Document:

Stock Incentive Plan

    
      

    

    
      

    

     

    EXHIBIT
      4.1

     

     

    ARTICLE
      1.

     

    PURPOSE
      AND ADOPTION OF THE PLAN

     

    
      	1.1      	
              Purpose.
                The purpose of the General Environmental Management, Inc. 2007 Stock
                Incentive Plan (hereinafter referred to as the “Plan”)
                is to assist in attracting and retaining highly competent key employees,
                non-employee directors and consultants and to act as an incentive
                in
                motivating selected key employees, non-employee directors and consultants
                of General Environmental Management, Inc. and its Subsidiaries (as
                defined
                below) to achieve long-term corporate
                objectives.

            

    

     

    
      	1.2      	
              Adoption
                and Term.
                The Plan has been approved by the Board of Directors (hereinafter
                referred
                to as the “Board”)
                of General Environmental Management, Inc. (hereinafter referred to
                as the
                “Company”),
                to be effective as of the date the Plan is approved by the Board (the
                “Effective
                Date”),
                subject to the approval of the stockholders of the Company solely
                for any
                Incentive Stock Options (as defined below). The Plan shall remain in
                effect until terminated by action of the Board; provided,
                however,
                that no Incentive Stock Option (as defined below) may be granted
                hereunder
                after the tenth anniversary of the Effective Date and the provisions
                of
                Articles VII and VIII with respect to performance-based awards to
“covered
                employees” under Section 162(m) of the Code (as defined below) shall
                expire as of the fifth anniversary of the Effective Date. The Company
                intends that any grant, award or other acquisition of the Company’s
                securities pursuant to the Plan to any officer and/or director of
                the
                Company shall be exempt from Section 16(b) of the Exchange
                Act.

            

    

     

    ARTICLE
      2.

     

    DEFINITIONS

     

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

     

    
      	2.1      	
              Award
                means any grant to a Participant of one or a combination of Non-Qualified
                Stock Options or Incentive Stock Options, and Stock Appreciation
                Rights
                described in Article 6, Restricted Shares described in Article 7
                and Performance Awards described in
                Article 8.

            

    

     

    
      	2.2      	
              Award
                Agreement
                means a written agreement between the Company and a Participant or
                a
                written notice from the Company to a Participant specifically setting
                forth the terms and conditions of an Award granted under the
                Plan.

            

    

     

    
      	2.3      	
              Award
                Period
                means, with respect to an Award, the period of time set forth in
                the Award
                Agreement during which specified target performance goals must be
                achieved
                or other conditions set forth in the Award Agreement must be
                satisfied.

            

    

     

    
      	2.4      	
              Beneficiary
                means an individual, trust or estate who or which, by a written
                designation of the Participant filed with the Company or by operation
                of
                law, succeeds to the rights and obligations of the Participant under
                the
                Plan and an Award Agreement upon the Participant’s
                death.

            

    

     

    
      	2.5      	
              Board
                means the Board of Directors of the
                Company.

            

    

     

    
      	2.6      	
              Change
                in Control
                means, and shall be deemed to have occurred upon the occurrence of,
                any
                one of the following events:

            

    

     

    
      	(a)     
               	
              Consummation
                by the Company of a reorganization, merger, consolidation or similar
                transaction (a “Reorganization Transaction”), in each case, unless,
                immediately following such Reorganization Transaction, more than
                50% of,
                respectively, the outstanding shares of common stock (or similar
                equity
                security) of the corporation or other entity resulting from or surviving
                such Reorganization Transaction and the combined voting power of
                the
                securities of such corporation or other entity entitled to vote generally
                in the election of directors, is then beneficially owned, directly
                or
                indirectly, by the individuals and entities who were the respective
                beneficial owners of the Outstanding Common Stock and the Company
                Voting
                Securities immediately prior to such Reorganization Transaction in
                substantially the same proportions as their ownership of the Outstanding
                Common Stock and Company Voting Securities immediately prior to such
                Reorganization Transaction; or 

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	(b)     
               	
              Consummation
                by the Company of (i) a complete liquidation or dissolution of the
                Company or (ii) the sale or other disposition of all or substantially
                all of the assets of the Company to a corporation or other entity,
                unless,
                with respect to such corporation or other entity, immediately following
                such sale or other disposition more than 50% of, respectively, the
                outstanding shares of common stock (or similar equity security) of
                such
                corporation or other entity and the combined voting power of the
                securities of such corporation or other entity entitled to vote generally
                in the election of directors, is then beneficially owned, directly
                or
                indirectly, by the individuals and entities who were the respective
                beneficial owners of the Outstanding Common Stock and the Company
                Voting
                Securities immediately prior to such sale or disposition in substantially
                the same proportions as their ownership of the Outstanding Common
                Stock
                and Company Voting Securities immediately prior to such sale or
                disposition.

            

    

     

    
      	2.7      	
              Code
                means the Internal Revenue Code of 1986, as amended. References to
                a
                section of the Code include that section and any comparable section
                or
                sections of any future legislation that amends, supplements or supersedes
                said section.

            

    

     

    
      	2.8      	
              Committee
                means the committee established in accordance with
                Section 3.1.

            

    

     

    
      	2.9      	
              Company
                means General Environmental Management, Inc., a Nevada corporation,
                and
                its successors.

            

    

     

    
      	2.10    	
              Common
                Stock
                means Common Stock of the Company, par value $.001 per
                share.

            

    

     

    
      	2.11    	
              Company
                Voting Securities
                means the combined voting power of all outstanding securities of
                the
                Company entitled to vote generally in the election of directors of
                the
                Company.

            

    

     

    
      	2.12     	
              Date
                of Grant
                means the date designated by the Committee as the date as of which
                it
                grants an Award, which shall not be earlier than the date on which
                the
                Committee approves the granting of such
                Award.

            

    

     

    
      	2.13     	
              Effective
                Date
                shall have the meaning given to such term in Section
                1.2.

            

    

     

    
      	2.14     	
              Exchange
                Act
                means the Securities Exchange Act of 1934, as
                amended.

            

    

     

    
      	2.15     	
              Exercise
                Price
                means, with respect to a Stock Appreciation Right, the amount established
                by the Committee in the related Award Agreement as the amount to
                be
                subtracted from the Fair Market Value on the date of exercise in
                order to
                determine the amount of the payment to be made to the Participant,
                as
                further described in
                Section 6.2(b).

            

    

     

    
      	2.16     	
              Fair
                Market Value
                means, as of any applicable date: (i) if the Common Stock is listed
                on a national securities exchange or is authorized for quotation
                on The
                Nasdaq National Market System (“NMS”),
                the closing price, regular way, of the Common Stock on such exchange
                or
                NMS, as the case may be, on such date or if no sale of the Common
                Stock
                shall have occurred on such date, on the next preceding date on which
                there was such a reported sale; or (ii) if the Common Stock is not
                listed for trading on a national securities exchange or authorized
                for
                quotation on NMS, the closing bid price as reported by The Nasdaq
                SmallCap
                Market on such date, or if no such price shall have been reported
                for such
                date, on the next preceding date for which such price was so reported;
                or
                (iii) if the Common Stock is not listed for trading on a national
                securities exchange or authorized for quotation on NMS or The Nasdaq
                SmallCap Market (if applicable), the last reported bid price
                published in the “pink sheets” or displayed on the National Association of
                Securities Dealers, Inc. (“NASD”)
                Electronic Bulletin Board, as the case may be; or (iv) if the Common
                Stock is not listed for trading on a national securities exchange,
                is not
                authorized for quotation on NMS or The Nasdaq SmallCap Market and
                is not
                published in the “pink sheets” or displayed on the NASD Electronic
                Bulletin Board, the fair market value of the Common Stock as determined
                in
                good faith by the Committee. 

            

    

     

    
      	2.17     	
              Incentive
                Stock Option
                means a stock option within the meaning of Section 422 of the
                Code.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	2.18     	
              Merger
                means any merger, reorganization, consolidation, share exchange,
                transfer
                of assets or other transaction having similar effect involving the
                Company.

            

    

     

    
      	2.19     	
              Non-Employee
                Director
                means a member of the Board who (i) is not currently an officer or
                otherwise employed by the Company or a parent or a subsidiary of
                the
                Company, (ii) does not receive compensation directly or indirectly
                from
                the Company or a parent or a subsidiary of the Company for services
                rendered as a consultant or in any capacity other than as a director,
                except for an amount for which disclosure would not be required pursuant
                to Item 404(a) of Regulation S-K, (iii) does not possess an interest
                in
                any other transaction for which disclosure would be required pursuant
                to
                Item 404(a) of Regulation S-K, (iv) is not engaged in a business
                relationship for which disclosure would be required pursuant to Item
                404(b) of Regulation S-K, and (v) qualifies as “Outside Director”
                pursuant to Section 162(m) of the
                Code.

            

    

     

    
      	2.20     	
              Non-Employee
                Director Option
                means a stock option granted to a Non-Employee Director in accordance
                with
                Section 6.1(a).

            

    

     

    
      	2.21     	
              Non-Qualified
                Stock Option
                means a stock option which is not an Incentive Stock
                Option.

            

    

     

    
      	2.22     	
              Options
                means all Non-Qualified Stock Options and Incentive Stock Options
                granted
                at any time under the Plan.

            

    

     

    
      	2.23     	
              Outstanding
                Common Stock
                means, at any time, the issued and outstanding shares of Common
                Stock.

            

    

     

    
      	2.24     	
              Participant
                means a person designated to receive an Award under the Plan in accordance
                with Section 5.1.

            

    

     

    
      	2.25     	
              Performance
                Awards
                means Awards granted in accordance with
                Article VIII.

            

    

     

    
      	2.26     	
              Plan
                means the General Environmental Management, Inc. 2007 Stock Incentive
                Plan
                as described herein, as the same may be amended from time to
                time.

            

    

     

    
      	2.27     	
              Purchase
                Price,
                with respect to Options, shall have the meaning set forth in
                Section 6.1(b).

            

    

     

    
      	2.28     	
              Restricted
                Shares
                means Common Stock subject to restrictions imposed in connection
                with
                Awards granted under
                Article VII.

            

    

     

    
      	2.29     	
              Retirement
                means
                early or normal retirement under a pension plan or arrangement of
                the
                Company or one of its Subsidiaries in which the Participant
                participates.

            

    

     

    
      	2.30     	
              Stock
                Appreciation Rights
                means Awards granted in accordance with
                Article VI.

            

    

     

    
      	2.31     	
              Subsidiary
                means a subsidiary of the Company within the meaning of
                Section 424(f) of the Code.

            

    

     

    
      	2.32     	
              Termination
                of Employment
                means the voluntary or involuntary termination of a Participant’s
                employment with the Company or a Subsidiary for any reason, including
                death, disability, retirement or as the result of the divestiture
                of the
                Participant’s employer or any similar transaction in which the
                Participant’s employer ceases to be the Company or one of its
                Subsidiaries. Whether entering military or other government service
                shall
                constitute Termination of Employment, or whether a Termination of
                Employment shall occur as a result of disability, shall be determined
                in
                each case by the Committee in its sole discretion. In the case of
                a
                consultant who is not an employee of the Company or a Subsidiary,
                Termination of Employment shall mean voluntary or involuntary termination
                of the consulting relationship for any reason. In the case of a
                Non-Employee Director, Termination of Employment shall mean voluntary
                or
                involuntary termination, non-election, removal or other act which
                results
                in such Non-Employee Director no longer serving in such capacity.
                

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3.

     

    ADMINISTRATION

     

    
      	3.1        
               	
              Committee.
                The Plan shall be administered by a committee appointed by the Board
                (the
                “Committee”).
                The Committee shall have exclusive and final authority in each
                determination, interpretation or other action affecting the Plan
                and its
                Participants. The Committee shall have the sole discretionary authority
                to
                interpret the Plan, to establish and modify administrative rules
                for the
                Plan, to impose such conditions and restrictions on Awards as it
                determines appropriate, and to take such steps in connection with
                the Plan
                and Awards granted hereunder as it may deem necessary or advisable.
                The
                Committee may, subject to compliance with applicable legal requirements,
                with respect to Participants who are not subject to Section 16(b) of
                the Exchange Act, delegate such of its powers and authority under
                the Plan
                as it deems appropriate to designated officers or employees of the
                Company. In addition, the Board may exercise any of the authority
                conferred upon the Committee hereunder. In the event of any such
                delegation of authority or exercise of authority by the Board, references
                in the Plan to the Committee shall be deemed to refer to the delegate
                of
                the Committee or the Board, as the case may
                be.

            

    

     

    ARTICLE
      4.

     

    SHARES

     

    
      	4.1        
               	
              Number
                of Shares Issuable.
                The total number of shares initially authorized to be issued under
                the
                Plan shall be 5.5 million (5,500,000 ) shares of Common Stock and
                are
                subject to adjustment pursuant to the terms of Section 9.7. The
                number of shares available for issuance under the Plan shall be subject
                to
                adjustment in accordance with Section 9.7. The shares to be offered
                under the Plan shall be authorized and unissued shares of Common
                Stock, or
                issued shares of Common Stock which will have been reacquired by
                the
                Company. 

            

    

     

    
      	4.2        
               	
              Shares
                Subject to Terminated Awards.
                Shares of Common Stock covered by any unexercised portions of terminated
                Options (including canceled Options) granted under Article VI, shares
                of Common Stock forfeited as provided in Section 7.2(a) and shares of
                Common Stock subject to any Award that are otherwise surrendered
                by a
                Participant may be subject to new Awards under the Plan. Shares of
                Common
                Stock subject to Options, or portions thereof, that have been surrendered
                in connection with the exercise of Stock Appreciation Rights shall
                not be
                available for subsequent Awards under the Plan, but shares of Common
                Stock
                issued in payment of such Stock Appreciation Rights shall not be
                charged
                against the number of shares of Common Stock available for the grant
                of
                Awards hereunder.

            

    

     

    ARTICLE
      5.

     

    PARTICIPATION

     

    
      	5.1       
                	
              Eligible
                Participants.
                Participants in the Plan shall be such key employees, non-employee
                directors and consultants of the Company and its Subsidiaries, whether
                or
                not members of the Board, as the Committee, in its sole discretion,
                may
                designate from time to time. The Committee’s designation of a Participant
                in any year shall not require the Committee to designate such person
                to
                receive Awards in any other year. The designation of a Participant
                to
                receive an Award under one portion of the Plan does not require the
                Committee to include such Participant under other portions of the
                Plan.
                The Committee shall consider such factors as it deems pertinent in
                selecting Participants and in determining the types and amounts of
                their
                respective Awards.

            

    

     

    ARTICLE
      6.

     

    STOCK
      OPTIONS AND STOCK APPRECIATION RIGHTS

     

    
      	6.1       
              	
              Option
                Awards.

            

    

     

    
      	(a)   
               	
              Grant
                of Options.
                The Committee may grant, to such Participants as the Committee may
                select,
                Options entitling the Participants to purchase shares of Common Stock
                from
                the Company in such numbers, at such prices, and on such terms and
                subject
                to such conditions, not inconsistent with the terms of the Plan,
                as may be
                established by the Committee and are subject to adjustment pursuant
                to the
                terms of Section 6.6. The terms of any Option granted under the Plan
                shall be set forth in an Award Agreement. In addition, the Committee
                shall
                grant to each director who is a Non-Employee Director on the Effective
                Date Non-Qualified Stock Options entitling such Non-Employee Director
                to
                purchase 25,000 shares of Common Stock from the Company. The Committee
                shall grant to each person who is elected, appointed or otherwise
                becomes
                a Non-Employee Director after the Effective Date Non-Qualified Stock
                Options entitling such Non-Employee Director to purchase 5,000 shares
                of
                Common Stock from the Company. As of the first day of the second
                annual
                term and each year thereafter that such Non-Employee Director serves
                in
                the capacity as a Non-Employee Director, the Committee shall grant
                such
                Non-Employee Director Non-Qualified Stock Options entitling such
                Non-Employee Director to purchase 10,000 shares of Common Stock from
                the
                Company. The Non-Qualified Stock Options granted to the initial
                Non-Employee Directors shall have an exercise price equal to the
                price
                shares of the Common Stock are sold in the initial public offering
                of
                equity securities by the Company on the Effective Date. Non-Qualified
                Stock Options granted after the Effective Date shall have an exercise
                price of not less than 100% of the Fair Market Value on the Date
                of Grant.
                Except as provided in Sections 6.3(c), or 6.5, Non-Employee Director
                Options shall not be exercisable prior to the first anniversary of
                the
                Date of Grant, at which time they will be immediately exercisable,
                in
                whole or in part, and shall remain exercisable until the tenth anniversary
                of the Date of Grant.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	(b)   
               	
              Purchase
                Price of Options.
                The Purchase Price of each share of Common Stock which may be purchased
                upon exercise of any Option granted under the Plan shall be determined
                by
                the Committee.

            

    

     

    
      	(c)  
                	
              Designation
                of Options.
                Except as otherwise expressly provided in the Plan, the Committee
                may
                designate, at the time of the grant of an Option, such Option as
                an
                Incentive Stock Option or a Non-Qualified Stock Option; provided,
                however,
                that an Option may be designated as an Incentive Stock Option only
                if the
                applicable Participant is an employee of the Company or a Subsidiary
                on
                the Date of Grant.

            

    

     

    
      	(d)   
               	
              Incentive
                Stock Option Share Limitation.
                No
                Participant may be granted Incentive Stock Options under the Plan
                (or any
                other plans of the Company and its Subsidiaries) that would result
                in
                Incentive Stock Options to purchase shares of Common Stock with an
                aggregate Fair Market Value (measured on the Date of Grant) of more
                than
                $100,000 first becoming exercisable by such Participant in any one
                calendar year.

            

    

     

    
      	(e)  
                	
              Rights
                as a Stockholder.
                A
                Participant or a transferee of an Option pursuant to Section 9.4
                shall have no rights as a stockholder with respect to the shares
                of Common
                Stock covered by an Option until that Participant or transferee shall
                have
                become the holder of record of any such shares, and no adjustment
                shall be
                made with respect to any such shares of Common Stock for dividends
                in cash
                or other property or distributions of other rights on the Common
                Stock for
                which the record date is prior to the date on which that Participant
                or
                transferee shall have become the holder of record of any shares covered
                by
                such Option; provided,
                however,
                that Participants are entitled to share adjustments to reflect capital
                changes under Section 9.7.

            

    

     

    
      	6.2        	
              Stock
                Appreciation Rights.

            

    

     

    
      	(a)   
               	
              Stock
                Appreciation Right Awards.
                The Committee is authorized to grant to any Participant one or more
                Stock
                Appreciation Rights. Such Stock Appreciation Rights may be granted
                either
                independent of or in tandem with Options granted to the same Participant.
                Stock Appreciation Rights granted in tandem with Options may be granted
                simultaneously with, or, in the case of Non-Qualified Stock Options,
                subsequent to, the grant to such Participant of the related Options;
                provided,
                however,
                that: (i) any Option covering any share of Common Stock shall expire
                and not be exercisable upon the exercise of any Stock Appreciation
                Right
                with respect to the same share, (ii) any Stock Appreciation Right
                covering any share of Common Stock shall expire and not be exercisable
                upon the exercise of any Option with respect to the same share, and
                (iii) an Option and a Stock Appreciation Right covering the same
                share of Common Stock may not be exercised simultaneously. Upon exercise
                of a Stock Appreciation Right with respect to a share of Common Stock,
                the
                Participant shall be entitled to receive an amount equal to the excess,
                if
                any, of (A) the Fair Market Value of a share of Common Stock on the
                date of exercise over (B) the Exercise Price of such Stock
                Appreciation Right established in the Award Agreement, which amount
                shall
                be payable as provided in
                Section 6.2(c).

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(b)  
                	
              Exercise
                Price.
                The Exercise Price established for any Stock Appreciation Right granted
                under this Plan shall be determined by the Committee, but in the
                case of
                Stock Appreciation Rights granted in tandem with Options shall not
                be less
                than the Purchase Price of the related Options. Upon exercise of
                Stock
                Appreciation Rights, the number of shares issuable upon exercise
                under any
                related Options shall automatically be reduced by the number of shares
                of
                Common Stock represented by such Options which are surrendered as
                a result
                of the exercise of such Stock Appreciation
                Rights.

            

    

     

    
      	(c)   
               	
              Payment
                of Incremental Value.
                Any payment that may become due from the Company by reason of a
                Participant’s exercise of a Stock Appreciation Right may be paid to the
                Participant as determined by the Committee (i) all in cash,
                (ii) all in Common Stock, or (iii) in any combination of cash
                and Common Stock. In the event that all or a portion of the payment
                is to
                be made in Common Stock, the number of shares of Common Stock to
                be
                delivered in satisfaction of such payment shall be determined by
                dividing
                the amount of such payment or portion thereof by the Fair Market
                Value on
                the date of exercise. No fractional share of Common Stock shall be
                issued
                to make any payment in respect of Stock Appreciation Rights; if any
                fractional share would otherwise be issuable, the combination of
                cash and
                Common Stock payable to a Participant shall be adjusted as directed
                by the
                Committee to avoid the issuance of any fractional
                share.

            

    

     

    
      	6.3        	
              Terms
                of Stock Options and Stock Appreciation
                Rights.

            

    

     

    
      	(a)
                  	
              Conditions
                on Exercise.
                An
                Award Agreement with respect to Options and/or Stock Appreciation
                Rights
                may contain such waiting periods, exercise dates and restrictions
                on
                exercise (including, but not limited to, periodic installments) as
                may be
                determined by the Committee at the time of grant.
                

            

    

     

    
      	(b)  
                 	
              Duration
                of Options and Stock Appreciation Rights.
                Options and Stock Appreciation Rights shall terminate after the first
                to
                occur of the following events:

            

    

     

    
      	(i)          
               	
              Expiration
                of the Option or Stock Appreciation Right as provided in the related
                Award
                Agreement; or

            

    

     

    
      	(ii)           
              	
              Termination
                of the Award as provided in Section 6.3(e), following the applicable
                Participant’s Termination of Employment;
                or

            

    

     

    
      	(iii)          	
              In
                the case of an Incentive Stock Option, ten years from the Date of
                Grant;
                or

            

    

     

    
      	(iv)          
              	
              Solely
                in the case of a Stock Appreciation Right granted in tandem with
                an
                Option, upon the expiration of the related
                Option.

            

    

     

    
      	(c) 
                   	
              Acceleration
                of Exercise Time.
                The Committee, in its sole discretion, shall have the right (but
                shall not
                in any case be obligated), exercisable at any time after the Date
                of
                Grant, to permit the exercise of any Option or Stock Appreciation
                Right
                prior to the time such Option or Stock Appreciation Right would otherwise
                become exercisable under the terms of the related Award
                Agreement.

            

    

     

    
      	 
              (d)       	
              Extension
                of Exercise Time. The
                Committee, in its sole discretion, shall have the right (but shall
                not in
                any case be obligated), exercisable on or at any time after the Date
                of
                Grant, to permit the exercise of any Option or Stock Appreciation
                Right
                after its expiration date described in
                Section 6(b).

            

    

     

    
      	6.4       	
              Termination

            

       

    

    
      	 	
                  
                (a)     

            	
              Termination.
                In
                the event of Termination of Employment of a Participant other than
                by
                reason of death, disability or Retirement, the right of the Participant
                to
                exercise any Option or Stock Appreciation Right shall terminate on
                the
                date of such Termination of Employment, unless the exercise period
                is
                extended by the Committee in accordance with
                Section 6.3(d).

            

    

     

    
      	 	
                  
                (b)

            	
              Disability
                or Retirement.
                In
                the event of a Participant’s Termination of Employment by reason of
                disability or Retirement, the right of the Participant to exercise
                any
                Option or Stock Appreciation Right which he or she was entitled to
                exercise upon Termination of Employment (or which became exercisable
                at a
                later date pursuant to Section 6.3(e)(ii)) shall terminate one year
                after the date of such Termination of Employment, unless the exercise
                period is extended by the Committee in accordance with Section 6.3(d).
                In
                no event, however, may any Option or Stock Appreciation Right be
                exercised
                later than the date of expiration of the Option determined pursuant
                to
                Section 6.3(b)(i), (iii) or
                (iv).

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 	
                  
                (c)

            	
              Death.
                In
                the event of the death of a Participant while employed by the Company
                or a
                Subsidiary or within any additional period of time from the date
                of the
                Participant’s Termination of Employment and prior to the expiration of any
                Option or Stock Appreciation Right as provided pursuant to Section
                6.3(e)(i)(B) or Section 6.3(d) above, to the extent the right to
                exercise
                the Option or Stock Appreciation Right was accrued as of the date
                of such
                Termination of Employment and had not expired during such additional
                period, the right of the Participant’s Beneficiary to exercise the Option
                or Stock Appreciation Right shall terminate one year after the date
                of the
                Participant’s death (but in no event more than one year from the date of
                the Participant’s Termination of Employment by reason of disability or
                Retirement), unless the exercise period is extended by the Committee
                in
                accordance with Section 6.3(d). In no event, however, may any Option
                or
                Stock Appreciation Right be exercised later than the date of expiration
                of
                the Option determined pursuant to Section 6.3(b)(i), (iii) or
                (iv).

            

    

     

    
      	 	
                  
                (d)

            	
              Termination
                of Unvested Options or Stock Appreciation Rights Upon Termination
                of
                Employment.
                Subject to Section 6.3(c), to the extent the right to exercise an
                Option
                or a Stock Appreciation Right, or any portion thereof, has not accrued
                as
                of the date of Termination of Employment, such right shall expire
                at the
                date of such Termination of Employment. Notwithstanding the foregoing,
                the
                Committee, in its sole discretion and under such terms as it deems
                appropriate, may permit, for a Participant who terminates employment
                by
                reason of Retirement and who will continue to render significant
                services
                to the Company or one of its Subsidiaries after his or her Termination
                of
                Employment, the continued vesting of his or her Options and Stock
                Appreciation Rights during the period in which that individual continues
                to render such services.

            

    

     

    
      
        	6.5    	
                 

              	
                Exercise
                  Procedures.
                  Each Option and Stock Appreciation Right granted under the Plan
                  shall be
                  exercised by written notice to the Company which must be received
                  by the
                  officer or employee of the Company designated in the Award Agreement
                  at or
                  before the close of business on the expiration date of the Award.
                  The
                  Purchase Price of shares purchased upon exercise of an Option granted
                  under the Plan shall be paid in full in cash by the Participant
                  pursuant
                  to the Award Agreement; provided,
                  however,
                  that the Committee may (but shall not be required to) permit payment
                  to be
                  made by delivery to the Company of either (a) shares of Common Stock
                  (which may include Restricted Shares or shares otherwise issuable
                  in
                  connection with the exercise of the Option, subject to such rules
                  as the
                  Committee deems appropriate) or (b) any combination of cash and
                  Common Stock or (c) such other consideration as the Committee deems
                  appropriate and in compliance with applicable law (including payment
                  in
                  accordance with a cashless exercise program under which, if so
                  instructed
                  by a Participant, shares of Common Stock may be issued directly
                  to the
                  Participant’s broker or dealer upon receipt of an irrevocable written
                  notice of exercise from the Participant). In the event that any
                  shares of
                  Common Stock shall be transferred to the Company to satisfy all
                  or any
                  part of the Purchase Price, the part of the Purchase Price deemed
                  to have
                  been satisfied by such transfer of shares of Common Stock shall
                  be equal
                  to the product derived by multiplying the Fair Market Value as
                  of the date
                  of exercise times the number of shares of Common Stock transferred
                  to the
                  Company. The Participant may not transfer to the Company in satisfaction
                  of the Purchase Price any fractional share of Common Stock. Any
                  part of
                  the Purchase Price paid in cash upon the exercise of any Option
                  shall be
                  added to the general funds of the Company and may be used for any
                  proper
                  corporate purpose. Unless the Committee shall otherwise determine,
                  any
                  shares of Common Stock transferred to the Company as payment of
                  all or
                  part of the Purchase Price upon the exercise of any Option shall
                  be held
                  as treasury shares.

