Document:

assetpurchase.htm

    Exhibit
10.1

     

    ASSET PURCHASE
AGREEMENT

     

    

     

    THIS ASSET PURCHASE AGREEMENT
(the “Agreement”), made and entered into as of this 31st day of December, 2008,
by and between the Buyer, as defined below, and the Seller, as defined
below.

     

    As used
in this Agreement, the term “Buyer” includes ERF Wireless, Inc., a Nevada
corporation (“Parent”), and ERF Wireless Bundled Services, Inc., a Texas
corporation and wholly-owned subsidiary of Parent, (“Subsidiary”).

     

    As used
in this Agreement, the term “Seller” means Centramedia, Inc., D.E. Rice
Management Corporation, D.E. Rice Equipment Corporation and D.E. Rice
Construction Company, collectively as sellers (“Centramedia”), Texas
corporations headquartered in Pampa, Texas.

     

    W
I T N E S S E T H:

     

    WHEREAS, Seller presently
operates a business engaged in providing a comprehensive full range of Internet
services including Internet Access, dial-in, ISDN, wireless, and networking
solutions to commercial businesses and residential customers (the “Business”);
and

    

    WHEREAS, Seller desires to
sell substantially all of the assets and contracts of the Business to Buyer, and
Buyer desires to purchase such assets and contracts from Seller, on the terms
and subject to the conditions set forth herein.

     

    NOW, THEREFORE, Buyer and
Seller, in consideration of the mutual promises hereinafter set forth, do hereby
promise, and agree as follows:

     

    ARTICLE ONE: ASSETS TO BE
PURCHASED

     

    
      	
              1.1

            	
              Subject
      Assets.  Upon the terms and subject to the conditions set
      forth in this Agreement, Seller hereby sells to Subsidiary and Subsidiary
      hereby purchases from Seller, at the Closing, all of Seller's right,
      title, and interest in substantially all of the assets associated with the
      Business, including the following:

            

    

    

    The
assets being acquired includes the right, title, and interest in substantially
all of the assets associated with the Business, including:

    
      	
               
      

            	
              a.

            	
              Real
      property / physical locations at 112 and 114 East Francis, i.e., Main
      office, store front, NOC and towers located on such real
      property.

            

    

    
      	
               
      

            	
              b.

            	
              all
      wireless network infrastructure equipment, including subscriber units,
      access nodes, backhaul links, towers, radios, antennas, switches, routers
      and servers with related software;

            

    

    
      	
               
      

            	
              c.

            	
              all
      cash, cash equivalents, accounts receivable (including, without
      limitation, any deposit accounts)

            

    

    
      	
               
      

            	
              d.

            	
              all
      inventory, equipment, goods, documents pertaining to the operations and
      instruments of the Business;

            

    

    
      	
               
      

            	
              e.

            	
              all
      vehicles and trailers;

            

    

    
      	
               
      

            	
              f.

            	
              all
      rights to equipment, tower and facilities space leases for the Business
      (“Assumed Leases”);

            

    

    
      	
               
      

            	
              g.

            	
              all
      transferable customer and contractual rights held by the Business,
      including ISP Subscriber Agreements, all Design Agreements, Equipment
      Purchase Agreements, Internet Access and Monitoring and Maintenance
      Agreements with customers with fixed wireless
  broadband;

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    

    
      	
               
      

            	
              h.

            	
              all
      general intangibles (including trademarks, trade names and symbols) used
      in connection with Centramedia Online
Services;

            

    

    
      	
               
      

            	
              i.

            	
              all
      work in progress, and all other contracts and agreements relating to the
      Business;

            

    

    
      	
               
      

            	
              j.

            	
              all
      transferable equipment and software related to the
    Business;

            

    

    
      	
               
      

            	
              k.

            	
              all
      Internet address space registered with the American Registry for Internet
      Numbers, (“ARIN”) by “Centramedia Online Services” and its internet
      suppliers that is transferable according to the rules, regulations or
      procedures promulgated by ARIN;

            

    

    
      	
               
      

            	
              l.

            	
              all
      legally assignable government permits, licenses and certifications for the
      Business ("Governmental Permits");
and

            

    

    
      	
               
      

            	
              m.

            	
              all
      documents, files and records containing technical support, all additions,
      accessions and substitutions thereto and other information pertaining to
      the Business in Seller’s possession or control (collectively, “Purchased
      Assets” set forth in Schedule 1.1).

            

    

    

    Documentation
that will be provided pursuant to the purchase will include copies of the
following books, records, manuals and other materials in any tangible form to
the extent relating to the Business and/or the Subject Assets: records relating
to customers that are parties to any contracts, records relating to vendors, and
all other books, records, files, correspondence, documents and information owned
by Seller relating to the Business that are currently in the possession of the
employees of the Business, however maintained or stored (collectively, the
“Records”), it being understood that the Seller may cause to be deleted
confidential information that does not relate to the Subject Assets or the
Business.

     

    
      	
              1.2

            	
              Excluded
      Assets.  The Subject Assets shall not include the
      following (herein referred to as the "Excluded
  Assets"):

            

    

    

    
      	
               
      

            	
              all
      corporate minute books, stock transfer books and other documents relating
      to the organization, maintenance and existence of Seller as a corporation
      ("Corporate Documents");

            

    

     

    
      	
               
      

            	
              all
      rights of Seller pursuant to this Agreement, including the consideration
      paid to Seller pursuant to this
Agreement;

            

    

     

    
      	
               
      

            	
              all
      originals of personnel records and other records that Seller is required
      by applicable law to retain in its
possession;

            

    

     

    all tax refunds which Seller is
due;

     

    all
capital stock in Seller; and

    

    
      	
               
      

            	
              any
      other item specifically listed in Schedule
1.2.

            

    

    

    1.3           Purchase
Price; Payment of Purchase Price. In addition to the Assumed Liabilities
described below, the aggregate consideration for the Subject Assets (the
“Purchase Price”) shall be the amount equal to: $2,000,000. The Purchase Price
shall be subject to adjustment as set forth in Section 1.7 below as so
adjusted.

    

    1.4    Payment
Terms. The Purchase Price shall be payable at the Closing date as
follows:

    

    
      	
               
      

            	
              Ø

            	
              $150,000
    cash

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    

    
      	
               
      

            	
              Ø

            	
              $600,000 Secured Convertible
      Note Payable to Seller (“Note”) attached hereto as Exhibit 1.4.3,
      which terms of said Note are incorporated herein at this point as if set
      forth in full – 3 year note at 7.5% interest with quarterly payments in
      the amount of $56,341.87 beginning ninety (90) days following
      Closing.  The Note Holder will
      have a “one-time” option to convert the note into Parent Company Stock at
      $0.75 per share on or before the 1st anniversary of the
      Note.  The Buyer shall have the right to make the Secured
      Promissory Note (“Note”) quarterly installments, until the entire
      outstanding balance has been repaid, to be made with cash or Freely
      Tradable common stock of the Parent.  Freely Tradable common
      stock shall mean fully registered securities which are not subject to any
      contractual, regulatory or other legal restrictions on their transfer, are
      free and clear of all liens and encumbrances and are freely tradable to
      members of the general public.  The Note shall be secured by
      100% of the Purchased Assets of Seller under a Pledge Agreement and
      Security Agreement executed concurrent with this Note.  The
      Buyer may prepay the Note at any time.  In this regard, Buyer
      guarantees the Holder that the underlying value of the common stock used
      to discharge any quarterly payment shall maintain or exceed the cash value
      of the quarterly payment for a period of 90 days from the payment
      date.  Otherwise, Buyer shall promptly deliver additional shares
      or cash for any difference between the value of the common stock delivered
      as a quarterly payment and the value of said shares 90 days
      thereafter.  Should Buyer elect to pay a quarterly payment in
      Freely Tradable common stock of Parent, Parent will execute a Guaranty
      Agreement, in form and substance acceptable to Holder, that shall
      guarantee the Holder the underlying value of the common stock as of the
      quarterly payment due date for a period of 90 days from the payment date.
      Valuation of the shares shall be based upon the same method and will
      initially be based upon the closing trade price of Parent’s common stock
      on the OTCBB as quoted under the symbol “ERFW" as of the payment
      date.  Parent agrees to grant Seller piggy-back registration
      rights to all Restricted Stock issued to Seller as part of the Definitive
      Agreements and will agree to provide its transfer agent with an opinion
      letter and instructions to remove the restricted legend from Seller’s
      shares in accordance with SEC Rule
144.

            

    

    
      	
               
      

            	
              Ø

            	
              $1,250,000 to be paid by
      issuance of Rule 144 Restricted Stock priced at trailing 10 day
      average prior to closing. Buyer agrees to make up any shortfall in Freely
      Tradable common stock if the aggregate value of all shares issued are sold
      in open market transactions and total less than $1,250,000 unless the
      shortfall expires according the following provisions.  The
      shortfall guarantee shall expire on the earlier of (a) the liquidation of
      $1,250,000 in value, (b) upon the market value of the aggregate of sold
      and unsold shares reaching $1,750,000 after the 6-month tacking period for
      Rule 144 Restricted Stock or (c) 18 months following the
      closing.

            

    

    

    In
accordance with the Pledge Agreement (Exhibit 1.4.4.1) and the Security
Agreement (Exhibit 1.4.4.2) to this Agreement, Parent agrees to guarantee the
faithful payment of the Purchase Price by pledging Buyer the first lien position
in the assets acquired and set forth in the Bill of Sale back to Seller through
the date that the Purchase Price (including all components and payment terms of
the Purchase Price) has been paid in full.

    

    1.5 Assumed
Liabilities; No Other Assumption of Liabilities. As partial consideration
for the Subject Assets, Subsidiary shall deliver to Seller at Closing an
Assignment and Assumption Agreement pursuant to which Subsidiary shall assume
and pay, perform or discharge, as appropriate, the liabilities and obligations
of Seller (the “Assumed Liabilities”)

     

    
      	
               
      

            	
              a.

            	
              arising
      in connection with the operation of the Business by the Purchaser after
      the closing date,

            

    

    
      	
               
      

            	
              b.

            	
              arising
      after the closing date in connection with the performance by the Purchaser
      of the contracts and agreements associated with the Business assigned to
      Purchaser, including; ISP Subscriber Agreements, tower leases, telecomm
      and bandwidth costs, office lease with the City of Pampa and utilities in
      effect pertaining to the Business, and the Equipment Purchase, Monitoring
      and Maintenance Agreements in existence with all customers
    and

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    

    
      	
               
      

            	
              c.

            	
              accounts
      payable outstanding, if any remained unpaid by Seller, as of the closing
      date as limited and subject to the adjustments set forth in section 1.7 –
      Adjustments to Purchase Price.

            

    

    

    Buyer
shall not assume or be responsible for any such liabilities or obligations that
arise from breaches thereof or defaults by Seller prior to the Closing, all of
which liabilities and obligations shall constitute “Specified Retained
Liabilities” and all such liabilities shall either be retained by Seller or be
fully paid prior to Closing.

