affecting any of the Parties, respectively, or any of their properties, assets, or business or to which any of the Parties is a party, in any court or before any arbitrator of any kind or before or by any Governmental Entity, which would, if adversely determined, individually or in the aggregate, have a Material Adverse Effect on the Parties, nor is there any judgment, decree, injunction, rule, or order of any Governmental Entity or arbitrator outstanding against any of the Parties, respectively, and having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.  To the knowledge of the Parties, there is no investigation pending or threatened against any of the respective Parties before any foreign, federal, state, municipal, or other governmental department, commission, board, bureau, agency, instrumentality, or other Governmental Entity.

		

		                      2.1.23  Compliance with Laws.  Except as set forth in the Disclosure Schedules, to the best of their knowledge and belief, none of the Parties' businesses is being conducted in violation of, or in a manner which could cause liability under any applicable law, rule, or regulation, judgment, decree, or order of any Governmental Entity, except for any violations or practices, which, individually or in the aggregate, have not had and will not have a Material Adverse Effect on the Parties.  The Parties each have all franchises, permits, licenses, and any

		

		

		

		

		
			9

		

		

		

		

		

		

		similar authority necessary for the conduct of their business as now being conducted by them, the lack of which could materially and adversely affect the business, properties, prospects, or financial condition of the Parties and believes they can obtain, without undue burden or expense, any similar authority for the conduct of their business as it is planned to be conducted.  To the best of their respective knowledge and belief, none of the Parties are in default in any material respect under any of such franchises, permits, licenses, or other similar authority.

		

		                      2.1.24  Related Party Transactions.  To the best of each of the Parties' knowledge and belief, no employee, officer, or director of any Party nor member of his or her immediate family is indebted to that Party or any other Party, nor is any Party indebted (or committed to make loans or extend or guarantee credit) to any of them.  To the best of each of the Parties’ knowledge, none of such persons has any direct or indirect ownership interest in any firm or corporation with which any of the Parties is affiliated or with which any of the Parties has a business relationship, or any firm or corporation that competes with the Parties, except that employees, officers, or directors of the Parties and members of their immediate families may own stock in publicly traded companies that may compete with the Parties.  To the best knowledge of each of the Parties, respectively, no member of the immediate family of any officer or director of any of the Parties is directly or indirectly interested in any material contract with any of the Parties.

		

		                      2.1.25  Minute Books.  The minute books of the Company provided to Buyer contain a complete summary of all meetings of directors and shareholders since the time of incorporation and reflect all transactions referred to in such minutes accurately in all material respects.

		

		                      2.1.26  Disclosure.  No representation or warranty made by any of the Parties in this Agreement, nor any document, written information, statement, financial statement, certificate, or exhibit prepared and furnished or to be prepared and furnished by the Parties or their representatives pursuant hereto or in connection with the transactions contemplated hereby, when taken together, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished, to the best of each of the Parties' knowledge and belief.

		

		                      2.1.27  Reliance.  The foregoing representations and warranties are made by each Party with the knowledge and expectation that the other Parties are placing reliance thereon.

		

		          2.2       Representations of Seller.  Seller represents and warrants to Buyer as follows:

		

		                                  (a)       Seller has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the common stock offered by Buyer of the size contemplated.  Seller represents that it is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment.  Seller has had a full opportunity to inspect the books and records of the Buyer and to make any and all inquiries of Buyer officers and directors regarding the Buyer and its business as Seller has deemed appropriate.

		

		

		

		

		
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		                                  (b)       Seller is an “Accredited Investor” as defined in Regulation D of the Securities Act of 1933 (the “Act”) or Seller, either alone or with Seller’s professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Buyer or any affiliate or selling agent of Buyer, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Seller is capable of evaluating the merits and risks of an investment in the common stock offered by Buyer and of making an informed investment decision with respect thereto and has the capacity to protect Seller’s own interests in connection with Seller’s proposed investment in the Buyer’s common stock.

		

		                                  (c)       Seller is acquiring the Buyer’s common stock solely for Seller’s own account as principal, for investment purposes only and not with a view to the resale or dis­tribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Buyer’s common stock.