              

      

       

      
        	6.6            	
                Adjustments
                  upon Changes in Capitalization, dissolution, Merger or Sale of
                  Assets

              

         

      

    

    
      	 	
                  
                (a)

            	
              Changes
                in Capitalization.
                Subject to any required action by the shareholders of the Company,
                the
                number of shares of Common Stock covered by each outstanding Option,
                and
                the number of shares of Common Stock which have been authorized for
                issuance under the Plan but as to which no Options have yet been
                granted
                or which have been returned to the Plan upon cancellation or expiration
                of
                an option, as well as the price per share of Common Stock covered
                by each
                such outstanding Option, shall be proportionately adjusted for any
                increase or decrease in the number of issued shares of Common Stock
                resulting from a stock split, reverse stock split, stock dividend,
                combination or reclassification of the Common Stock, or any other
                increase
                or decrease in the number of issued shares of Common Stock effected
                without receipt of consideration by the Company; provided, however,
                that
                conversion of any convertible securities of the Company shall not
                be
                deemed to have been "effected without receipt of consideration."
                Such
                adjustment shall be made by the Board, whose determination in that
                respect
                shall be final, binding and conclusive. Except as expressly provided
                herein, no issuance by the Company of shares of stock of any class,
                or
                securities convertible into shares of stock of any class, shall affect,
                and no adjustment by reason thereof shall be made with respect to,
                the
                number or price of shares of Common Stock subject to an Option.
                

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
                  
                (b)

            	
              Dissolution
                or Liquidation.
                In the event of the proposed dissolution or liquidation of the Company,
                the Committee shall notify each Participant as soon as practicable
                prior
                to the effective date of such proposed transaction. The Committee
                in its
                discretion may provide for a Participant to have the right to exercise
                his
                or her Option until ten (10) days prior to such transaction as to
                all of
                the Options covered thereby, including Shares as to which the Option
                would
                not otherwise be exercisable. In addition, the Committee may provide
                that
                any Company repurchase option applicable to any Shares purchased
                upon
                exercise of an Option shall lapse as to all such Shares, provided
                the
                proposed dissolution or liquidation takes place at the time and in
                the
                manner contemplated. To the extent it has not been previously exercised,
                an Option will terminate immediately prior to the consummation of
                such
                proposed action. 

            

    

     

    
      	 	
                  
                (c)

            	
              Merger
                or Asset Sale. In the event of a merger of the Company with or into
                another corporation, or the sale of substantially all of the assets
                of the
                Company, each outstanding Option shall be assumed or an equivalent
                option
                or right substituted by the successor corporation or a Parent or
                Subsidiary of the successor corporation. In the event that the successor
                corporation refuses to assume or substitute for the Option, the
                Participant shall fully vest in and have the right to exercise the
                Option
                as to all of the Optioned Stock, including Shares as to which it
                would not
                otherwise be vested or exercisable. If an Option becomes fully vested
                and
                exercisable in lieu of assumption or substitution in the event of
                a merger
                or sale of assets, the Committee shall notify the Participant in
                writing
                or electronically that the Option shall be fully vested and exercisable
                for a period of fifteen (15) days from the date of such notice, and
                the
                Option shall terminate upon the expiration of such period. For the
                purposes of this paragraph, the Option shall be considered assumed
                if,
                following the merger or sale of assets, the option or right confers
                the
                right to purchase or receive, for each Share of Optioned Stock,
                immediately prior to the merger or sale of assets, the consideration
                (whether stock, cash, or other securities or property) received in
                the
                merger or sale of assets by holders of Common Stock for each Share
                held on
                the effective date of the transaction (and if holders were offered
                a
                choice of consideration, the type of consideration chosen by the
                holders
                of a majority of the outstanding Shares); provided, however, that
                if such
                consideration received in the merger or sale of assets is not solely
                common stock of the successor corporation or its Parent, the Committee
                may, with the consent of the successor corporation, provide for the
                consideration to be received upon the exercise of the Option, for
                each
                Share of Optioned Stock to be solely common stock of the successor
                corporation or its Parent equal in fair market value to the per share
                consideration received by holders of Common Stock in the merger or
                sale of
                assets.

            

    

     

    
      
        
          
            	6.7 	
                     

                  	
                    
                      Change
                        in Control.
                        Unless otherwise provided by the Committee in the applicable
                        Award
                        Agreement, in the event of a Change in Control, all Options
                        and Stock
                        Appreciation Rights outstanding on the date of such Change
                        in Control
                        shall become immediately and fully exercisable. The provisions
                        of this
                        Section 6.7 shall not be applicable to any Options or Stock
                        Appreciation Rights granted to a Participant if any Change
                        in Control
                        results from such Participant’s beneficial ownership (within the meaning
                        of Rule 13d-3 under the Exchange Act) of Common Stock or
                        Company Voting
                        Securities.

                    

                  

          

        

      

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7.

     

    RESTRICTED
      SHARES

     

    
      	7.1              
                       
               	
              Restricted
                Share Awards.
                The Committee may grant to any Participant an Award of such number
                of
                shares of Common Stock on such terms, conditions and restrictions,
                whether
                based on performance standards, periods of service, retention by
                the
                Participant of ownership of purchased or designated shares of Common
                Stock
                or other criteria, as the Committee shall establish. With respect
                to
                performance-based Awards of Restricted Shares intended to qualify
                for
                deductibility under Section 162(m) of the Code, performance targets
                will
                include specified levels of one or more of operating income, return
                or
                investment, return on stockholders’ equity, earnings before interest,
                taxes, depreciation and amortization and/or earnings per share. The
                terms
                of any Restricted Share Award granted under this Plan shall be set
                forth
                in an Award Agreement which shall contain provisions determined by
                the
                Committee and not inconsistent with this
                Plan.

            

    

     

    
      	 (a)      	
              Issuance
                of Restricted Shares.
                As
                soon as practicable after the Date of Grant of a Restricted Share
                Award by
                the Committee, the Company shall cause to be transferred on the books
                of
                the Company or its agent, shares of Common Stock, registered on behalf
                of
                the Participant, evidencing the Restricted Shares covered by the
                Award,
                subject to forfeiture to the Company as of the Date of Grant if an
                Award
                Agreement with respect to the Restricted Shares covered by the Award
                is
                not duly executed by the Participant and timely returned to the Company.
                All shares of Common Stock covered by Awards under this Article VII
                shall be subject to the restrictions, terms and conditions contained
                in
                the Plan and the applicable Award Agreements entered into by the
                appropriate Participants. Until the lapse or release of all restrictions
                applicable to an Award of Restricted Shares the share certificates
                representing such Restricted Shares may be held in custody by the
                Company,
                its designee, or, if the certificates bear a restrictive legend,
                by the
                Participant. Upon the lapse or release of all restrictions with respect
                to
                an Award as described in Section 7.1(d), one or more share
                certificates, registered in the name of the Participant, for an
                appropriate number of shares as provided in Section 7.1(d), free of
                any restrictions set forth in the Plan and the related Award Agreement
                (however subject to any restrictions that may be imposed by law)
                shall be
                delivered to the Participant.

            

    

     

    
      	(b)      	
              Stockholder
                Rights.
                Beginning on the Date of Grant of a Restricted Share Award and subject
                to
                execution of the related Award Agreement as provided in
                Section 7.1(a), and except as otherwise provided in such Award
                Agreement, the Participant shall become a stockholder of the Company
                with
                respect to all shares subject to the Award Agreement and shall have
                all of
                the rights of a stockholder, including, but not limited to, the right
                to
                vote such shares and the right to receive dividends; provided,
                however,
                that any shares of Common Stock distributed as a dividend or otherwise
                with respect to any Restricted Shares as to which the restrictions
                have
                not yet lapsed, shall be subject to the same restrictions as such
                Restricted Shares and held or restricted as provided in
                Section 7.1(a).

            

    

     

    
      	(c)      	
              Restriction
                on Transferability.
                None of the Restricted Shares may be assigned or transferred (other
                than
                by will or the laws of descent and distribution or to an inter
                vivos
                trust with respect to which the Participant is treated as the owner
                under
                Sections 671 through 677 of the Code), pledged or sold prior to the
                lapse
                of the restrictions applicable
                thereto.

            

    

     

    
      	(d)      
              	
              Delivery
                of Shares Upon Vesting.
                Upon expiration or earlier termination of the forfeiture period without
                a
                forfeiture and the satisfaction of or release from any other conditions
                prescribed by the Committee, or at such earlier time as provided
                under the
                provisions of Section 7.3, the restrictions applicable to the
                Restricted Shares shall lapse. As promptly as administratively feasible
                thereafter, subject to the requirements of Section 9.5, the Company
                shall deliver to the Participant or, in case of the Participant’s death,
                to the Participant’s Beneficiary, one or more share certificates for the
                appropriate number of shares of Common Stock, free of all such
                restrictions, except for any restrictions that may be imposed by
                law.

            

    

     

    
      	7.2              	
              Terms
                of Restricted Shares.

            

    

     

    
      	(a)      
              	
              Forfeiture
                of Restricted Shares.
                Subject to Sections 7.2(b) and 7.3, Restricted Shares shall be
                forfeited and returned to the Company and all rights of the Participant
                with respect to such Restricted Shares shall terminate unless the
                Participant continues in the service of the Company or a Subsidiary
                as an
                employee until the expiration of the forfeiture period for such Restricted
                Shares and satisfies any and all other conditions set forth in the
                Award
                Agreement. The Committee shall determine the forfeiture period (which
                may,
                but need not, lapse in installments) and any other terms and conditions
                applicable with respect to any Restricted Share
                Award.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	(b) 
                 	
              Waiver
                of Forfeiture Period.
                Notwithstanding anything contained in this Article VII to the
                contrary, the Committee may, in its sole discretion, waive the forfeiture
                period and any other conditions set forth in any Award Agreement
                under
                appropriate circumstances (including the death, disability or Retirement
                of the Participant or a material change in circumstances arising
                after the
                date of an Award) and subject to such terms and conditions (including
                forfeiture of a proportionate number of the Restricted Shares) as
                the
                Committee shall deem appropriate.

            

    

     

    
      	7.3               
                        	
              Change
                in Control.
                Unless otherwise provided by the Committee in the applicable Award
                Agreement, in the event of a Change in Control, all restrictions
                applicable to the Restricted Share Award shall terminate fully and
                the
                Participant shall immediately have the right to the delivery of share
                certificates for such shares in accordance with
                Section 7.1(d).

            

    

     

    ARTICLE
      8.

     

    PERFORMANCE
      AWARDS

     

    
      	8.1          
	
              Performance
                Awards.

            

    

     

    
      	(a)   
                	
              Award
                Periods and Calculations of Potential Incentive
                Amounts.
                The Committee may grant Performance Awards to Participants. A Performance
                Award shall consist of the right to receive a payment (measured by
                the
                Fair Market Value of a specified number of shares of Common Stock,
                increases in such Fair Market Value during the Award Period and/or
                a fixed
                cash amount) contingent upon the extent to which certain predetermined
                performance targets have been met during an Award Period. Performance
                Awards may be made in conjunction with, or in addition to, Restricted
                Share Awards made under Article VII. The Award Period shall be two or
                more fiscal or calendar years as determined by the Committee. The
                Committee, in its discretion and under such terms as it deems appropriate,
                may permit newly eligible employees, such as those who are promoted
                or
                newly hired, to receive Performance Awards after an Award Period
                has
                commenced.

            

    

     

    
      	(b)    
               	
              Performance
                Targets.
                The performance targets may include such goals related to the performance
                of the Company and/or the performance of a Participant as may be
                established by the Committee in its discretion. In the case of Performance
                Awards intended to qualify for deductibility under Section 162(m)
                of the
                Code, the targets will include specified levels of one or more of
                operating income, return on investment, return on stockholders’ equity,
                earnings before interest, taxes, depreciation and amortization and/or
                earnings per share. The performance targets established by the Committee
                may vary for different Award Periods and need not be the same for
                each
                Participant receiving a Performance Award in an Award Period. Except
                to
                the extent inconsistent with the performance-based compensation exception
                under Section 162(m) of the Code, in the case of Performance Awards
                granted to employees to whom such section is applicable, the Committee,
                in
                its discretion, but only under extraordinary circumstances as determined
                by the Committee, may change any prior determination of performance
                targets for any Award Period at any time prior to the final determination
                of the value of a related Performance Award when events or transactions
                occur to cause such performance targets to be an inappropriate measure
                of
                achievement.

            

    

     

    
      	(c)    
               	
              Earning
                Performance Awards.
                The Committee, on or as soon as practicable after the Date of Grant,
                shall
                prescribe a formula to determine the percentage of the applicable
                Performance Award to be earned based upon the degree of attainment
                of
                performance targets. 

            

    

     

    
      	(d)   
                	
              Payment
                of Earned Performance Awards.
                Payments of earned Performance Awards shall be made in cash or shares
                of
                Common Stock or a combination of cash and shares of Common Stock,
                in the
                discretion of the Committee. The Committee, in its sole discretion,
                may
                provide such terms and conditions with respect to the payment of
                earned
                Performance Awards as it may deem
                desirable.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	8.2              	
              Terms
                of Performance Awards.

            

    

     

    
      	(a)    
               	
              Termination
                of Employment.
                Unless otherwise provided below or in Section 8.3, in the case of a
                Participant’s Termination of Employment prior to the end of an Award
                Period, the Participant will not have earned any Performance Awards
                for
                that Award Period.

            

    

     

    
      	(b)  
                  	
              Retirement.
                If
                a Participant’s Termination of Employment is because of Retirement prior
                to the end of an Award Period, the Participant will not be paid any
                Performance Award, unless the Committee, in its sole and exclusive
                discretion, determines that an Award should be paid. In such a case,
                the
                Participant shall be entitled to receive a pro-rata portion of his
                or her
                Award as determined under subsection (d) of this Section
                8.2.

            

    

     

    
      	(c)   
                	
              Death
                or Disability.
                If
                a Participant’s Termination of Employment is due to death or to disability
                (as determined in the sole and exclusive discretion of the Committee)
                prior to the end of an Award Period, the Participant or the Participant’s
                personal representative shall be entitled to receive a pro-rata share
                of
                his or her Award as determined under subsection (d) of this Section
                8.2.

            

    

     

    
      	(d) 
                  	
              Pro-Rata
                Payment.
                The amount of any payment to be made to a Participant whose employment
                is
                terminated by Retirement, death or disability (under the circumstances
                described in subsections (b) and (c)) will be the amount determined
                by
                multiplying (i) the amount of the Performance Award that would have
                been earned through the end of the Award Period had such employment
                not
                been terminated by (ii) a fraction, the numerator of which is the
                number of whole months such Participant was employed during the Award
                Period, and the denominator of which is the total number of months
                of the
                Award Period. Any such payment made to a Participant whose employment
                is
                terminated prior to the end of an Award Period shall be made at the
                end of
                such Award Period, unless otherwise determined by the Committee in
                its
                sole discretion. Any partial payment previously made or credited
                to a
                deferred account for the benefit of a Participant in accordance with
                Section 8.1(d) of the Plan shall be subtracted from the amount
                otherwise determined as payable as provided in this Section
                8.2(d).

            

    

     

    
      	(e)  
                	
              Other
                Events.
                Notwithstanding anything to the contrary in this Article VIII, the
                Committee may, in its sole and exclusive discretion, determine to
                pay all
                or any portion of a Performance Award to a Participant who has terminated
                employment prior to the end of an Award Period under certain circumstances
                (including the death, disability or Retirement of the Participant
                or a
                material change in circumstances arising after the Date of Grant),
                subject
                to such terms and conditions as the Committee shall deem
                appropriate.

            

    

     

    
      	8.3                        
               	
              Change
                in Control.
                Unless otherwise provided by the Committee in the applicable Award
                Agreement, in the event of a Change in Control, all Performance Awards
                for
                all Award Periods shall immediately become fully payable to all
                Participants and shall be paid to Participants within thirty (30)
                days
                after such Change in Control.

            

    

     

    ARTICLE
      9.

     

    TERMS
      APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN

     

    
      	9.1                          	
              Plan
                Provisions Control Award Terms.
                The terms of the Plan shall govern all Awards granted under the Plan,
                and
                in no event shall the Committee have the power to grant any Award
                under
                the Plan the terms of which are contrary to any of the provisions
                of the
                Plan. In the event any provision of any Award granted under the Plan
                shall
                conflict with any term in the Plan as constituted on the Date of
                Grant of
                such Award, the term in the Plan as constituted on the Date of Grant
                of
                such Award shall control. Except as provided in Section 9.3 and
                Section 9.7, the terms of any Award granted under the Plan may not
                be
                changed after the Date of Grant of such Award so as to materially
                decrease
                the value of the Award without the express written approval of the
                holder.

            

    

     

    
      	9.2                        
               	
              Award
                Agreement.
                No
                person shall have any rights under any Award granted under the Plan
                unless
                and until the Company and the Participant to whom such Award shall
                have
                been granted shall have executed and delivered an Award Agreement
                or the
                Participant shall have received and acknowledged notice of the Award
                authorized by the Committee expressly granting the Award to such
                person
                and containing provisions setting forth the terms of the
                Award.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	9.3                       
                	
              Modification
                of Award After Grant.
                No
                Award granted under the Plan to a Participant may be modified (unless
                such
                modification does not materially decrease the value of that Award)
                after
                its Date of Grant except by express written agreement between the
                Company
                and such Participant, provided that any such change (a) may not be
                inconsistent with the terms of the Plan, and (b) shall be approved by
                the Committee. 

            

    

     

    
      	9.4                          
               	
              Limitation
                on Transfer.
                Except as provided in Section 7.1(c) in the case of Restricted
                Shares, a Participant’s rights and interest under the Plan may not be
                assigned or transferred other than by will or the laws of descent
                and
                distribution and, during the lifetime of a Participant, only the
                Participant personally (or the Participant’s personal representative) may
                exercise rights under the Plan. The Participant’s Beneficiary may exercise
                the Participant’s rights to the extent they are exercisable under the Plan
                following the death of the Participant. Notwithstanding the foregoing,
                the
                Committee may grant Non-Qualified Stock Options that are transferable,
                without payment of consideration, to immediate family members of
                the
                Participant or to trusts or partnerships for such family members,
                and the
                Committee may also amend outstanding Non-Qualified Stock Options
                to
                provide for such transferability.

            

    

     

    
      	9.5                        
               	
              Taxes.
                The Company shall be entitled, if the Committee deems it necessary
                or
                desirable, to withhold (or secure payment from the Participant in
                lieu of
                withholding) the amount of any withholding or other tax required
                by law to
                be withheld or paid by the Company with respect to any amount payable
                and/or shares issuable under such Participant’s Award or with respect to
                any income recognized upon a disqualifying disposition of shares
                received
                pursuant to the exercise of an Incentive Stock Option, and the Company
                may
                defer payment of cash or issuance of shares upon exercise or vesting
                of an
                Award unless indemnified to its satisfaction against any liability
                for any
                such tax. The amount of such withholding or tax payment shall be
                determined by the Committee and shall be payable by the Participant
                at
                such time as the Committee determines in accordance with the following
                rules: 

            

    

     

    
      	(a)  
                  	
              The
                Participant shall have the right to elect to meet his or her withholding
                requirement (i) by having withheld from such Award at the appropriate
                time that number of shares of Common Stock, rounded up to the next
                whole
                share, the Fair Market Value of which is equal to the amount of
                withholding taxes due, (ii) by direct payment to the Company in cash
                of the amount of any taxes required to be withheld with respect to
                such
                Award or (iii) by a combination of withholding such shares and paying
                cash.

            

    

     

    
      	(b)
                    	
              The
                Committee shall have the discretion as to any Award to cause the
                Company
                to pay to tax authorities for the benefit of the applicable Participant,
                or to reimburse such Participant for, the individual taxes which
                are due
                on the grant, exercise or vesting of any Award or the lapse of any
                restriction on any Award (whether by reason of such Participant’s filing
                of an election under Section 83(b) of the Code or otherwise),
                including, but not limited to, Federal income tax, state income tax,
                local
                income tax and excise tax under Section 4999 of the Code, as well as
                for any such taxes as may be imposed upon such tax payment or
                reimbursement.

            

    

     

    
      	(c)
                    	
              In
                the case of Participants who are subject to Section 16 of the Exchange
                Act, the Committee may impose such limitations and restrictions as
                it
                deems necessary or appropriate with respect to the delivery or withholding
                of shares of Common Stock to meet tax withholding
                obligations.

            

    

     

    
      	9.6                       
                	
              Surrender
                of Awards.
                Any Award granted under the Plan may be surrendered to the Company
                for
                cancellation on such terms as the Committee and the Participant
                approve.

            

    

     

    
      	9.7              	
              Adjustments
                to Reflect Capital Changes.

            

    

     

    
      	(a)
                   	
              Recapitalization.
                The number and kind of shares subject to outstanding Awards, the
                Purchase
                Price or Exercise Price for such shares, the number and kind of shares
                available for Awards subsequently granted under the Plan and the
                maximum
                number of shares in respect of which Awards can be made to any Participant
                in any calendar year shall be appropriately adjusted to reflect any
                stock
                dividend, stock split, combination or exchange of shares, merger,
                consolidation or other change in capitalization with a similar substantive
                effect upon the Plan or the Awards granted under the Plan. The Committee
                shall have the power and sole discretion to determine the amount
                of the
                adjustment to be made in each case.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	(b)
                   	
              Merger.
                After any Merger in which the Company is the surviving corporation,
                each
                Participant shall, at no additional cost, be entitled upon any exercise
                of
                an Option or receipt of any other Award to receive (subject to any
                required action by stockholders), in lieu of the number of shares
                of
                Common Stock receivable or exercisable pursuant to such Award prior
                to
                such Merger, the number and class of shares or other securities to
                which
                such Participant would have been entitled pursuant to the terms of
                the
                Merger if, at the time of the Merger, such Participant had been the
                holder
                of record of a number of shares of Common Stock equal to the number
                of
                shares of Common Stock receivable or exercisable pursuant to such
                Award.
                Comparable rights shall accrue to each Participant in the event of
                successive Mergers of the character described above. In the event
                of a
                Merger in which the Company is not the surviving corporation, the
                surviving, continuing, successor or purchasing corporation, as the
                case
                may be (the “Acquiring
                Corporation”),
                will either assume the Company’s rights and obligations under outstanding
                Award Agreements or substitute awards in respect of the Acquiring
                Corporation’s stock for outstanding Awards,
                provided, however, that
                if the Acquiring Corporation does not assume or substitute for such
                outstanding Awards, the Board shall provide prior to the Merger that
                any
                unexercisable and/or unvested portion of the outstanding Awards shall
                be
                immediately exercisable and vested as of a date prior to such merger
                or
                consolidation, as the Board so determines. The exercise and/or vesting
                of
                any Award that was permissible solely by reason of this Section 9.7(b)
                shall be conditioned upon the consummation of the Merger. Any Options
                which are neither assumed by the Acquiring Corporation not exercised
                as of
                the date of the Merger shall terminate effective as of the effective
                date
                of the Merger.

            

    

     

    
      	(c)   
                	
              Options
                to Purchase Shares or Stock of Acquired
                Companies.
                After any merger in which the Company or a Subsidiary shall be a
                surviving
                corporation, the Committee may grant substituted options under the
                provisions of the Plan, pursuant to Section 424 of the Code,
                replacing old options granted under a plan of another party to the
                merger
                whose shares of stock subject to the old options may no longer be
                issued
                following the merger. The manner of application of the foregoing
                provisions to such options and any appropriate adjustments shall
                be
                determined by the Committee in its sole discretion. Any such adjustments
                may provide for the elimination of any fractional shares which might
                otherwise become subject to any
                Options.

            

    

     

    
      	9.8                        
               	
              No
                Right to Employment.
                No
                employee or other person shall have any claim of right to be granted
                an
                Award under the Plan. Neither the Plan nor any action taken hereunder
                shall be construed as giving any employee any right to be retained
                in the
                employ of the Company or any of its
                Subsidiaries.

            

    

     

    
      	9.9                        
               	
              Awards
                Not Includable for Benefit Purposes.
                Payments received by a Participant pursuant to the provisions of
                the Plan
                shall not be included in the determination of benefits under any pension,
                group insurance or other benefit plan applicable to the Participant
                which
                is maintained by the Company or any of its Subsidiaries, except as
                may be
                provided under the terms of such plans or determined by the
                Board.

            

    

     

    
      	9.10                       
                   	
              Governing
                Law.
                All determinations made and actions taken pursuant to the Plan shall
                be
                governed by the laws of the State of Nevada, other than the conflict
                of
                law provisions thereof, and construed in accordance
                therewith.

            

    

     

    
      	9.11                       
                	
              No
                Strict Construction.
                No
                rule of strict construction shall be implied against the Company,
                the
                Committee or any other person in the interpretation of any of the
                terms of
                the Plan, any Award granted under the Plan or any rule or procedure
                established by the Committee.

            

    

     

    
      	9.12                       
               	
              Captions.
                The captions (i.e., all Section headings) used in the Plan are for
                convenience only, do not constitute a part of the Plan, and shall
                not be
                deemed to limit, characterize or affect in any way any provisions
                of the
                Plan, and all provisions of the Plan shall be construed as if no
                captions
                had been used in the Plan.

            

    

     

    
      	9.13                       
                	
              Severability.
                Whenever possible, each provision in the Plan and every Award at
                any time
                granted under the Plan shall be interpreted in such manner as to
                be
                effective and valid under applicable law, but if any provision of
                the Plan
                or any Award at any time granted under the Plan shall be held to
                be
                prohibited by or invalid under applicable law, then (a) such
                provision shall be deemed amended to accomplish the objectives of
                the
                provision as originally written to the fullest extent permitted by
                law and
                (b) all other provisions of the Plan, such Award and every other
                Award at any time granted under the Plan shall remain in full force
                and
                effect.

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	9.14           	
              Amendment
                and Termination.

            

    

     

    
      	(a)     
               	
              Amendment.
                The Board shall have complete power and authority to amend the Plan
                at any
                time without the authorization or approval of the Company’s stockholders,
                unless the amendment (i) materially increases the benefits accruing
                to
                Participants under the Plan, (ii) materially increases the aggregate
                number of securities that may be issued under the Plan or (iii) materially
                modifies the requirements as to eligibility for participation in
                the Plan,
                but in each case only to the extent then required by the Code or
                applicable law, or deemed necessary or advisable by the Board. No
                termination or amendment of the Plan may, without the consent of
                the
                Participant to whom any Award shall theretofore have been granted
                under
                the Plan, materially adversely affect the right of such individual
                under
                such Award. 

            

    

     

    
      	(b)      
              	
              Termination.
                The Board shall have the right and the power to terminate the Plan
                at any
                time. No Award shall be granted under the Plan after the termination
                of
                the Plan, but the termination of the Plan shall not have any other
                effect
                and any Award outstanding at the time of the termination of the Plan
                may
                be exercised after termination of the Plan at any time prior to the
                expiration date of such Award to the same extent such Award would
                have
                been exercisable had the Plan not been
                terminated.

            

    

     

     

     

     

     

    14Execution
      Copy

     

    PURCHASE
      AGREEMENT

    

    by
      and between

    

    SUPERCOM
      INC.

    

    and

    

    THE
      SHAREHOLDERS of SECURITY HOLDING CORP.