     

    Except
for the Assumed Liabilities, Buyer shall not assume or be obligated under, or
become liable for, any debt, liability, contract or obligation whatsoever of
Seller or the Business, and Seller shall be responsible for the payment or
performance and full discharge of all debts, liabilities, contracts and
obligations whatsoever of Seller, including those of the Business accruing prior
to the Closing and the Specified Retained Liabilities. In particular (and by way
only of example and not by way of limitation), Seller shall be and remain solely
responsible for, and shall timely pay or perform and discharge, all debts,
liabilities, contracts and obligations with respect to the Business other than
the Assumed Liabilities (collectively, together with those liabilities and
obligations described in Section 2.2 as constituting the same, “Specified
Retained Liabilities”): (i) ) any tax liability or obligation relating to
transactions or periods prior to and including the Closing Date (but excluding
any sales, use, transfer or other tax obligation resulting from the transactions
contemplated by this Agreement, which Buyer hereby agrees to be responsible
for); (ii) any liability or obligation to Seller's employees for salaries and
wages whether relating to the termination of their employment or otherwise
arising, relating to periods prior to and including the Closing; and (iii) any
legal claim or any other liability or obligation whatsoever incurred by Seller
relating to the Business for periods or occurrences prior to and including the
Closing Date.

     

    1.6  Allocation
of Purchase Price.  Seller and Buyer shall cooperate to
determine (in accordance with applicable U.S. Treasury regulations promulgated
under Section 1060 of the U.S. Internal Revenue Code, as amended, the allocation
of the Purchase Price and the liabilities of Seller (plus other relevant items)
among the Subject Assets as of the Closing Date.  Such allocation
shall be made in a manner consistent with the fair market value of such
assets.  Each of the parties will file all tax returns and information
reports (including the IRS Form 8594 and any disclosures that are required under
Section 1060 of the Internal Revenue Code) in a manner consistent with such
allocation.

     

    1.7  Adjustments
to Purchase Price.  The Purchase Price shall be subject to the
following additional credits and adjustments (either as additions or reductions
to the Purchase Price, as the case may be), which shall be reflected in the
closing statements to be executed and delivered by Buyer and Seller as
hereinafter provided: (a) Cash plus accounts receivable plus any prepaid
expenses, (including but not limited to taxes and other similar items directly
related to the Assumed Liabilities which shall be prorated at Closing) less (b)
any accounts receivable collected and not set aside in Seller’s bank account(s)
against bills in advance or prepaid services for any service periods
post-Closing and (c) trade accounts payable, credit card obligations for
business expenses paid by Purchaser on behalf of Seller for obligations and
services rendered prior to the Closing.  Notwithstanding the above
provision, Seller agrees to track and set aside in the Seller’s bank account(s)
such funds received against post-Closing service periods. The amount of this
adjustment shall be identified as Purchase Price Adjustment
(“PPA”).  At the end of a ninety-day period immediately after Closing,
Purchaser and Seller shall review the PPA and revise it as follows:

     

    
      
        	
              	
                i.

              	
                Reduce
      or increase the PPA as the case may be by an amount equal to any customer
      accounts receivable purchased at Closing that are deemed uncollectible or
      understated;

              

      

    

    
      
        	
              	
                ii.

              	
                Decrease
      or increase the PPA as the case may be by an amount equal to any increase
      in the accounts payable assumed by Purchaser at Closing which resulted
      from such accounts payable having been understated-yet-due by Seller as of
      the Closing date or
overstated.

              

      

    

     

    Purchaser
and Seller shall review this revision and upon mutual agreement, the amount of
the Rule 144 Restricted Stock described in section 1.4 may be increased or
decreased.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    ARTICLE TWO:
CLOSING

     

    2.1 Time and
Place of Closing; Closing Deliveries. The closing of the purchase and
sale contemplated herein (the “Closing”) shall take place at 11:00 a.m., on
December 31, 2008 at the offices of Parent, located at League City, Texas, or
such time and date as the parties may agree upon. The date of Closing is
hereinafter referred to as the “Closing Date.”

     

    At the
Closing, Seller shall deliver to Buyer according to Buyer’s
instructions:

     

    
      	
               
      

            	
              a.

            	
              by
      wire transfer or certified bank check, an amount equal to $150,000, in
      U.S. Dollars,

            

    

     

    
      	
               
      

            	
              b.

            	
              (b)
      $1,250,000 of Restricted Stock of the
Parent,

            

    

     

    
      	
               
      

            	
              c.

            	
              (c)
      an executed, Secured $600,000 Promissory Note and Pledge and Security
      Agreement; and

            

    

     

    
      	
               
      

            	
              d.

            	
              (e)
      the documents, certificates, agreements and instruments described in
      Section 2.2.  Buyer shall deliver to Seller the documents,
      certificates, agreements and instruments described in Sections 2.2 and
      2.3.

            

    

     

    2.2 Conditions
Precedent to Buyer's Obligation. The obligation of Buyer to consummate
the transactions contemplated herein is subject to the satisfaction (or, in
Buyer's sole discretion, written waiver thereof) as of the Closing of the
following conditions:

     

    The
representations and warranties of Seller made in this Agreement shall be true
and correct in all material respects at Closing.

     

    No
demand, action, suit, audit, investigation, review, claim or other legal or
administrative proceeding (collectively, a “Proceeding”) by any nation or
government, any state or other political subdivision thereof, including any
governmental agency, department, commission, or instrumentality of the United
States, any State of the United States or any political subdivision thereof or,
any self-regulatory agency or authority (collectively, “Governmental Authority”)
or other person shall have been instituted or threatened against Seller which
seeks to enjoin, restrain or prohibit, or which questions the validity or
legality of, the transactions contemplated hereby or which otherwise seeks to
affect or could reasonably be expected to affect the transactions contemplated
hereby.

     

    Seller's
shareholders shall have approved this Agreement and the transactions
contemplated thereby.

     

    Seller
shall have performed in all material respects its obligations described in
Section 5.1.

     

    The
Seller, Dwight Rice and Mike Williams, except for providing services to benefit
the Buyer during a transition and integration period, will also agree not to be
involved in any way with the Internet Access industry until 3 years from the
date of Closing, provided the Buyer and Parent meet all obligations to Seller
under this Definitive Agreement.

    

     

    Buyer
shall have received from Seller all of the following:

     

    A bill of
sale including a complete listing of assets, in form and substance satisfactory
to Buyer, duly executed by Seller (collectively, the “Bill of Sale”), conveying
to Buyer the Subject Assets free and clear of all pledges, security interests,
or other similar liens granted by Seller and free and clear of all other adverse
claims of any kind whatsoever known by Seller (collectively, “Encumbrances”),
except (i) encumbrances for taxes, the payment of which is not delinquent, (ii)
materialmen's, warehousemen's, mechanic's, lender’s, lessor’s, or other
Encumbrances arising by operation of law in the ordinary course of business for
sums not due and which do not materially detract from the value of such assets
or properties or materially impair the operation of the Business, and (iii)
statutory Encumbrances incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits (collectively "Permitted Encumbrances")
;

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    An
assignment and assumption agreement in the form of Exhibit 4 (the “Assignment
and Assumption Agreement”), duly executed by Seller;

     

    Trademark,
copyright and other intellectual property assignment documents reasonably
requested  by Buyer to fully effectuate use or transfer of the
intellectual property within the Subject Assets, each duly executed by
Seller;

     

    Actual or
constructive physical possession of all of the Subject Assets and the
Records;

    A
certificate of the Secretary of Seller certifying, as complete and accurate as
of the Closing, attached copies of the governing documents of Seller, certifying
and attaching all requisite resolutions or actions of Seller's board of
directors and shareholders approving the execution and delivery of this
Agreement and the consummation of the contemplated transactions
and  the change of name contemplated by Section 1.1 and certifying to
the incumbency and signatures of the officers of Seller executing this Agreement
and any other document relating to the contemplated transactions  and
accompanied by the requisite documents for amending the relevant governing
documents of Seller required to effect such change of name in form sufficient
for filing with the appropriate Governmental Body

     

    2.3 Conditions
Precedent to Seller's Obligations. The obligation of Seller to consummate
the transactions contemplated hereby is subject to satisfaction as of the
Closing of the following conditions (or, in the sole discretion of Seller,
written waiver thereof):

     

    The
representations and warranties of Buyer made in this Agreement shall be true and
correct in all material respects at Closing.

     

    No
proceeding by any Governmental Authority or other person shall have been
instituted or threatened against Buyer which seeks to enjoin, restrain or
prohibit, or which questions the validity or legality of, the transactions
contemplated hereby or which otherwise seeks to affect or could reasonably be
expected to affect the transactions contemplated hereby.

     

    Buyer’s
operations have been in compliance with all applicable laws and regulations that
could have a material adverse impact on the Business.

     

    Buyer
shall have performed in all material respects its obligations described in
Section 5.1 and elsewhere in this Agreement.

     

    Seller
shall have received from Buyer all of the following:

     

    The
Purchase Price (including the Secured Promissory Notes, and Pledge and Security
Agreements, all duly executed by Buyer) as provided in Sections 1.4
and  2.1; and

     

    The
Assignment and Assumption Agreement, duly executed by Subsidiary;

     

    A
certificate of the Secretary of each of Parent and Subsidiary certifying, as
complete and accurate as of the Closing, attached copies of the governing
documents of Parent and Subsidiary as amended and restated, respectively, and
certifying and attaching all requisite resolutions or actions of Buyer's board
of directors approving the execution and delivery of this Agreement and the
consummation of the contemplated transactions and certifying to the incumbency
and signatures of the officers of Buyer executing this Agreement and any other
document relating to the contemplated transactions; and

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    2.4
Consents and Other Conditions to Closing.  It shall also be a
condition precedent to closing that:

     

    
      	
               
      

            	
              (a)

            	
              Buyer
      and Seller shall have obtained all necessary material consents or
      approvals from all governmental or regulatory authorities that are
      necessary to acquire the Subject Assets and to continue the historical
      operations of the Seller in the
Subsidiary;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Seller
      shall not be involved in or threatened with any litigation that would have
      a material adverse effect on the Subject
Assets;

            

    

     

    Seller
shall have obtained all necessary consents from any utility companies,
landlords, lenders, suppliers and other third parties in connection with the
material contracts described in Exhibit 5 to be assumed by Subsidiary at Closing
("Material Consents"). If there are any Material Consents that have not yet been
obtained (or otherwise are not in full force and effect) as of the Closing, in
the case of each Seller contract as to which such Material Consents were not
obtained (or otherwise are not in full force and effect) (the "Restricted
Material Contracts"), Buyer may waive the closing conditions as to any
such Material Consent and either:

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              elect
      to have Seller retain that Restricted Material Contract and all
      Liabilities arising therefrom or relating
  thereto.