		

		                                  (d)       Seller will not sell or otherwise transfer the Buyer’s common stock without registration under the Act or an exemption therefrom and fully understands and agrees that Seller must bear the economic risk of Seller’s purchase for an indefinite period of time because, among other reasons, the Buyer’s common stock have not been registered under the Act or under the securi­ties laws of any state and, therefore, cannot be resold, pledged, assigned or other­wise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

		

		          2.3       Representations of Buyer.  Buyer represents and warrants to Seller as follows:

		

		                                  (a)       Buyer has adequate means of providing for current needs and contingencies, has no need for liquidity in the investment, and is able to bear the economic risk of an investment in the common stock offered by Seller of the size contemplated.  Buyer represents that it is able to bear the economic risk of the investment and at the present time can afford a complete loss of such investment.  Buyer has had a full opportunity to inspect the books and records of the Seller and to make any and all inquiries of Seller officers and directors regarding the Seller and its business as Buyer has deemed appropriate.

		

		                                  (b)       Buyer is an “Accredited Investor” as defined in Regulation D of the Securities Act of 1933 (the “Act”) or Buyer, either alone or with Buyer’s professional advisers who are unaffiliated with, have no equity interest in and are not compensated by Seller or any affiliate or selling agent of Seller, directly or indirectly, has sufficient knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of an investment in the common stock offered by Seller and of making an informed investment decision with respect thereto and has the capacity to protect Buyer’s own interests in connection with Buyer’s proposed investment in the Seller’s common stock.

		

		                                  (c)       Buyer is acquiring the Seller’s common stock solely for Buyer’s own account as principal, for investment purposes only and not with a view to the resale or dis­tribution thereof, in whole or in part, and no other person or entity has a direct or indirect beneficial interest in such Seller’s common stock.

		

		

		

		

		
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		                                  (d)       Buyer will not sell or otherwise transfer the Seller’s common stock without registration under the Act or an exemption therefrom and fully understands and agrees that Buyer must bear the economic risk of Buyer’s purchase for an indefinite period of time because, among other reasons, the Seller’s common stock have not been registered under the Act or under the securi­ties laws of any state and, therefore, cannot be resold, pledged, assigned or other­wise disposed of unless they are subsequently registered under the Act and under the applicable securities laws of such states or unless an exemption from such registration is available.

		

		
			ARTICLE 3

				CONDITIONS PRECEDENT

					

				

		

		
			          3.1       Conditions to Each Party’s Obligations.  The respective obligations of each Party hereunder shall be subject to the satisfaction prior to or at the Closing of the following conditions:

				

				                      (a)       No Restraints.  No statute, rule, regulation, order, decree, or injunction shall have been enacted, entered, promulgated, or enforced by any court or Governmental Entity of competent jurisdiction which enjoins or prohibits the consummation of this Agreement and shall be in effect.

				

				                      (b)       Legal Action.  There shall not be pending or threatened in writing any action, proceeding, or other application before any court or Governmental Entity challenging or seeking to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain any material damages.

				

				          3.2       Conditions to Seller’s Obligations.  The obligations of Seller shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Seller:

				

				                      (a)       Representations and Warranties of Buyer.  The representations and warranties of Buyer set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Seller shall have received a certificate signed on behalf of Buyer by the President or Chief Executive Officer of Buyer to such effect on the Closing.

				

				                      (b)       Performance of Obligations of Buyer.  Buyer shall have performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Seller shall have received a certificate signed on behalf of Buyer by the President or Chief Executive Officer of Buyer to such effect on the Closing.

				

				          3.3       Conditions to Buyer’s Obligations.  The obligations of Buyer shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Buyer:

				

				

				

			

		

		
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		                      (a)       Representations and Warranties of Seller and the Company.  The representations and warranties of Seller and the Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Buyer shall have received certificates signed on behalf of Seller and the Company by the President or Chief Executive Officer of each Seller and the Company to such effect on the Closing.

		

		                      (b)       Performance of Obligations of Seller and the Company.  Seller and the Company shall have performed all agreements and covenants required to be performed by them under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.  Buyer shall have received certificates signed on behalf of Seller and the Company by the President or Chief Executive Officer of each Seller and the Company to such effect on the Closing.