    

    Dated
      as of July 3, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Table
      of Contents

    

      
        	
                ARTICLE
                  I DEFINITIONS

              	
                1

              
	 	 
	 	
                SECTION
                  1.1 Definitions

              	
                1

              
	 	
                SECTION
                  1.2 Other Terms.

              	
                6

              
	 	 	 
	
                ARTICLE
                  II PURCHASE AND SALE

              	
                8

              
	 	 	 
	 	
                SECTION
                  2.1 Purchase
                  and Sale

              	
                8

              
	 	
                SECTION
                  2.2 Purchase
                  Price

              	
                8

              
	 	
                SECTION
                  2.3 Escrow

              	
                8

              
	 	
                SECTION
                  2.4 The
                  Closing.

              	
                9

              
	 	
                SECTION
                  2.5 Deliveries
                  At Closing.

              	
                10

              
	 	 	 
	
                ARTICLE
                  III REPRESENTATIONS AND WARRANTIES OF THE SELLERS

              	
                10

              
	 	 	 
	 	
                SECTION
                  3.1 Organization

              	
                10

              
	 	
                SECTION
                  3.2 Due
                  Authorization

              	
                10

              
	 	
                SECTION
                  3.3 Noncontravention

              	
                11

              
	 	
                SECTION
                  3.4 Capitalization

              	
                11

              
	 	
                SECTION
                  3.5 Litigation

              	
                12

              
	 	
                SECTION
                  3.6 Financial
                  Statements; Books and Records

              	
                13

              
	 	
                SECTION
                  3.7 Liabilities
                  Not in the Ordinary Course of Business

              	
                13

              
	 	
                SECTION
                  3.8 Absence
                  of Change

              	
                13

              
	 	
                SECTION
                  3.9 Title
                  to Assets; Condition; Sufficiency

              	
                15

              
	 	
                SECTION
                  3.10 Real
                  Property

              	
                15

              
	 	
                SECTION
                  3.11 Intellectual
                  Property

              	
                16

              
	 	
                SECTION
                  3.12 Compliance
                  with Law

              	
                18

              
	 	
                SECTION
                  3.13 Contracts;
                  Status of Contracts

              	
                18

              
	 	
                SECTION
                  3.14 Insurance

              	
                20

              
	 	
                SECTION
                  3.15 Employee
                  Benefits

              	
                20

              
	 	
                SECTION
                  3.16 Employment
                  Matters

              	
                22

              
	 	
                SECTION
                  3.17 Taxes

              	
                22

              
	 	
                SECTION
                  3.18 Accounts
                  Receivable; Accounts Payable

              	
                24

              
	 	
                SECTION
                  3.19 Environmental
                  Matters

              	
                25

              
	 	
                SECTION
                  3.20 Customers

              	
                25

              
	 	
                SECTION
                  3.21 Effect
                  of Transaction

              	
                25

              
	 	
                SECTION
                  3.22 No
                  Broker

              	
                25

              
	 	
                SECTION
                  3.23 Additional
                  Information

              	
                25

              
	 	
                SECTION
                  3.24 Product
                  Warranty and Product Liability

              	
                26

              
	 	
                SECTION
                  3.25 Accredited
                  Investors

              	
                26

              
	 	
                SECTION
                  3.26 No
                  Series A Preferred Stock Payment Obligations

              	
                27

              
	 	
                SECTION
                  3.27 Disclosure

              	
                28

              

      

       

      
        
          
          

        

        
          (i)

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  IV REPRESENTATIONS AND WARRANTIES OF THE BUYER

              	
                28

              
	 	 	 
	 	
                SECTION
                  4.1 Organization

              	
                28

              
	 	
                SECTION
                  4.2 Due
                  Authorization

              	
                28

              
	 	
                SECTION
                  4.3 Noncontravention

              	
                28

              
	 	
                SECTION
                  4.4 Issuance
                  of the Vuance Shares.

              	
                29

              
	 	
                SECTION
                  4.5 Capitalization.

              	
                29

              
	 	
                SECTION
                  4.6 Financial
                  Statements.

              	
                29

              
	 	
                SECTION
                  4.7 Private
                  Placement.

              	
                29

              
	 	
                SECTION
                  4.8 Investment
                  Company.

              	
                30

              
	 	
                SECTION
                  4.9 Listing
                  and Maintenance Requirements.

              	
                30

              
	 	
                SECTION
                  4.10 No
                  Integrated Offering.

              	
                30

              
	 	
                SECTION
                  4.11 Foreign
                  Corrupt Practices.

              	
                30

              
	 	
                SECTION
                  4.12 No
                  Broker

              	
                31

              
	 	
                SECTION
                  4.13 Contract
                  Prohibitions

              	
                31

              
	 	 	 
	
                ARTICLE
                  V OTHER AGREEMENTS

              	
                32

              
	 	 	 
	 	
                SECTION
                  5.1 Lock-Up

              	
                32

              
	 	
                SECTION
                  5.2 Piggyback
                  Registration Rights

              	
                32

              
	 	
                SECTION
                  5.3 Voting
                  of HMSC’s Vuance Shares

              	
                33

              
	 	
                SECTION
                  5.4 Right
                  of First Refusal

              	
                33

              
	 	
                SECTION
                  5.5 Note
                  Assumption

              	
                33

              
	 	
                SECTION
                  5.6 HMSC
                  Financing

              	
                34

              
	 	
                SECTION
                  5.7 Conversion
                  of Series A Preferred Stock; Termination of Certain
                  Agreement

              	
                34

              
	 	
                SECTION
                  5.8 Employment
                  Agreements

              	
                34

              
	 	
                SECTION
                  5.9 Listing
                  of Ordinary Shares

              	
                34

              
	 	
                SECTION
                  5.10 Form
                  D; Blue Sky Filings.

              	
                34

              
	 	 	 
	
                ARTICLE
                  VI PRE AND POST-CLOSING COVENANTS

              	
                35

              
	 	 	 
	 	
                SECTION
                  6.1 Conduct
                  of Business

              	
                35

              
	 	
                SECTION
                  6.2 Pre-Closing
                  Access to Information

              	
                37

              
	 	
                SECTION
                  6.3 Cooperation;
                  Notices and Consents

              	
                37

              
	 	
                SECTION
                  6.4 Publicity

              	
                38

              
	 	
                SECTION
                  6.5 Tax
                  Matters

              	
                38

              
	 	
                SECTION
                  6.6 Exclusivity

              	
                40

              
	 	
                SECTION
                  6.7 Non-Competition;
                  Non-Solicitation

              	
                40

              
	 	
                SECTION
                  6.8 Resignations.

              	
                42

              
	 	
                SECTION
                  6.9 Pre-Closing
                  Confidentiality.

              	
                42

              
	 	
                SECTION
                  6.10 Other
                  Seller Obligations

              	
                43

              

      

       

      
        
          
          

        

        
          (ii)

          
            

          

        

        
          
          

        

      

       

      
        	 	
                SECTION
                  6.11 Update

              	
                43

              
	 	
                SECTION
                  6.12 Further
                  Assurances; Litigation Support

              	
                43

              
	 	
                SECTION
                  6.13 Auditors’
                  Consent

              	
                44

              
	 	 	 
	
                ARTICLE
                  VII CONDITIONS PRECEDENT TO CONSUMMATION OF THE
                  CLOSING

              	
                44

              
	 	 	 
	 	
                SECTION
                  7.1 Conditions
                  Precedent to Each Party’s Obligations to Close

              	
                44

              
	 	
                SECTION
                  7.2 Conditions
                  Precedent to Obligations of the Buyer

              	
                44

              
	 	
                SECTION
                  7.3 Conditions
                  Precedent to Obligations of the Sellers.

              	
                46

              
	 	 	 
	
                ARTICLE
                  VIII REMEDIES FOR BREACH

              	
                47

              
	 	 	 
	 	
                SECTION
                  8.1 Limitation
                  on and Survival of Representations and Warranties

              	
                47

              
	 	
                SECTION
                  8.2 Indemnification
                  by the Sellers

              	
                47

              
	 	
                SECTION
                  8.3 Indemnification
                  by the Buyer.

              	
                48

              
	 	
                SECTION
                  8.4 Limitation
                  of Liability; Indemnity Procedures

              	
                48

              
	 	
                SECTION
                  8.5 Method
                  of Indemnification

              	
                49

              
	 	 	 
	
                ARTICLE
                  IX TERMINATION

              	
                50

              
	 	 	 
	 	
                SECTION
                  9.1 Termination

              	
                50

              
	 	
                SECTION
                  9.2 Effect
                  of Termination

              	
                50

              
	 	 	 
	
                ARTICLE
                  X MISCELLANEOUS

              	
                51

              
	 	 	 
	 	
                SECTION
                  10.1 Entire
                  Agreement

              	
                51

              
	 	
                SECTION
                  10.2 Expenses

              	
                51

              
	 	
                SECTION
                  10.3 Governing
                  Law; Submission to Jurisdiction; Service of Process

              	
                51

              
	 	
                SECTION
                  10.4 Assignment

              	
                51

              
	 	
                SECTION
                  10.5 Notices

              	
                52

              
	 	
                SECTION
                  10.6 Amendment
                  and Waiver

              	
                53

              
	 	
                SECTION
                  10.7 Failure
                  or Delay

              	
                53

              
	 	
                SECTION
                  10.8 Counterparts

              	
                53

              
	 	
                SECTION
                  10.9 Specific
                  Performance

              	
                53

              
	 	
                SECTION
                  10.10 Counterpart
                  Facsimile Execution

              	
                54

              
	 	
                SECTION
                  10.11 Interpretation

              	
                54

              
	 	
                SECTION
                  10.12 Survival

              	
                54

              
	 	
                SECTION
                  10.13 Third
                  Party Beneficiaries; No Reliance

              	
                54

              
	 	
                SECTION
                  10.14 Incorporation
                  of Exhibits and Schedules

              	
                55

              
	 	
                SECTION
                  10.15 Guarantee.

              	
                55

              

      

       

      
        
          
          

        

        
          (iii)

          
            

          

        

        
          
          

        

      

    

    EXHIBITS

    

      
        	
                Exhibit
                  A

              	 	
                Form
                  of Power of Attorney

              
	
                Exhibit
                  B

              	 	
                Employment
                  Agreements

              
	
                Exhibit
                  C

              	 	
                Termination
                  Letter

              
	 	 	 
	
                DISCLOSURE
                  SCHEDULES

              
	 	 	 
	
                Schedule
                  3.1

              	 	
                Company
                  Organization

              
	
                Schedule
                  3.3

              	 	
                Noncontravention

              
	
                Schedule
                  3.4(b)

              	 	
                Subsidiaries

              
	
                Schedule
                  3.4(c)

              	 	
                Restricted
                  Stock Grants

              
	
                Schedule
                  3.5(b)

              	 	
                Litigation
                  Affecting Company or Subsidiaries

              
	
                Schedule
                  3.6(a)

              	 	
                Financial
                  Statements

              
	
                Schedule
                  3.7

              	 	
                Liabilities
                  Not in the Ordinary Course of Business

              
	
                Schedule
                  3.9

              	 	
                Title
                  to Assets; Conditions; Sufficiency

              
	
                Schedule
                  3.8

              	 	
                Absence
                  of Changes

              
	
                Schedule
                  3.10

              	 	
                Real
                  Property

              
	
                Schedule
                  3.11(a)

              	 	
                Company
                  IP

              
	
                Schedule
                  3.11(b)

              	 	
                Exceptions
                  to Company IP

              
	
                Schedule
                  3.11(c)

              	 	
                Licensed
                  Intellectual Property

              
	
                Schedule
                  3.12

              	 	
                Compliance
                  with Law

              
	
                Schedule
                  3.13

              	 	
                Contracts

              
	
                Schedule
                  3.14

              	 	
                Insurance

              
	
                Schedule
                  3.15

              	 	
                Employee
                  Benefit Plans

              
	
                Schedule
                  3.16

              	 	
                Employment
                  Matters

              
	
                Schedule
                  3.17

              	 	
                Taxes

              
	
                Schedule
                  3.18(a)

              	 	
                Accounts
                  Receivable

              
	
                Schedule
                  3.18(b)

              	 	
                Accounts
                  Payable

              
	
                Schedule
                  3.20

              	 	
                Customers

              
	
                Schedule
                  3.21

              	 	
                Effect
                  of Transaction

              
	
                Schedule
                  3.23

              	 	
                Additional
                  Information

              
	
                Schedule
                  3.24(a)

              	 	
                Product
                  Warranty

              
	
                Schedule
                  4.5

              	 	
                Buyer’s
                  Parent Capitalization

              
	
                Schedule
                  4.6

              	 	
                Buyer’s
                  Parent Financial Statements

              
	
                Schedule
                  6.7

              	 	
                Non-Compete
                  Exclusions

              
	
                Schedule
                  6.8

              	 	
                Resignations

              
	
                Schedule
                  6.10(d)

              	 	
                Furniture
                  and Fixtures

              

      

    

     

    
      
        
        

      

      
        (iv)

        
          

        

      

      
        
        

      

       

      
        Execution
          Copy

      

       

    

    PURCHASE
      AGREEMENT

    

    This
      Purchase Agreement is made as of July 3, 2007 by and between Homeland Security
      Capital Corporation (“HMSC”),
      a
      Delaware corporation, the majority shareholder of Security Holding Corp. (the
      “Company”),
      a
      Delaware corporation, the other Shareholders of the Company set forth on the
      signature pages hereto (the “Minority
      Shareholders”
and
      collectively with HMSC, the “Sellers”)
      and
      SuperCom Inc., a Delaware corporation (the “Buyer”)
      and
      wholly owned subsidiary of Vuance Ltd., a company organized under the laws
      of
      Israel (“Buyer’s
      Parent”).

     

    RECITALS

     

    WHEREAS,
      the Sellers own of record directly or indirectly all of the outstanding capital
      stock of the Company and the Subsidiaries;

     

    WHEREAS,
      the Company, directly and through its Subsidiaries, Compass Technologies, Inc,,
      SecurityInc LLC (“SecurityInc”)
      and
      Auto Access ID Security Solutions, Inc. (“AAID”)
      (the
“Subsidiaries”),
      is
      engaged in the business of developing, selling and distributing analytical
      security systems (the “Business”);
      and

     

    WHEREAS,
      the Buyer desires to acquire, and the Sellers desire that the Buyer acquire
      at
      Closing (as defined below) all of the outstanding capital stock of the Company
      on the terms set forth in this Agreement.

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual representations,
      warranties, covenants, conditions and agreements set forth herein, the
      sufficiency of which is hereby acknowledged, the parties agree as set forth
      below:

     

    ARTICLE
      I

    DEFINITIONS

     

    SECTION
      1.1 Definitions

     

    As
      used
      in this Agreement, the following terms shall have the meanings set forth or
      as
      referenced below:

     

    “Action”
shall
      mean any action, claim, suit, hearing, charge, complaint, demand, litigation,
      arbitration, or governmental investigation, indictment, proceeding or similar
      matter.

     

    “Affiliate”
shall
      mean, with respect to (a) a natural Person (i) each other member of such
      individual’s Family; (ii) any Person that is directly or indirectly Controlled
      by any one or more members of such individual’s Family; (iii) any Person in
      which members of such individual’s Family hold (individually or in the
      aggregate) a Material Interest; and (iv) any Person with respect to which one or
      more members of such individual’s Family serves as a director, officer, partner,
      executor or trustee (or in a similar capacity); and (b) with respect to a Person
      other than a natural Person, (i) any Person that directly or indirectly
      Controls, is directly or indirectly Controlled by or is directly or indirectly
      under common Control with such specified Person; (ii) any Person that holds
      a
      Material Interest in such specified Person; (iii) each Person that serves as
      a
      director, officer, partner, executor or trustee of such specified Person (or
      in
      a similar capacity); and (iv) any Person in which such specified Person holds
      a
      Material Interest. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Agreement”
shall
      mean this Agreement, together with the Exhibits and Schedules attached hereto,
      as the same may be amended from time to time in accordance with the terms
      hereof.

     

    “Basis”
means
      any past or present fact, situation, circumstance, status, condition, activity,
      practice, plan, occurrence, event, incident, action, failure to act, or
      transaction that forms or would be reasonably likely to form the basis for
      any
      specified consequence.

     

    “Business
      Day”
shall
      mean any day other than a Saturday, Sunday or a day on which banks in New York
      City are authorized or obligated by Law to close.

     

    “Closing
      Price Per Share”
shall
      mean the volume weighted average closing price per share on the OTC Electronic
      Bulletin Board of Buyer’s ordinary shares for the 15 trading days immediately
      prior to the Closing Date; provided, however, that the Closing Price Per Share
      will not in any instance exceed $5.714 per share or be less than $5.170 per
      share.

     

    “Code”
shall
      mean the U.S. Internal Revenue Code of 1986, as amended. 

     

    “Commercial
      Arbitration Rules of the AAA”
shall
      mean the amended and effective commercial arbitration rules of the
      AAA.

     

    “Company
      IP”
shall
      mean all Intellectual Property owned, held or used by or required for the
      Company or the Subsidiaries in their businesses.

     

    “Company
      Shares”
shall
      mean all of the issued and outstanding capital stock of the Company immediately
      before Closing, consisting of 4,350,000 shares of common stock, par value $1.00
      per share (assuming conversion of all of the Company’s Series A Convertible
      Preferred Stock.

     

    “Control”
      (including the terms “Controlled
      by”
and
      “under
      common Control with”)
      means
      possession, directly or indirectly, of the power to direct or cause the
      direction of management or policies (whether through ownership of securities
      or
      partnership or other ownership interests, by contract or
      otherwise).

     

    “Employee
      Benefit Plan”
shall
      mean any bonus, incentive, deferred compensation, pension, profit sharing,
      retirement, stock option, stock rights, stock purchase, stock appreciation,
      leave of absence, layoff, vacation, day or dependent care, cafeteria, life,
      health, dental, accident, disability, worker compensation, severance, change
      of
      control, or other employee benefit plan, policy, contract, practice or
      arrangement, whether written or oral, whether or not required by Law or labor
      or
      other contract, including, but not limited to any “employee benefit plan” within
      the meaning of Section 3(3) of ERISA, established, maintained, contributed
      to,
      or sponsored by the Company or any predecessor or ERISA Affiliate of the
      Company, existing at the Closing or prior thereto, to which any of the Company
      or the Subsidiaries contributes or has contributed and under which any employee,
      former employee, director of the Company or the Subsidiaries or beneficiary
      of
      such Person is eligible or has benefit rights.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Environmental
      Laws”
means
      all applicable Laws, Orders, common law and other provisions having the force
      or
      effect of law and all contractual obligations concerning or relating in any
      manner to public health and safety, worker health and safety, pollution, or
      protection of natural resources or the environment, including, without
      limitation, all those relating to the presence, use, production, generation,
      handling, transportation, treatment, storage, disposal, distribution, labeling,
      testing, processing, discharge, release, threatened release, control, or cleanup
      of any Hazardous Materials, noise, or radiation, as in effect on the date hereof
      or the Closing Date, as the case may be.

     

    “ERISA”
shall
      mean the Employee Retirement Income Security Act of 1974, as
      amended.

     

    “ERISA
      Affiliate”
shall
      mean any Person in the same controlled group of corporations or who is under
      common control with any of the Company or the Subsidiaries, within the meaning
      of Section 414(b), (c), (m) or (o) of the Code.

     

    “Family”
of
      an
      individual shall include (i) the individual, (ii) the individual’s spouse, (iii)
      any other natural Person who is related to the individual or the individual's
      spouse within the second degree and (iv) any other natural Person who resides
      with such individual.

     

    “GAAP”
shall
      mean generally accepted accounting principles as in effect in the United States
      of America at the time of the preparation of the subject financial
      statements.

     

    “Governmental
      Authority”
shall
      mean any federal, state, provincial, municipal or other governmental department,
      commission, board, bureau, agency or instrumentality, or any court or
      self-regulatory organization, in each case whether of the United States, any
      of
      its possessions or territories, or of any foreign nation.

     

    “Hazardous
      Materials”
shall
      mean all hazardous, dangerous or toxic substances or wastes, including,
      petroleum (including crude oil or any fraction thereof), asbestos and
      asbestos-containing materials, polychlorinated biphenyls, pesticides, and any
      other material that is regulated pursuant to any Environmental Laws or that
      would reasonably be likely to result in liability under any Environmental
      Laws.

     

    “Indebtedness”
shall
      mean, at a particular time, without duplication, (i) any obligation for borrowed
      money or issued in substitution for or exchange of indebtedness for borrowed
      money, (ii) any obligation evidenced by any note, bond, debenture or other
      debt
      security, (iii) any commitment by which a Person assures a creditor against
      loss (including contingent reimbursement obligations with respect to letters
      of
      credit), and (iv) any fees, penalties, premiums or accrued and unpaid interest
      with respect to the foregoing (in the case of prepayments or otherwise), all
      as
      determined in accordance with GAAP. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Intellectual
      Property”
shall
      mean all intellectual property rights, whether or not embodied in a form which
      is filed or registered with any Governmental Authority, including all (i) (a)
      patents, patent applications, patent reissuances, continuations, revisions,
      re-examinations or extensions, inventions, discoveries, processes, designs,
      techniques, developments, technology and know-how; (b) copyrights and works
      of
      authorship in any media, including software, databases and compilations, textual
      works, documentation, graphics, advertising, marketing and promotional
      materials, drawings and the protected features of any utilitarian objects or
      pictorial, graphic or sculptural works; (c) trademarks, service marks, trade
      names, brand names, corporate names, domain names, logos, trade dress and other
      source indicators, and the goodwill of any business symbolized thereby; (d)
      trade secrets, confidential, proprietary or non-public information, documents,
      analyses, research and lists, business and marketing plans (including current
      and potential customer and user lists, pricing and cost information, formulas,
      manufacturing and production processes and techniques); (e) all Systems; and
      (ii) all registrations, applications and recordings related to any of the
      foregoing.

     

    “Knowledge
      of the Buyer’s Parent”
shall
      mean the actual knowledge of any officer or employee having a policy making
      function of the Buyer’s Parent without independent investigation.

     

    “Knowledge
      of the Sellers”
shall
      mean the actual knowledge of any of the Minority Shareholders or any officer
      or
      employee having a policy making function of HMSC without independent
      investigation. 

     

    “Laws”
shall
      mean any Order, any federal, state, provincial, local or other statute, law,
      rule of common law, or code of any kind, domestic or foreign, and the rules,
      regulations, ordinances and standards promulgated thereunder and, where
      applicable, any interpretation thereof by any authority having jurisdiction
      with
      respect thereto or charged with the administration thereof.

     

    “Liability”
shall
      mean any liability, obligation or responsibility (whether known or unknown,
      whether asserted or unasserted, whether fixed or unfixed, whether absolute
      or
      contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
      whether secured or unsecured and whether due or to become due), including any
      Indebtedness, guaranty, or liability for Taxes.

     

    “Liens”
shall
      mean any and all liens, encumbrances, mortgages, charges, claims, restrictions,
      options, pledges, security interests or other similar interests, title defects,
      tenancies (and other possessory interests), easements, rights of way, covenants,
      encroachments, rights of first refusal, preemptive rights, judgments,
      conditional sale or other title retention agreements and other impositions
      or
      imperfections of title of any nature whatsoever.

     

    “Material
      Adverse Effect”
or
      “Material
      Adverse Change”
shall
      mean an occurrence, event, incident, development, circumstance or omission
      which, alone or when aggregated with others, has a material adverse effect
      on or
      change in (or would reasonably be expected to have a material adverse effect
      on
      or change in) (a) the business, operations, assets, liabilities, financial
      condition, properties, or results of operations of the Company or the
      Subsidiaries including any material changes to any Laws affecting the Company
      or
      the Subsidiaries, or (b) the ability of the Sellers to
      perform their obligations hereunder or consummate the transactions contemplated
      hereby on a timely basis, including any adverse change, development, or effect
      arising from or relating to the taking of any action contemplated by this
      Agreement and the other agreements contemplated hereby, regardless of whether
      Buyer has knowledge of such effect or change on the date hereof, unless such
      occurrence, event, incident, development, circumstance or omission is fully
      and
      clearly disclosed on the Schedules hereto. Notwithstanding the foregoing, none
      of the following events or the resulting effects on the business or operations
      of the Company will be deemed to be, or result in, a Material Adverse Effect
      or
      Material Adverse Change: (1) the sale of Cyberlynk Network, Inc. and (2) the
      merger of the Compass operations into SecurityInc.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Material
      Interest”
shall
      mean direct or indirect beneficial ownership of voting securities or other
      voting interests representing at least 10% of the outstanding voting power
      of a
      Person or equity securities or other equity interests representing at least
      10%
      of the outstanding equity securities or equity interests in a
      Person.

     

    “Order”
shall
      mean any judgment, injunction, decree, order, ruling, award, stipulation or
      settlement rendered by or subject to any Government Authority or
      arbitrator.

     

    “Permits”
shall
      mean all written permits, consents, licenses and governmental authorizations,
      registrations and approvals required for conduct of the business of the Company
      or the Subsidiaries and for the occupation or use of the Leased Properties
      as
      currently conducted, occupied or used and as contemplated to be conducted,
      occupied or used immediately following the Closing Date, including certificates
      of occupancy.

     

    “Permitted
      Liens”
shall
      mean any (i) liens for Taxes not yet due and payable and, for those existing
      on
      May 31, 2007, for which adequate reserves in accordance with GAAP are reflected
      on the May 31, 2007 balance sheet, and (ii) mechanics or, materialmen liens
      arising or incurred in the ordinary course of business and other inchoate liens
      arising or incurred in the ordinary course of business, provided that
      the
      obligations in respect of which such liens were created are not delinquent,
      and,
      for those existing on May 31, 2007, for which adequate reserves in accordance
      with GAAP are reflected on the May 31, 2007 balance sheet.

     

    “Person”
means
      an individual, a corporation, a partnership, an association, a limited liability
      company, a trust, a Governmental Authority or any other entity or organization
      of any kind.

     

    “Systems”
means
      computer software (including source code, executable code, data and databases),
      hardware, databases, systems, networks, information technology, and Internet
      and
      domain web sites, and all information contained or stored therein or transmitted
      thereby.

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

    “Trading
      Markets”
means
      the OTC Electronic Bulletin Board and Euronext Brussels.

     

    “Treasury
      Regulations”
means
      the treasury regulations promulgated under the Code, as amended.

     

    SECTION
      1.2 Other
      Terms.