            

    

     

    If Buyer
elects to have Seller continue its efforts to obtain any Material Consents and
the Closing occurs, notwithstanding Sections 1.1 and 1.5, neither this Agreement
nor the Assignment and Assumption Agreement nor any other document related to
the consummation of the contemplated transactions shall constitute a sale,
assignment, assumption, transfer, conveyance or delivery or an attempted sale,
assignment, assumption, transfer, conveyance or delivery of the Restricted
Material Contracts, and following the Closing, the parties shall use Best
Efforts (other than that Seller and Buyer shall have no obligation to offer or
pay any consideration in order to obtain any such Material Consents), and
cooperate with each other, to obtain the Material Consent relating to each
Restricted Material Contract as quickly as practicable.  Pending the
obtaining of such Material Consents relating to any Restricted Material
Contract, the parties shall cooperate with each other in any reasonable and
lawful arrangements designed to provide to Buyer the benefits of use of the
Restricted Material Contract for its term (or any right or benefit arising
thereunder, including the enforcement for the benefit of Buyer of any and all
rights of Seller against a third party thereunder).  Once a Material
Consent for the sale, assignment, assumption, transfer, conveyance and delivery
of a Restricted Material Contract is obtained, Seller shall promptly assign,
transfer, convey and deliver such Restricted Material Contract to Buyer, and
Buyer shall assume the obligations under such Restricted Material Contract
assigned to Buyer from and after the date of assignment to Buyer pursuant to a
special-purpose assignment and assumption agreement substantially similar in
terms to those of the Assignment and Assumption Agreement (which special-purpose
agreement the parties shall prepare, execute and deliver in good faith at the
time of such transfer, all at no additional cost to Buyer).  If there
are any Consents not listed on Exhibit 5 necessary for the assignment and
transfer of any Seller contracts to Buyer (the "Nonmaterial
Consents") which have not yet been obtained (or otherwise are not in full
force and effect) as of the Closing, Buyer shall elect at the Closing, in the
case of each of the Seller contracts as to which such Nonmaterial Consents were
not obtained (or otherwise are not in full force and effect) (the "Restricted
Nonmaterial Contracts"), whether to:

     

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

    

    (ii)           reject
the assignment of such Restricted Nonmaterial Contracts, in which case,
notwithstanding Sections 1.1 and 1.5, (A) neither this Agreement nor the
Assignment and Assumption Agreement nor any other document related to the
consummation of the Contemplated Transactions shall constitute a sale,
assignment, assumption, conveyance or delivery or an attempted sale, assignment,
assumption, transfer, conveyance or delivery of such Restricted Nonmaterial
Contract, and  (B) Seller shall retain such Restricted Nonmaterial
Contract and all liabilities arising therefrom or relating
thereto.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    2.5
Failure of Conditions. If any of the
material conditions to Closing set forth in Sections 2.2, 2.3 and 2.4 have not
been satisfied, the party or parties entitled to the benefit of such material
conditions may elect to waive the requirement or terminate this Agreement
without further liability of the terminating party or to consummate the
transactions contemplated hereby.

     

     ARTICLE
THREE: WARRANTIES AND REPRESENTATIONS OF SELLER

     

    Seller
hereby warrants and represents to Buyer, which warranties and representations
shall survive the Closing for one year, as follows:

     

    3.1
Corporate Matters; No Conflict.  Seller is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Texas and has the authority and power, corporate and otherwise, to carry on
the Business in the places and in the manner presently conducted. Seller has the
corporate power and authority to enter into this Agreement and the agreements
and documents to be executed and delivered pursuant to this Agreement (the
“Ancillary Agreements”) by Seller and to consummate the transactions
contemplated hereby.

     

    The
execution, delivery and performance of this Agreement and the Ancillary
Agreements to be executed by Seller and the consummation of the transactions
contemplated hereby have been approved by all necessary corporate action, other
than the Seller's shareholders. This Agreement and the Ancillary Agreements to
be executed by Seller constitute, or, in the case of such Ancillary Agreements,
upon their execution and delivery by Seller, will constitute, valid and legally
binding obligations of Seller, enforceable against it in accordance with their
respective terms except as such enforceability may be limited by bankruptcy and
other Laws generally affecting the rights of creditors and general principles of
equity.

     

    To
Seller’s knowledge, there are no material adverse environmental liabilities
associated with the Seller's Business or the Subject Assets.

     

    Except as
set forth in Schedule 3, the execution, delivery and performance of this
Agreement and such Ancillary Agreements to be executed by Seller and the
consummation of the transactions contemplated hereby by such party: (i) does not
and will not violate, conflict with, or result in the breach of, or default
under, any term, condition or provision of, give rise to any right to terminate,
cancel, modify, accelerate or otherwise change the existing rights or
obligations of such party with respect to, (A) any domestic or foreign Federal,
state or local statute, law, ordinance, rule, administrative interpretation,
regulation, policy, guideline or other requirement of or by any Governmental
Authority, each as amended through the date hereof (collectively, “Laws”) which
is applicable to such party, the Business and/or the Subject Assets, (B) any
judgment, order, writ, injunction, decree, directive or award of any arbitrator
or Governmental Authority (collectively, an “Order”) which is applicable to such
party, the Business and/or the Subject Assets, (C) the charter documents of
Seller or any securities issued by Seller, or (D) any authorization, approval,
consent, qualification, permit or license (collectively, an “Authorization”) of
any Governmental Authority, or any material agreement, or other material
instrument, document or understanding, oral or written, to which such party is a
party, by which Seller may have rights or by which any of the Subject Assets may
be bound or affected; or (ii) result in the creation or imposition of any
Encumbrance except Permitted Encumbrances, on the Subject Assets.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    No
Authorization or other action of, or registration, declaration, recording or
filing with, any Governmental Authority or other person (other than the approval
of the Board of Directors and shareholders of Seller) is required in connection
with the execution and delivery of this Agreement and/or any Ancillary
Agreements to be executed and delivered pursuant hereto by Seller and/or the
consummation by Seller of the transactions contemplated hereby.

     

    3.2 Title
to the Subject Assets.  Seller has good and valid title to all
of the assets constituting the Subject Assets described in Section 1.1, free and
clear of all Encumbrances except Permitted Encumbrances.

     

    3.3
Commitments; Customers and Vendors. To the knowledge of
Seller, the obligations listed on Exhibit 5 are all of the material agreements,
arrangements, and other commitments of the Business with its customers (whether
written, oral or otherwise) which, if not assigned to or assumed by Buyer as an
“Assumed Contract” hereunder, would result in liabilities or obligations of
Seller accruing after the Closing. True and correct copies of each of the
contracts and all amendments and modifications thereof, have been delivered to
Buyer. Assuming that the consent of the customers who are parties to the
contracts is obtained pursuant to consents (as defined in 5.1), all of the
contracts are assignable by Seller.

     

    3.4 Each
Assumed Contract is in full force and effect.  To the knowledge
of Seller, Seller has not been made aware of any facts that would suggest that
any of the material contracts within Subject Assets is not valid and binding or
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy and other Laws generally affecting the rights of creditors
and general principles of equity. Except as set forth in Schedule 3, neither
Seller nor, to the knowledge of Seller, any other party to a contract is in
breach or default under any contract (with or without the lapse of time, or the
giving of notice, or both).

     

    3.5
Brokers, Agents. Seller has not dealt with any agent, finder, broker or
other representative (other than representatives of Buyer) in any manner which
could result in Buyer being liable for any finder's, broker's or other fee or
commission in connection with the subject matter of this Agreement.

     

    3.6
Warranties True and Correct. No representation or warranty by Seller
contained in this Agreement or in any writing to be furnished pursuant hereto
contains or will contain any untrue statement of fact or omits or will omit to
state any material fact required to make the statements herein or therein
complete and not misleading.

     

    Exclusion
of Implied Warranties.  SELLER EXCLUDES AND DISCLAIMS ANY AND ALL
IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE SUBJECT ASSETS AND EACH
OF THEM.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, SELLER
MAKES NO WARRANTIES TO BUYER IN CONNECTION WITH THE SALE OR TRANSFER OF THE
SUBJECT ASSETS TO SUBSIDIARY OR THE CONDITION OR PROSPECTS OF THE BUSINESS OTHER
THAN THOSE EXPRESSLY SET FORTH IN THIS ARTICLE THREE.

     

    ARTICLE FOUR: WARRANTIES AND
REPRESENTATIONS OF BUYER

     

    Buyer
hereby warrants and represents to Seller, which warranties and representations
shall survive the Closing for a period of three (3) years following Closing as
follows:

     

    4.1
Corporate Matters; No Conflict. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the state where it was
incorporated.  Buyer has the authority and power, corporate or
otherwise, to carry on all business activities in the places and in the manner
currently conducted by it.  Buyer has the corporate power and
authority to enter into this Agreement and the Ancillary Agreements to be
executed and delivered by it and to consummate the transactions contemplated
hereby.  The execution, delivery, and performance of this Agreement
and the Ancillary Agreements by Buyer have been approved by all necessary
corporate action. This Agreement and the Ancillary Agreements to be executed and
delivered by Buyer constitute, or in the case of the Ancillary Agreements, upon
their execution and delivery by Buyer, will constitute, valid and legally
binding obligations of Buyer, enforceable against it in accordance with their
respective terms except as such enforceability may be limited by bankruptcy and
other Laws generally affecting the rights of creditors and general principles of
equity.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    The
execution, delivery and performance of this Agreement and the Ancillary
Agreements to be executed and delivered by Buyer, the consummation of the
transactions contemplated hereby, and the compliance herewith, by Buyer: (i)
does not, and will not violate, conflict with or result in the breach of, or
default under, any term, condition or provision of, give rise to any right to
terminate, cancel, modify, accelerate or otherwise change the existing rights or
obligations of such party with respect to, (A) any domestic or foreign federal,
state or local statute, law, ordinance, rule, administrative interpretation,
regulation, policy, guideline or other requirement of or by any governmental
authority, each as amended through the date hereof (collectively, “Laws”) which
is applicable to such party, the business and/or the subject assets, (B) any
judgment, writ, injunction, decree, directive or order of any arbitrator or
governmental authority (collectively, an “Order”) which is applicable to such
party, the business and/or the subject assets, (C) the charter documents of
Buyer or any securities issued by Buyer, or (D) any authorization, approval,
consent, qualification, permit or license (collectively an “Authorization”) of
any governmental authority, or any material agreement, or other material
instrument, document or understanding, oral or written, to which such party is a
party, by which Seller may have rights or by which any of the subject assets may
be bound or affected.

     

    No
Authorization or other action of, or registration, declaration, recording or
filing with, any Governmental Authority or other person is required in
connection with the execution and delivery of this Agreement and/or any
Ancillary Agreement to be executed and delivered pursuant hereto by Buyer and/or
the consummation by Buyer of the transactions contemplated hereby.

     

    4.2
SEC Filings; Financial Statements

     

    
      	
               
      

            	
              (a)

            	
              The
      Parent has made available to the Seller, upon request of the Seller,
      accurate and complete copies (excluding copies of exhibits) of each
      report, registration statement and definitive proxy statement filed by the
      Parent with the Securities Exchange Commission (the “SEC”) between
      December 31, 2004 and the date of this Agreement (the “Parent SEC
      Documents”).  As of the time it was filed with the SEC (or, if
      amended or superseded by a filing prior to the date of this Agreement,
      then on the date of such filing):  (i) each of the Parent
      SEC Documents complied in all material respects with the applicable
      requirements of the Securities Act of 1933 or the Securities Exchange Act
      of 1934 (as the case may be); and (ii) none of the Parent SEC
      Documents contained any untrue statement of a material fact or omitted to
      state a material fact required to be stated therein or necessary in order
      to make the statements therein, in the light of the circumstances under
      which they were made, not
misleading.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Between
      the date of the most recently filed Parent SEC Document and the date of
      this Agreement, there has been no material adverse change in the Parent’s
      affairs that has not been disclosed in the Parent's SEC Documents, provided, however, that
      for purposes of determining whether there shall have been any such
      material adverse change, (i) any adverse change resulting from or relating
      to worldwide general business or economic conditions shall be disregarded,
      (ii) any adverse change resulting from or relating to conditions generally
      affecting the industry in which Parent  competes shall be
      disregarded, and (iii) any adverse change to the stock price of the
      Parent’s Common Stock, as quoted on any nationally recognized stock
      quotation system, shall be disregarded.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      consolidated financial statements contained in the Parent's SEC
      Documents:  (i) complied as to form in all material
      respects with the published rules and regulations of the SEC applicable
      thereto; (ii) were prepared in accordance with generally accepted
      accounting principles applied on a consistent basis throughout the periods
      covered, except as may be indicated in the notes to such financial
      statements and (in the case of unaudited statements) as permitted by
      Form 10-Q of the SEC, and except that unaudited financial statements
      may not contain footnotes and are subject to year-end audit adjustments;
      and (iii)  fairly present the consolidated financial position of the
      Parent and its subsidiaries as of the respective dates thereof and the
      consolidated results of operations of the Parent and its subsidiaries for
      the periods covered thereby.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    

    
      	
               
      

            	
              (d)

            	
              The
      Parent qualifies as a registrant whose securities may be resold pursuant
      to Form S-1 or SB-2 promulgated by the SEC pursuant to the Securities Act
      of 1933, as amended.