		

		                      (c)       Governmental Approvals.  All Consents of Governmental Entities legally required by Seller and the Company for the transactions contemplated by this Agreement shall have been filed, occurred, or been obtained, other than such Consents, the failure of which to obtain would not have a Material Adverse Effect on the consummation of the transactions contemplated by this Agreement.

		

		                      (d)       Consents of Other Third Parties.  Seller and the Company shall have received and delivered to Buyer all requisite consents and approvals of all lenders, lessors, and other third parties whose consent or approval is required in order for Seller and the Company to consummate the transactions contemplated by this Agreement, or in order to permit the continuation after the Closing of the business activities of the Company in the manner such business is presently carried on by it.  Buyer shall have received copies of any necessary written consent(s) to this Agreement and the transactions contemplated herein.

		

		                      (e)       Material Adverse Change.  Since the date hereof and through Closing, there shall not have occurred any change, occurrence, or circumstance in Seller or the Company having or reasonably likely to have, individually or in the aggregate, in the reasonable judgment of Buyer, a Material Adverse Effect on the Parties or on the transactions contemplated by this Agreement.

		

		
			ARTICLE 4

					

				CLOSING AND DELIVERY OF DOCUMENTS

					

				

		

		
			          4.1       Time and Place.  The closing of the transactions contemplated by this Agreement shall take place at the offices of Buyer, located at 11661 San Vicente Boulevard, Suite 707, Los Angeles, California 90049, immediately upon the full execution of this Agreement, the satisfaction of all conditions, and the delivery of all required documents, or at such other time and place as the Parties mutually agree upon (which time and place are hereinafter referred to as the “Closing”).

				

				

				

			

		

		
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		          4.2       Deliveries by Seller.  At Closing, Seller shall make the following deliveries to Buyer:

		

		                      (a)       A cancelled stock certificate representing the Shares previously owned by Seller as set forth in Section 1.1 above;

		

		                      (b)       A certificate of good standing of the Seller;

		

		                      (c)       A certificate executed by Seller certifying that: (i)  all Seller’s representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) Seller has performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement; and

		

		                      (d)       Certified resolutions of the Board of Directors of Seller, in form satisfactory to counsel for Buyer, authorizing the execution and performance of this Agreement.

		

		          4.3       Deliveries by the Company.  At Closing, the Company shall make the following deliveries to Buyer:

		

		                      (a)       A certificate representing the Shares that Buyer is acquiring as set forth in Section 1.1 above;

		

		                      (b)       A certificate of good standing for the Company;

		

		                      (c)       A certificate executed by the Company certifying that: (i)  all the Company's representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) the Company has performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement; and

		

		                      (d)       Certified resolutions of the Board of Directors of the Company, in form satisfactory to counsel for Buyer, authorizing the execution and performance of this Agreement;

		

		                      (e)       The minute book and corporate records of the Company; and

		

		                      (f)       The financial statements of the Company as required in Section 2.1.7.

		

		          4.4       Deliveries by Buyer. At Closing, Buyer shall make the following deliveries to Seller:

		

		                      (a)       A certificate executed by Buyer certifying that: (i)  Buyer’s representations and warranties under this Agreement are true as of the Closing, as though each of those representations and warranties had been made on that date; and (ii) Buyer has performed all agreements and covenants required to be performed by it under this Agreement prior to the

		

		

		

		

		
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		Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement;

		

		                      (b)       A certificate of good standing for Buyer; and

		

		                      (c)       Certified resolutions of the Board of Directors of Buyer in form satisfactory to counsel for Seller, authorizing the execution and performance of this Agreement.