     

    Accounting
      terms not defined in Section
      1.1
      and
      accounting terms partly defined in Section
      1.1,
      to the
      extent not defined, shall have the respective meanings given to them under
      GAAP.
      In addition to the terms defined in Section
      1.1,
      the
      following terms are defined in the Sections of this Agreement noted
      below:

    

      
        	
                Defined
                  Term

              	 	
                Section

              
	
                AAA

              	 	
                2.3(d)(iii)

              
	
                AAID

              	 	
                Recitals

              
	
                Abba

              	 	
                7.2(p)

              
	
                Another
                  Transaction

              	 	
                6.6

              
	
                Arbitrator

              	 	
                2.3(d)(iii)

              
	
                Arbitrator’s
                  Decision

              	 	
                2.3(d)(iii)

              
	
                Assignment
                  and Assumption Agreement

              	 	
                5.5

              
	
                Business

              	 	
                Recitals

              
	
                Buyer

              	 	
                Preamble

              
	
                Buyer
                  Claim

              	 	
                8.2(a)

              
	
                Buyer
                  Indemnified Parties

              	 	
                8.2(a)

              
	
                Buyer
                  Parties

              	 	
                8.3

              
	
                Buyer’s
                  Parent

              	 	
                Preamble

              
	
                Buyer’s
                  Parent Financial Statements

              	 	
                3.25(c)

              
	
                Claim
                  Settlement Agreement

              	 	
                2.3(d)(i)

              
	
                Closing

              	 	
                2.4

              
	
                Closing
                  Date

              	 	
                2.4

              
	
                Company

              	 	
                preamble

              
	
                Company
                  Financial Statements

              	 	
                3.6(a)

              
	
                Contracts

              	 	
                3.13

              
	
                Employment
                  Agreements

              	 	
                5.8

              
	
                Escrow
                  Agent

              	 	
                2.3

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                Defined
                  Term

              	 	
                Section

              

      

      
        	
                Escrow
                  Agreement

              	 	
                2.3

              
	
                Escrow
                  Fund

              	 	
                2.3

              
	
                Exchange
                  Act

              	 	
                5.1(a)

              
	
                Expiration
                  Date

              	 	
                8.1

              
	
                First
                  Offer Period

              	 	
                5.4(a)

              
	
                HMSC

              	 	
                preamble

              
	
                HMSC
                  Financing

              	 	
                5.6

              
	
                Indemnification
                  Claim

              	 	
                2.3(a)(i)

              
	
                Indemnified
                  Party

              	 	
                8.4(b)

              
	
                Indemnifying
                  Party

              	 	
                8.4(b)

              
	
                Involuntary
                  Sale

              	 	
                5.4

              
	
                Leased
                  Property

              	 	
                3.10

              
	
                Leases

              	 	
                3.10

              
	
                License
                  Agreement

              	 	
                7.2(p)

              
	
                Losses

              	 	
                8.2(a)

              
	
                Maximum
                  Indemnity Amount

              	 	
                8.4(a)

              
	
                Merger
                  Agreement

              	 	
                5.7(b)

              
	
                Minority
                  Shareholders

              	 	
                preamble

              
	
                Note

              	 	
                5.5

              
	
                Noteholders

              	 	
                5.5

              
	
                Notice
                  of Claim Dispute

              	 	
                2.3(d)(i)

              
	
                Offer

              	 	
                5.4(a)

              
	
                Offered
                  Shares

              	 	
                5.4(a)

              
	
                Pre-Closing
                  Tax Period

              	 	
                6.5(b)

              
	
                Premises

              	 	
                7.2(r)

              
	
                Purchase
                  Price

              	 	
                2.2

              
	
                Restricted
                  Stock Agreement

              	 	
                5.7(b)

              
	
                Restrictive
                  Period

              	 	
                6.7(b)

              
	
                RFID

              	 	
                6.10(b)

              
	
                Sale
                  Notice

              	 	
                5.4(a)

              
	
                Second
                  Offer Period

              	 	
                5.4(d)

              
	
                Second
                  Purchase Notice

              	 	
                5.4(e)

              
	
                Schedules

              	 	
                Article
                  III

              
	
                Securities
                  Act

              	 	
                3.25(b)

              
	
                SecurityInc

              	 	
                Recitals

              
	
                Sellers

              	 	
                Preamble

              
	
                Sellers
                  Claim

              	 	
                8.3

              
	
                Series
                  A Preferred Stock Agreement

              	 	
                5.6

              
	
                Straddle
                  Period

              	 	
                6.5(a)

              
	
                Subsidiaries

              	 	
                recitals

              
	
                Threshold

              	 	
                8.4(a)

              
	
                Vuance
                  Shares

              	 	
                2.2

              

      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    
      PURCHASE
        AND SALE

       

      SECTION
        2.1 Purchase
        and Sale

       

      Upon
        and
        subject to the terms and conditions set forth in this Agreement, the Sellers
        agree to, and shall at Closing, sell, assign, transfer and convey to the
        Buyer
        and the Buyer agrees to and shall at Closing purchase and acquire from the
        Sellers, all right, title and interest in and to the Company Shares, free
        and
        clear of all Liens. 

       

      SECTION
        2.2 Purchase
        Price

       

      Upon
        the
        terms and subject to the conditions set forth in this Agreement, in
        consideration of the aforesaid sale, assignment, transfer and conveyance
        to the
        Buyer, the Buyer will pay to the Sellers a total consideration of $5,100,000
        (the “Purchase
        Price”)
        consisting of newly issued ordinary shares (the “Vuance
        Shares”)
        of
        Buyer’s Parent. The Vuance Shares issuable as Purchase Price will be calculated
        based on the Closing Price per Share. The Purchase Price will be allocated
        among
        the Sellers in the percentage amounts set forth on the signature pages hereto.
        The parties agree that 15%
        of
        the Purchase Price (the “Holdback
        Amount”)
        will
        be paid into an escrow account under a mutually agreed escrow agreement (the
        “Escrow
        Agreement”)
        among
        the Buyer, the Sellers and an escrow agent (the “Escrow
        Agent”),
        to
        serve as a fund (the “Escrow
        Fund”) to
        be held
        in
        accordance with Section 2.3
        of this
        Agreement, for payments that may be due to the Buyer for claims under this
        Agreement, including the indemnification provisions of Article
        VIII.

       

      SECTION
        2.3 Escrow

       

      (a) The
        Escrow Fund shall be disbursed by the Escrow Agent as follows: 

       

      (i) from
        time
        to time upon joint instructions of the Buyer and the Seller, or, subject
        to
        subparagraph (d) below, from time to time, upon Buyer’s instructions, for
        indemnification under Article VIII of this Agreement (an “Indemnification
        Claim”);
        and

       

      (ii) 15
        months
        after the Closing Date, to the Sellers, the Holdback Amount minus
        the sum
        of the amount of any Indemnification Claim that has been asserted by the
        Buyer
        but not satisfied and the amount of any such claim theretofore paid to the
        Buyer; and

       

      (iii) all
        remaining amounts after all Indemnification Claims have been finally determined
        in accordance with this Agreement. 

       

      (b) The
        Buyer
        on the one hand and the Sellers on the other hand shall pay the fees and
        expenses of the Escrow Agent in equal parts as they become due. 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (c) Interest
        and proceeds earned on the Escrow Fund that constitute taxable income for
        United
        States federal income and other Tax purposes on the Escrow Fund shall be
        allocated to the party to which it is distributed. 

       

      (d) Objections

       

      (i) Notwithstanding
        anything contained in Section
        2.3(a)(i),
        the
        Sellers shall have ten (10) Business Days from the date an Indemnification
        Claim
        is given to the Sellers to object in writing to all or part of an
        Indemnification Claim (a “Notice
        of Claim Dispute”).
        If
        the Buyer and the Sellers fail to resolve any objection contained in such
        Notice
        of Claim Dispute within ten (10) days after the date the Notice of Claim
        Dispute
        is delivered, then, at the request of either party, the Buyer and the Sellers
        shall meet in an attempt to resolve an objection described in such Notice
        of
        Claim Dispute and reach a written agreement with respect to such objection
        (the
“Claim
        Settlement Agreement”).
        

       

      (ii) If
        the
        Buyer and the Sellers enter into a Claim Settlement Agreement, the objections
        contained in such Notice of Claim Dispute shall be deemed to be as resolved
        therein. If the Buyer and the Sellers are unable to resolve the objection
        described in such Notice of Claim Dispute within twenty (20) days after delivery
        to the recipient of such Notice of Claim Dispute, then the Buyer and Sellers
        shall submit the objections contained in such Notice of Claim Dispute to
        arbitration as described in Section
        2.3(d)(iii).
        

       

      (iii) Any
        objection contained in a Notice of Claim Dispute not resolved in a Claim
        Settlement Agreement shall be resolved by submission to arbitration as follows:
        The Buyer and the Sellers shall select a single arbitrator from the American
        Arbitration Association (“AAA”)
        in New
        York, NY (an “Arbitrator”)
        (or,
        if they cannot agree upon a selection, the Buyer and the Sellers shall each
        select an Arbitrator, and the two Arbitrators so selected shall choose a
        third
        Arbitrator who shall act as the Arbitrator to resolve the dispute). The
        Arbitrator shall resolve the objection contained in the Notice of Claim Dispute
        pursuant to the Commercial Arbitration Rules of the AAA as promptly as possible
        and a decision by the Arbitrator as to the resolution of such objection shall
        be
        (absent an agreement of the parties regarding an error that is manifest)
        conclusive and binding upon the parties for purposes of this Agreement (the
        “Arbitrator’s
        Decision”).
        The
        Arbitrator’s Decision shall be (i) in writing and (ii) nonappealable and
        incontestable by the Buyer and Sellers and each of their respective Affiliates
        and personal representatives, heirs, successors and assigns and not subject
        to
        collateral attack for any reason. The fees and costs payable to the AAA shall
        be
        paid 50% by the Buyer and 50% from the Escrow Fund. Counsel fees and other
        costs
        incurred in connection with the dispute, shall be paid if incurred by the
        respective parties.

       

      SECTION
        2.4 The
        Closing. The
        closing of the transactions contemplated by this Agreement (the “Closing”)
        shall
        take place at the offices of Carter Ledyard & Milburn LLP, 2 Wall Street,
        New York, NY 10005, on the date that all closing conditions set forth in
        Article
        VII
        have
        been satisfied or waived, but not earlier than three Business Days after
        the
        date on which the shareholders of Buyer’s Parent have duly authorized this
        Agreement and the transactions contemplated hereunder and not later than
        50 days
        after the date of the execution of this Agreement, or on such other date
        as the
        Buyer and the Sellers shall mutually determine in writing (the “Closing
        Date”).
        

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      SECTION
        2.5 Deliveries
        At Closing. At
        the
        Closing, (i) the Sellers will deliver to the Buyer the various certificates,
        instruments, and documents referred to in Section
        7.2
        below,
        (ii) the Buyer will deliver to the Sellers the various certificates,
        instruments, and documents referred to in Section
        7.3
        below,
        and (iii) the Buyers will pay to Sellers the Purchase Price. 

       

       

      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES OF THE SELLERS

       

      Except
        as
        set forth in the disclosure schedules (the “Schedules”)
        delivered by Sellers and annexed to this Agreement, the Sellers
        hereby
        represent and warrant to the Buyer that the statements contained in this
        Article
        III
        are
        correct and complete as of the date of this Agreement and will be correct
        and
        complete as of the Closing Date (as though made then and as though the Closing
        Date were substituted for the date of this Agreement throughout this
Article
        III).
        

      

      SECTION
        3.1 Organization 

       

      The
        Company and the Subsidiaries are companies duly formed, validly existing
        and in
        good standing under the Laws (as in effect on the date hereof and on the
        Closing
        Date) of their respective States of formation. The Company and the Subsidiaries
        have full organizational power and authority to conduct their businesses
        as now
        being conducted or as is currently contemplated to be conducted and to own,
        operate and lease their properties. The Company and the Subsidiaries are
        duly
        licensed or qualified to do business as foreign business entities and are
        in
        good standing in each jurisdiction in which the property owned or leased
        by
        them, or the nature of the activities conducted by them, requires such
        qualification (except any where the failure to be so qualified would not
        have a
        Material Adverse Effect). Schedule
        3.1
        lists
        (i) each jurisdiction in which the Company and the Subsidiaries are qualified
        to
        do business as foreign business entities and (ii) the directors, managers
        (as
        the case may be) and officers of the Company and the Subsidiaries. The Sellers
        have delivered to the Buyer true, correct and complete copies of the Company’s
        and the Subsidiaries’ by-laws or other organizational documents, as the case may
        be (as amended to date), which are in full force and effect and there are
        no
        other documents or agreements affecting the rights or obligations of the
        equityholders of the Company and the Subsidiaries. The Company and the
        Subsidiaries are not in default under or in violation of any provision of
        their
        organizational documents.

      

      SECTION
        3.2 Due
        Authorization

       

      The
        Sellers have full right, power and authority to enter into and perform this
        Agreement and each agreement or instrument executed and delivered in connection
        herewith or pursuant hereto to which they are a party, to consummate the
        transactions contemplated hereby and thereby and to perform their obligations
        hereunder and thereunder. The Sellers
        are not bound by or subject to any contractual or other obligation that would
        be
        violated by the execution or performance of this Agreement. This Agreement
        and
        all agreements or instruments executed and delivered by the Sellers in
        connection herewith or pursuant hereto have been duly executed and delivered
        by
        the Sellers and this Agreement and all agreements and instruments executed
        and
        delivered by the Sellers in connection herewith or pursuant hereto constitute,
        and will at Closing constitute, legal, valid and binding obligations of the
        Sellers, enforceable against the Sellers in accordance with their respective
        terms (except to the extent that enforcement may be affected by applicable
        bankruptcy, reorganization, insolvency and similar Laws affecting creditors’
rights and remedies generally and by general principles of equity (regardless
        of
        whether enforcement is sought at law or in equity)). 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      SECTION
        3.3 Noncontravention

       

      The
        execution, delivery and performance by the Sellers of this Agreement and
        of all
        the other agreements or instruments contemplated hereby and the consummation
        of
        the transactions contemplated hereby and thereby do not and will not
        (a) conflict with or violate any applicable Laws (as in effect on the date
        hereof and on the Closing Date), (b) conflict with or violate any provision
        of the certificate of incorporation, bylaws or other organizational documents
        of
        the Company or the Subsidiaries, (c) except as set forth on Schedule
        3.3,
        violate, result in a breach, default or acceleration under, or give rise
        to any
        penalty or any right of termination or modification under, or any other remedy
        under, or result in the creation of any Lien upon the Company Shares or (d)
        except as set forth on Schedule
        3.3,
        require
        the consent, approval, authorization, license, order or permit of, or
        declaration, filing or registration with, or notification to, any Governmental
        Authority or any other Person.

       

      SECTION
        3.4 Capitalization

       

      (a) The
        Company.
        The
        authorized capital stock of the Company will consist immediately before the
        Closing of 4,350,000 shares of common stock, each with a par value of US
        $0.01
        per share. All of the Company Shares will be immediately before the Closing
        (i)
        duly authorized and validly issued, (ii) fully paid and nonassessable, (iii)
        issued in compliance with all applicable Laws (as in effect on the date of
        issuance) concerning the issuance of securities, (iv) not issued in violation
        of, or subject to, any preemptive, subscription or other similar rights of
        any
        Person, and (v) held of record by the Sellers in the amounts set forth on
        the
        signature page hereto free and clear of all Liens. The Company Shares will
        constitute immediately before Closing all of the issued and outstanding capital
        stock of the Company. Upon delivery of and payment for the Company Shares
        as
        contemplated herein, the Sellers will transfer to the Buyer valid title to
        the
        Company Shares, free and clear of all Liens. 

       

      (b) Subsidiaries.
        Schedule
        3.4(b)
        sets
        forth a list of all entities in which the Company directly or indirectly,
        has,
        on the date of this Agreement, an ownership interest and for each entity
        disclosed thereon (i) its name and jurisdiction of incorporation,
        (ii) the number of shares and class of authorized capital stock,
        (iii) the number of all issued and outstanding shares of its capital stock,
        the names of the holders thereof and the number of shares held by each such
        holder and (iv) the number of shares of its capital stock held in treasury.

       

      
        
          
          

        

        
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      (c) Other
        Arrangements.
        Other
        than as set forth on Schedule 3.4(c),
        there
        (i) are no outstanding obligations of the Company or the Subsidiaries to
        issue,
        sell, offer for sale, repurchase, redeem or otherwise acquire any securities
        of
        the Company or the Subsidiaries or rights convertible into, or exercisable
        or
        exchangeable for, any such securities; (ii) is no voting trust, proxy,
        stockholder or other agreement or understanding to which any of the Sellers
        is a
        party or is bound by with respect to the voting or transfer of the capital
        stock
        or other voting securities of The Company or the Subsidiaries; and (iii)
        are no
        subscriptions, options, calls, warrants, purchase rights or other rights
        (including registration rights, whether demand or piggyback registration
        rights), agreements, arrangements or commitments of any character relating
        to
        the issued or unissued capital stock of the Company or the Subsidiaries
        (including commitments that could require the Sellers to transfer or otherwise
        dispose of the capital stock or ownership interests of the Company or the
        Subsidiaries). Schedule
        3.4(c)
        sets
        forth a list of all grants of restricted stock since inception (stating the
        date
        of the grant, the amount of restricted stock issued and the date of termination)
        under the Restricted Stock Agreements. The consummation of the transactions
        contemplated by this Agreement will not trigger any pre-emptive rights, rights
        of first refusal, demands, conversion rights, subscription rights or other
        agreements or arrangements of any character or nature whatsoever under which
        the
        Company or the Subsidiaries are or may be obligated to issue or acquire their
        shares of capital stock or any other equity or ownership interests.

       

      SECTION
        3.5 Litigation

       

      (a) Affecting
        this Transaction.
        There
        are no
        Actions pending or, to the Knowledge of the Sellers, threatened
        against
        the Sellers, the Company or the Subsidiaries, nor any outstanding Orders
        against
        the Sellers, the Company or the Subsidiaries, which
        seek to prohibit or adversely restrict or delay the consummation of the
        transactions contemplated hereby or would adversely affect the ability of
        the
        Sellers, the Company or the Subsidiaries, to consummate
        the
        transactions contemplated hereby. 

       

      (b) Affecting
        the Company or the Subsidiaries.
        Schedule
        3.5(b)
        sets
        forth a list of all pending, and, to the Knowledge of the Sellers, threatened
        Actions, Orders, disputes and grievances against or, to the Knowledge of
        the
        Sellers, affecting the Company or any of their respective properties, assets,
        operations or business. Neither the Company nor any of the Subsidiaries is
        in
        default under any Order entered against, or, to the Knowledge of the Sellers,
        applicable to, them or any of their respective properties, assets, operations
        or
        business. Except as set forth on Schedule
        3.5(b),
        there
        are no Actions by the Company or the Subsidiaries pending, or which the Company
        or the Subsidiaries intend to initiate, against any Person. Except as set
        forth
        on Schedule
        3.5(b),
        none of
        the Sellers, the Company or the Subsidiaries, and, to the Knowledge of the
        Sellers, none of the employees, officers, directors or agents of the Company
        or
        the Subsidiaries, has been or is subject to any Order with respect to any
        criminal violation or alleged criminal violation of any Law and, to the
        Knowledge of the Sellers, there are no pending, threatened or imminent Actions
        or Orders with respect to any criminal violation or alleged criminal violation
        of any Law against any such Persons.

       

      
        
          
          

        

        
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      SECTION
        3.6 Financial
        Statements; Books and Records

       

      (a) Financial
        Statements.
        The
        audited financial statements for the fiscal years ended December 31, 2005
        and
        the unaudited financial statements for the fiscal year ended December 31,
        2006
        and the fiscal quarter ended March 31, 2007 (which have been prepared in
        a
        manner consistent with the Company’s audited financial statements for the years
        ended December 31, 2005 and December 31, 2006) (collectively, the “Company
        Financial Statements”),
        all
        of which are attached as Schedule 3.6(a)
        hereto,
        present fairly, and, with respect to the June 30, 2007 projected financial
        statements, will present fairly, in all material respects the consolidated
        financial position,
        the consolidated income, shareholders’ equity and cash flows of the Company and
        the Subsidiaries, as of the dates and for the periods indicated therein,
        in
        accordance with GAAP and are consistent with the books and records of the
        Company and the Subsidiaries.

       

      (b) Books
        and Records.
        The
        books of account, minute books, stock record books, and other records of
        the
        Company and the Subsidiaries, all of which have previously been made available
        to the Buyer, are complete and correct in all material respects, contain
        accurate and complete records of all meetings held of, and corporate or
        organizational action taken by, the stockholders or holders of ownership
        interests, as the case may be, the directors, managers and committees of
        the
        directors or managers, as the case may be, and have been maintained in
        accordance with sound business practices. No meetings were held for which
        minutes were not prepared and are not contained in such minute books.

       

      SECTION
        3.7 Liabilities
        Not in the Ordinary Course of Business

       

      Except
        as
        set forth on Schedule
        3.7
        or the
        Company Financial Statements, the Company and the Subsidiaries do not and
        immediately following the Closing will not have any material Liabilities
        (and
        there is no Basis for any present or future Action giving rise to any material
        Liability) except for (i) Liabilities incurred in the ordinary course of
        business and consistent with past practices (none of which arises out of,
        relates to, is in the nature of, or was caused by any breach of contract,
        breach
        of warranty, tort, infringement or violation of law including the income
        Tax
        laws applicable to each jurisdiction in which the Company and the Subsidiaries
        operate) and (ii) obligations not in default under contracts entered into
        in the
        ordinary course of business. 

      

      SECTION
        3.8 Absence
        of Change

       

      Since
        December 31, 2006, except as set forth on Schedule
        3.8,
        the
        Company and the Subsidiaries have conducted their business in the ordinary
        course, consistent with past practice, and: 

       

      (a) there
        has
        not been any Material Adverse Change;

       

      (b) the
        Company and the Subsidiaries have not entered into any transaction or incurred,
        created, assumed or guaranteed any Liability or obligation other than in
        the
        ordinary course of business substantially consistent with past practice and
        the
        Company and the Subsidiaries have not made any capital expenditure (or series
        of
        related capital expenditures) either involving more than $50,000 or outside
        the
        ordinary course of business;

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (c) the
        Company and the Subsidiaries have not sold, leased, transferred or assigned
        any
        assets other than in the ordinary course of business substantially consistent
        with past practice, other than assets that have been replaced with other
        assets
        of equal or greater value nor sold or otherwise disposed of their capital
        stock,
        or granted any options, warrants or other rights to purchase or obtain any
        of
        their capital stock;

       

      (d) the
        Company or the Subsidiaries have not mortgaged, pledged or subjected to any
        Lien
        any of their assets other than Liens with respect to current Taxes not yet
        due;

       

      (e) the
        Company or the Subsidiaries have not suffered any material damage, destruction
        or loss, whether or not covered by insurance, (i) that individually or in
        the
        aggregate would have a Material Adverse Effect or (ii) of any item carried
        on their books of account at more than $25,000, or suffered any repeated,
        recurring or prolonged shortage, cessation or interruption of supplies or
        utility services required to conduct their business and operations;

       

      (f) the
        Company or the Subsidiaries have not (i) changed any of the Employee Benefit
        Plans, (ii) granted any general increase in any rate or rates of salaries
        or
        compensation or in benefits of any kind to its employees other than in the
        ordinary course of business substantially consistent with past practice or
        (ii)
        any specific increase in the salary of or compensation to any employee whose
        total salary and compensation after such increase would be at an annual rate
        in
        excess of $75,000;

       

      (g) the
        Company or the Subsidiaries have not made or suffered any amendment or
        termination of any material agreement, contract, commitment, or lease to
        which
        they are a party or by which they are bound, or cancelled, modified or waived
        any debts or claims held by them, other than in the ordinary course of business
        consistent with past practice, or waived any rights of substantial value,
        whether or not in the ordinary course of business;

       

      (h) the
        Company or the Subsidiaries have not changed any of the accounting principles
        followed by them or the methods of applying such principles, except as required
        by GAAP; 

       

      (i) the
        Company or the Subsidiaries have not made any material tax elections;

       

      (j) the
        Company or the Subsidiaries have not postponed or delayed the payment of
        accounts payable and other Liabilities outside the ordinary course of business
        or accelerated the collection of their accounts receivable;

       

      (k) the
        Company or the Subsidiaries have not transferred, assigned or granted any
        license or sublicense of any rights under or with respect to any Intellectual
        Property;

       

      (l) the
        Company or the Subsidiaries have not declared, set aside or paid any dividend
        or
        made any distribution with respect to their capital;

       

      
        
          
          

        

        
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      (m) the
        Company or the Subsidiaries have not made any loan to or entered into any
        other
        transaction with, any of their directors, managers, officers and employees;
        and

       

      (n) the
        Company or the Subsidiaries have not agreed to do any of the foregoing.

       

      SECTION
        3.9 Title
        to Assets; Condition; Sufficiency

       

      Except
        as
        set forth on Schedule 3.9,
        the
        Company and the Subsidiaries have good and marketable title to, or a valid
        leasehold interest in and to, all of the properties and assets used by them,
        free and clear of all Liens (other than Permitted Liens), except for properties
        and assets disposed of in the ordinary course of business consistent with
        past
        practice. All of these assets are in good and usable condition, ordinary
        wear
        and tear excepted, are free from defects (patent and latent), have been
        maintained in accordance with normal industry practice and are being used
        in the
        business of the Company and the Subsidiaries and are suitable for the purposes
        for which they are used. The Company’s and Subsidiaries’ assets, together with
        the Company IP, and the other properties being leased by the Company and
        the
        Subsidiaries pursuant to the leases described on Schedule 3.10, constitute
        all
        of the assets, properties, rights and interests necessary to conduct the
        business of the Company and the Subsidiaries in substantially the same manner
        as
        such is and since December 31, 2005 has
        been
        conducted by the Company and the Subsidiaries.

      

      SECTION
        3.10 Real
        Property

       

      The
        Company and the Subsidiaries do not own any real property. Schedule
        3.10
        contains
        a brief description of all real property leased by the Company and the
        Subsidiaries and lists all agreements, in each case as amended, modified
        and
        supplemented to date (the “Leases”),
        pursuant to which the Company and the Subsidiaries lease, sublease, or otherwise
        occupy (whether as landlord, tenant, subtenant or pursuant to any other
        occupancy arrangement) any real property and interests in real property (the
        “Leased
        Property”).
        The
        Sellers have delivered to the Buyer true and complete copies of the Leases,
        together with all amendments, modifications and supplements thereto. With
        respect to each Leased Property:

       

      (a) The
        Company and the Subsidiaries have a valid and enforceable leasehold interest
        in
        the Leased Property, free and clear of all Liens other than Permitted
        Liens;

       

      (b) (i)
        each
        Lease is in full force and effect and constitutes a valid and binding obligation
        of, and is legally enforceable against, each of the other parties thereto,
        (ii)
        the Company and the Subsidiaries enjoy peaceful and undisturbed possession
        under
        all Leases, and (iii) all of the buildings and structures (including all
        fixtures, equipment, roof, heating, ventilation, air conditioning, mechanical,
        electrical and other holding systems, wiring, computer and cable installations)
        leased by the Company and the Subsidiaries are in reasonably good repair
        and
        operating condition, subject to normal wear and tear, and are adequate and
        suitable for their present uses;

       

      (c) with
        respect to each Lease, the Company and the Subsidiaries are not in breach
        or
        default, and no event has occurred which, with notice or lapse of time or
        both,
        would constitute a breach or default or permit termination or acceleration
        thereunder and there are no disputes, oral agreements or forbearance programs
        in
        effect, as to such Lease;

       

      
        
          
          

        

        
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      (d) except
        as
        expressly set forth on Schedule
        3.10,
        the
        transactions contemplated by this Agreement do not require the consent of
        any
        other party to such Lease, will not result in a breach of or default under
        such
        Lease, and will not otherwise cause such Lease to cease to be legal, valid,
        binding, enforceable and in full force and effect on identical terms following
        the Closing;

       

      (e) the
        Leased Properties and all improvements on the Leased Properties are in
        compliance with all applicable Laws including those applicable to zoning,
        building and planning and the establishment and maintenance of working
        conditions for labor; 

       

      (f) current
        use and occupancy of the Leased Properties and the operation of the Company’s
        and the Subsidiaries Business as currently conducted thereon do not violate
        any
        easement, covenant, condition, restriction or similar provision in any
        instrument of record or other unrecorded agreement affecting such properties
        and
        the Sellers, the Company and the Subsidiaries (including their key employees,
        directors and officers) have not received (and there is no Basis for) any
        notice
        of any such violation; 

       

      (g) the
        Company and the Subsidiaries have not assigned, transferred, conveyed,
        mortgaged, deeded in trust or encumbered any interest in any Leased Property
        and
        except as expressly set forth in Schedule
        3.10
        the
        Company and the Subsidiaries have not subleased, licensed or otherwise granted
        any Person the right to use or occupy the Leased Properties or any portion
        thereof; and

       

      (h) there
        is
        no condemnation, expropriation or other proceeding in eminent domain, pending
        or
        threatened, affecting any parcel of Leased Property or any portion thereof
        or
        interest therein.