            

    

    

    4.3
Acquisition Subsidiary. Subsidiary was formed in October, 2005 and is
principally engaged in providing Internet Access to commercial and residential
clients. Immediately following the Closing, Subsidiary will continue to operate
as a wholly owned subsidiary of Parent, ERF Wireless, Inc.

     

    4.4 Brokers;
Agents.  Buyer has not dealt with any agent, finder, broker or
other representative in any manner other than International Business Exchange,
as authorized by Seller, which could result in Seller being liable for any fee
or commission in the nature of a finder's or originator's fee in connection with
the subject matter of this Agreement.

     

    4.5
Warranties True and Correct.  No warranty or representation by
Buyer contained in this Agreement or in any writing to be furnished pursuant
hereto contains or will contain any untrue statement of fact or omits or will
omit to state any material fact required to make the statements therein
contained not misleading.

     

    ARTICLE FIVE: ADDITIONAL
COVENANTS

     

    5.1 General  Buyer
and Seller understand and agree to cooperate on the completion of comprehensive
due diligence, including the preparation of Parent audited financial statements
covering the assets to be purchased and liabilities assumed for inclusion in a
report on Form 8-K to be filed by Parent with the U.S. Securities and Exchange
Commission.  Buyer and Seller acknowledge that the satisfactory
completion of due diligence is a condition precedent to the closing obligation
of either party.

     

    5.2 Best
Efforts.
Buyer shall use its best efforts to obtain within sixty (60) days after the
Closing from each party (other than Seller) to a contract such customer's
written agreement to the assignment of its contract to Buyer, and Seller shall
use its best efforts, together with Buyer, in obtaining all such
Consents.  "Best Efforts" means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to achieve
that result as expeditiously as possible, provided, however, that a Person
required to use Best Efforts under this Agreement will not be thereby required
to take actions that would result in a material adverse change in the benefits
to such Person of this Agreement and the contemplated transactions or to dispose
of or make any change to its business, expend any material funds or incur any
other material burden.

     

    5.3 Publicity.   No party
will make any public disclosure or issue any press releases pertaining to the
existence of this Agreement without having first obtained the consent of the
other party, except for communications with employees, customers, suppliers,
governmental agencies, and other groups as may be legally required or necessary
or appropriate (i.e., any securities filings or notices), and which are not
inconsistent with the prompt consummation of the transactions contemplated in
this Agreement.  However, Parent is a public company and Seller agrees
that it will not unreasonably withhold consent for Parent to issue a public
press release, provided to Seller in advance, if requested by
Parent.

     

    5.4 Cooperation.
Seller shall cooperate with Buyer and use its best efforts to cause respective
officers, employees, agents, accountants and representatives, if any, of Seller
to cooperate with Buyer after the Closing to facilitate the orderly transition
of the Business and the Subject Assets to Buyer and to minimize any disruption
to the Business that might result from the transactions contemplated
hereby.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    5.5 Execution
of Additional Documents. From time to time, as and when requested by
Buyer, Seller shall execute and deliver, or cause to be executed and delivered,
all such documents and instruments of conveyance and shall take, or cause to be
taken, all such further or other actions as are necessary to consummate the
transactions contemplated by this Agreement and to convey, assign, transfer and
deliver to Buyer any of the properties or assets intended to be conveyed,
assigned, transferred and delivered pursuant to this Agreement.

     

    5.7 Records.
For the five (5) year period commencing on the Closing Date, upon reasonable
notice, Buyer and Seller agree to furnish or cause to be furnished, during
normal business hours, to each other and their respective representatives,
employees, counsel and accountants access to such information and assistance
relating to the Business as is reasonably necessary for financial reporting and
accounting matters, the preparation and filing of any returns, reports or forms,
or the defense of any tax claim or assessment, relating to the Business;
provided, however, that such access does not unreasonably disrupt the normal
operations of Buyer or Seller.

     

    5.8 Default
Provisions.  Buyer and Seller have agreed to the default
provisions that are included in the Secured Promissory Notes, Pledge and
Security Agreements.

     

    ARTICLE SIX: INDEMNIFICATION
& POST CLOSING CONDITIONS

     

    6.1 Indemnification
of Buyer. Seller agrees to indemnify Buyer and its Affiliates and their
respective members, managers, shareholders, directors, officers, employees,
accountants, attorneys and agents (collectively, the “Buyer Indemnified
Parties”) against, and to hold each such person harmless from, any and all
damages, losses, deficiencies, actions, demands, judgments, diminution in value,
costs and expenses (including reasonable attorneys' and accountants' fees)
(collectively, “Losses”) of or against such person resulting from (i) any
misrepresentation or breach of warranty on the part of Seller in this Agreement
or in any Ancillary Agreement; (ii) any breach or non-fulfillment of any
agreement or covenant contained herein or in any Ancillary Agreement on the part
of Seller; (iii) any failure of Seller to pay and/or perform any liabilities or
obligations of Seller or the Business (including the Specified Retained
Liabilities and any such liability arising by operation of law) other than the
Assumed Liabilities; and (iv) any claims and liabilities to the extent related
to both (A) Seller's operation of the Business and (B) periods or occurrences
prior to the Closing or, as Seller's operation of the Business relates to an
Assumed Contract, prior to the deferred transfer date, if any, applicable to
such Restricted Material Contract. For purposes hereof, “Affiliate” shall mean,
as to any person, any other person which, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, such person.

     

    6.2 Indemnification
of Seller. Buyer agrees to indemnify Seller and its Affiliates and their
respective shareholders, directors, officers, employees, accountants, attorneys
and  agents (collectively, the “Seller Indemnified Parties”) against,
and to hold each such person harmless from, any and all Losses of or against
such person resulting from (i) any misrepresentation or breach of warranty on
the part of Buyer in this Agreement or in any Ancillary Agreement; (ii) any
breach or non-fulfillment of any agreement or covenant contained herein or in
any Ancillary Agreement on the part of Buyer; (iii) any failure by Buyer to pay,
discharge and/or perform any of the Assumed Liabilities; (iv) any claims and
liabilities to the extent related to both (A) Buyer's operation of the Business
and (B) periods or occurrences after the Closing or, as Buyer's operation of the
Business relates to a Restricted Material Contract, after the deferred transfer
date if any, applicable to such Restricted Material Contract.

     

    6.3 Procedure
Relative to Indemnification. The following procedure shall govern
indemnification:

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

     

    (a) If
either party hereto shall claim that it is entitled to be indemnified pursuant
to the terms of this Article Six, it (the “Claiming Party”) shall so notify
Seller in the case of a claim for indemnification hereunder (a “Claim”) by any
Claiming Party who or which is a Buyer Indemnified Party or Buyer in the case of
a Claim by a Claiming Party who or which is a Seller Indemnified Party (the
“Indemnifying Party”) in writing of such claim promptly within ninety (90) days
after receipt of a notice of such claim or notice of any claim of a third party
that may reasonably be expected to result in a claim by the Claiming Party
against the Indemnifying Party except that notice shall be given to the
Indemnifying Party within such earlier period of time as may be reasonably
necessary to allow the Indemnifying Party to respond to any pleading or other
document for which a timely response is required; provided, however, that
failure to timely give such notification shall not affect the indemnification
provided hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure. Such notice shall specify the
breach of representation, warranty, or agreement claimed by the Claiming Party
and the Losses incurred by, or imposed upon, the Claiming Party on account
thereof. If such Losses are liquidated in amount, the notice shall so state and
such amount shall be deemed the amount of the Claim of the Claiming Party. If
such Losses are not liquidated in amount, the notice shall so state and, in such
event, a Claim shall be deemed asserted against the Indemnifying Party by the
Claiming Party, but no payment shall be made on account thereof until the amount
of such Claim is liquidated and the Claim is finally determined. In the case of
a Claim other than one which is based upon a Proceeding by any third party,
including any Proceeding by any Governmental Authority (a “Third Party Claim”),
if the Indemnifying Party agrees with such Claim for indemnification, it shall
remit payment for the amount of such Claim promptly after receipt from the
Claiming Party of the notice and invoice therefore. In the event of a dispute,
the Claiming Party and the Indemnifying Party shall proceed in good faith and
attempt to negotiate a resolution of such dispute, and if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.

     

    (b) The
following provisions shall apply to any Claim of the Claiming Party that is
based upon a Third Party Claim:

     

    (1) The
Indemnifying Party shall, upon receipt of such written notice and at its
expense, defend such Third Party Claim in its own name or, if necessary, in the
name of the Claiming Party. The Claiming Party will cooperate with and make
available to the Indemnifying Party such assistance and materials as may be
reasonably requested of it and the Claiming Party shall have the right, at its
expense, to participate in such defense. The Indemnifying Party shall have the
right to settle and compromise such Third Party Claim only with the consent of
the Claiming Party, which consent shall not be unreasonably withheld; provided,
however, that, in making its determination as to whether to grant such consent,
the Claiming Party shall be entitled to consider the impact of the proposed
settlement upon its reputation and/or the goodwill of the businesses which it
conducts.

     

    (2) If
the Indemnifying Party shall notify the Claiming Party that it disputes any
Claim made by the Claiming Party with respect to, and/or it shall refuse or
choose not to conduct a defense against, such Third Party Claim, then the
Claiming Party shall have the right to conduct a defense against such Third
Party Claim and shall have the right to settle and compromise such Third Party
Claim without the consent of the Indemnifying Party. Once the amount of such
Claim is liquidated and the Claim is finally determined, the Claiming Party
shall be entitled to pursue each and every remedy available to it at law or in
equity to enforce the indemnification provisions of this Article Six and, if it
is determined, or the Indemnifying Party agrees, that it is obligated to
indemnify the Claiming Party for such Claim, the Indemnifying Party agrees to
pay all costs, expenses and fees, including all reasonable attorneys' fees,
which may be incurred by the Claiming Party in attempting to enforce
indemnification under this Article Six, whether the same shall be enforced by
suit or otherwise.

     

    6.4 Closing
and Post Closing Conditions.

     

    6.4.1 Buyer’s
Obligations To Seller   Following the Closing, Buyer shall
have the ongoing obligations and duties to Seller concerning the operations of
Subsidiary set forth below.

     

    
      	
               
      

            	
              a.

            	
              Subsidiary’s
      Pampa-area operation will be domiciled, managed and operated from Pampa,
      Plains or Lubbock, Texas, unless otherwise agreed to in writing by both
      Parent and Seller, until December 31, 2011 or the date Buyer pays in full
      the Purchase Price.

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              b.

            	
              Parent
      will operate the Subsidiary as a wholly owned subsidiary of Parent until
      December 31, 2011 or the date Buyer pays in full the Purchase
      Price.  Parent shall also not, without the written approval of
      Seller cause the Subsidiary to sell or otherwise dispose of any of its
      assets or of any Subject Assets acquired from Seller until December 31,
      2011 or the date Buyer pays in full the Purchase Price, except in each
      case for dispositions made in the ordinary course of business or payment
      of expenses incurred by the Subsidiary pursuant to the transactions
      contemplated by this Agreement.

            

    

     

    
      	
               
      

            	
              c.