		

		
			ARTICLE 5

				INDEMNIFICATION

					

				

		

		
			          5.1       Seller and the Company’s Indemnity Obligations.

				

				                      (a)       Upon receipt of notice thereof, Seller and the Company shall, jointly and severally, indemnify, defend, and hold harmless Buyer from any and all claims, demands, liabilities, damages, deficiencies, losses, obligations, costs and expenses, including attorney fees and any costs of investigation that Buyer shall incur or suffer, that arise, result from or relate to: (i) any breach of, or failure by Seller or the Company to perform, any of their representations, warranties, covenants, or agreements in this Agreement or in any schedule, certificate, exhibit, or other instrument furnished or to be furnished by Seller and/or the Company under this Agreement; and (ii) the employment of any of the Company’s employees which is in violation of any law, regulation, or ordinance of any Governmental Entity.

				

				                      (b)       Buyer shall notify promptly Seller and the Company of the existence of any claim, demand, or other matter to which Seller and the Company’s indemnification obligations would apply, and shall give them a reasonable opportunity to defend the same at their own expense and with counsel of their own selection, provided that Seller shall at all times also have the right to fully participate in the defense. If Seller and the Company, within a reasonable time after this notice, fails to defend, Buyer shall have the right, but not the obligation, to undertake the defense of, and, with the written consent of Seller and the Company, to compromise or settle the claim or other matter on behalf, for the account, and at the risk, of Seller and the Company.

				

				          5.2       Buyer’s Indemnity Obligations.

				

				                      (a)       Upon receipt of notice thereof, Buyer shall indemnify, defend, and hold harmless Seller and/or the Company from any and all claims, demands, liabilities, damages, deficiencies, losses, obligations, costs, and expenses, including attorney fees and any costs of investigation that Seller and/or the Company shall incur or suffer, that arise, result from or relate to any breach of, or failure by Buyer to perform any of its representations, warranties, covenants, or agreements in this Agreement or in any schedule, certificate, exhibit, or other instrument furnished or to be furnished by Buyer under this Agreement.

				

				                      (b)       Seller and/or the Company shall notify promptly Buyer of the existence of any claim, demand or other matter to which Buyer’s indemnification obligations would apply, and shall give it a reasonable opportunity to defend the same at its own expense and with counsel of its own selection, provided that Seller and the Company shall at all times also have the right to fully participate in the defense. If Buyer, within a reasonable time after this notice, fails to 

				

				

				

			

		

		
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			defend, Seller and the Company shall have the right, but not the obligation, to undertake the defense of, and, with the written consent of Buyer, to compromise or settle the claim or other matter on behalf, for the account, and at the risk, of Buyer.

			

		

		
			ARTICLE 6

				DEFAULT, AMENDMENT AND WAIVER

					

				

		

		
			          6.1       Default.  Upon a breach or default under this Agreement by any of the Parties (following the cure period provided herein), the non-defaulting party shall have all rights and remedies given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.  Notwithstanding the foregoing, in the event of a breach or default by any Party hereto in the observance or in the timely performance of any of its obligations hereunder which is not waived by the non-defaulting Party, such defaulting Party shall have the right to cure such default within 15 days after receipt of notice in writing of such breach or default.

				

				          6.2       Waiver and Amendment.  Any term, provision, covenant, representation, warranty, or condition of this Agreement may be waived, but only by a written instrument signed by the party entitled to the benefits thereof.  The failure or delay of any party at any time or times to require performance of any provision hereof or to exercise its rights with respect to any provision hereof shall in no manner operate as a waiver of or affect such party's right at a later time to enforce the same.  No waiver by any party of any condition, or of the breach of any term, provision, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other condition or of the breach of any other term, provision, covenant, representation, or warranty.  No modification or amendment of this Agreement shall be valid and binding unless it be in writing and signed by all Parties hereto.

				

			

		

		
			ARTICLE 7

				MISCELLANEOUS

					

				

		

		
			          7.1       Expenses.  Whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear all taxes of any nature (including, without limitation, income, franchise, transfer, and sales taxes) and all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such party's covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants' fees, and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect, and all such taxes, fees, and expenses of the Parties hereto shall be paid prior to Closing.

				

				          7.2       Notices.  Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by facsimile transmission to the addresses of the Parties as follows:

				

				

				

			

		

		
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				To Buyer:                                 Material Technologies, Inc.