       

      SECTION
        3.11 Intellectual
        Property

       

      (a) Company
        IP.
        Schedule
        3.11 (a)
        sets
        forth a list of (i) all registrations and applications for the registration
        of
        Company IP, (ii) all unregistered Company IP, (iii) all websites, domain
        names
        and material software owned or used by the Company or the Subsidiaries, (iv)
        the
        names of all distributors of the Company or the Subsidiaries who have a right
        to
        use the any of the Company’s or the Subsidiaries’ names in connection with the
        Business, and (v) each license, sublicense, agreement or other permission
        that
        the Company or the Subsidiaries have granted to any third party with respect
        to
        the Company IP. All of the Company IP is valid, has not expired, been abandoned
        or cancelled. To the Knowledge of the Sellers, the Company IP and the use
        thereof does not infringe, dilute or otherwise impair or violate the rights
        of
        any other Person. To the Knowledge of the Sellers, the Company IP is not
        being
        infringed, diluted or otherwise impaired or violated by any other Person.
        Neither the Company or the Subsidiaries (including its key employees, directors
        and officers) nor the Sellers have
        received any written notice alleging any such infringement. No Action or
        Order
        is pending or outstanding, or, to the Knowledge of the Sellers, is threatened
        or
        imminent, that seeks to cancel, limit or challenge the validity, enforceability,
        ownership or use of any Company IP, and neither the Company or the Subsidiaries
        (including their key employees, directors and officers) nor the Sellers know
        of
        any valid Basis for same. To the Knowledge of the Sellers, no loss of any
        Company IP is threatened, pending, or reasonably foreseeable (and not as
        a
        result of any act or omission by Sellers or of the Company or the Subsidiaries).
        No expiration of any Company IP is threatened, pending, or reasonably
        foreseeable, except for patents expiring at the end of their statutory terms
        (and not as a result of any act or omission by Sellers or of the Company
        or the
        Subsidiaries). 

       

      
        
          
          

        

        
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      (b) Exceptions
        to Company IP.
        Except
        as expressly set forth on Schedule 3.11(b),
        the
        Company and the Subsidiaries (i) own and possess all right, title and interest
        in and to, or (ii) possess a valid and enforceable license and right to
        use, the Company IP in
        the
        manner in which it has been used and is proposed to be used by the Company
        and
        the Subsidiaries,
        free
        and clear of all Liens. Except as set forth on Schedule
        3.11(b),
        the
        Company and the Subsidiaries have taken reasonable actions (including executing
        with current and past employees, contractors and agents non-disclosure and
        intellectual property assignment agreements, filing for statutory protections
        and paying such employees, contractors and agents all remuneration required
        by
        Law or agreement with respect to intellectual property developed by them
        which
        constitutes Company IP) to protect, preserve, police and maintain the Company
        IP. The Company IP constitutes all of the Intellectual Property necessary
        for
        the operation of the Business as presently conducted and as proposed to be
        conducted. Each item of Company IP existing immediately prior to the Closing
        will be owned or available for use by the Company or the Subsidiaries on
        identical terms and conditions immediately subsequent to the Closing. No
        actions
        are necessary (including filing of documents or payment of fees, including
        with
        respect to pre-Closing periods) within 120 days after the Closing Date to
        maintain or preserve the validity or status of any Company IP that is registered
        or for which an application is pending.

       

      (c) Licensed
        Intellectual Property.
        Schedule
        3.11(c)
        identifies each item of Company IP that any third party owns and that the
        Company or the Subsidiaries use pursuant to license, sublicense, agreement,
        or
        permission. The Sellers have delivered to the Buyer correct and complete
        copies
        of all such licenses, sublicenses, agreements, and permissions (as amended
        to
        date). With respect to each item of Company IP identified on Schedule
        3.11(c):
        (i) the
        license, sublicense, agreement, or permission covering the item is and will
        following the Closing continue to be (on identical terms) legal, valid, binding,
        enforceable, and in full force and effect; (ii) to the Knowledge of the Sellers,
        no party to the license, sublicense, agreement, or permission is in breach
        or
        default, and no event has occurred that with notice or lapse of time would
        constitute a breach or default or permit termination, modification, or
        acceleration thereunder; (iii) the underlying item of Intellectual Property
        is
        not subject to any outstanding Order; and (iv) no Action is pending or to
        the
        Knowledge of the Sellers is threatened that challenges the legality, validity,
        or enforceability of the underlying item of Intellectual Property, and there
        is
        no Basis for the same.

       

      (d) New
        Developments.
        To the
        Knowledge of the Sellers, there are no new products, inventions, procedures,
        or
        methods of manufacturing or processing that any competitors or other third
        parties have developed that reasonably would be expected to supersede or
        make
        obsolete any product or process of the Company or the Subsidiaries or to
        limit
        the Business as presently conducted or as presently proposed to be
        conducted.

       

      
        
          
          

        

        
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      (e) Systems.
        The
        Company and the Subsidiaries (i) use commercially reasonable efforts to protect
        the confidentiality, integrity and security of their Systems; (ii) obey and
        follow in all material respects all applicable Laws (as in effect on the
        date
        hereof and on the Closing Date) with respect to data protection and privacy
        and
        have not violated their own privacy policy, (iii) use reliable encryption
        (or
        equivalent) protection, to ensure the security and integrity of transactions
        executed through their Systems; (iv) use reliable methods (including passwords)
        to ensure the correct identity of the users of its Systems; (v) use commercially
        reasonable mechanisms to ensure the accuracy of any transactions executed
        through its Systems; and (vi) have implemented commercially reasonable disaster
        recovery and business continuity capabilities for their Systems and their
        Business. 

       

      SECTION
        3.12 Compliance
        with Law

       

      To
        the
        Knowledge of the Sellers, other than as stated in Schedule 3.12,
        neither
        the Company or the Subsidiaries nor the operations of the Company’s or the
        Subsidiaries’ Business, as conducted at the date hereof and as will be conducted
        through the Closing Date, violate, in any material respect, any foreign,
        federal, state or local law, ordinance, rule or regulation. For purposes
        of
        clarity, this Section 3.12 does not apply, and Section 3.17 contains
        the sole representations of the Company related to, Tax matters.

       

      SECTION
        3.13 Contracts;
        Status of Contracts

       

      Schedule
        3.13
        contains
        a correct and complete list of the following material commitments, contracts,
        agreements, arrangements or undertakings, whether oral or written (and in
        the
        case of oral commitments, contracts, agreements, arrangements or undertakings,
        also contains a description of the material terms thereof) to which the Company
        or the Subsidiaries are a party or by which their assets or properties are
        bound
        (“Contracts”):

       

      (a) all
        Contracts (or group of related Contracts), for the purchase or sale or lease
        of
        goods, services, supplies, real property or capital assets, each requiring
        aggregate future payments by or to the Company or the Subsidiaries of more
        than
        $25,000 or having a non-cancelable term of more than six months;

       

      (b) all
        Contracts for the distribution of the products of the Company or the
        Subsidiaries;

       

      (c) prior
        to
        Closing, Seller shall present copies of all employment, management, consulting,
        profit sharing, stock option, stock purchase or stock appreciation Contracts
        or
        other equity-incentive, deferred compensation, retirement, change in control
        or
        severance Contracts or other agreements that provide for payments relating
        to
        the foregoing, including service agreements with self-employed persons, and
        all
        collective bargaining agreements, and, with respect to standard form employment
        contracts and service agreements, a description of the general provisions
        thereof, applicable to remuneration and other compensation (e.g. company
        car,
        vacation bonus, vacation entitlements, termination and prohibition of
        competition) and provisions applicable to specific Persons only;

       

      
        
          
          

        

        
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      (d) all
        joint
        venture, partnership or other Contracts involving the sharing of profits
        or
        losses; 

       

      (e) all
        acquisition or divestiture agreements that are currently enforceable against
        the
        Company or the Subsidiaries, including all Contracts relating to the acquisition
        by the Company or the Subsidiaries of the outstanding capital stock, equity
        interests or substantially all of the assets of any business
        enterprise;

       

      (f) all
        material Contracts with the Company’s or Subsidiaries’ Affiliates, or with any
        of the Sellers or with any of the Company’s or the Subsidiaries’ directors,
        officers or any combination of such Persons;

       

      (g) all
        notes, mortgages, indentures, loan or credit agreements and other commitments,
        Contracts or instruments reflecting obligations for borrowed money or other
        monetary Indebtedness or otherwise relating to the borrowing of money by,
        or the
        extension of credit to, the Company or the Subsidiaries and all security
        agreements securing Indebtedness of the Company or the Subsidiaries;

       

      (h) outstanding
        guarantees, subordination agreements, indemnity agreements and other similar
        types of Contracts under which the Company or the Subsidiaries are or may
        become
        liable for or obligated to discharge, or any asset of the Company or the
        Subsidiaries are or may become subject to the satisfaction of, any Indebtedness,
        obligation, performance or undertaking of any Person;

       

      (i) all
        Contracts preventing or restricting the Company’s or the Subsidiaries’ business
        activities in any location, including all non-competition
        agreements;

       

      (j) all
        other
        agreements, commitments and understandings (written or oral) that require
        payment by or to the Company or the Subsidiaries of more than $25,000 or
        that
        cannot be terminated on less than 30 days’ notice without liability or are
        otherwise material to the business operations of the Company or the
        Subsidiaries; and 

       

      (k) all
        other
        material commitments, agreements, arrangements or undertakings to enter into
        any
        of the foregoing agreements.

       

      The
        Sellers have delivered to the Buyer true and complete copies of each material
        Contract set forth on Schedule
        3.13,
        including all amendments, exhibits, schedules, modifications, waivers and
        elections applicable thereto. Except as set forth on Schedule
        3.13,
        with
        respect to each Contract: (i) such Contract is legal, valid, binding,
        enforceable and in full force and effect; (ii) such Contract will continue
        to be legal, valid, binding, enforceable and in full force and effect on
        identical terms immediately following the consummation of the transactions
        contemplated hereby; (iii) neither the Company or the Subsidiaries nor, to
        the Knowledge of the Sellers, any other party thereto is in breach or default
        with respect to such Contract; (iv) to the Knowledge of the Sellers, no event
        has occurred which with notice or lapse of time would constitute a breach
        or
        default, or permit termination, modification, or acceleration, under any
        such
        Contract; and (v) such Contract was entered into in the ordinary course of
        business. Except as expressly set forth on Schedule
        3.13,
        no
        consent, approval, authorization, license, order or permit of, or declaration,
        filing or registration with, or notification to, any Governmental Authority
        or
        any other Person is required under any Contract in connection with the
        transaction contemplated by this Agreement. 

       

      
        
          
          

        

        
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      SECTION
        3.14 Insurance

       

      The
        Company and the Subsidiaries
        maintains insurance coverage on their respective structures, facilities,
        equipment and other assets and properties and with respect to their employees
        and operations, which covers liabilities and risks prudently insured against
        by
        similar businesses and which insurance provides coverage that is, in light
        of
        industry practices and the operations of the
        Company and the Subsidiaries.
        At least
        five (5) Business Days prior to Closing, Sellers shall deliver Schedule
        3.14
        which
        sets forth the following information with respect to each insurance policy
        (including any self insurance arrangements) to which the Company and the
        Subsidiaries have been a party, a named insured, or otherwise the beneficiary
        of
        coverage at any time within the past two years: (a) the name, address, and
        telephone number of the agent; (b) the name of the insurer, the name of the
        policyholder, and the name of each covered insured; (c) the policy number
        and
        the period of coverage; and (d) the scope (including an indication of whether
        the coverage was on a claims made, occurrence, or other basis) and amount
        (including a description of how deductibles and ceilings are calculated and
        operate) of coverage. With respect to each such insurance policy: (a) the
        policy is and will continue following the Closing to be (on identical terms)
        legal, valid, binding and enforceable in accordance with its terms and is
        outstanding and in full force and effect; (b) neither the Company and the
        Subsidiaries or, to the Knowledge of the Sellers, any other party to the
        policy,
        are in breach or default (including with respect to the payment of premiums
        or
        the giving of notices), and, to the Knowledge of the Sellers, no event has
        occurred which, with notice or the lapse of time, would constitute such a
        breach
        or default, or permit termination, modification or acceleration under the
        policy; and (c) there are no outstanding unpaid premiums or claims under
        any such policy. Since December 31, 2005, no disallowance of any claim under
        any
        such insurance policy has been received by the Company and the Subsidiaries
        and
        the Company and the Subsidiaries have not been refused any insurance nor
        received any notice of cancellation or nonrenewal. The Company and the
        Subsidiaries are not now, nor will in the future be, obligated to pay any
        retroactively or retrospectively rated premiums or premium adjustments,
        deductible amounts or self-insured retentions in connection with any such
        insurance policies with respect to the period prior to the Closing Date.
        Since
        December 31, 2005, there has not been any failure to present any material
        claim
        under any such insurance policy in a timely fashion or in the manner or detail
        required by such insurance policy. 

       

      SECTION
        3.15 Employee
        Benefits

       

      (a) Schedule
        3.15
        (i)
        contains a true and complete list and description of each Employee Benefit
        Plan,
        other than the Employee Benefit Plans which are expressly required by applicable
        Law to be maintained and are maintained in accordance with (and do not in
        any
        manner differ from) the requirements of applicable Law and (ii) identifies
        each
        Employee Benefit Plan that is intended to qualify under Section 401(a) of
        the
        Code. With respect to each oral Employee Benefit Plan, Schedule
        3.15
        sets
        forth a complete summary of its terms and conditions.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      (b) True
        and
        complete copies of each Employee Benefit Plan, including all amendments thereto
        and related trust, insurance contracts, and other funding arrangements have
        been
        delivered to the Buyer prior to the execution of this Agreement.

       

      (c) Each
        Employee Benefit Plan is, and has been since its inception, administered
        in
        accordance with its terms and with the requirements of all Laws, including
        but
        not limited to ERISA, that are applicable to each such Employee Benefit Plan.
        In
        respect of each Employee Benefit Plan, the Company and the Subsidiaries have
        not
        failed to make any contribution to, or to pay any premium, tax, or funding
        obligation due and payable or typically paid as of a date on or before the
        Closing Date, as required by applicable Law, employment contract, or the
        terms
        of such Employee Benefit Plan. None of the Company or the Subsidiaries, any
        Employee Benefit Plan or any “party in interest,” as defined in Section 3(14) of
        ERISA, has engaged in a “prohibited transaction” which could subject any of them
        or Buyer to liability under Section 409 or Section 502(i) of ERISA or Section
        4975 of the Code.

       

      (d) Neither
        the Sellers, the Company or the Subsidiaries, any predecessor or ERISA Affiliate
        nor any other person Controlled by or under common Control with any of the
        foregoing within the meaning of Section 4001 of ERISA, has at any time
        contributed to any (i) “multiemployer plan,” as defined in Section 4001 of
        ERISA, or (ii) defined benefit pension plan which is subject to Part 3 of
        Title
        I of ERISA, Title IV of ERISA or Section 412 of the Code.

       

      (e) There
        is
        no pending or, to the Knowledge of the Sellers, threatened legal Action,
        against
        the Sellers, the Company or the Subsidiaries or any Employee Benefit Plan
        which
        would reasonably be expected to result in liability to the Buyer, to any
        Person,
        or to any Employee Benefit Plan, and, to the Knowledge of the Sellers, there
        is
        no Basis for any such action, proceeding or investigation.

       

      (f) No
        benefit under any Employee Benefit Plan, including, without limitation, any
        severance, change of control, or “parachute” payment plan or agreement, will be
        established or become accelerated, vested, funded or payable on account of
        any
        transaction contemplated by this Agreement.

       

      (g) The
        Sellers and the Company and the Subsidiaries have not scheduled or agreed
        upon
        future increases of benefit levels under any Employee Benefit Plan or the
        establishment of new benefits or Employee Benefit Plans, and no such increases
        or establishment of benefits have been proposed, made the subject of
        representations to employees or their representatives, requested or demanded
        by
        employees under circumstances which make it reasonable to expect that such
        increases or benefits will be effected.

       

      (h) The
        Sellers have provided or will provide timely notice to all Governmental
        Authorities, benefit administrators, employees, employee representatives
        or
        other Persons as required by Law, labor or other contract, or the terms of
        any
        Employee Benefit Plan to be given on or before the Closing Date on account
        of a
        change of control or identity of the employer or sponsor of an Employee Benefit
        Plan, termination of employees, or any transaction contemplated by this
        Agreement.

       

      
        
          
          

        

        
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      SECTION
        3.16 Employment
        Matters 

       

      Except
        as
        disclosed on Schedule
        3.16,
        (a) the
        Company and the Subsidiaries are not a party to, bound by, or negotiating
        in
        respect of any collective bargaining agreement or any other agreement with
        any
        labor union, association or other representative of any employees of the
        Company
        and the Subsidiaries, nor is any employee of the Company and the Subsidiaries
        represented by any labor union or other representative organization; (b) no
        labor union or other representative organization has been certified or
        recognized as the collective bargaining representative of any employees of
        the
        Company and the Subsidiaries; (c) there are no organizing campaigns or
        representation proceedings or campaigns in process to form a union, or
        collective bargaining unit or, to the Knowledge of Sellers, threatened, with
        respect to any employees of the Company and the Subsidiaries; (d) there are
        no existing nor, to the Knowledge of the Sellers, threatened labor strikes,
        work
        stoppages, organized slowdowns, unfair labor practice charges or complaints
        or
        labor arbitration proceedings affecting any employee of the Company and the
        Subsidiaries, and the Company and the Subsidiaries have not experienced any
        such
        labor controversy within the past five years; (e) the Company and the
        Subsidiaries paid in full to its employees all wages, salaries, commissions,
        bonuses, benefits and other compensation payable, as applicable, on or before
        the date hereof and on or before the Closing Date or otherwise arising as
        of
        such date under any policy, practice, agreement, plan, program, statute or
        other
        Law; (f) the Company and the Subsidiaries have not closed any plant or
        facility, effectuated any layoffs of employees or implemented any early
        retirement, separation or window program within the past five years, nor
        have
        the Company and the Subsidiaries planned or announced any such action or
        program
        for the future, and (g) the Company and the Subsidiaries are in compliance
        with
        all notification and bargaining obligations arising under applicable Laws.
        The
        Company and the Subsidiaries are in compliance with all applicable Laws,
        collective bargaining agreements, and employment contracts respecting
        employment, employment practices, work permits, terms and conditions of
        employment, and wages and hours requirements. The Company and the Subsidiaries
        are not engaged in any unfair labor practice and there is no unfair labor
        practice complaint against the Company and the Subsidiaries or grievance
        or
        labor arbitration pending. Neither the Sellers nor the Company and the
        Subsidiaries (including its key employees, directors and officers) have received
        any notice that any petition respecting any of the Company and the Subsidiaries
        employees has been filed with the U.S. National Labor Relations Board.

       

      SECTION
        3.17 Taxes

       

      (a) Each
        of
        the Company and the Subsidiaries have filed timely all Tax Returns that they
        were required to file under applicable Laws. All such Tax Returns were correct
        and complete in all respects and were prepared in compliance with all applicable
        Laws. All Taxes due and owing by the Company and the Subsidiaries (whether
        or
        not shown on any Tax Return) have been paid. The Company and the Subsidiaries
        currently are not the beneficiaries of any extension of time within which
        to
        file any Tax Return other than as stated in Schedule 3.17.
        No
        claim has ever been made by an authority in a jurisdiction where the Company
        and
        the Subsidiaries do not file Tax Returns that the Company or the Subsidiaries
        is
        or may be subject to taxation by that jurisdiction. There are no Liens for
        Taxes
        (other than Taxes not yet due and payable) upon any of the assets of the
        Company
        and the Subsidiaries.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (b) The
        Company and the Subsidiaries have withheld and paid all Taxes required to
        have
        been withheld and paid in connection with any amounts paid or owing to any
        employee, independent contractor, creditor, stockholder, or other third party.
        

       

      (c) Neither
        the Sellers nor any of the directors and officers (or employees responsible
        for
        Tax matters) of the Company or the Subsidiaries expect any Governmental
        Authority to assess any additional Taxes for any period for which Tax Returns
        have been filed. No foreign, federal, state, or local Tax audits or
        administrative or judicial Tax proceedings are pending or being conducted
        with
        respect to the Company or the Subsidiaries. The Company and the Subsidiaries
        have not received from any foreign, federal, state, or local taxing authority
        (including jurisdictions where such Company has not filed Tax Returns) any
        (i)
        notice indicating an intent to open an audit or other review, (ii) request
        for
        information related to Tax matters, or (iii) notice of deficiency or proposed
        adjustment for any amount of Tax proposed, asserted, or assessed by any taxing
        authority against the Company or the Subsidiaries. Schedule
        3.17
        lists
        all Tax Returns filed with respect to the Company or the Subsidiaries for
        taxable periods ended on or after December 31, 2000, indicates those Tax
        Returns
        that have been audited, and indicates those Tax Returns that currently are
        the
        subject of audit. The Sellers have delivered to the Buyer correct and complete
        copies of all Tax Returns for Taxes, and all examination reports, and statements
        of deficiencies assessed against or agreed to by the Company or the Subsidiaries
        filed or received since December 31, 2003.

       

      (d) The
        Company and the Subsidiaries have not waived any statute of limitations in
        respect of Taxes or agreed to any extension of time with respect to a Tax
        assessment or deficiency.

       

      (e) Neither
        the Company nor any of its Subsidiaries is a party to any agreement, contract,
        arrangement or plan that has resulted or could result, separately or in the
        aggregate, in the payment of (i) any “excess parachute payment” within the
        meaning of Code Section 280G (or any corresponding provision of state, local
        or
        foreign Tax law) and (ii) any amount that will not be fully deductible as
        a
        result of Code Section 162(m) (or any corresponding provision of state, local
        or
        foreign Tax law). Neither the Company nor any of its Subsidiaries has been
        a
        United States real property holding corporation within the meaning of Code
        Section 897(c)(2) during the applicable period specified in Code Section
        897(c)(1)(A)(ii). The Company and the Subsidiaries are not a party to or
        bound
        by any Tax allocation or sharing agreement. The Company and the Subsidiaries
        (i)
        have not been a member of an Affiliated Group filing a consolidated federal
        income Tax Return (other than a group the common parent of which was the
        Company) and (ii) have satisfied any Liability for the Taxes of any Person
        (other than the Company or the Subsidiaries) under Reg. §1.1502-6 (or any
        similar provision of state, local, or foreign law), as a transferee or
        successor, by contract, or otherwise. 

       

      (f) The
        unpaid Taxes of the Company and the Subsidiaries (i) did not, as of May 31,
        2007, exceed the reserve for Tax Liability (including any reserve for deferred
        Taxes established to reflect timing differences between book and Tax income)
        set
        forth on the face of the March 31, 2007 balance sheet (rather than in any
        notes
        thereto) and (ii) do not exceed that reserve as adjusted for the passage
        of time
        through the Closing Date in accordance with the past custom and practice
        of the
        Company and the Subsidiaries in filing their Tax Returns. Since March 31,
        2007,
        the Company and the Subsidiaries have not incurred any liability for Taxes
        arising from extraordinary gains or losses, as that term is used in GAAP,
        outside the ordinary course of business consistent with past custom and
        practice.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      (g) To
        the
        Knowledge of the Sellers, the Company and the Subsidiaries will not be required
        to include any item of income in, or exclude any item of deduction from,
        taxable
        income for any taxable period (or portion thereof) ending after the Closing
        Date
        as a result of any:

       

      (i) change
        in
        method of accounting for a taxable period ending on or prior to the Closing
        Date; 

       

      (ii) any
        agreement with any Tax authority executed on or prior to the Closing Date;
        

       

      (iii) intercompany
        transaction or excess loss account described in Treasury Regulations under
        Code
§1502 (or any corresponding or similar provision of state or local income
        Tax
        law); 

       

      (iv) installment
        sale or open transaction disposition made on or prior to the Closing Date;
        or

       

      (v) prepaid
        amount received on or prior to the Closing Date.

       

      (h) The
        Company and the Subsidiaries have met all prerequisites and requirements
        for any
        investment grants and subsidies received or accrued.

       

      SECTION
        3.18 Accounts
        Receivable; Accounts Payable

       

      (a) Accounts
        Receivable; Accounts Payable.
        All
        accounts receivable of the Company and the Subsidiaries are reflected properly
        on their books and records, are valid receivables subject to no setoffs or
        counterclaims, are, to the Knowledge of Sellers, current and collectible
        and
        will be collected in the ordinary course of business at their recorded amounts,
        subject only to the reserve for bad debts set forth on the face of the May
        31,
        2007 balance sheet (rather than in any notes thereto) as adjusted for the
        passage of time through the Closing Date in accordance with the past custom
        and
        practice of the Company and the Subsidiaries. Schedule
        3.18(a)
        sets
        forth a complete and accurate list of all outstanding accounts receivable
        as of
        the date of this Agreement, which list sets forth the aging of such accounts
        receivables.

       

      (b) Accounts
        Payable.
        Schedule
        3.18(b)
        contains
        a complete and accurate list of all accounts payable as of the date of this
        Agreement, which list sets forth the aging of each such account payable.
        All
        accounts payable that are reflected on the March 31, 2007 balance sheet,
        on
Schedule
        3.18(b),
        or on
        the accounting records of the Company and the Subsidiaries as of the Closing
        Date represent valid obligations arising from products or services actually
        received by or loans actually made to the Company and the Subsidiaries in
        the
        ordinary course of business.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      SECTION
        3.19 Environmental
        Matters

       

      To
        the
        Knowledge of the Sellers, the Company and the Subsidiaries are, and at all
        prior
        times have been, in continuous compliance with all Environmental Laws and
        there
        is no condition that would reasonably be expected to prevent or interfere
        with
        such compliance with all Environmental Laws in the future.

       

      SECTION
        3.20 Customers

       

      Schedule
        3.20
        lists
        for the year ended December 31, 2006 and for the five months ended May 30,
        2007,
        its top 10 customers, listing for each customer the aggregate value of the
        sales
        made by the Company and the Subsidiaries in the year ended December 31, 2006
        and
        the five months ended May 30, 2007. Since December 31, 2006, there has not
        been
        (i) any material change in the business relationship of the Company and the
        Subsidiaries with any of their material customers, including all of the
        customers listed on Schedule
        3.20,
        or (ii)
        any change in any material term (including credit terms) of the customer
        agreements or other arrangements with any such customers. 

       

      SECTION
        3.21 Effect
        of Transaction

       

      Except
        as
        indicated on Schedule 3.21,
        no
        creditor, employee, client, customer, supplier or other Person having a business
        relationship with the Company and the Subsidiaries has informed the Sellers
        or
        the Company and the Subsidiaries (including their key employees, directors
        and
        officers) that such Person will, and, to the Knowledge of the Sellers, no
        such
        Person intends to, cancel, terminate or otherwise modify such relationship
        because of the consummation of any of the transactions contemplated hereby
        or
        otherwise.