            	
              Buyer
      shall cause the Seller’s employees listed on Exhibit 6 to be offered at
      will employment with Subsidiary, subject to Closing, on terms no less
      favorable to such employees than they currently enjoy with
      Seller.

            

    

     

    
      	
               
      

            	
              d.

            	
              Buyer
      shall provide for an aggregate of up to 6MB of bandwidth and Internet
      services to other Rice entities at no charge for a 5 year period of time.
      Additional bandwidth in excess of 6MB and other services will be provided
      at rates to be mutually agreed – including maintaining domain, websites,
      emails (approximately 40) for Rice Construction – www.derice.com,
      Rice Environmental – www.riceenvironmental.com,
      Panhandle Valve, Fabrication and Machine, Inc. – www.panhandlevalve.com,
      Amarillo Machinery Company – www.amarillomachinery.com.

            

    

    

     

    6.4.2   
 Sellers
Obligations To Buyer.  Following the Closing, Seller shall have
the ongoing understanding concerning the operations of Centramedia and the
Buyers existing Lubbock area operation, (collectively, “the West Texas Network”)
as set forth below.

     

    
      	
               
      

            	
              a.

            	
              Following
      the Closing, the operation of the West Texas Network will be focused on
      the sales, design, installation, and implementation aspects of the
      business and all “shared service “ aspects of the Business will be
      provided by Parent to Subsidiary as a support function in order to reduce
      costs and achieve economies of scale.  Examples of such shared
      services include, but are not limited to, (1) administrative and financial
      transactions such as billing, collections, purchase orders, payments,
      accounting, etc.,  (2) administrative matters related to
      personnel, such as payroll, insurance, stock plans and 401K plan, (3)
      legal, tax, leasing, public releases, investor relations, and human
      relations functions.

            

    

     

    
      	
               
      

            	
              b.

            	
              Following
      the Closing, all operations of the West Texas Network wireless broadband
      ISP service as well as all future ISP services to commercial businesses
      and residential customers will be conducted as a part of the ERF Wireless
      Bundled Services, Inc. Subsidiary
operations.

            

    

     

    
      	
               
      

            	
              c.

            	
              Acceptable
      assignment of applicable tower, land and bandwidth
    contracts.

            

    

    
      	
               
      

            	
              d.

            	
              Establishment
      of a VPN to our monitoring center to allow SolarWinds to map the
      network

            

    

    
      	
               
      

            	
              e.

            	
              Verified
      geographical maps with GPS
coordinates

            

    

    
      	
               
      

            	
              f.

            	
              Delivery
      of complete equipment list with manufacturer, model number, MAC address,
      IP address, location, service date, original cost,
  etc.

            

    

    
      	
               
      

            	
              g.

            	
              Integration
      responsibilities:

            

    

    
      	
               
      

            	
              i.

            	
              Transfer
      of the Centramedia sales phone to the assigned League City
      number

            

    

    
      	
               
      

            	
              ii.

            	
              Transfer
      the Centramedia Support phone to an assigned League City
      number

            

    

    
      	
               
      

            	
              iii.

            	
              Connect
      the two networks pursuant to a ERF approved plan which includes monitoring
      and bandwidth sharing with ERF to provide required hardware and likely new
      IP numbers being implemented or changed as well as likely including
      changing to a dynamically assigned IP addressing
  scheme.

            

    

    
      	
               
      

            	
              iv.

            	
              Cooperative
      effort between ERF and Centramedia to test and prove the new
      configuration

            

    

    
      	
               
      

            	
              v.

            	
              Transfer
      and verification of the customer and billing
  records.

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              vi.

            	
              Provide
      our CFO and Controller with 2 years of accounting records for purposes of
      supporting the Company’s audit and SEC filing
  requirements.

            

    

    
      	
               
      

            	
              vii.

            	
              Level
      II telephone support “post-closing” from Mike Williams for 3
      months.

            

    

    
      	
               
      

            	
              h.

            	
              Delivery
      of Audited Financial Statements – Seller, at Buyer’s expense, shall be
      responsible for the delivery of audited financial statements from an
      accounting firm acceptable to the Buyer within 60 days of Closing that
      includes financial years 2006 and 2007 and the 9 month period ended
      September 30, 2008.  The Parties agree that cash and cash
      equivalents resulting from collection of accounts receivable post-Closing
      will be used to pay for the cost of the delivery of the audit
      report.

            

    

    
      	
               
      

            	
              i.

            	
              Seller
      or its affiliated Rice companies shall provide locations from which Buyer
      can setup tower locations in order to expand service areas further at no
      cost to Buyer.  Amarillo Machinery Company – 6400 I-40 East –
      Amarillo, TX (east side of Amarillo), Rice Environmental, Inc. – 3611
      Soncy - Amarillo, TX (west side of Amarillo), Rice Construction, 3300 S.
      Cedar, Borger, TX (existing tower on site – not being
      utilized). 

            

    

    
      	
               
      

            	
              j.

            	
              Seller
      and its affiliated Rice companies shall enter into a sales lead referral
      agreement with the Purchaser upon terms to be mutually agreed for
      introductions to Sellers existing customers and other prospective new
      customers including Mesa Power and other T. Boone Pickens
      interests.

            

    

    

     

    ARTICLE SEVEN:
MISCELLANEOUS

     

    7.1 Expenses.
The parties hereto shall pay their own expenses, including accountants' and
attorneys' fees, incurred in connection with the negotiation and consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements.
Buyer shall be liable for and shall pay and discharge when due any sales or
transfer taxes incurred in connection with the purchase and sale of the Subject
Assets pursuant to this Agreement.

     

    7.2 Headings;
Use of Certain Words. The headings in this Agreement are for purposes of
convenience and ease of reference only and shall not be construed to limit or
otherwise affect the meaning of any part of this Agreement. Unless the context
clearly otherwise requires, as used herein, the term “Agreement” shall mean this
Agreement, including the Exhibits attached hereto. The words “herein,” “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and,
except as expressly provided otherwise herein, references herein to Articles or
Sections or Schedules or Exhibits shall mean the Articles and Paragraphs hereof
and the Schedules and Exhibits attached hereto. The use of the neuter pronoun
“it” shall also refer as appropriate to the masculine and/or feminine gender,
and vice versa. The use of the singular herein shall, where appropriate, be
deemed to include the plural and vice versa. As used herein, the word “person”
refers to any individual, corporation, limited liability company, partnership,
trust, Governmental Authority or other organization or entity. As used herein,
the term “including” shall mean “including, without limitation. For those
warranties and representations set forth in Article Three which are subject to
the qualification “to the Knowledge of Seller” or similar language, Seller shall
be deemed to have knowledge of a matter if any executive officer has knowledge
of the matter. For those warranties and representations set forth in Article
Four which are subject to the qualification “to the Knowledge of Buyer” or
similar language, Buyer shall be deemed to have knowledge of a matter if any
executive officer has knowledge of the matter.

     

    7.3 Notices.
All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be considered to be given and received in all
respects when personally delivered, when sent by facsimile transmission actually
received by the receiving equipment, when sent by reputable express or courier
delivery service, delivery charges prepaid, or three (3) days after being
deposited in the United States mail, certified mail, postage prepaid, return
receipt requested, addressed as set forth on the signature page, or to such
other address as shall be designated by the addressee by notice duly given in
accordance herewith.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

     

    7.4 Assignment.
This Agreement and the rights hereunder shall not be assignable or transferable
by Buyer or Seller prior to or following the Closing without the prior written
consent of the other party hereto.

     

    7.5 Binding
Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives, heirs,
beneficiaries, successors and permitted assigns. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give any
person other than the parties hereto and their permitted successors or assigns
any rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.

     

    7.6 Entire
Agreement; Amendment or Waiver; Cumulative Remedies. This Agreement, the
Schedules and Exhibits attached hereto and the agreements executed and delivered
in connection herewith constitute the entire agreement between the parties
hereto relating to the subject matter hereof, and all prior agreements,
correspondence, discussions, negotiations, agreements and understandings of the
parties (whether oral or written) are merged herein and superseded hereby. No
amendment, modification, or waiver hereto or hereunder shall be valid unless
made in writing and signed by an authorized signatory of each party to be
affected thereby against whom enforcement thereof is being sought. The failure
of any party hereto to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof or the
right of such party thereafter to enforce each and every such provision. No
waiver of any breach of, or failure to comply with, this Agreement shall be held
to be a waiver of any other or subsequent breach or failure to comply. All
rights and remedies under this Agreement are cumulative to all other rights and
remedies that may be available to each party, including all rights and remedies,
whether in tort or otherwise, whatsoever at law or in equity with respect
hereto, which each party hereby expressly reserves.

     

    7.7 Severability.
The parties agree that if any provision of this Agreement shall under any
circumstances be deemed invalid or inoperative, this Agreement shall be
construed with the invalid or inoperative provision deleted, and the rights and
obligations of the parties shall be construed and enforced
accordingly.

     

    7.8 Applicable
Law. This Agreement in all respects, including as to its validity,
interpretation, enforcement and effect, shall be governed by the internal Laws
of the State of Texas without regard to the Laws which otherwise would govern
under principles of conflicts of laws thereof.

     

    7.9 Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered but one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties and
delivered to the other party.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

     

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

     

    

     

    
      	 	

              BUYER

              ERF
      Wireless, Inc., a Nevada corporation (“Parent”)

              

               

              By:
      /s/ R. Greg
      Smith     

              Name:
      R. Greg Smith

              Title:
      Executive Vice President

              

              

              ERF
      Wireless Bundled Services, Inc. a Texas corporation
      (“Subsidiary”)

              

              By: /s/ Robert “Bobby Mack”
      McClung

              Name:
      Robert “Bobby Mack” McClung

              Title:
      President & CEO

            

    

     

    
    

    Send Notices
to:

    Dr. H.
Dean Cubley, CEO

    ERF
Wireless, Inc.

    2911
South Shore Blvd., Suite 100

    League
City, TX 77573

    Telephone
281.538.2101

    Facsimile
281.538.2121

    Email
hdc@erfwireless.com

     

    
    

     

    
      	 	

              SELLER

              Centramedia,
      Inc.

              

              By: /s/ Mike
      Williams                          
      

              Name:
      Mike Williams

              Title:
      President

            

    

     

    

    

    Send Notices
to:

    Mr. Mike
Williams

    President

    Centramedia,
Inc.

    P.O. Box
3344

    Borger,
Texas 79008-3344

    Telephone
806.274.7187

    Facsimile
806.274.3262

    Email
mwilliams@derice.com

     

     

    
 

     

     

     

    17acgi_8k-ex1001.htm

Exhibit
10.1

    

     

    

     

    
      	

               

               

               

               

               

              SECURITIES
      PURCHASE AND EXCHANGE AGREEMENT

               

              By
      and Between

               

              THE
      AMACORE GROUP, INC.

               

              and

               

              VICIS
      CAPITAL MASTER FUND

               

               

               

              

               

               

              December
      31, 2008

               

               

               

               

               

               

               

            

    

     

     

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    SECURITIES
PURCHASE AND EXCHANGE AGREEMENT

    
 

     

    This
SECURITIES PURCHASE AND EXCHANGE AGREEMENT (the “Agreement”), effective as of
this 31st day of December, 2008, is made by and between THE AMACORE GROUP, INC.,
a Delaware corporation (the “Company”), and VICIS CAPITAL MASTER FUND (the
“Purchaser”), a series of the Vicis Capital Master Trust, a trust formed under
the laws of the Cayman Islands.