					                                                Attn: Robert M. Bernstein, Chief Executive Officer

					                                                11661 San Vicente Boulevard, Suite 707

					                                                Los Angeles, California 90049

					                                                Fax: (310) 473-3177

					

					To the Company:                      Bridge Testing Concepts, Inc.

					                                                Attn: Brent Phares, President

					                                                11661 San Vicente Boulevard, Suite 707

					                                                Los Angeles, California 90049

					                                                Fax: (310) 473-3177

					

					To Seller:                                  Brent Phares

					                                                702 NW Boulder Brooks Dr.

					                                                Ankeny, Iowa 50023

					

					With a copy to:                         Oswald & Yap

					                                                Attn: Lynne Bolduc, Esq.

					                                                16148 Sand Canyon Avenue

					                                                Irvine, CA  92618

					                                                Fax: (949) 788-8980

			

		

		The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid.  If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient.  If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. If notice is given by facsimile transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

			

			          7.3       Entire Agreement.  This Agreement, together with the Schedule and Exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof.  No understanding, promise, inducement, statement of intention, representation, warranty, covenant, or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement, or in the schedules or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant, or condition not so set forth.

			

			          7.4       Survival of Representations.  All statements of fact (including financial statements) contained in the Schedules, the exhibits, the certificates, or any other instrument delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective party hereunder.  All representations, warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or 

			

			

			

		

		
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		on behalf of the Parties or of any information a party may have in respect hereto.  Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any party hereto, notwithstanding that such party knew or should have known at the time of Closing that such right or remedy existed.

		

		          7.5       Incorporated by Reference.  The recitals, schedules, exhibits, and all documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.

		

		          7.6       Remedies Cumulative.  No remedy herein conferred upon the Parties is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

		

		          7.7       Execution of Additional Documents.  Each Party hereto shall make, execute, acknowledge, and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

		

		          7.8       Costs and Fees.  Each of the Parties hereto is responsible for their own costs and fees incurred with respect to this Agreement or to any of the transactions contemplated hereby.

		

		          7.9       Choice of Law.  This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

		

		          7.10      Jurisdiction.  The parties submit to the jurisdiction of the Courts of the County of Orange, State of California or a Federal Court empaneled in the State of California for the resolution of all legal disputes arising under the terms of this Agreement.

		

		          7.11      Attorneys’ Fees.  In the event any Party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys' fees, as may be fixed by the court.

		

		          7.12      Binding Effect and Assignment.  This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives, and assigns.

		

		          7.12      Counterparts; Facsimile Signatures.  This Agreement may be executed simul­taneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The Parties agree that facsimile signatures of this Agreement shall be deemed a valid and binding execution of this Agreement. 

		

		          7.14       Conflict Waiver.  Seller hereby acknowledges that Oswald & Yap (“the Firm”) represents the Buyer with various legal matters and does not represent the Seller in connection

		

		

		

		
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		with this Agreement or the contemplated transaction nor in any other respect. Seller further acknowledges that the Firm has drafted this Agreement. Seller has been given the opportunity to consult with counsel of their choice regarding their rights under this Agreement.  Seller hereby waives any action it may have against the Firm regarding such conflict of interest.

		

		

		

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

		

		

		BUYER:                                                                     THE COMPANY:

			

		MATERIAL TECHNOLOGIES, INC.,                   BRIDGE TESTING CONCEPTS, INC.,

		a Delaware corporation                                                 a California corporation 

		

		

		/s/ Robert M. Bernstein                                                 /s/ Brent Phares                                               

		By: Robert M. Bernstein                                               By: Brent Phares

		Its: Chief Executive Officer                                            Its: President

		

		SELLER:

			

		BRENT PHARES,

		an individual

		

		

		 /s/ Brent Phares                                               

		By: Brent Phares

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
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			EXHIBIT A

					

				INTELLECTUAL PROPERTY OF THE COMPANY

					

				

		

		
			          Energy-based methods are widely used to obtain solutions to elasticity problems and to determine deflections in structures. The fundamentals of work-energy methods of analyzing structures are well documented elsewhere and will not be repeated in detail here. However, in brief these methods are all based upon the principle of conservation of energy that states that the work (W) done by external forces applied to the structure and the internal strain energy (U) stored in the structural members must be equal. Because this principle must always be satisfied, the concept developed by Dr. Brent M. Phares focuses exclusively on utilizing sensed information to assess changes in a quantity directly related to strain energy.