       

      SECTION
        3.22 No
        Broker

       

      None
        of
        the Sellers the Company and the Subsidiaries (i) has had any dealings,
        negotiations or communications with or retained any broker or other intermediary
        in connection with the transactions contemplated by this Agreement or (ii)
        is
        committed to any liability for any brokers’ or finders’ fees or any similar fees
        in connection with the transactions contemplated by this Agreement.

       

      SECTION
        3.23 Additional
        Information

       

      Schedule
        3.23,
        to the
        extent not described on another Schedule to this Agreement, contains accurate
        lists and summary descriptions of the following:

       

      (a) the
        names
        and addresses of every bank and other financial institution in which the
        Company
        or the Subsidiaries maintain an account (whether checking, savings or
        otherwise), lock box or safe deposit box, and the account numbers and names
        of
        persons having signing authority or other access thereto;

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (b) the
        names
        of all persons authorized to borrow money or incur or guarantee indebtedness
        on
        behalf of the Company and the Subsidiaries; 

       

      (c) the
        names
        of all Persons holding powers of attorney from the Company and the Subsidiaries
        empowering them to act on behalf of the Company and the Subsidiaries and
        a
        summary statement of the terms thereof; and

       

      (d) any
        and
        all outstanding loans made, or taken or held by the Company and the
        Subsidiaries.

       

      SECTION
        3.24 Product
        Warranty and Product Liability

       

      (a) Product
        Warranty.
        To the
        Knowledge of the Sellers, each product manufactured, sold, leased, or delivered
        by the Company and the Subsidiaries has been in conformity with all applicable
        contractual commitments and all express and implied warranties. To the Knowledge
        of the Sellers, the Company and the Subsidiaries have no Liability (and there
        is
        no Basis for any present or future Action against any of them giving rise
        to any
        Liability) for replacement or repair thereof or other damages in connection
        therewith, subject only to the reserve for product warranty claims set forth
        on
        the face of the March 31, 2007 balance sheet (rather than in any notes thereto)
        as adjusted for the passage of time through the Closing Date in accordance
        with
        the past custom and practice of the Company and the Subsidiaries. Schedule
        3.24(a)
        includes
        copies of the standard terms and conditions of sale or lease for the Company
        and
        the Subsidiaries (containing applicable guaranty, warranty, and indemnity
        provisions). No product manufactured, sold, leased, or delivered by the Company
        and the Subsidiaries is subject to any guaranty, warranty, or other indemnity
        beyond the applicable standard terms and conditions of sale or lease set
        forth
        in Schedule
        3.24(a).

       

      (b) Product
        Liability.
        To the
        Knowledge of the Sellers, the Company and the Subsidiaries have no Liability
        (and there is no Basis for any present or future Action against any of them
        giving rise to any Liability) arising out of any injury to individuals or
        property as a result of the ownership, possession, or use of any product
        manufactured, sold, leased, or delivered by the Company and the
        Subsidiaries.

       

      SECTION
        3.25 Accredited
        Investors

       

      With
        respect to the issuance of the Vuance Shares to the Minority
        Shareholders:

       

      (a) The
        Minority Shareholders can bear the economic risk of this investment and can
        afford a complete loss thereof. The Minority Shareholders (i) have adequate
        means of providing for their current and presently foreseeable future needs,
        (ii) have no present need for liquidity of their investment in the Shares,
        and
        (iii) will not have an overall commitment to non-marketable investments
        disproportionate to its net worth.

      

      (b) The
        Minority Shareholders each qualify as an “accredited investor” as such term is
        defined under Rule 501 under the Securities Act of 1933 (the “Securities
        Act”),
        as
        amended. 

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      (c) The
        Minority Shareholders, and such other persons whom the Minority Shareholders
        have found it necessary or advisable to consult, have sufficient knowledge
        and
        experience in business and financial matters to evaluate the risks of the
        investment and to make an informed investment decision with respect thereto;
        and
        the Minority Shareholders have been provided with copies of the audited
        financial statements of the Buyer’s Parent for the fiscal years ended December
        31, 2005 and 2006 and the unaudited financial statements for the three months
        ended March 31, 2007 (collectively, the “Buyer’s
        Parent Financial Statements”)
        and a
        copy of the Buyer’s Parent annual report on Form 20-F for 2005, and have been
        given the opportunity to ask Buyer’s Parent management questions related to the
        operations and financial condition of Buyer’s Parent.

      

      (d) The
        Minority Shareholders understand that the issuance of the Vuance Shares has
        not
        been registered under the Securities Act, or pursuant to the provisions of
        the
        securities or other laws of any other applicable jurisdictions. The Minority
        Shareholders understand that the Vuance Shares are being issued in reliance
        upon
        the exemptions for private offerings contained in Regulation D as promulgated
        under the Securities Act and upon the laws of such other applicable
        jurisdictions based upon the fact that this issuance of Vuance Shares will
        only
        be made to a limited number of investors, and acknowledges that any certificate
        representing shares of the Vuance Shares shall bear a legend to such effect.
        The
        Minority Shareholders are fully aware that the reliance on such exemptions
        for
        their purchase of the Vuance Shares is based, in part, upon its representations,
        warranties and agreements hereto. As the issuance has not been registered
        under
        the Securities Act, the Minority Shareholders are fully aware that (i) they
        must
        bear the economic risk of its investment herein for the period of time which
        is
        required by the Act, and (ii) their investment in the Vuance Shares cannot
        be
        offered or sold unless the offering is subsequently registered under the
        Securities Act or an exemption from such registration of the Vuance Shares
        issued hereunder is contemplated. The Minority Shareholders understand that
        no
        federal or state agency has passed upon or made any recommendation or
        endorsement of the Vuance Shares. 

      

      The
        Minority Shareholders understand the meaning and legal consequences of the
        foregoing representations and warranties. Each such representation and warranty
        made by the Minority Shareholders shall survive the issuance of the Vuance
        Shares.

      

      SECTION
        3.26 No
        Series A Preferred Stock Payment Obligations

       

      As
        of the
        date of this Agreement, HMSC has no outstanding payment obligations to the
        Company pursuant to the Series A Convertible Preferred Stock Purchase Agreement,
        dated August 21, 2006 (the “Series
        A Preferred Stock Agreement”).

      

      SECTION
        3.27 Disclosure 

       

      The
        representations and warranties contained in this Article
        III
        do not
        contain any untrue statement of a material fact or omit to state any material
        fact necessary in order to make the statements and information contained
        in this
Article
        III
        not
        materially misleading.

       

      
        
          
          

        

        
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      ARTICLE
        IV

      REPRESENTATIONS
        AND WARRANTIES OF THE BUYER

       

      The
        Buyer
        and the Buyer’s Parent (with respect to Section 4.4 through 4.13) hereby
        represent and warrant to the Sellers that the statements contained in this
        Article
        IV
        are
        correct and complete as of the date of this Agreement and will be correct
        and
        complete as of the Closing Date (as though made then and as though the Closing
        Date were substituted for the date of this Agreement throughout this
Article
        IV.
        

       

      SECTION
        4.1 Organization

       

      The
        Buyer
        is a corporation duly organized, validly existing and in good standing under
        the
        Laws of the State of Delaware (as in effect on the date hereof and on the
        Closing Date).

       

      SECTION
        4.2 Due
        Authorization

       

      The
        Buyer
        has full right, power and authority to execute and deliver this Agreement
        and
        each agreement or instrument executed and delivered in connection herewith
        or
        pursuant hereto to which it is a party, to consummate the transactions
        contemplated hereby and thereby and to perform its obligations hereunder
        and
        thereunder. The Buyer’s execution, delivery and performance of this Agreement
        and all agreements and instruments executed in connection herewith and delivered
        pursuant hereto and its performance of the transactions contemplated hereby
        and
        thereby have been duly authorized by all requisite corporate action. This
        Agreement and all agreements or instruments executed and delivered by the
        Buyer
        in connection herewith or pursuant hereto have been or will at Closing be
        duly
        executed and delivered by the Buyer, and this Agreement and all agreements
        and
        instruments executed by the Buyer in connection herewith or delivered by
        the
        Buyer pursuant hereto constitute and will at Closing constitute legal, valid
        and
        binding obligations of the Buyer enforceable against the Buyer in accordance
        with their respective terms (except to the extent that enforcement may be
        affected by applicable bankruptcy, reorganization, insolvency and similar
        Laws
        affecting creditors’ rights and remedies generally and by general principles of
        equity (regardless of whether enforcement is sought at law or in
        equity)).

       

      SECTION
        4.3 Noncontravention

       

      The
        execution, delivery and performance by the Buyer of this Agreement and all
        of
        the other agreements or instruments contemplated hereby do not and will not
        (a)
        conflict with or violate any Laws (as in effect on the date hereof and on
        the
        Closing Date) applicable to the Buyer, (b) conflict with or violate any
        provision of the Buyer’s organization documents (c) violate, result in a
        breach, default or acceleration under, or give rise to any penalty or any
        right
        of termination, cancellation or modification under, any agreement to which
        the
        Buyer is a party or by which it is bound or (d) require the consent,
        approval, authorization, license, order or permit of, or declaration, filing
        or
        registration with, or notification to, any Governmental Authority, or any
        other
        Person. 

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      SECTION
        4.4 Issuance
        of the Vuance Shares. 

       

      The
        Vuance Shares, when issued and paid for in accordance with this Agreement,
        will
        be duly authorized and validly issued, fully paid and nonassessable, free
        and
        clear of all Liens imposed by the Buyer’s Parent other than restrictions on
        transfer provided for in this Agreement. 

       

      SECTION
        4.5 Capitalization.

       

      The
        capitalization of the Buyer’s Parent is as set forth on Schedule
        4.5.
        Except
        as set forth on Schedule
        4.5,
        (i) no
        Person has any right of first refusal, preemptive right, right of participation,
        or any similar right to participate in the transactions contemplated by this
        Agreement, (ii) there are no outstanding options, warrants, script rights
        to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities, rights or obligations convertible into or exercisable or
        exchangeable for, or giving any Person any right to subscribe for or acquire,
        any Vuance Shares, or contracts, commitments, understandings or arrangements
        by
        which the Buyer’s Parent or any of its subsidiaries is or may become bound to
        issue additional ordinary shares or ordinary share equivalents and (iii)
        the
        issuance of the Vuance Shares pursuant to this Agreement will not obligate
        the
        Buyer’s Parent to issue ordinary shares of its share capital or other securities
        to any Person (other than the Sellers) and will not result in a right of
        any
        holder of Buyer’s Parent securities to adjust the exercise, conversion, exchange
        or reset price under any of such securities. All of the outstanding shares
        of
        the share capital of the Buyer’s Parent are validly issued, fully paid and
        nonassessable, have been issued in compliance with all federal and state
        securities laws, and none of such outstanding shares was issued in violation
        of
        any preemptive rights or similar rights to subscribe for or purchase securities.
        As of the Closing Date, no further approval or authorization of any
        stockholders, the Board of Directors of the Buyer’s Parent or others will be
        required for the issuance and sale of the Vuance Shares. There are no
        stockholders agreements, voting agreements or other similar agreements with
        respect to the Buyer’s Parent’s share capital to which the Buyer’s Parent is a
        party or, to the Knowledge of the Buyer’s Parent, between or among any of the
        Buyer’s Parent’s stockholders.

       

      SECTION
        4.6 Financial
        Statements.

       

      The
        Buyer’ Parent Financial Statements (attached as Schedule
        4.6
        hereto)
        have been prepared in accordance with GAAP, except as may be otherwise specified
        in such Buyer Parent’s Financial Statements or the notes thereto and except that
        unaudited portion of the Buyer Parent’s Financial Statements may not contain all
        footnotes required by GAAP, and fairly present in all material respects the
        financial position of the Buyer’s Parent and its consolidated subsidiaries as of
        and for the dates thereof and the results of operations and cash flows for
        the
        periods then ended, subject, in the case of unaudited statements, to normal,
        immaterial, year-end audit adjustments.

       

      SECTION
        4.7 Private
        Placement. 

       

      No
        registration under the Securities Act is required for the offer and sale
        of the
        Vuance Shares by the Buyer’s Parent to the Sellers as contemplated hereby. The
        issuance and sale of the Vuance Shares hereunder does not contravene the
        rules
        and regulations of the Trading Markets. The issuance of the Vuance Shares
        pursuant to this Agreement will not require any registration or qualification
        under any non-U.S. jurisdiction.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      SECTION
        4.8 Investment
        Company. 

       

      The
        Buyer’s Parent is not, and is not an Affiliate of, and immediately after receipt
        of payment for the Vuance Shares, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940,
        as amended. The Buyer’s Parent shall conduct its business in a manner so that it
        will not become subject to the Investment Company Act of 1940, as
        amended.

       

      SECTION
        4.9 Listing
        and Maintenance Requirements. 

       

      The
        Buyer’s Parent ordinary shares are registered pursuant to 12(g) of the Exchange
        Act, and the Buyer’s Parent has taken no action designed to, or which to its
        knowledge is likely to have the effect of, terminating the registration of
        the
        Buyer’s Parent’s ordinary shares under the Exchange Act nor has the Buyer’s
        Parent received any notification that the Securities and Exchange Commission
        is
        contemplating terminating such registration. The Buyer’s Parent has not, in the
        12 months preceding the date hereof, received notice from any Trading Market
        on
        which the ordinary shares are or have been listed or quoted to the effect
        that
        the Buyer’s Parent is not in compliance with the listing or maintenance
        requirements of such Trading Market. The Buyer’s Parent is, and has no reason to
        believe that it will not in the foreseeable future continue to be, in compliance
        with all such listing and maintenance requirements.

       

      SECTION
        4.10 No
        Integrated Offering. 

       

      Assuming
        the accuracy of the Minority Shareholders’ representations and warranties set
        forth in Section 3.25, neither the Buyer’s Parent, nor any of its Affiliates,
        nor any Person acting on its or their behalf has, directly or indirectly,
        made
        any offers or sales of any security or solicited any offers to buy any security,
        under circumstances that would cause this offering of the Vuance Shares to
        be
        integrated with prior offerings by the Buyer’s Parent for purposes of the
        Securities Act in a manner that would require the registration under the
        Securities Act of the sale of the Vuance Shares to the Sellers or any applicable
        shareholder approval provisions of any Trading Markets on which any of the
        securities of the Buyer’s Parent are listed or designated.

       

      SECTION
        4.11 Foreign
        Corrupt Practices. 

       

      Neither
        the Buyer’s Parent or any of its subsidiaries, nor to the Knowledge of the
        Buyer’s Parent, any agent or other person acting on behalf of the Buyer’s
        Parent, has (i) directly or indirectly, used any funds for unlawful
        contributions, gifts, entertainment or other unlawful expenses related to
        foreign or domestic political activity, (ii) made any unlawful payment to
        foreign or domestic government officials or employees or to any foreign or
        domestic political parties or campaigns from corporate funds, (iii) failed
        to
        disclose fully any contribution made by the Buyer’s Parent or any of its
        subsidiaries (or made by any person acting on their behalf of which the Buyer’s
        Parent is aware) which is in violation of law, or (iv) violated in any material
        respect any provision of the Foreign Corrupt Practices Act of 1977, as
        amended.

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      SECTION
        4.12 No
        Broker

       

      Except
        for Oberon Securities, LLC, the Buyer Parties (i) have not had any dealings,
        negotiations or communications with or retained any broker or other intermediary
        in connection with the transactions contemplated by this Agreement and (ii)
        are
        not committed to any liability for any brokers’ or finders’ fees or any similar
        fees in connection with the transactions contemplated by this
        Agreement.

       

      SECTION
        4.13 Contract
        Prohibitions

       

      Neither
        the Buyer Parties nor any of their subsidiaries is, due to any past action,
        omission of affiliation, prohibited from, or would reasonably be expected
        to be
        prohibited from, entering into any supply, service or other contract with
        the
        United States government or any instrumentality thereof. 

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        V

      OTHER
        AGREEMENTS

       

      SECTION
        5.1 Lock-Up

       

      (a) Other
        than as set forth herein or a security interest granted by HSMC to its largest
        existing lender in the Vuance Shares, the Sellers will not offer, sell, contract
        to sell, hypothecate, pledge or otherwise dispose of (or enter into any
        transaction which is designed to, or might reasonably be expected to, result
        in
        the disposition (whether by actual disposition or effective economic disposition
        due to cash settlement or otherwise) by the Sellers or any Affiliate of the
        Sellers or any person in privity with the Sellers or any Affiliate of the
        Sellers), directly or indirectly, or establish or increase a put equivalent
        position or liquidate or decrease a call equivalent position within the meaning
        of Section 16 of the Securities Exchange Act of 1934 (the “Exchange
        Act”)
        with
        respect to, any Vuance Shares beneficially owned, held or hereafter acquired
        by
        the Sellers. Beneficial ownership shall be calculated in accordance with
        Section
        13(d) of the Exchange Act. The prohibition under this Section 5.1 shall not
        apply to a transfer by the Sellers of up to an aggregate of 7,000 Vuance
        Shares
        to Peter Miller, William LaPointe or Rampart Partners, LLC, provided that
        such
        Persons execute a lock-up agreement with prohibitions identical to those
        contained in this Section 5.1 and such Persons represent that they are
“accredited investors” as such term is defined under Rule 501 under the
        Securities Act. Buyer will impose irrevocable stop-transfer instructions
        preventing its transfer agent from effecting any actions in violation of
        this
        Section 5.1. 

       

      (b) The
        restrictions on the transfer of the Vuance Shares set forth in Section 5.1(a)
        will expire (i) for the Minority Shareholders in
        twelve
        equal installments, commencing with the end of the first calendar quarter
        following the Closing and each of the eleven following calendar quarters
        thereafter,
        and
        (ii) for HMSC in eight equal installments, commencing with the end of the
        first
        calendar quarter following the Closing and each of the seven following calendar
        quarters thereafter.

       

      (c) Following
        expiration of the restrictions under Section 5.1(a) pursuant to Section 5.1(b),
        the Vuance Shares may be transferred in accordance with the limitations under
        Rule 144 under the Securities Act, provided that in no event may HMSC transfer
        any of its Vuance Shares to any of its shareholders or creditors.

       

      SECTION
        5.2 Piggyback
        Registration Rights

       

      If
        at any
        time or times after the date hereof Buyer’s Parent shall seek to register any of
        its ordinary shares under the Securities Act for sale to the public for its
        own
        account or on the account of others (except with respect to registration
        statements on Form S-4, Form S-8 or another form not available for registering
        the Vuance Shares for sale to the public), Buyer’s Parent will promptly give
        written notice thereof to HMSC. If within twenty (20) days after their receipt
        of such notice HMSC requests the inclusion of some or all of the Vuance Shares
        owned by it in such registration, Buyer’s Parent will use its reasonable best
        efforts to effect the registration under the Securities Act of such Vuance
        Shares. In the case of the registration of ordinary shares by Buyer’s Parent in
        connection with any underwritten public offering to which this Section 5.2
        applies, if the underwriter(s) determines that reasonable and customary
        marketing factors require a limitation on the number of Vuance Shares to
        be
        offered, then Buyer’s Parent shall not be required to register Vuance Shares of
        HMSC in excess of the amount, if any, of ordinary shares which the principal
        underwriter of such underwritten offering shall reasonably and in good faith
        agree to include in such offering in addition to any amount to be registered
        for
        the account of Buyer’s Parent. 

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      SECTION
        5.3 Voting
        of HMSC’s Vuance Shares

       

      HMSC
        will
        grant an irrevocable power of attorney in the form attached hereto as
Exhibit
        A
        to the
        chairman of the board of directors of Buyer’s Parent to exercise all voting
        rights related to its Vuance Shares, until a voluntary sale or transfer of
        the
        Vuance Shares in accordance with Section 5.1 has occurred.

       

      SECTION
        5.4 Right
        of First Refusal

       

      To
        the
        extent that and as long as HMSC’s Vuance Shares remain subject to the
        restrictions set forth in Section 5.1(a), upon the occurrence of any sale
        by
        HMSC of its Vuance Shares due to HSMC’s bankruptcy, insolvency or otherwise by
        operation of law (an “Involuntary
        Sale”),
        Buyer’s Parent or Buyer will have the right to purchase all (but not less than
        all) HSMC’s Vuance Shares on the following terms and conditions: 

       

      (a) HSMC
        will
        give Buyer prompt written notice (the “Sale
        Notice”)
        of any
        pending Involuntary Sale and Buyer or Buyer’s Parent will have five (5) Business
        Days to elect to purchase HSMC’s Vuance Shares. The purchase of HSMC’s Vuance
        Shares must occur within five (5) Business Days of such election at a purchase
        price per share equal to the average closing price of the Buyer Parent’s common
        stock on the Trading Markets for the fifteen (15) Business Days prior to
        the
        purchase date. The purchase price for Vuance Shares acquired pursuant to
        this
        Section 5.4(a) must be paid in immediately available funds.

       

      (b) In
        the
        event that neither Buyer’s Parent nor the Buyer elects to purchase HMSC’s Vuance
        Shares, will not have the right to prevent or delay the Involuntary
        Sale..

       

      SECTION
        5.5 Note
        Assumption

       

      As
        of the
        date of this Agreement, the Company has outstanding a note payable to the
        Minority Shareholders Messrs. Joel Konicek, James Peroutka and James Vinson
        (the
“Noteholders”)
        in the
        amount of $467,582 (subject to adjustment for regular interest payments not
        paid) (the “Note”).
        At
        the Closing, Buyer will assume all obligations under the Note from the Company
        pursuant to a customary assignment and assumption agreement (the “Assignment
        and Assumption Agreement”).
        Alternatively, Buyer’s Parent may issue a number of ordinary shares to the
        Noteholders equal to the outstanding amount of the Note divided by the Closing
        Price Per Share, in which event (i) all of the Company’s obligations under the
        Note shall terminate, and (ii) such ordinary shares shall be subject to the
        restrictions set forth in Section 5.1(a), which restrictions shall expire
        in
        twelve equal installments, commencing with the end of the first calendar
        quarter
        following the Closing and each of the eleven following calendar quarter
        thereafter. 

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      SECTION
        5.6 HMSC
        Financing

       

      In
        the
        event that HMSC provides debt financing to the Company prior to the Closing
        (the
“HMSC
        Financing”),
        the
        Buyer will cause the Company to repay such financing in immediately available
        funds up to $400,000 with an 8% per annum interest rate promptly after
        Closing.

       

      SECTION
        5.7 Conversion
        of Series A Preferred Stock; Termination of Certain Agreement

       

      (a) All
        shares of Series A Preferred Stock issued under the Series A Preferred Stock
        Agreement will be converted into shares of common stock immediately prior
        to the
        Closing.

       

      (b) All
        rights and obligations arising out of (i) the Series A Preferred Stock
        Agreement, (ii) the Agreement and Plan of Merger among the Company, Security
        Holding Enterprises, Inc. and the Minority Shareholders (the “Merger
        Agreement”)
        and
        (iii) certain restricted stock agreements between the Company on the one
        hand
        and the Minority Shareholders and certain employees of the Company on the
        other
        hand (the “Restricted
        Stock Agreements”)
        will
        be terminated before Closing.

       

      SECTION
        5.8 Employment
        Agreements

       

      Prior
        to
        the Closing, Messrs. Joel Konicek, James Peroutka and Charles Martin will
        have
        entered into employment agreements with the company or the subsidiaries,
        forms
        of which are attached hereto as Exhibit B (the “Employment
        Agreements”).
        

       

      SECTION
        5.9 Listing
        of Ordinary Shares

       

      The
        Buyer’s Parent hereby agrees to use best efforts to maintain the listing or
        quotation of the Buyer’s Parent ordinary shares on the Trading Markets, and as
        soon as reasonably practicable following the Closing (but not later than
        first
        anniversary of the Closing Date) to list (or include for quotation) all of
        the
        Vuance Shares issued to the Sellers on such Trading Markets. The Buyer’s Parent
        further agrees, if the Buyer’s Parent applies to have the Buyer’s Parent
        ordinary shares traded on any other securities exchange, trading market or
        quotation system, it will include in such application all of the ordinary
        shares, and will take such other action as is necessary to cause all of the
        Vuance Shares to be listed on such other securities exchange, trading market
        or
        quotation system as promptly as possible. 

       

      SECTION
        5.10 Form
        D; Blue Sky Filings. 

       

      The
        Buyer’s Parent agrees to timely file a Form D with respect to the Vuance Shares
        as required under Regulation D and to provide a copy thereof, promptly upon
        request of any Seller. The Buyer’s Parent shall take such action as the Buyer’s
        Parent shall reasonably determine is necessary in order to obtain an exemption
        for, or to qualify the Vuance Shares for, sale to the Sellers at the Closing
        under applicable securities or “Blue Sky” laws of the states of the United
        States, and shall provide evidence of such actions promptly upon request
        of any
        Seller.