     

    R E C I T A L
S

     

    WHEREAS,
the Purchaser is the holder of 694.6 shares of Series D Convertible Preferred
Stock, par value $.001 per share (the “Series D Preferred Stock”) with an
aggregate stated value of $6,946,000; and 139 shares of Series E Convertible
Preferred Stock, par value $.001 per share (the “Series E Preferred Stock”) with
a stated value of $1,390,000.

     

    WHEREAS,
as of the date hereof, the Company has not paid any dividends that have accrued
heretofore with respect to the shares of Series D Preferred Stock and the shares
of Series E Preferred Stock held by the Purchaser, which dividends are equal to
$807,376 with
respect to the shares of Series D Preferred Stock (the “Series D Unpaid
Dividends”) held by the Purchaser, and are equal to $168,209 with respect to the
shares of Series E Preferred Stock held by the Purchaser (the “Series E Unpaid
Dividends” and together with the Series D Unpaid Dividends, the “Unpaid
Dividends”).

     

    WHEREAS,
as partial consideration for the Purchase Price and the other agreements set
forth herein, the Company wishes to exchange all of the shares of Series D
Preferred Stock held by the Purchaser and the Series D Unpaid Dividends for
775.34 shares of
the Company’s newly designated Series J Convertible Preferred Stock, par
value $.001 per share (the “Series J Preferred Stock”); and all of the shares of
Series E Preferred Stock held by the Purchaser and the Series E Unpaid Dividends
for 155.82 shares of the Company’s newly designated Series K Convertible
Preferred Stock, par value $.001 per share (the “Series K Preferred Stock”) (the
shares of Series J Preferred Stock and Series K Preferred Stock being acquired
hereunder are collectively referred to as the “Exchange Shares”).

     

    WHEREAS,
pursuant to the terms and conditions of this Agreement, the Company wishes to
issue and sell to the Purchaser the following securities (collectively, the
“Securities”): (a) 250 shares (the “Acquired Shares”) of the Company’s
Series I Convertible Preferred Stock, par value $.001 per share (the “Series I
Preferred Stock”); and (b) a warrant to purchase an aggregate of 28,125,000
shares of the Company’s Class A Common Stock, par value $.001 per share (the
“Class A Common Stock”), initially at an exercise price of $0.375 per share in
the form attached hereto as Exhibit A (the
“Warrant”).

     

    WHEREAS,
pursuant to a Securities Purchase and Exchange Agreement by and between the
Company and the Purchaser dated as of December 21, 2007, the Company and the
Purchaser agreed to enter into a first amendment to certain registration rights
agreements (the “Amended Registration Rights Agreement”), which Amended
Registration Rights Agreement has not yet been executed, and the parties wish to
enter into such agreement at this time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
pursuant to warrants issued by the Company to the Purchaser each dated March 13,
2008, April 30, 2008, June 2, 2008, September 30, 2008 and October 6, 2008, the
Purchaser is the holder of warrants to purchase an aggregate of 180,000,000
shares of Class A Common Stock at a per share exercise price of $0.375, subject
to certain adjustments, and, pursuant to a warrant dated August 10, 2004, the
Purchaser is the holder of warrant to purchase 400,000 shares of Class A Common
Stock at a per share exercise price of $1.25  (collectively, the
“Warrant Agreements”).

     

    WHEREAS,
as partial consideration of for conversion of the Series D Preferred Stock,
Series E Preferred Stock and the Unpaid Dividends, the Company and the Purchaser
desire to amend each Warrants Agreement upon the terms and conditions and
substantially in the form as set forth in Exhibit G hereto (the “Amended Warrant
Agreement”).

     

    NOW,
THEREFORE, the
Company and the Purchaser hereby agree as follows:

     

    ARTICLE
I

    PURCHASE
AND SALE OF THE ACQUIRED SHARES

     

    1.1           Purchase and Sale of the
Acquired Shares and Exchange of the Exchange Shares.  On the
Closing Date, at the closing of the transactions contemplated hereby (the
“Closing”), subject to the terms and conditions hereof and in reliance on the
representations and warranties contained herein, the following actions shall be
taken:

     

    (a)           The
Company, against delivery of payment of the Purchase Price in accordance with
Section 1.1(b), will deliver to the Purchaser the documents set forth in Section
4.4 hereof.

     

    (b)           The
Purchaser shall deliver to the Company the documents set forth in Section 5.2
hereof and Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Purchase
Price”) in immediately available funds by wire transfer of immediately available
funds in accordance with the instructions of the Company and will deliver to the
Company the documents set forth in Section 5.2 hereof.  The Company
hereby confirms that the Purchase Price was previously paid by the
Purchaser.

     

    1.2           Closing.  The
Closing shall be deemed to have occurred at the offices of Quarles & Brady,
LLP, 411 East Wisconsin Avenue, Milwaukee, Wisconsin at 5:00 p.m. CDT on
December 31, 2008 (the “Closing Date).

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    ARTICLE
II

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

     

    The
Company hereby represents and warrants to the Purchaser as of the date of this
Agreement as follows:

     

    2.1           Organization and
Qualification.  The Company is a corporation duly organized and
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated, and has all requisite corporate power and authority to
carry on its business as now conducted.   The Company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties, assets,
operations, results of operations, condition (financial or otherwise) or
prospects of the Company or its Subsidiaries (as defined below) or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Transaction Documents (as
hereinafter defined).

     

    2.2           Subsidiaries.  The
Company has seven subsidiaries: LBI Brokerage, Inc., JRM Benefits Consulting,
LLC, US Health Benefits Group, Inc., US Health Plans, Inc., On The Phone, Inc.,
Zurvita, Inc. and Lifeguard Benefit Services, Inc.  (each a
“Subsidiary” and collectively, the “Subsidiaries”).

     

    2.3           No
Violation.  Neither the Company nor any Subsidiary is in
violation of: (a) any of the provisions of its certificate of
incorporation, bylaws or other organizational or charter documents; or
(b) any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse
Effect.

     

    2.4           Capitalization.

     

    (a)           As
of the date hereof, the Company is currently authorized to issue up to (i)
1,480,000,000 shares of Common Stock, par value $.001 per share, of which
155,758,869 shares
are currently outstanding and 982,127,717 shares have been reserved for issuance
upon the exercise of all of the outstanding options, warrants and other
securities issued by the Company that are convertible into Common Stock. All of
such outstanding shares have been, or upon issuance will be, validly issued, are
fully paid and nonassessable; and (ii) 20,000,000 shares of Preferred Stock, par
value $.001 per share, of which 3,188.6 shares are currently
outstanding.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (b)           Except
as disclosed herein or in the Company’s reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and Exchange
Commission (the “SEC”) pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), prior to the date hereof
(the “SEC Documents”):

     

    (i)          no
holder of shares of the Company’s capital stock has any preemptive rights or any
other similar rights or has been granted or holds any liens or encumbrances
suffered or permitted by the Company;

     

    (ii)         there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or its Subsidiary, or contracts, commitments,
understandings or arrangements by which the Company or its Subsidiary are or may
become bound to issue additional shares of capital stock of the Company or its
Subsidiary or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or its Subsidiary;

     

    (iii)        there
are no outstanding debt securities, notes, credit agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness (as
defined in Section 2.14 hereof) of the Company or its Subsidiary or by which the
Company or its Subsidiary are or may become bound;

     

    (iv)        there
are no agreements or arrangements under which the Company is obligated to
register the sale of any of its securities under the Securities Act of 1933, as
amended, (the “Securities Act”);

     

    (v)         there
are no outstanding securities or instruments of the Company that contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company;

     

    (vi)        there
are no securities or instruments containing antidilution or similar provisions
that will be triggered by the issuance of the Securities; and

     

    (vii)       the
Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement.

     

    2.5           Issuance of the
Securities.

     

    (a)           The
Securities and Exchange Shares to be issued hereunder are duly authorized and,
upon payment and issuance in accordance with the terms hereof and thereof, shall
be free from all Liens and charges with respect to the issuance thereof. As of
the Closing Date, the Company has authorized and has reserved free of preemptive
rights and other similar contractual rights of stockholders, a number of its
authorized but unissued shares of Class A Common Stock equal to one hundred
percent (100%) of the aggregate number of shares of Class A Common Stock to
effect the conversion of the Acquired Shares and the Exchange Shares (together,
the “Conversion Shares”) and one hundred percent (100%) of the aggregate number
of shares of Class A Common Stock to effect the exercise of the Warrant (the
“Warrant Shares”).  All actions by the Board, the Company and its
stockholders necessary for the valid issuance of the Acquired Shares, the
Exchange Shares and the Warrant, and the Conversion Shares and the Warrant
Shares pursuant to the terms of the Series I Preferred Stock, Series J Preferred
Stock, Series K Preferred Stock and the Warrant, respectively, have been
taken.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    (b)           The
Conversion Shares and Warrant Shares, when issued and paid for upon conversion
of the Acquired Shares and Exchange Shares and of the Warrant, respectively,
will be validly issued, fully paid and nonassessable and free from all Liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Class A Common Stock. Assuming the accuracy
of each of the representations and warranties set forth in Article III hereof,
the issuance by the Company to the Purchaser of the Securities and Exchange
Shares is exempt from registration under the Securities Act.

     

    2.6           Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement, the Registration
Rights Agreement delivered pursuant to Section 4.4(b) hereof, the Amended
Registration Rights Agreement, the Warrant, the Amended Warrant Agreement and
each of the other agreements or instruments entered into by the parties hereto
in connection with the transactions contemplated by this Agreement
(collectively, the “Transaction Documents”) and to issue the Securities and, the
Exchange Shares , the Conversion Shares and the Warrant Shares in accordance
with the terms hereof. The execution and delivery of the Transaction Documents
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, and the issuance
of the Securities and Exchange Shares, have been duly authorized by the board of
directors of the Company (the “Board”), and no further consent or authorization
is required by the Company, the Board or its stockholders or from any Person
other than the Purchaser. This Agreement and the other Transaction Documents of
even date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except
(i) as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies, or (ii) as any rights to indemnity or
contribution hereunder may be limited by federal and state securities laws and
public policy consideration.

     

    2.7           Dilutive Effect. The
Company understands and acknowledges that its obligation to issue the Conversion
Shares and Warrant Shares upon conversion of the Acquired Shares or Exchange
Shares, or the exercise of the Warrant, as the case may be, in accordance
therewith is absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the
Company.

     

    2.8           No Conflicts. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance of the
Conversion Shares and Warrant Shares) will not (i) result in a violation of
any articles or certificate of incorporation, any certificate of designations,
preferences and rights of any outstanding series of preferred stock or bylaws of
the Company or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected, except in the case of clauses (ii)
and (iii), for such breaches or defaults as would not be reasonably expected to
have a Material Adverse Effect.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    2.9           Governmental
Consents. Except for the filing of a Form D with the SEC and the the
registration of Conversion Shares and Warrant Shares under the Securities Act
for resale by the Purchaser, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person (as hereinafter defined) in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents, in
each case, in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain at or prior to the Closing pursuant to the preceding sentence have
been obtained or effected. The Company is unaware of any facts or circumstances
which might prevent the Company from obtaining or effecting any of the
foregoing.

     

    2.10           No General
Solicitation.  Neither the Company, nor any of its
Subsidiaries, nor any of their affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Securities.

     

    2.11           No Integrated
Offering. None of the Company, its Subsidiaries, their affiliates, or any
Person acting on 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 require registration of the Securities under the
Securities Act or cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act or any
applicable stockholder approval provisions.

     

    2.12           Placement Agent’s
Fees.  No brokerage or finder’s fee or commission are or will
be payable to any Person with respect to the transactions contemplated by this
Agreement based upon arrangements made by the Company or any of its
affiliates.  The Company agrees that it shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than for persons engaged by Purchaser) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold the
Purchaser harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any claim for any such fees or commissions.