				

				          The internal strain energy, U, for a generic volume, V, can be expressed in terms of the internal energy per unit volume. This quantity is more commonly referred to as the strain energy density, U0.  Thus, the total strain energy is given by:

				

			

		

		
			

				

			

		

		
			          The strain energy density for any elastic isotropic material (as those used in civil structures typically are) is given in terms of the three principal strains, ε, by:

		

		

		and in terms of orthogonal coordinates (x, y, z) as:

			

			

		For cases where the measured orthogonal strain is dominated by a single direction, which is frequently the case in civil structures, the strain energy density reduces to:

			

		

		
			

		

		with

		

			

			

		

		
			          Where E is the modulus of elasticity and v is Poisson's Ratio. Because strain can only be sensed at discrete locations, one can never truly determine, from sensed information, the strain energy for the entire 

				

				

				

				

			

			

			

			

			

			

			volume. However, changes in sensed strain at a single point (an infinitesimal volume) are fortunately directly related to changes in the sum-total strain energy.

			

			          Strain energy density, U0, at a point in time is, by definition, an indicator of the energy stored in a system in response to an applied external load. As such, strain energy density is a possible assessment metric. However, recognizing that the goal with a structural health monitoring system is to identify changes in the structure, coupled with the fact that St. Venant's principle indicates that the zone of influence for changes is relatively small, a quantity termed the cumulative live load strain energy density (CLLSED) is proposed here. This quantity, given mathematically below, is directly related to the sum of strain energy density with time and enhances the sensitivity of strain measurements through mathematical integration. As measured strain is directly related to structural characteristics, the CLLSED is a damage and deterioration indicator.

			

		

		
			

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		

		
			EXHIBIT B

					

				MATERIAL TECHNOLOGIES, INC. DISCLOSURE SCHEDULE

					

				

		

		
			The Buyer incorporates the following documents by reference in this Agreement:

				

				The Buyer’s Annual Report on Form 10-KSB filed for the fiscal year ended December 31, 2006; the Buyer’s Quarterly Reports on Form 10-QSB filed for the quarters ended March 31, 2007 and June 30, 2007; and all reports and documents filed by the Buyer pursuant to Sections 13, 14, or 15(d) of the Exchange Act, shall be deemed to be incorporated by reference herein and to be a part from the respective date of filing of such documents.  Any statement incorporated by reference herein shall be deemed to be modified or superseded for purposes of the Agreement to the extent that a statement contained herein or in any subsequently filed document, which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement.  Any statement modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this Agreement.

				

				The items set forth below are exceptions to the representations and warranties of Material Technologies, Inc. (the “Buyer”) set forth in Section 2 of the Agreement.  Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

				

			

				Section	Exception
	  	
	2.4	     Subsidiaries of the Buyer include:
		
							Matech International, Inc., a Nevada corporation

							
	Matech Aerospace, Inc., a Nevada corporation

							
	Materials Monitoring Technologies, Inc., a Florida corporation

							
	Stress Analysis Technologies, Inc., a Florida corporation
						

					

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

			

		

		
			EXHIBIT C

					

				BRIDGE TESTING CONCEPTS, INC. DISCLOSURE SCHEDULE

					

				

		

		
			          The items set forth below are exceptions to the representations and warranties of Bridge Testing Concepts, Inc. (the “Company”) set forth in Section 2 of the Agreement.  Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement.  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

				

				Section             Exception

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

					

				

		

		
			

			

			

			

			

		
			EXHIBIT D

					

				BRENT PHARES DISCLOSURE SCHEDULE

					

				

		

		
			          The items set forth below are exceptions to the representations and warranties of Brent Phares (the “Seller”) set forth in Section 2 of the Agreement. Any matter set forth herein as an exception to a section of the Agreement shall be deemed to constitute an exception to all other applicable sections of the Agreement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.

				

				Section             Exception

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