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        VI

      PRE
        AND POST-CLOSING COVENANTS

       

      SECTION
        6.1 Conduct
        of Business

       

      From
        the
        date of this Agreement until the earlier of the Closing Date and the date
        of the
        termination of this Agreement in accordance with its terms, the Sellers shall
        cause the Company and the Subsidiaries to, and the Company and the Subsidiaries
        shall, conduct their Business in the ordinary course consistent with past
        practice and in conformance with all Laws, to preserve their assets, properties,
        business goodwill, and relationships with their suppliers, customers and
        others
        having business relationships with it and retain the services of its employees.
        Without limiting the generality of the foregoing, from the date of this
        Agreement until the earlier of Closing or the termination of this Agreement
        in
        accordance with its terms, except as specifically permitted elsewhere in
        this
        Agreement or by this Agreement, the Sellers must
        not
        cause the Company or the Subsidiaries to:

       

      (a) declare,
        set aside or pay any dividend or other distribution with respect to their
        capital stock (whether in cash or in kind) or redeem, purchase or otherwise
        acquire any of its capital stock; 

       

      (b) (i) mortgage,
        pledge or otherwise encumber, incur or suffer to exist any Lien (other than
        Permitted Liens) on any of its properties or assets; (ii) guarantee any
        Indebtedness of another Person or enter into any “keep well” or other agreement
        to maintain any financial condition of another Person; or (iii) make any
        loans, advances or capital contributions to, or investments in, any other
        Person;

       

      (c) forgive,
        cancel or compromise any Indebtedness owing to them or any claims which they
        may
        have possessed, or waive any right of substantial value;

       

      (d) (i)
        issue, deliver, dispose of, pledge, sell or otherwise encumber or authorize
        or
        propose the issuance, sale, disposition or pledge or other encumbrance of
        any
        shares of capital stock of any class or any securities or rights convertible
        into, exchangeable for, or evidencing the right to subscribe for any shares
        of
        its capital stock, or grant any rights, warrants, options, calls, commitments
        or
        any other agreements of any character to purchase or acquire any shares of
        their
        capital stock or any securities or rights convertible into, exchangeable
        for, or
        evidencing the right to subscribe for, any shares of their capital stock,
        or
        redeem, repurchase or otherwise acquire any such securities, or (ii) split,
        combine or reclassify any shares of their capital stock;

       

      (e) sell,
        lease, transfer, assign or otherwise dispose of any assets of the Company
        or the
        Subsidiaries;

       

      (f) enter
        into any new unrelated line of business or acquire any business or any
        corporation, partnership, association or other business organization or division
        thereof;

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      (g) fail
        to
        comply, in any material respect, with all applicable Laws (as in effect from
        the
        date hereof to the Closing Date) and with all applicable Orders;

       

      (h) amend
        their articles of incorporation, bylaws or other organizational documents,
        or
        merge, reorganize or consolidate with or into any other Person;

       

      (i) make
        any
        change in its accounting methods or practices other than those required to
        effect compliance with GAAP;

       

      (j) grant
        any
        license or sublicense of any rights under or with respect to any Company
        IP;

       

      (k) make
        any
        loan to, or enter into any other transaction with, any director, officer
        or
        employee;

       

      (l) (i)
        increase the compensation or fringe benefits of any present or former director,
        officer, employee or consultant of the Company or the Subsidiaries (except
        for
        increases in salary or wages, in the ordinary course of business consistent
        with
        past practice or the payment of accrued or earned but unpaid bonuses or as
        otherwise required by Law), (ii) grant any bonus, severance or termination
        pay
        to any present or former director, officer, employee or consultant of the
        Company or the Subsidiaries, except pursuant to an Employee Benefit Plan
        in
        existence on the date of this Agreement the terms of which have been disclosed
        on Schedule
        3.15,
        (iii)
        establish, adopt, enter into, amend, modify or terminate any Employee Benefit
        Plan or any plan, agreement, program, policy, trust, fund or other arrangement
        that would be an Employee Benefit Plan if it were in existence as of the
        date of
        this Agreement, except for amendments required by Law, (iv) grant any equity
        or
        equity-based awards, or (v) terminate, hire or materially modify the employment
        terms of any employee of the Company;

       

      (m) fail
        to
        maintain or renew any Permits required for their business;

       

      (n) amend,
        modify or terminate any Contract of a type required to be disclosed pursuant
        to
Section
        3.13
        or enter
        into any new Contract of a type required to be disclosed pursuant to
Section 
        3.13;

       

      (o) (i)
        enter
        into or renew any lease, agreement or commitment which, if entered into prior
        to
        the date of this Agreement would be required to be disclosed on Schedule 3.10,
        or
        cause, or take any action to allow, any lease, agreement or commitment listed
        on
Schedule
        3.10
        to lapse
        (other than in accordance with its terms), to be modified in any material
        adverse respect, or otherwise to become impaired in any material manner;
        

       

      (p) make
        or
        pledge to make any charitable or other capital contribution;

       

      (q) initiate
        any Action or settle any Action, which in either case is not fully covered
        by
        insurance;

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

      (r) enter
        into any transaction or incur any liability or obligation that is material
        to
        their business or operations, including commencing any new research, development
        or marketing programs and incurring any liability or obligation in connection
        therewith;

       

      (s) (i)
        adopt
        a plan of complete or partial liquidation, dissolution, merger, consolidation,
        restructuring, recapitalization or other reorganization with respect to any
        of
        the Company or the Subsidiaries; (ii)  make any acquisition by means of
        stock purchase, asset purchase, merger, consolidation or otherwise;
        (iii) enter into any agreement providing for acceleration of payment or
        performance or other consequence as a result of a change of control of the
        Company or the Subsidiaries; (iv) enter into any negotiations or
        discussions with, regarding or relating to recognizing any collective bargaining
        representative for the employees of the Company or the Subsidiaries;
        (v) submit or file with, or otherwise voluntarily participate as a party to
        any material stipulation, pleading, filing or other proceeding with any
        Governmental Authority with jurisdiction over the Company or the Subsidiaries
        or
        fail to notify the Buyer promptly of any involuntary participation in any
        of the
        foregoing; or

       

      (t) without
        the prior written approval of Buyer, (i) create, incur or assume any
        Indebtedness (other than the HMSC Financing) in excess of $25,000 in the
        aggregate; (ii) make or agree to make any new capital or other expenditures
        involving more than $25,000 in the aggregate; acquire or invest in any assets
        involving more than $25,000; or

       

      (u) authorize
        any of, or agree or commit to do any of, the foregoing actions. 

       

      SECTION
        6.2 Pre-Closing
        Access to Information

       

      (a) Access
        to Books; Records; Personnel; Properties.
        From
        the date hereof until the Closing Date, the Sellers shall cause the Company
        and
        the Subsidiaries to permit the Buyer and its authorized agents, officers
        and
        representatives to have full access to the properties, personnel, customers,
        suppliers, advisors (including attorneys and accountants), books, records,
        contracts, information and documents of the Company and the Subsidiaries
        to
        conduct such examinations and investigations of the Company and the Subsidiaries
        as the Buyer deems desirable or necessary; provided,
        however,
        that
        such examinations and investigations shall be conducted during normal business
        hours.
        The
        Sellers and the Company and the Subsidiaries shall cooperate in all reasonable
        respects and in a prompt and timely manner with the Buyer’s examinations and
        investigations, and will authorize the Buyer and its employees, agents and
        representatives to gain access to governmental records concerning environmental
        matters that relate to or affect the Company’s or the Subsidiaries’ facilities.

       

      SECTION
        6.3 Cooperation;
        Notices and Consents

       

      (a) Generally.
        Upon
        the terms and subject to the conditions of this Agreement, each of the parties
        hereto hereby agrees to use its commercially reasonable efforts to take all
        actions which are necessary, proper or advisable in order to consummate and
        make
        effective the transactions contemplated hereby. 

       

      
        
          
          

        

        
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      (b) Notices
        and Consents.
        The
        Sellers shall cause the Company and the Subsidiaries to (i) give any notices
        to
        third parties necessary for the consummation of the transactions contemplated
        hereunder, (ii) use their commercially reasonable efforts to as soon as
        practicable obtain all third-party consents, approvals and waivers necessary
        for
        the consummation of the transactions contemplated hereunder, including, but
        not
        limited to, the consents, approvals and waivers necessary with respect to
        the
        Leases disclosed on Schedule
        3.10,
        and
        (iii) consult with and obtain the Buyer’s prior approval to any notice or
        consent letter submitted to a third party pursuant to (i) and (ii). Each
        of the
        parties shall (and the Sellers shall cause the Company and the Subsidiaries
        to)
        give any notices to, make any filings with, and use its commercially reasonable
        efforts to obtain any authorizations, consents, and approvals of, Governmental
        Authorities required in connection with the consummation of the transactions
        contemplated by this Agreement. 

       

      (c) Duty
        to Keep Informed.
        The
        Buyer and the Sellers shall consult with each other and keep each other informed
        of the status of the matters referred to in this Section
        6.3
        and,
        except to the extent confidential treatment has been given in any document
        filed
        with a Governmental Authority pursuant to this Section
        6.3,
        shall
        provide each other with copies of all such documents prepared on its behalf
        and
        all correspondence relating to the matters referred to in this Section
        6.3.

       

      SECTION
        6.4 Publicity

       

      All
        general notices, releases, statements and communications to employees,
        suppliers, distributors and customers of the Company and the Subsidiaries
        and to
        the general public and the press relating to the transactions covered by
        this
        Agreement shall be made only at such times and in such manner as may be
        reasonably agreed upon in advance between the Buyer and the Sellers;
provided,
        however,
        that
        any party hereto shall be entitled to make a public announcement of the
        foregoing if, in the written opinion of its legal counsel delivered to the
        other
        party, such announcement is required to comply with any Law, provided that
        such
        party first consults with the other party hereto and gives prior written
        notice
        of its intention to make such public announcement.

       

      SECTION
        6.5 Tax
        Matters

       

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

       

      (a) Straddle
        Period.
        In the
        case of any taxable period that includes (but does not end on) the Closing
        Date
        (a “Straddle
        Period”),
        the
        amount of any Taxes based on or measured by income or receipts of the Company
        and the Subsidiaries for the Pre-Closing Tax Period shall be determined based
        on
        an interim closing of the books as of the close of business on the Closing
        Date
        (and for such purpose, the taxable period of any partnership or other
        pass-through entity in which the Company or the Subsidiaries hold a beneficial
        interest shall be deemed to terminate at such time) and the amount of other
        Taxes of the Company and the Subsidiaries for a Straddle Period that relates
        to
        the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for
        the
        entire taxable period multiplied by a fraction the numerator of which is
        the
        number of days in the taxable period ending on the Closing Date and the
        denominator of which is the number of days in such Straddle Period.

       

      
        
          
          

        

        
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      (b) Indemnity.
        Sellers
        shall, severally and jointly, indemnify the Buyer Indemnified Parties and
        hold
        them harmless from and against (without duplication) any Losses attributable
        to
        (i) all Taxes (or the non-payment thereof) of the Company and the Subsidiaries
        for all taxable periods ending on or before the Closing Date and the portion
        through the end of the Closing Date for any taxable period that includes
        (but
        does not end on) the Closing Date (“Pre-Closing
        Tax Period”),
        (ii)
        all Taxes of any member of an affiliated, consolidated, combined or unitary
        group of which the Company or the Subsidiaries (or any predecessor of any
        Company or the Subsidiaries) are or were a member on or prior to the Closing
        Date, including pursuant to Treasury Regulation §1.1502-6 or any analogous or
        similar Law, and (iii) any and all Taxes of any person (other than the Company
        and the Subsidiaries) imposed on the Company and the Subsidiaries as a
        transferee or successor, by contract or pursuant to any Law, which Taxes
        relate
        to an event or transaction occurring before the Closing.

       

      (c) Responsibility
        for Filing Tax Returns. 
        The
        Buyer shall prepare or cause to be prepared and file or cause to be filed
        all
        Tax Returns for the Company and the Subsidiaries that are filed after the
        Closing Date. The Buyer shall permit the Sellers to review and comment on
        any
        such Tax Return that covers a Pre-Closing Tax Period. 

       

      (d) Cooperation
        on Tax Matters.

       

      (i) The
        Buyer, the Company, the Subsidiaries, and the Sellers shall cooperate fully,
        as
        and to the extent reasonably requested by the other Party, in connection
        with
        the filing of Tax Returns pursuant to this Section
        6.5
        and any
        audit, litigation or other proceeding with respect to Taxes. Such cooperation
        shall include the retention and (upon the other Party's request) the provision
        of records and information that are reasonably relevant to any such audit,
        litigation or other proceeding and making employees available on a mutually
        convenient basis to provide additional information and explanation of any
        material provided hereunder. The Buyer, the Company and the Subsidiaries
        and the
        Sellers will (A) retain all books and records with respect to Tax matters
        pertinent to the Company and the Subsidiaries relating to any taxable period
        beginning before the Closing Date until the expiration of the statute of
        limitations (and, to the extent notified by the Buyer or the Sellers, any
        extensions thereof) of the respective taxable periods, and to abide by all
        record retention agreements entered into with any taxing authority, and (B)
        to
        give the other Party reasonable written notice prior to transferring, destroying
        or discarding any such books and records and, if the other Party so requests,
        the Buyer, the Company, the Subsidiaries or the Sellers, as the case may
        be,
        shall allow the other Party, at such Party’s sole cost, to take possession of
        such books and records.

       

      (ii) The
        Buyer
        and the Sellers further agree, upon request, to use their best efforts to
        obtain
        any certificate or other document from any Governmental Authority or any
        other
        Person as may be necessary to mitigate, reduce or eliminate any Tax that
        could
        be imposed (including, but not limited to, with respect to the transactions
        contemplated hereby).

       

      
        
          
          

        

        
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      (e) Tax-Sharing
        Agreements. 
        All
        tax-sharing agreements or similar agreements with respect to or involving
        the
        Company and the Subsidiaries shall be terminated as of the Closing Date and,
        after the Closing Date, the Company and the Subsidiaries shall not be bound
        thereby or have any liability thereunder.

       

      (f) Certain
        Taxes and Fees.
        All
        transfer, documentary, sales, use, stamp, registration and other such Taxes,
        and
        all conveyance fees, recording charges and other fees and charges (including
        any
        penalties and interest) incurred in connection with consummation of the
        transactions contemplated by this Agreement shall be paid by the Sellers
        when
        due. The Sellers will, at its own expense, file all necessary Tax Returns
        and
        other documentation with respect to all such Taxes, fees and charges, and,
        if
        required by applicable law, the Buyer will, and will cause its Affiliates
        to,
        join in the execution of any such Tax Returns and other
        documentation.

       

      SECTION
        6.6 Exclusivity

       

      From
        the
        date hereof until the earlier of the Closing Date or the date of the termination
        of this Agreement in accordance with its terms, the Sellers, the Company
        and the
        Subsidiaries shall not, and shall cause their officers, directors,
        representatives, agents and Affiliates not to: (a) enter into any written
        or
        oral agreement or understanding with any Person (other than the Buyer) regarding
        a sale of the Company or the Subsidiaries, any part of their stock, assets
        (other than inventory in the ordinary course of business) or business, or
        a
        merger, consolidation, or re-capitalization involving the Company or a
        Subsidiary (“Another
        Transaction”);
        (b)
        enter into, participate or continue any negotiations or discussions with
        any
        Person (other than the Buyer or the Buyer’s advisors and agents) relating to
        Another Transaction; or (c) provide any non-public or other confidential
        or
        proprietary information regarding this Agreement, the Company or the
        Subsidiaries or their Affiliates (including legal and contractual documentation
        or any financial information, projections, or proposals regarding any of
        their
        respective businesses) to any Person (other than to the Buyer or the Buyer’s
        advisors and agents). The Sellers, the Company and the Subsidiaries shall
        promptly disclose to the Buyer any requests or inquiries (in each case, whether
        written or oral) from any Person regarding Another Transaction or relating
        to
        the circumstances described in clauses (a) through (c) above. In the event
        of a
        breach of the covenant set forth in this Section
        6.6,
        the
        Sellers will be severally and jointly liable to pay to the Buyer all of the
        Buyer’s expenses related to the transaction contemplated under this Agreement,
        whether or not consummated, up to $100,000. 

       

      SECTION
        6.7 Non-Competition;
        Non-Solicitation

       

      (a) Non-Competition.
        Except
        as described on Schedule
        6.7,
        the
        Minority Shareholders (other than James Vinson) agree that for a period of
        two
        years from the Closing Date (the “Restrictive
        Period”)
        they
        shall not, and shall cause their Affiliates not to, directly or indirectly,
        own,
        manage, operate, control or participate in the ownership, management, operation
        or control of, or provide any financing to or advise or render services to
        or
        guarantee the obligations of any Person that engages in or is planning to
        become
        engaged in, or in any other manner engage in, any activity, operation or
        business that competes with the business of the Company or the Subsidiaries
        and
        the business of the Buyer Parties consisting of innovative incident management,
        active radio-frequency identification (“RFID”)
        and
        credentialing solutions to the public safety, for the commercial and
        government sectors, in each case as presently conducted and as such business
        may
        evolve, in the United States, except that each such Person may hold less
        than 1%
        of the capital stock of any such Person that is a publicly traded company.
        

       

      
        
          
          

        

        
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      (b) Customer,
        Other Business Relation, Non-Solicitation.
        The
        Sellers shall not, and shall cause their Affiliates not to, directly or
        indirectly, take any action
        during a
        period of four years from the Closing (the “Restrictive
        Period”)
        that
        is designed, intended or likely to have the effect of discouraging any lessor,
        licensor, customer, or supplier from having a business relationship or potential
        business relationship with the Company or the Subsidiaries or from maintaining
        business relationships or entering into a new business relationship with
        the
        Company or the Subsidiaries. During the Restrictive Period the Sellers will
        refer all inquiries relating to the businesses of the Company and the
        Subsidiaries to the Buyer.

       

      (c) Employee
        Non-Solicitation.
        During
        the Restrictive Period the Sellers shall not, and shall cause his Affiliates
        not
        to, directly or indirectly, interfere with, or attempt to interfere with,
        the
        employment of any directors, officers, employees, representatives or agents
        of
        the Company or the Subsidiaries, or solicit, hire or attempt to induce any
        of
        them to leave the employ of the Company or the Subsidiaries.

       

      (d) Confidentiality.
        The
        Sellers shall not and shall cause his Affiliates not to, directly or indirectly,
        during the Restrictive Period disclose to any Person or use any information,
        in
        any form, whether acquired prior to or after the Closing Date, relating to
        the
        business of the Company or the Subsidiaries, except information which the
        Sellers can establish (i) is in the public domain, or becomes public knowledge
        through no fault of the Sellers, (ii) is disclosed to the Sellers following
        the
        Closing Date by a third party that had the right to do so or (iii) is required
        to be disclosed by court order or other government process or to comply with
        applicable Law, provided,
        that,
        in the
        case of (iii) the Sellers first notify the Buyer and give the Buyer a reasonable
        opportunity to seek a protective order.

       

      (e) Relief.
        The
        Sellers acknowledge and agree that the covenants set forth in this Section
        6.7
        are
        necessary to protect the business and goodwill of the Company and the
        Subsidiaries that are being purchased by the Buyer and that the Buyer’s
        willingness to enter into this Agreement is conditioned and dependent upon
        the
        Sellers’ promise to be bound by this Section
        6.7.
        The
        Sellers acknowledge that any breach of the restrictive covenants contained
        in
        this Section
        6.7
        would
        cause injury to the Company, the Subsidiaries and to the Buyer, which cannot
        be
        adequately compensated for by money damages, and the Sellers agree that in
        addition to any other remedy available to the Buyer, temporary and permanent
        injunctive relief may be granted in any Action which may be brought by the
        Buyer
        to enforce such restrictive covenants, without necessity of proof that any
        other
        remedy is inadequate and without the posting of a bond. 

       

      (f) Severability.
        The
        Sellers acknowledge and agree that all of the restrictions, covenants and
        agreements in Section
        6.7
        hereof
        are appropriate, reasonable and valid (including with respect to geographic
        scope and duration) and fully necessary for the protection of the legitimate
        interests of the Buyer. If any provision contained in this Section
        6.7
        (or
        portion thereof) shall for any reason be held invalid, illegal or unenforceable
        in any respect, such invalidity, illegality or unenforceability shall not
        affect
        any other provisions of this Section
        6.7
        (or
        portion thereof) but this Section
        6.7
        shall be
        construed as if such invalid, illegal or unenforceable provision (or portion
        thereof) had never been contained herein. It is the intention of the parties
        that if any of the restrictions or covenants contained herein is held to
        cover a
        geographic area or to be for a length of time which is not permitted by
        applicable law, or in any way construed to be too broad or to any extent
        invalid, such provision shall not be construed to be null, void and of no
        effect, but a court of competent jurisdiction under Section
        10.3(b)
        hereof
        is hereby requested by the parties to construe and interpret or reform this
        Section to provide for a covenant having the maximum enforceable geographic
        area, time period and other provisions (not greater than those contained
        herein)
        as shall be valid and enforceable under such applicable law.

       

      
        
          
          

        

        
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      SECTION
        6.8 Resignations.

       

      On
        the
        Closing Date, the Sellers shall cause to be delivered to the Buyer duly signed
        resignations, effective immediately upon the Closing, of those directors
        and
        officers of the Company and the Subsidiaries listed on Schedule
        6.8
        and the
        Sellers shall use their best efforts to ensure that such Persons as the Buyer
        shall nominate prior to the Closing Date are appointed as directors and officers
        of the Company and the Subsidiaries effective as of the Closing Date.

       

      SECTION
        6.9 Pre-Closing
        Confidentiality.

       

      All
        information furnished by the Sellers, the Company and the Subsidiaries (or
        their
        agents and representatives) to the Buyer (or its agents and representatives)
        pursuant hereto shall until the Closing Date be treated as the sole property
        of
        the Company and the Subsidiaries, as the case may be, and, if the Closing
        shall
        not occur, the Buyer shall return to the Sellers all copies of any documents
        or
        other materials containing or reflecting such information, shall use its
        commercially reasonable efforts to keep con-fidential all of such information
        regarded as confidential by the Company and the Subsidiaries, and shall not
        directly or indirectly use such information for any competitive or other
        commercial purpose, for a period of two years after the date of termination
        of
        this Agreement. The obligation to keep such information confidential shall
        not
        apply to (i) any information which (w) the Buyer can establish was already
        in
        its possession prior to the disclosure thereof by the Person furnishing the
        information, (x) was then generally known to the public, (y) became known
        to the
        public through no fault of the Buyer, or (z) was disclosed to the Buyer by
        a
        third party not bound by an obligation of confidentiality to the Company
        or the
        Subsidiaries; (ii) disclosures in accordance with an order of a court of
        competent jurisdiction; or (iii) disclosures made in connection with enforcing
        the Buyer’s rights hereunder or defending Buyer in a claim relating to this
        Agreement. Notwithstanding the foregoing, if Buyer is requested or required
        (by
        oral questions, interrogatories, requests for information or document subpoena,
        civil investigative demand or similar process) to disclose any of the
        above-referenced documents or information, the Buyer will promptly notify
        the
        Sellers of such request so that the Sellers may seek an appropriate protective
        order or waive compliance with the provisions hereof. If, in the absence
        of a
        protective order or the receipt of a waiver hereunder, the Buyer is, in the
        opinion of its counsel, compelled to disclose any terms or conditions of
        the
        above-referenced documents to any tribunal or else stand liable for contempt
        or
        suffer other censure or penalty, such party may disclose such information
        to
        such tribunal without liability hereunder.

       

      
        
          
          

        

        
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      SECTION
        6.10 Other
        Seller Obligations

       

      (a) Prior
        to
        Closing, the Company will use commercially reasonable best efforts to amend
        the
        License to Manufacture Agreement dated April 25, 2007 between Abba Logic
        LLC
        (“Abba”)
        to the
        effect that (i) the license granted under the License Agreement shall be
        converted into an exclusive license for a duration of not less than three
        years
        and (ii) SecurityInc shall have been granted an option to purchase the
        Intellectual Property licensed under the License Agreement for a purchase
        price
        which is to be approved by Buyer, which approval may not be unreasonably
        withheld.

       

      (b) Prior
        to
        Closing, AAID will use commercially reasonable best efforts to enter into a
        supply agreement with Wavetrend in a form to be approved by Buyer (which
        approval may not be unreasonably withheld) for active radio-frequency
        identification (“RFID”)
        products distributed by AAID, which agreement shall (i) provide for a sufficient
        supply of “Readers” and “Tags” so that AAID may satisfy the demands of its
        customers and (ii) have a duration of at least one year before it can be
        terminated by Wavetrend.

       

      SECTION
        6.11 Update

       

      From
        the
        date of this Agreement and until the Closing Date, each party hereto will
        disclose to the other in writing any information contained in its
        representations and warranties and on its Schedules that becomes in such
        post-signing, pre-Closing period incomplete or no longer correct (including
        with
        respect to Schedules
        3.18(a)
        and
3.18(b))
        or
        that, if known prior to the date of this Agreement, would have been required
        to
        be disclosed in such party’s schedules to this Agreement. The disclosures made
        pursuant to this Section
        6.10
        shall
        not be deemed to modify, amend or supplement (for purposes of an indemnification
        claim) the representations and warranties of the party making such disclosures,
        and, may be the basis for a party to terminate this Agreement in accordance
        with
Section
        9.1(b)
        and for
        any claim that any representation or warranty is inaccurate or has been breached
        for purposes of Article
        VIII.

       

      SECTION
        6.12 Further
        Assurances; Litigation Support

       

      (a) Further
        Assurances.
        Subject
        to the terms and conditions of this Agreement, each of the parties hereto
        shall
        use all reasonable efforts to take, or cause to be taken, all action, and
        to do,
        or cause to be done, all things necessary, proper or advisable under applicable
        Laws to consummate and make effective transactions contemplated by this
        Agreement and the other agreements entered into pursuant hereto. From time
        to
        time after the date hereof (including after the Closing Date if requested),
        Sellers shall (or shall cause his Affiliates to), at their own expense and
        without further consideration, execute and deliver such documents to the
        Buyer
        as the Buyer may reasonably request in order more effectively to vest in
        the
        Buyer good title to the Company Shares and to more effectively consummate
        the
        transactions contemplated by this Agreement and the other agreements entered
        into pursuant hereto.

       

      
        
          
          

        

        
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      (b) Litigation
        Support.
        In the
        event and for so long as the Buyer is actively contesting or defending against
        any Action in connection with (i) any transaction contemplated under this
        Agreement or (ii) any fact, situation, circumstance, status, condition,
        activity, practice, plan, occurrence, event, incident, action, failure to
        act,
        or transaction involving the Company or the Subsidiaries, the Sellers shall
        (and
        shall cause his Affiliates to) cooperate with Buyer and its counsel in the
        contest or defense, make available their personnel, and provide such testimony
        and access to books and records as shall be necessary in connection with
        the
        contest or defense, all at the sole cost and expense of the Buyer (unless
        the
        Buyer is entitled to indemnification therefore under Article
        VII
        below).

       

      SECTION
        6.13 Auditors’
        Consent

       

      Sellers
        will also cause the independent registered accounting firm of the Company
        and
        the Subsidiaries to provide any necessary consents as necessary to allow
        Buyer
        to comply with its obligations, if any, under Regulation S-X under the
        Securities Exchange Act of 1934, as amended, to file audited financial
        statements of the Company and the Subsidiaries with the Securities and Exchange
        Commission, to the extent necessary. 

       

      ARTICLE
        VII

      CONDITIONS
        PRECEDENT TO CONSUMMATION OF THE CLOSING

       

      SECTION
        7.1 Conditions
        Precedent to Each Party’s Obligations to Close

       

      The
        respective obligations of each party to consummate the transactions contemplated
        by this Agreement on the Closing Date are subject to the satisfaction or
        waiver,
        in writing, by the Buyer and the Sellers at or prior to the Closing of the
        following condition precedent:

       

      (a) no
        Action
        or Order shall be pending or threatened before any Governmental Authority
        which
        would (i) prevent consummation of any of the transactions contemplated by
        this Agreement or (ii) cause any of the transactions contemplated by this
        Agreement to be rescinded following consummation; and

       

      (b) the
        Escrow Agreement shall have been duly entered into.

       

      SECTION
        7.2 Conditions
        Precedent to Obligations of the Buyer

       

      The
        obligation of the Buyer to consummate the transactions contemplated by this
        Agreement on the Closing Date is subject to the satisfaction at or prior
        to the
        Closing of the following conditions precedent (any of which may be waived
        in
        writing by the Buyer):

       

      (a) since
        the
        date of this Agreement there shall have occurred no Material Adverse
        Change;

       

      (b) (i)
        the
        Sellers shall
        have
        performed and satisfied all of their agreements and obligations and complied
        with all covenants set forth in this Agreement required to be performed and
        satisfied by him or it on or prior to the Closing Date; and (ii) the
        representations and warranties of the Sellers contained in this Agreement
        shall
        be true and correct in all material respects (A) at and as of the time given
        (or
        with respect to any representation or warranty that speaks as of a later
        date,
        as of such date) and (B) at and as of the Closing Date;

       

      
        
          
          

        

        
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      (c) the
        Sellers shall have delivered to the Buyer certificates, from the appropriate
        Governmental Authority, for the
        Company and the Subsidiaries
        certifying as to their organization, valid existence and good standing in
        the
        state of its incorporation and certifying as to its good standing in each
        jurisdiction in which they qualified to conduct its business as a foreign
        entity
        as of a date no more than 10 days prior to the Closing Date;

       

      (d) the
        Sellers shall have delivered to the Buyer true and complete copies of the
        certificates of incorporation or other formation documents, as the case may
        be,
        of each of the
        Company and the Subsidiaries,
        certified as true and complete by the Secretary of State or other appropriate
        governmental official of their jurisdictions of organization, and a copy
        of the
        bylaws or other organizational documents, as the case may be, of each of
        the
        Company and the Subsidiaries,
        certified as true and complete
        by their
        Secretary, Assistant Secretary or by a director;

       

      (e) the
        Sellers shall have delivered to the Buyer original stock certificates
        representing all of the Company Shares, endorsed in blank or accompanied
        by duly
        executed assignment documents in form reasonably satisfactory to the
        Buyer;

       

      (f) all
        shares of Series A Preferred Stock issued under the Series A Preferred Stock
        Agreement shall have been converted into shares of common stock of the
        Company;

       

      (g) all
        obligations under the Series A Preferred Stock Agreement, the Merger Agreement,
        warrant, stock option agreement and the Restricted Stock Agreements shall
        have
        been terminated;

       

      (h) the
        Buyer
        shall have received the resignations (effective as of the Closing Date) of
        all
        of the directors and officers of the Company and the Subsidiaries listed
        on
Schedule
        6.8;

       

      (i) the
        Buyer
        shall have received all of the minute or other corporate books of the Company
        and the Subsidiaries, including all stock registers, corporate seals and
        related
        material; 

       

      (j) the
        Company and the Subsidiaries shall have received all necessary governmental
        or
        contractual consents for the completion of the transactions under this
        Agreement; 

       

      (k) the
        Buyer
        shall have received a certificate, dated the Closing Date, duly executed
        by the
        Secretary or an Assistant Secretary of each of the HMSC, on behalf of HMSC,
        certifying as to the attached copy of the resolutions of the Board of Directors
        (or a duly authorized committee) of HMSC authorizing and approving the
        execution, delivery and performance of, and the consummation of the transactions
        contemplated by, this Agreement and any other documents or instruments
        contemplated hereby, and stating that the resolutions thereby certified have
        not
        been amended, modified, revoked or rescinded;

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      (l) Sellers
        shall have caused their counsel to deliver to Buyer their counsel’s opinion in a
        form reasonably satisfactory to Buyer’s counsel;

       

      (m) each
        Seller shall deliver to Buyer a non-foreign affidavit dated as of the Closing
        Date, sworn under penalty of perjury and in form and substance required under
        the Treasury Regulations issued pursuant to Code Section 1445 stating that
        such
        Seller is not a “Foreign Person” as defined in Code Section 1445;

       

      (n) the
        shareholders of Buyer’s Parent shall have duly authorized this Agreement and the
        transactions contemplated hereunder, including an increase in Buyer’s Parent’s
        share capital, under applicable Israeli law and NASDAQ Stock Market Rules;
        and

       

      (o) the
        Company and the Subsidiaries shall have entered into the Employment Agreements
        with the individuals set forth in Schedule 5.8. 