     

    2.13           Litigation.  There
is no material action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company or its Subsidiaries, the transactions contemplated by the Transaction
Documents, the Class A Common Stock or any of the Company’s respective current
or former officers or directors in their capacities as such. To the knowledge of
the Company, there has not been within the past two (2) years, and there is not
pending, any investigation by the SEC involving the Company or any current or
former director or officer of the Company (in his or her capacity as such). The
SEC has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Securities Act within
the past two (2) years.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    2.14           Indebtedness and Other
Contracts. Except as disclosed in the SEC Documents, the Company (a) does
not have any outstanding Indebtedness (as defined below), (b) is not a
party to any contract, agreement or instrument, the violation of which, or
default under, by any other party to such contract, agreement or instrument
would result in a Material Adverse Effect, (c) is not in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (d) is
not a party to any contract, agreement or instrument relating to any
Indebtedness, the performance of which, in the judgment of the Company’s
officers, has or is expected to have a Material Adverse Effect.  For
purposes of this Agreement: (x) ”Indebtedness” of any Person means, without
duplication (i) all indebtedness for borrowed money, (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business), (iii) all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments,
(iv) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (v) all indebtedness created
or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (vi) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (vii) all indebtedness
referred to in clauses (i) through (vi) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any mortgage, lien, pledge, change, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness,
and (viii) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (i) through
(vii) above; (y) “Contingent Obligation” means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; and
(z) ”Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof.

    
      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

    

    

    2.15           Financial Information; SEC
Documents.  Except as set forth in Schedule 2.15 hereto,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of such SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.  Except as set forth in Schedule 2.15 hereto,
as of their respective dates, the financial statements of the Company included
in such SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto.  Except as set forth in Schedule 2.15 hereto,
such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

     

    2.16           Absence of Certain
Changes. Except as disclosed in the SEC Documents or on Schedule 2.16,
since December 31, 2007, there has been no material adverse change and no
material adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiary. Since December 31, 2007, the Company has not (i) declared
or paid any dividends, (ii) sold any assets, individually or in the
aggregate, in excess of $50,000 outside of the ordinary course of business or
(iii) had capital expenditures, individually or in the aggregate, in excess
of $100,000.  The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings.  After giving effect to the transactions contemplated
hereby to occur at the Closing, the Company will not be Insolvent (as
hereinafter defined). For purposes of this Agreement, “Insolvent” means
(i) the present fair saleable value of the Company’s assets is less than
the amount required to pay the Company’s total indebtedness, contingent or
otherwise, (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that
it will incur debts that would be beyond its ability to pay as such debts mature
or (iv) the Company has unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted.

     

    2.17           Foreign Corrupt
Practices.  Neither the Company nor any Subsidiary, nor any
director, officer, agent, employee or other Person acting on behalf of the
Company or a Subsidiary has, in the course of its actions (a) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended or
(d) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    2.18           Transactions With
Affiliates.  Except as set forth in the SEC Documents or on
Schedule 2.18,
none of the officers, directors or employees of the Company or any Subsidiary is
presently a party to any transaction with the Company (other than for ordinary
course services as employees, officers or directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any such officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner.

     

    2.19           Insurance.   The
Company and each Subsidiary is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which
the Company and each such Subsidiary is engaged.  The Company has not
been refused any insurance coverage sought or applied for and the Company has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

     

    2.20           Employee
Relations.  Neither the Company nor any Subsidiary is a party
to any collective bargaining agreement or employs any member of a union. No
Executive Officer of the Company (as defined in Rule 501(f) of the Securities
Act) has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer’s employment with the Company. No Executive
Officer of the Company, to the knowledge of the Company, is, or is now, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company to any
liability with respect to any of the foregoing matters. The Company is in
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

     

    2.21           Title.  Each
of the Company and its Subsidiaries has good and marketable title to all
personal property owned by it which is material to their respective business, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the SEC Documents or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company.

     

    2.22           Intellectual Property
Rights.  The Company’s and its Subsidiaries’ patents,
trademarks, trade names, service marks copyrights, and registrations and
applications therefor, trade secrets and any other intellectual property right
(collectively, “Intellectual Property Rights”), are, to the best of the
Company’s knowledge, fully valid and are in full force and
effect.  The Company does not have any knowledge of any infringement
by the Company or any Subsidiary of Intellectual Property Rights of others.
There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company, being threatened, against the Company or a Subsidiary
regarding its Intellectual Property Rights that could have a Material Adverse
Effect. The Company is unaware of any facts or circumstances which might give
rise to any of the foregoing infringements or claims, actions or proceedings.
The Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of its Intellectual Property Rights.

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    2.23           Environmental
Laws.  Each of Company and its Subsidiaries (a) is in
compliance with any and all Environmental Laws (as hereinafter defined),
(b) has received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(c) is in compliance with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (a), (b) and (c),
the failure to so comply could be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved
thereunder.

     

    2.24           Tax
Matters.  Each of Company and its Subsidiaries (a) has
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject,
(b) has paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (c) has
set aside on its books reasonably adequate provision for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply, except where such failure would not have a Material Adverse
Effect. There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the Company know
of no basis for any such claim.

     

    2.25           Sarbanes-Oxley Act.
Except as set forth in Schedule 2.25, the Company is in compliance with any and
all requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the
date hereof and applicable to it, and any and all rules and regulations
promulgated by the SEC thereunder that are effective and applicable to it as of
the date hereof, except where such noncompliance would not have a Material
Adverse Effect.

     

    2.26           Investment Company
Status.  The Company is not, and immediately after receipt of
payment for the Acquired Shares will not be, an “investment company,” an
“affiliated person” of, “promoter” for or “principal underwriter” for, or an
entity “controlled” by an “investment company,” within the meaning of the
Investment Company Act.

    
      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

    

    

    2.27           Material
Contracts.  Each contract of the Company that involves
expenditures or receipts in excess of $100,000 (each an “Applicable Contract”)
is in full force and effect and is valid and enforceable in accordance with its
terms. The Company is and has been in full compliance with all applicable terms
and requirements of each Applicable Contract and, to the Company’s knowledge, no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with or result in a violation or breach of, or
give the Company or any other entity the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify any Applicable Contract. The Company has not given or
received from any other entity any notice or other communication (whether oral
or written) regarding any actual, alleged, possible or potential violation or
breach of, or default under, any Applicable Contract.

     

    2.28           Inventory.  All
inventory of the Company consists of a quality and quantity usable and salable
in the ordinary course of business, except for obsolete items and items of
below-standard quality, all of which have been or will be written off or written
down to net realizable value on the audited consolidated balance sheet of the
Company as of December 31, 2007.  The quantities of each type of
inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable and warranted in the present circumstances of the
Company.

     

    2.29           Disclosure. All
disclosure provided to the Purchaser regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The Purchaser hereby represents and
warrants to the Company as of the date of this Agreement as
follows:

     

    3.1           Organization.  The
Purchaser is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.

     

    3.2           Authorization.  Purchaser
has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents.  The
execution and delivery of the Transaction Documents by the Purchaser and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by the trustee of the Purchaser, which
delegated authority to enter into the Transaction Documents to the investment
advisor to the Purchaser pursuant to an investment management agreement, and no
further consent or authorization is required by the Purchaser, its trustee or
its beneficiaries.  This
Agreement and the other Transaction Documents have been duly executed and
delivered by the Purchaser, and constitute the legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their respective terms, except (i) as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies, or (ii) as any rights to indemnity or contribution hereunder may
be limited by federal and state securities laws and public policy
consideration.

    
      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

    

    

    3.3           Investment
Investigation.  The Purchaser understands that no Federal,
state, local or foreign governmental body or regulatory authority has made any
finding or determination relating to the fairness of an investment in the
Securities and that no Federal, state, local or foreign governmental body or
regulatory authority has recommended or endorsed, or will recommend or endorse,
any investment in the Securities. The Purchaser, in making the decision to
acquire the Securities, has relied upon independent investigation made by it and
has not relied on any information or representations made by third
parties.

     

    3.4           Accredited
Investor.  The Purchaser is an “accredited investor” as defined
under Rule 501 of Regulation D promulgated under the Securities
Act.

     

    3.5           No
Distribution.  The Purchaser is and will be acquiring the
Securities for its own account, and not with a view to any resale or
distribution of any of the Securities in whole or in part, in violation of the
Securities Act or any applicable securities laws.

     

    3.6           Resale.  The
parties intend that the offer and sale of the Securities be exempt from
registration under the Securities Act, by virtue of Section 4(2) and/or Rule 506
of Regulation D promulgated under the Securities Act. The Purchaser
understands that the Securities purchased hereunder have not been, and may never
be, registered under the Securities Act and that the Securities cannot be sold
or transferred unless first registered under the Securities Act and such state
and other securities laws as may be applicable or in the opinion of counsel for
the Company an exemption from registration under the Securities Act is available
(and then the Securities and any securities issued upon exercise or conversion
thereof may be sold or transferred only in compliance with such exemption and
all applicable state and other securities laws).

     

    3.7           Reliance.  The
Purchaser understands that the Securities are being offered and sold to it in
reliance on specific provisions of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act, and applicable state securities laws.

     

    ARTICLE
IV

    CONDITIONS
TO CLOSING OF THE PURCHASERS

     

    The obligation of the Purchaser to
purchase the Securities at the Closing is subject to the fulfillment to the
Purchaser’s satisfaction on or prior to the Closing Date of each of the
following conditions, any of which may be waived by the Purchaser:

     

    4.1           Representations and
Warranties Correct.  The representations and warranties in
Article II hereof shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of the Closing Date.

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    4.2           Performance.  All
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by the Company on or prior to the Closing Date shall have been
performed or complied with by the Company in all material respects.

     

    4.3           No
Impediments.  Neither the Company nor any Purchaser shall be
subject to any order, decree or injunction of a court or administrative agency
of competent jurisdiction that prohibits the transactions contemplated hereby or
would impose any material limitation on the ability of such Purchaser to
exercise full rights of ownership of the Securities and Exchange
Shares.  At the time of the Closing, the purchase of the Acquired
Shares and the Warrant to be purchased by the Purchaser and the exchange of the
shares of Series D Preferred Stock and Series E Preferred Stock for the Exchange
Shares by the Purchaser hereunder shall be legally permitted by all laws and
regulations to which the Purchaser and the Company are subject.

     

    4.4           Other Agreements and
Documents.  Company shall have executed and delivered the
following agreements and documents:

     

    
      
        	 	
                (a)

              	
                Certificates,
      registered in the name of the Purchaser, representing the Acquired Shares,
      the Exchange Shares and the Warrant in the form of Exhibit A attached
  hereto.