       

      (p) (i)
        HMSC
        and the Company shall have entered into a Termination Letter (in the form
        attached as Exhibit C
        hereto)
        (the “Termination
        Letter”)
        for
        the termination of the Services Agreement, dated August 22, 2006, by and
        among
        the Company and Homeland Security Advisory Services, Inc. and (ii) the
        transactions contemplated by the Termination Letter have been
        consummated.

       

      SECTION
        7.3 Conditions
        Precedent to Obligations of the Sellers. 

       

      The
        obligation of the Sellers to consummate the transactions contemplated by
        this
        Agreement on the Closing Date is subject to the satisfaction or waiver at
        or
        prior to the Closing of the following conditions precedent (any of which
        may be
        waived in writing by the Sellers):

       

      (a) (i)
        the
        Buyer shall
        have
        performed and satisfied all of its agreements and obligations and complied
        with
        all covenants set forth in this Agreement required to be performed and satisfied
        by it on or prior to the Closing Date; (ii) the representations and
        warranties of the Buyer contained in this Agreement shall be true and correct
        in
        all material respects (A) at and as of the time given (or with respect to
        any
        representation or warranty that speaks as of a later date, as of such date)
        and
        (B) at and as of the Closing Date;

       

      (b) the
        Sellers shall have received a certificate, dated the Closing Date, duly executed
        by the Secretary
        or an
        Assistant Secretary of the Buyer, on behalf of the Buyer, certifying as to
        (i)
        the attached copy of the resolutions of the Board of Directors (or a duly
        authorized committee) of the Buyer
        authorizing and approving the execution, delivery and performance of, and
        the
consummation
        of the transactions contemplated by, this Agreement and any other documents
        or
        instruments contemplated hereby, and stating that the resolutions thereby
        certified have not been amended, modified, revoked or rescinded and (ii)
        the
        incumbency, authority and specimen signature of each officer of the Buyer
        executing this Agreement or any other document or instrument contemplated
        hereby; 

       

      (c) the
        Buyer
        shall have caused its counsel to deliver an opinion in a form reasonably
        satisfactory for Sellers;

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

       

      (d) Buyer
        shall have delivered the Assignment and Assumption Agreement or the Vuance
        Warrant, as the case may be; and

       

      (e) the
        Buyer
        shall have paid the Purchase Price in accordance with Sections 2.2 and 2.3.
        

       

      ARTICLE
        VIII

      REMEDIES
        FOR BREACH

       

      SECTION
        8.1 Limitation
        on and Survival of Representations and Warranties

       

      All
        representations and warranties contained in Articles
        III and IV
        of this
        Agreement shall survive the Closing Date, but no party shall be liable to
        the
        other for misrepresentation or breach of warranty except to the extent that
        notice of a claim is asserted in writing and delivered to the other party
        prior
        to 5:00 p.m. New York City time on the day 15 months after the Closing Date,
        except that the representations and warranties contained in Sections
        3.4(a) and 4.5
        (Capitalization), Section
        3.15
        (ERISA),
Section
        3.17
        (Taxes)
        and Section
        3.19
        (Environmental) shall survive until sixty (60) days after the expiration
        of the
        applicable legal statute of limitations, as the same may have been extended
        or
        tolled. In order to seek a remedy pursuant to this Article
        VIII
        in
        respect of a breach of representation or warranty, the Person seeking such
        remedy shall give notice of such breach or claim in writing to the party
        against
        whom indemnification is sought within such period. Any claim for indemnification
        for which notice has been given within the prescribed period may be prosecuted
        to conclusion notwithstanding the subsequent expiration of such period. All
        covenants and agreements of the parties shall continue in full force and
        effect
        in accordance with their respective terms and thereafter until the expiration
        of
        the applicable statute of limitations as the same may have been extended
        or
        tolled.

       

      For
        purposes of this Article
        VIII,
        a party
        shall have the right to indemnification for a breach of a representation,
        warranty or covenant regardless of (a) the due diligence activities conducted
        by
        the party seeking indemnification, (b) such party’s prior knowledge or notice of
        the existence of the breach, and (c) the presence of information in the due
        diligence materials relating to the breach, provided,
        however,
        that a
        representation shall not be deemed breached if appropriate disclosures are
        made
        in the Schedules.

       

      SECTION
        8.2 Indemnification
        by the Sellers

       

      (a) General
        Indemnity.
        The
        Sellers hereby agree, severally (but not jointly) to indemnify and hold the
        Buyer and its directors, officers, and Affiliates (collectively, the
“Buyer
        Indemnified Parties”)
        harmless from and against any and all Actions, Orders, Liabilities, damages
        and
        costs (collectively, “Losses”)
        asserted against, imposed upon or suffered by one or more of the Buyer
        Indemnified Parties (any of such Losses by one or more Buyer Indemnified
        Parties
        being herein called a “Buyer
        Claim”)
        as a
        result of or in connection with any of the following:

       

      (i) any
        breach of a representation or warranty made by the Sellers in this Agreement
        or
        any agreement or certificate executed and delivered pursuant to this Agreement;
        

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      (ii) the
        non-fulfillment or breach of, or default in the performance by the Sellers,
        the
        Company or the Subsidiaries of, any covenant, agreement or obligation to
        be
        performed by the Sellers, the Company or the Subsidiaries pursuant to this
        Agreement or any agreement or instrument executed and delivered in connection
        herewith or pursuant hereto; and

       

      (iii) 
        litigations of any kind with any party or any disputes with distributors
        which
        have arisen in the period prior to the Closing Date.

       

      (b) Tax
        Indemnity.
        The
        Sellers agree to indemnify and hold harmless the Buyer Indemnified Parties
        as
        contemplated by Section
        6.5(b).

       

      (c) Satisfaction
        of Buyer Indemnified Parties’ indemnity claims shall first be effected in
        accordance with Section 2.3.

       

      SECTION
        8.3 Indemnification
        by the Buyer.

       

      The
        Buyer
        and Buyer’s Parent (the “Buyer
        Parties”)
        hereby
        agree to indemnify and hold the Sellers harmless from and against any and
        all
        Losses imposed upon or incurred by the Sellers (any of such Losses by the
        Sellers being herein called a “Sellers
        Claim”)
        as a
        result of or in connection with any of the following:

       

      (i) any
        breach of a representation or warranty made by the Buyer Parties in this
        Agreement or any instrument executed and delivered pursuant to this Agreement;
        and

       

      (ii) the
        non-fulfillment or breach of or default in the performance by the Buyer Parties
        of any covenant, agreement or obligation to be performed by the Buyer Parties
        pursuant to this Agreement.

       

      SECTION
        8.4 Limitation
        of Liability; Indemnity Procedures

       

      (a) Limitation
        of Liability.
        Notwithstanding anything to the contrary contained in this Article
        VIII,
        the
        Sellers (in the aggregate) shall be obligated to indemnify the Buyer Indemnified
        Parties pursuant to Sections
        8.2(a)(i)
        and the
        Buyer shall be obligated to indemnify the Sellers pursuant to Sections
        8.3(i)
        only (i)
        once the aggregate amount of all Losses incurred by the other party exceeds
        $60,000 (“Threshold”),
        in
        which event the other party shall be entitled to recover all such Losses
        that
        exceed the Threshold, and (ii) up to an aggregate maximum of sixty-two and
        one-half percent (62.5%) of the Purchase Price (the “Maximum
        Indemnity Amount”);
        provided that
        the
        limitations contained in the immediately preceding clauses (i) and (ii) shall
        not apply to any breach of a representation or warranty contained in
Sections
        3.4(a) and 4.5
        (Capitalization), Section
        3.15
        (ERISA),
Section
        3.17
        (Taxes)
        and Section
        3.19
        (Environmental). 

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      (b) Indemnity
        Procedures.
        Promptly (i) after receipt by the Sellers or a Buyer Indemnified Party of
        notice
        of, or the Sellers or Buyer Indemnified Party becoming aware of, the
        commencement of an Action with respect to which such Party is entitled to
        indemnification under this Article
        VIII
        and (ii)
        after the Sellers or a Buyer Indemnified Party becoming aware of any fact,
        situation, circumstance, condition, event or occurrence giving rise to a
        claim
        with respect to which such Party is entitled to indemnification under this
        Article
        VIII,
        the
        party receiving such notice or becoming aware of such Action, fact, situation,
        circumstance, condition, event or occurrence (the “Indemnified
        Party”)
        shall
        notify the other (the “Indemnifying
        Party”)
        in
        writing; provided,
        however,
        that
        failure to give such notice shall not affect the right to indemnification
        hereunder except to the extent of actual prejudice to the Indemnifying Party
        and, provided,
        further,
        that no
        such notice shall be required if the Threshold applies until the Threshold
        has
        been exceeded. With respect to such Action, the Indemnifying Party shall
        have
        the option, and shall notify the Indemnified Party in writing within 10 Business
        Days after the date of the notice of its election, either: (i) to take
        charge of and control the defense (at its own expense) or (ii) to participate
        in
        the defense (in which case the defense shall be controlled by the Indemnified
        Party). If the Indemnifying Party fails to notify the Indemnified Party of
        its
        election within the applicable response period, then the Indemnifying Party
        shall be deemed to have elected not to control the defense. If the Indemnifying
        Party elects to control the defense, the Indemnified Party shall have the
        right
        to employ separate counsel and participate in the defense, but the fees and
        expenses of such counsel shall be at the expense of the Indemnified Party
        unless: (i) the named parties in such Action (including any impleaded
        parties) include both the Indemnified Party and the Indemnifying Party, and
        the
        Indemnified Party shall have been advised by its counsel in writing that
        there
        may be one or more legal defenses available to it that are different from
        or
        additional to those available to the Indemnifying Party, (ii) the
        Indemnified Party has been advised by its counsel that representation by
        the
        counsel to the Indemnifying Party is inappropriate in light of an actual
        or
        potential conflict of interest between them, (iii) the Indemnified Party
        has reasonably determined that Losses that may be incurred may exceed either
        individually, or when aggregated, the Maximum Indemnity Amount (in which
        case,
        the Indemnifying Party shall not have the right to assume the defense on
        behalf
        of the Indemnified Party), or (iv) the Indemnified Party has been advised
        by
        counsel that the Indemnifying Party is not diligently conducting such defense.
        The Indemnified Parties may not settle any Action or Buyer Claim without
        the
        written consent of the Indemnifying Party. The Indemnifying Party shall not
        be
        released from any obligation to indemnify the Indemnified Party hereunder
        with
        respect to a claim without the prior written consent of the Indemnified Party,
        unless the Indemnifying Party shall deliver to the Indemnified Party a duly
        executed agreement settling or compromising such claim with no monetary
        liability to or injunctive relief against the Indemnified Party and a complete
        release of the Indemnified Party with respect thereto, which agreement shall
        not
        limit or impair the Indemnified Party’s ability to conduct its business.

       

      SECTION
        8.5  Method
        of Indemnification 

       

      The
        Sellers hereby agree and acknowledge that if any of them are required to
        provide
        any indemnification payments pursuant to Section 8.2 hereof, indemnifiable
        amounts shall be paid by such Sellers to the Buyer (and its related Indemnified
        Parties) first from the Escrow Fund; provided, however, that if such breach
        is
        limited to a particular Seller, such Seller will satisfy such Indemnification
        Claim out of his or its separate holdings. For purposes of satisfaction of
        Indemnification Claims, the value of the Vuance Shares will be calculated
        based
        on Closing Price Per Share.

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        IX

      TERMINATION

       

      SECTION
        9.1 Termination 

       

      This
        Agreement may be terminated and the transactions contemplated by this Agreement
        may be abandoned at any time, prior to the Closing, only as follows:

       

      (a) by
        mutual
        written consent of the Buyer and the Sellers at any time prior to the
        Closing;

       

      (b) by
        the
        Buyer, upon written notice to the Sellers, at any time prior to the Closing,
        in
        the event the Sellers has breached any representation, warranty, covenant,
        or
        agreement contained in this Agreement in any material respect, the Buyer
        has
        notified the Sellers of the breach, and the breach has continued without
        cure
        for a period of ten (10) Business Days after the notice of breach;

       

      (c) by
        the
        Sellers, upon written notice to the Buyer at any time prior to the Closing,
        in
        the event the Buyer has breached any representation, warranty, covenant or
        agreement contained in this Agreement in any material respect, the Sellers
        have
        notified the Buyer of the breach, and the breach has continued without cure
        for
        a period of ten (10) Business Days after the notice of breach;

       

      (d) by
        the
        Buyer or the Sellers, upon written notice to the other party at any time
        prior
        to the Closing, if the Closing Date shall not have occurred on or before
        50 days
        after the execution of this Agreement (provided that
        the
        right to terminate this Agreement under this Section
        9.1(d)
        shall
        not be available to any party whose breach of any obligation under this
        Agreement has been the cause of, or has resulted in, the failure of the Closing
        Date to occur on or before such date); 

       

      (e) by
        the
        Buyer or the Sellers, upon written notice to the other party at any time
        prior
        to the Closing, if any Governmental Authority shall have issued an Order
        or
        taken any other Action restraining, enjoining or otherwise prohibiting the
        transactions contemplated hereby and such Order or Action shall have become
        final and nonappealable; provided that
        the
        right to terminate this Agreement under this Section
        9.1(e)
        shall
        not be available to any party whose breach of any obligation under this
        Agreement has been the cause of, or has resulted in, such denial;
        or

       

      (f) by
        the
        Buyer, upon written notice to the Sellers, at any time prior to Closing,
        in the
        event a Material Adverse Change shall have occurred since the date of this
        Agreement.

       

      SECTION
        9.2  Effect
        of Termination

       

      If
        this
        Agreement is terminated pursuant to Section
        9.1(a),
        (d),
        (e)
        or
(f)
        and the
        transactions contemplated by this Agreement are not consummated, all rights
        and
        obligations of the parties under or pursuant to this Agreement shall terminate
        without further liability of either party to the other; provided,
        however,
        the
        obligations contained in this Section
        9.2,
        the
        publicity provisions contained in Section
        6.4,
        the
        confidentiality provisions contained in Section
        6.9,
        and the
        expenses provision contained in Section
        10.2
        of this
        Agreement shall survive any termination; provided,
        further,
        that no
        termination shall relieve any party from liability for any willful breach
        of
        this Agreement. 

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        X

      MISCELLANEOUS

       

      SECTION
        10.1 Entire
        Agreement

       

      This
        Agreement and the Schedules and Exhibits hereto and the documents referred
        to
        herein and to be delivered pursuant hereto constitute the entire agreement
        between the parties pertaining to the subject matter hereof, and supersede
        all
        prior and contemporaneous agreements, understandings, negotiations and
        discussions of the parties, whether oral or written, and there are no
        warranties, representations or other agreements between the parties in
        connection with the subject matter hereof, except as specifically set forth
        herein or therein.

       

      SECTION
        10.2 Expenses

       

      Whether
        or not the transactions contemplated by this Agreement are consummated, each
        of
        the parties hereto shall pay the fees and expenses of its respective counsel,
        investment bankers, financial advisors, accountants and other experts and
        the
        other expenses incident to the negotiation and preparation of this Agreement
        and
        consummation of the transactions contemplated hereby.
        

       

      SECTION
        10.3 Governing
        Law; Submission to Jurisdiction; Service of Process

       

      (a) Governing
        Law.
        This
        Agreement shall be governed by and construed and interpreted in accordance
        with
        the laws of the State of New York (regardless of conflict of law provisions
        thereof). 

       

      (b) Submission
        to Jurisdiction.
        The
        federal Courts of New York shall have exclusive jurisdiction to adjudicate
        and
        determine any claim or dispute arising out of or in connection with this
        Agreement. The parties to this Agreement irrevocably submit to such jurisdiction
        and waive any objection to it on the grounds of inconvenient forum or otherwise.
        A judgment, order or decision of those courts in respect of any such claim
        or
        dispute may be recognized and enforced by any courts of any state, country
        or
        other jurisdiction which, under the laws and rules applicable in that state,
        country or other jurisdiction, are competent or able to grant such recognition
        or enforcement. 

       

      SECTION
        10.4 Assignment

       

      This
        Agreement and each party’s respective rights hereunder may not be assigned
        without the prior written consent of the other party, except that the Buyer
        may
        (i) assign any or all of its rights and obligations hereunder to one or
        more of its Affiliates, and (ii) designate one or more of its Affiliates to
        perform its obligations hereunder (in any or all of which cases the Buyer
        nonetheless shall remain responsible for the performance of all of its
        obligations hereunder).

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

       

      SECTION
        10.5 Notices

       

      All
        communications, notices, waivers and disclosures required or permitted by
        this
        Agreement shall be in writing and shall be deemed to have been given when
        delivered by overnight delivery service (Federal Express, UPS or comparable
        service), or when received via facsimile, in all cases addressed to the Person
        for whom it is intended at his address set forth below or to such other address
        as a party shall have designated by notice in writing to the other parties
        in
        the manner provided by this Section
        10.5.

       

      
        	
                If
                  to HMSC:

              	 	
                Homeland
                  Security Capital Corporation

                1005
                  Glebe Road, Suite 500

                Arlington,
                  VA 22201

                Attn: C.
                  Thomas McMillen

                Facsimile: (703)
                  528-0956

              
	 	 	 
	
                with
                  a copy to:

              	 	
                Kirkpatrick
                  & Lockhart Preston Gates Ellis LLP 

                201
                  South Biscayne Blvd.

                Suite
                  2000

                Miami,
                  FL 33313

                Attention:
                  Martin T. Schrier, Esq.

                Facsimile:
                   305-358-7095

              
	 	 	 
	
                If
                  to the Minority Shareholders:

              	 	
                To
                  the address set forth on the signature page hereto.

              
	 	 	 
	
                If
                  to the Buyer:

              	 	
                SuperCom
                  Inc. 

                c/o
                  Vuance Ltd.

                Sagid
                  House “Hasharon Industrial Park” 

                P.O.B
                  5039, Qadima 60920

                Israel

                Attention:

                Facsimile:

              

      

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

       

      
        	
                If
                  to Buyer’s Parent:

              	 	
                Vuance
                  Ltd.

                Sagid
                  House “Hasharon Industrial Park” 

                P.O.B
                  5039, Qadima 60920

                Israel

                Attention:

                Facsimile:

              
	 	 	 
	
                with
                  a copy to:

              	 	
                Carter
                  Ledyard & Milburn LLP

                2
                  Wall Street

                New
                  York, NY 10005

                Attention:
                  Steven J. Glusband

                Facsimile:
                   212-732-3232

              

      

       

      SECTION
        10.6 Amendment
        and Waiver

       

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

       

      SECTION
        10.7 Failure
        or Delay

       

      No
        failure on the part of any party to exercise, and no delay in exercising,
        any
        right, power or privilege hereunder operates as a waiver thereof; nor does
        any
        single or partial exercise of any right, power or privilege hereunder preclude
        any other or further exercise thereof, or the exercise of any other right,
        power
        or privilege. No notice to or demand on any party in any case entitles such
        party to any other or further notice or demand in similar or other
        circumstances.

       

      SECTION
        10.8 Counterparts 

       

      This
        Agreement may be executed in several counterparts, each of which shall be
        deemed
        an original, but all of which together shall constitute one and the same
        Agreement. 

       

      SECTION
        10.9 Specific
        Performance

       

      Each
        of
        the parties acknowledges and agrees that the other parties would be damaged
        irreparably in the event any of the provisions of this Agreement are not
        performed in accordance with their specific terms or are otherwise breached.
        Accordingly, each of the parties agrees that the other parties shall be entitled
        to an injunction or injunctions to prevent breaches of the provisions of
        this
        Agreement and to enforce specifically this Agreement and the terms and
        provisions hereof, in addition to any other remedy to which they may be
        entitled, at law or in equity. 

       

      
        
          
          

        

        
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      SECTION
        10.10 Counterpart
        Facsimile Execution

       

      For
        purposes of this Agreement, a document (or signature page thereto) signed
        and
        transmitted by facsimile machine is to be treated as an original document.
        The
        signature of any party thereon, for purposes hereof, is to be considered
        as an
        original signature, and the document transmitted is to be considered to have
        the
        same binding effect as an original signature on an original document. At
        the
        request of any party, any facsimile or scanned document is to be re-executed
        in
        original form by the parties who executed the facsimile or scanned document.
        No
        party may raise the use of a facsimile machine, or the fact that any signature
        was transmitted through the use of a facsimile as a defense to the enforcement
        of this Agreement or any amendment or other document executed in compliance
        with
        this Section
        10.10.

       

      SECTION
        10.11 Interpretation

       

      (a) Generally.
        The
        article and section headings in this Agreement are inserted for convenience
        of
        reference only and shall not affect in any way the meaning or interpretation
        of
        this Agreement. Unless the context of this Agreement clearly requires otherwise:
        (i) references to the plural include the singular and vice versa; (ii)
        references to any Person include such Person’s successors and assigns but, if
        applicable, only if such successors and assigns are permitted by this Agreement;
        (iii) references to one gender include all genders; (iv) “including” and similar
        terms are not limiting; (v) “or” has the inclusive meaning represented by the
        phrase “and/or”; (vi) the terms “dollars” and “$” shall mean United States
        dollars; (vii) section, clause and Schedule and Exhibit references are to
        this
        Agreement unless otherwise specified; (viii) reference to any agreement
        (including this Agreement), document or instrument means such agreement,
        document or instrument as amended or modified and in effect from time to
        time in
        accordance with the terms thereof and, if applicable, the terms hereof; and
        (ix)
        general or specific references to any Law shall mean such Law as amended,
        modified, codified or reenacted, in whole or in part, and in effect from
        time to
        time and shall be deemed also to refer to all rules and regulations promulgated
        thereunder in effect from time to time. 

       

      (b) Joint
        Drafting.
        The
        parties have participated jointly in the negotiation and drafting of this
        Agreement. In the event an ambiguity or question of intent or interpretation
        arises regarding this Agreement, this Agreement will be construed as if drafted
        jointly by the parties and no presumption or burden of proof will arise favoring
        or disfavoring any party by virtue of the authorship of any of the provisions
        of
        this Agreement. The parties intend that each representation, warranty, and
        covenant contained herein shall have independent significance.

       

      SECTION
        10.12 Survival

       

      Except
        as
        otherwise provided in Article
        VIII,
        the
        agreements, covenants and obligations of each party made under this Agreement
        shall survive indefinitely (or for the relevant period specified in the
        particular provision, if applicable).

       

      SECTION
        10.13 Third
        Party Beneficiaries; No Reliance

       

      This
        Agreement is solely for the benefit of the parties and their respective
        successors and permitted assigns, and no other Person has any right, benefit,
        priority or interest under or because of the existence of this Agreement
        except
        as specifically set forth herein.

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      SECTION
        10.14 Incorporation
        of Exhibits and Schedules

       

      The
        Exhibits and Schedules identified in this Agreement are incorporated herein
        by
        reference and made a part hereof. 

       

      SECTION
        10.15 Guarantee. 

       

      Buyer’s
        Parent guarantees all of the obligations of the Buyer hereunder.

       

      [Remainder
        of Page Intentionally Left Blank]

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
        as
        of the day and year first above written.

       

      
        	 	BUYER:
	 	 	 
	 	SUPERCOM
                INC.
	 
 	 
 	 
 
	 	By:  	/s/ Eyal
                Tuchman
	 	
                
Name:
                Eyal Tuchman
	 	Title:
                Director

      

      
         

        
          	 	BUYER’S
                  PARENT:
	 	 	 
	 	VUANCE
                  LTD.
	 
 	 
 	 
 
	 	By:  	/s/ Eyal
                  Tuchman
	 	 	
                  
                    

                  

                   

                  /s/ Lzor Maza

                  
                    

                  
Name: Eyal Tuchman and Lzor Maza
	 	Name: Eyal Tuchman
	 	Title:
                  CEO and CFO

        

         

      

      
        
          	 	SELLERS:
	 	 	 
	 	HOMELAND
                  SECURITY
                  CAPITAL CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ C.
                  Thomas
                  McMillen
	 	
                  
Name:
                  C. Thomas McMillen
	 	Title:
                  President and CEO
	 	Percentage Share of Purchase Price: 68.9655%
	 	Number of Shares: 3,000,000
	 	Address:
	 	Tax ID No.: 52-2050585
	 	 
	 	 
	 	
                  /s/ Joel Konicek

                  
                    

                  
Name: Joel Konicek
	 	Percentage Share of Purchase Price: 10.2753%
	 	Number of Shares: 446,976
	 	Address: 
	 	Tax ID No.: ###-##-####

             
            

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

             
            

          
            	 	 	  
	
                  	 	/s/ James
                    Peroutka
	
                  	 	
                    
Name:
                    James Peroutka
	
                  	 	Percentage
                    Share of Purchase Price: 10.2753%
	 	 	Number of Shares:
                    446,976
	 	 	Address:
	 	 	Tax ID No.:
                    392-60-383

          

           

          
            
              	 	 	  
	
                    	 	/s/ James
                      Vinson
	
                    	 	
                      
Name:
                      James Vinson
	
                    	 	Percentage
                      Share of Purchase Price: 7.0186%
	 	 	Number of Shares:
                      305,309
	 	 	Address:
	 	 	Tax ID No.:
                      ###-##-####

            

             

            
              
                	 	 	  
	
                      	 	/s/ Charles
                        Martin
	
                      	 	
                        
                          

                        

                         

                        /s/ Elizabeth Martin

                      
	 	 	
                        
Name:
                        Charles and Elizabeth Martin
	
                      	 	Percentage
                        Share of Purchase Price: 3.4652%
	 	 	Number of Shares:
                        150,738
	 	 	Address:
	 	 	Tax ID No.: ###-##-####
                        (Charles
                        Martin) and
	 	 	###-##-####
                        (Elizabeth Martin)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]