              
	 	 	 
	 	
                (b)

              	
                The
      Registration Rights Agreement in the form of Exhibit B attached hereto (the
      “Registration Rights Agreement”);

              
	 	 	 
	 	
                (c)

              	
                The
      Amended Registration Rights Agreement in the form of Exhibit F attached
  hereto;

              
	 	 	 
	 	
                (d)

              	
                The
      Amended Warrant Agreement, each substantially in the form of Exhibit G attached
  hereto;

              
	 	 	 
	 	
                (e)

              	
                A
      certificate of good standing with respect to the Company from the
      Secretary of State of Delaware;

              
	 	 	 
	 	
                (f)

              	
                A
      certificate of the Company’s Secretary, dated the Closing Date, certifying
      (i) the fulfillment of the conditions specified in Sections 4.1 and
      4.2 of this Agreement, (ii) the Board resolutions approving this
      Agreement and the transactions contemplated hereby, (iii) the Company’s
      certificate of incorporation, and (iv) other matters as the Purchaser
      shall reasonably request;

              
	 	 	 
	 	
                (g)

              	
                A
      written waiver, in form and substance satisfactory to the Purchaser, from
      each person other than the Purchaser who has any of the following
      rights:

              

      

       

    

    
      
        	 	
                (i)

              	
                any
      currently effective right of first refusal to acquire the Acquired Shares
      or the Exchange Shares; or

              
	 	
                (ii)

              	
                any
      right to an anti-dilution adjustment of securities issued by the Company
      that are held by such person that will be triggered as a result of the
      issuance of the Acquired Shares or the Exchange Shares;
  and

              

      

       

    

    
      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

    

     

    (h)           All
necessary consents or waivers, if any, from all parties to any other material
agreements to which the Company is a party or by which it is bound immediately
prior to the Closing in order that the transactions contemplated hereby may be
consummated and the business of the Company may be conducted by the Company
after the Closing without adversely affecting the Company.

     

    4.5           Due Diligence
Investigation.  No fact shall have been discovered, whether or
not reflected in the Schedules hereto, which in the Purchaser’s determination
would make the consummation of the transactions contemplated by this Agreement
not in the Purchaser’s best interests.

     

    4.6           Certificates of
Designations.  The Company shall have filed a Certificate of
Designations for each of the Series J Preferred Stock and the Series K Preferred
Stock in the form attached hereto as Exhibit D and Exhibit E,
respectively, with the Secretary of State of Delaware.

     

    ARTICLE
V

    CONDITIONS
TO CLOSING OF THE COMPANY

     

    The Company’s obligation to sell the
Securities at the Closing is subject to the fulfillment to its satisfaction on
or prior to the Closing Date of each of the following conditions:

     

    5.1           Representations.  The
representations made by the Purchaser pursuant to Article III hereof shall
be true and correct when made and shall be true and correct on the Closing
Date.

     

    5.2           Performance.  All
covenants, agreements and conditions contained in this Agreement to be performed
or complied with by the Purchaser on or prior to the Closing Date shall have
been performed or complied with by the Purchaser in all material
respects.

     

    5.3           Other Agreements and
Documents.  Purchaser shall have executed and delivered the
following agreements and documents:

     

    (a)           The
Registration Rights Agreement;

     

    (b)           The
Amended Registration Rights Agreement;

     

    (c)           The
Amended Warrant Agreement, each substantially in the form of Exhibit G attached
hereto;

     

    (d)           The
Waiver of Anti-Dilution Rights in the form of Exhibit C attached
hereto; and

     

    (e)           The
Purchaser shall have surrendered to the Company certificates representing the
shares of Series D Preferred Stock and Series E Preferred Stock held by the
Purchaser.

    
      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

    

     

    5.4           No
Impediments.  Neither the Company nor any Purchaser shall be
subject to any order, decree or injunction of a court or administrative agency
of competent jurisdiction that prohibits the transactions contemplated hereby or
would impose any material limitation on the ability of such Purchaser to
exercise full rights of ownership of the Acquired Shares, the Exchange Shares or
the Warrant.  At the time of the Closing, the purchase of the Acquired
Shares and the Warrant to be purchased by the Purchaser and the exchange of the
shares of Series D Preferred Stock and Series E Preferred Stock for the Exchange
Shares hereunder shall be legally permitted by all laws and regulations to which
the Purchaser and the Company are subject.

     

    5.5           Payment of Purchase
Price.  The Company shall have received the Purchase
Price.

     

    ARTICLE
VI

    INDEMNIFICATION

     

    6.1           Indemnification by the
Company.  The Company agrees to defend, indemnify and hold
harmless the Purchaser and shall reimburse the Purchaser for, from and against
each claim, loss, liability, cost and expense (including without limitation,
interest, penalties, costs of preparation and investigation, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, “Losses”) directly or indirectly relating
to, resulting from or arising out of any untrue representation,
misrepresentation, breach of warranty or non-fulfillment of any covenant,
agreement or other obligation by or of the Company contained herein or in any
certificate, document, or instrument delivered to the Purchaser pursuant
hereto.

     

    6.2           Indemnification by the
Purchaser.  The Purchaser agrees to defend, indemnify and hold
harmless the Company and shall reimburse the Company for, from and against all
Losses directly or indirectly relating to, resulting from or arising out of any
untrue representation, misrepresentation, breach of warranty or non-fulfillment
of any covenant, agreement or other obligation of the Purchaser contained herein
or in any certificate, document or instrument delivered to the Company pursuant
hereto.

     

    6.3           Procedure. The
indemnified party shall promptly notify the indemnifying party of any claim,
demand, action or proceeding for which indemnification will be sought under
Sections 6.1 or 6.2 of this Agreement, and, if such claim, demand, action or
proceeding is a third-party claim, demand, action or proceeding, the
indemnifying party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the indemnified
party.  The indemnified party shall have the right to participate, at
its own expense, with respect to any such third-party claim, demand, action or
proceeding.  In connection with any such third-party claim, demand,
action or proceeding, the Purchaser and the Company shall cooperate with each
other and provide each other with access to relevant books and records in their
possession.  No such third-party claim, demand, action or proceeding
shall be settled without the prior written consent of the indemnified party,
which shall not be unreasonably withheld.  If a firm written offer is
made to settle any such third-party claim, demand, action or proceeding and the
indemnifying party proposes to accept such settlement and the indemnified party
refuses to consent to such settlement, then: (i) the indemnifying party
shall be excused from, and the indemnified party shall be solely responsible
for, all further defense of such third-party claim, demand, action or
proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party-claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third-party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.

     

    
      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

    

     

    ARTICLE
VII

    MISCELLANEOUS

     

    7.1           Governing
Law.  This Agreement and the rights of the parties hereunder
shall be governed in all respects by the laws of the State of New York wherein
the terms of this Agreement were negotiated, without regard to the conflicts of
laws thereof.

     

    7.2           Survival.  Except
as specifically provided herein, the representations, warranties, covenants and
agreements made herein shall survive the Closing.

     

    7.3           Amendment.  This
Agreement may not be amended, discharged or terminated (or any provision hereof
waived) without the written consent of the Company and the
Purchaser.

     

    7.4           Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon and
enforceable by and against, the successors, assigns, heirs, executors and
administrators of the parties hereto.  The Purchaser may assign its
rights hereunder, and the Company may not assign its rights or obligations
hereunder without the consent of the Purchaser or any of its successors,
assigns, heirs, executors and administrators.

     

    7.5           Entire
Agreement.  This Agreement, the Transaction Documents and the
other documents delivered pursuant hereto and simultaneously herewith constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof.

     

    7.6           Notices,
etc.  All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered
either personally or by a nationally recognized courier service marked for next
business day delivery or sent in a sealed envelope by first class mail, postage
prepaid and either registered or certified, addressed as follows:

     

    (a)           if
to the Company:

    1511
North Westshore Blvd.

    Tampa,
Florida  34607

    Attn:
Chief Executive Officer

     

    (b)           if
to a Purchaser:

     

    Vicis
Capital Master Fund

    445 Park
Avenue, 15th Floor

    New York,
NY 10022

    Attn:
Shad Stastney

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

    with a
copy to:

     

    Andrew D.
Ketter, Esq.

    Quarles
& Brady LLP

    411 East
Wisconsin Avenue

    Milwaukee,
Wisconsin 53202

     

    7.7           Delays or
Omissions.  No delay or omission to exercise any right, power
or remedy accruing to any holder of any Acquired Shares upon any breach or
default of the Company under this Agreement shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence, therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.  Any waiver, permit, consent or approval of any
kind or character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement must be, made in writing and shall be effective
only to the extent specifically set forth in such writing.  All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.

     

    7.8           Severability.  The
invalidity of any provision or portion of a provision of this Agreement shall
not affect the validity of any other provision of this Agreement or the
remaining portion of the applicable provision.  It is the desire and
intent of the parties hereto that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is
sought.  Accordingly, if any particular provision of this Agreement
shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is
made.

     

    7.9           Expenses.  The
Company and, except as set forth in this Section 7.9, the Purchaser shall each
bear its own expenses and legal fees incurred on its behalf with respect to the
negotiation, execution and consummation of the transactions contemplated by this
Agreement and shall pay all documentary stamp or similar taxes imposed by any
authority upon the transactions contemplated by this Agreement or any
Transaction Document. The Company shall pay all reasonable, documented
third-party fees and expenses incurred by the Purchaser in connection with the
enforcement of this Agreement or any of the other Transaction Documents,
including, without limitation, all actual reasonable attorneys’ fees and
expenses.

     

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    7.10           Consent to Jurisdiction;
Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED THE STATE AND COUNTY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE TRANSACTION DOCUMENTS.  EACH OF THE PARTIES TO THIS AGREEMENT
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO
SERVICE OF PROCESS BY NOTICE IN THE MANNER SPECIFIED IN SECTION 7.6 AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION SUCH
PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN SUCH
MANNER.

     

    7.11           Titles and
Subtitles.  The titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

     

    7.12           Further
Assurances.  The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.

     

    7.13           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.

     

    

     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

    

    

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

    
      	 
      	 
      
	 
      	
              COMPANY:

               

            
	 
      	
              THE
      AMACORE GROUP, INC.

            
	 
      	
               
      

               

               

            
	 
      	/s/
      Jay
      Shafer                                                               
      
	 
      	
              Jay
      Shafer

            
	 
      	
              Chief
      Executive Officer

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              PURCHASER:

            
	 
      	 
      
	 
      	
              VICIS
      CAPITAL MASTER FUND

            
	 
      	
              By:
      Vicis Capital LLC

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	/s/
      Chris
      Phillips                                                          
      
	 
      	
              Chris
      Phillips

            
	 
      	
              Managing
      Director

            
	 
      	 
      

    

    
 

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    FORM
OF WARRANT

    

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    FORM
OF REGISTRATION RIGHTS AGREEMENT

     

    
 

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    FORM
OF WAIVER OF ANTI-DILUTION RIGHTS

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    EXHIBIT
D

    FORM
OF CERTIFICATE OF DESIGNATION FOR

    THE
SERIES J CONVERTIBLE PREFERRED STOCK

     

    
 

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

    

    EXHIBIT
E

    FORM
OF CERTIFICATE OF DESIGNATION FOR

    THE
SERIES K CONVERTIBLE PREFERRED STOCK

     

    
 

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

    EXHIBIT
F

    

    FORM
OF FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENTS

     

    
 

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

    EXHIBIT
F

    

    FORM
OF FIRST AMENDMENT TO WARRANT AGREEMENTS

    

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    SCHEDULES

    

    Schedule
2.15 – At various times the Company has failed to comply with its obligations
under Section 14 of the Securities Exchange Act of 1934, as
amended.  On December 18, 2008 the Company filed a Current Report on
Form 8-K stating that its financial statements for the quarterly periods ended
March 31, 2008 and June 30, 2008 must be restated (the “Restatement
8-K”).  See the Restatement 8-K for additional
information.

    

    Schedule
2.16 – Prior to an infusion of capital from Purchaser, the Company was
experiencing severe liquidity issues.

    

    Schedule
2.18 – Jay Shafer, President and Chief Executive Officer loaned the Company
$800,000.

    

    Schedule
2.25 – Due to recent resignations of certain directors, the Company may not be
full compliance with respect to requirements relating to having an audit
committee comprised of independent directors.

     

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

-27-

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