Document:

Adamis
Pharmaceuticals Corporation

     

    STOCK
REPURCHASE AGREEMENT

     

    THIS STOCK REPURCHASE AGREEMENT
(this “Agreement”) is
made as of the 3rd day of
November 2008 by and between Adamis
Pharmaceuticals Corporation, a Delaware corporation (the “Company”),
and David J. Marguglio (“Stockholder”).

     

    Whereas, the Stockholder owns two
million three hundred thirty seven thousand and nineteen (2,337,019) shares of
the Common Stock of the Company (the “Stock”)
which he purchased at $0.001 per share (the “Per-Share
Purchase Price”); and

     

    Whereas, the Stockholder became
an employee of the Company on July 1, 2006 “the Vesting
Commencement Date”; and

     

    Whereas,
on or about October 28, 2008, the Company declined its right of first refusal
and approved the sale and transfer from Richard Frost to Purchaser an aggregate
two hundred thousand (200,000) shares of the Common Stock of the Company subject
to the terms and conditions set forth in the Stock Purchase Agreement dated
April 17, 2007; and

     

    Whereas, the Stockholder agrees
to designate all the two million five hundred thirty seven thousand and nineteen
(2,537,019) shares of the Common Stock as being "Repurchasable
Stock;" and

     

    Whereas, the Stockholder executed
a Stock
Repurchase Agreement with the Company effective as of the 20th day of
September, 2008; and

     

    Whereas, the Company wishes to
replace the previous Stock
Repurchase Agreement effective September 20, 2008 with this Stock
Repurchase Agreement;

     

    Now,
THEREFORE, IT IS AGREED
between the parties as follows:

     

    1.
REPURCHASE OPTIONS.
In addition to any restrictions imposed by the Bylaws of the Company, the
Company has two independent options to repurchase the Repurchasable Stock:
Performance; and Time-Based (collectively referred to herein as the "Repurchase
Options"). Each reference to Repurchasable Stock in this Agreement shall
mean the number of shares of Repurchasable Stock after giving effect to any
adjustment in the aggregate number of shares of Repurchasable Stock as a result
of the exercise of any of the preceding Repurchase Options. The Repurchase
Options may be triggered by one of the following Repurchase Events ("Repurchase
Event"):

     

    (a)           Performance-Based Repurchase Option.
A Repurchase Option will occur on June 30, 2010. Notwithstanding the
provisions of Section 1(b), all of Stockholder’s shares of Repurchasable Stock
shall be subject to a performance-based repurchase option in favor of the
Company (the “Performance
Repurchase Option”). This
Performance Repurchase Option will lapse upon the earlier to occur of clause (i)
or (ii) below:

     

    (i)
Adamis Laboratories, Inc. reports financial results in any two sequential fiscal
quarters that meet both of the two criteria set forth below:

     

    (1)              net
revenue is in excess of $3.5 million in the two sequential quarters,
and

     

    
      
        
        

      

      
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    (2)              operating
profit before product development expenses of at least 15% of
net revenue during the same two sequential quarters.

     

    For
purposes of this section 1.(a)(i), net revenue shall be determined in accordance
with Generally Accepted Accounting Principles and defined as gross product sales
reduced by returns, discounts, allowances and royalties. Operating profit shall
be determined in accordance with Generally Accepted Accounting Principles and
defined as net sales less cost of goods sold less sales, general and
administrative expenses, depreciation, and amortization. It specifically
excludes interest extraordinary expenses and product development
expenses.

     

    (ii) the
volume weighted average price of the Company’s common stock is at an average
price in excess of $1.00 per share, as reported by the exchange on which the
Company's common stock is then trading, during twenty (20) consecutive trading
days.

     

    If the
criteria have not been met, the Company shall be entitled to repurchase the
fraction of Stockholder's aggregate shares of Repurchasable Stock determined by
dividing (1) the difference between (A) $3,500,000 and (B) the amount of net
revenue reported in the quarter ending June 30, 2010, by (2)
$3,500,000.

     

    For
purposes of illustrating the effect of the Performance Repurchase Option, assume
that an individual holds 1,000,000 shares of Repurchasable Stock and that for
the quarter ending on June 30, 2010 the reported net revenue of the Company is
$3,000,000. The Company would have the right to repurchase 142,857 shares of
Repurchasable Stock (i.e., $500,000/$3,500,000 X 1,000,000). Stockholder would
then hold 857,143 shares of Repurchasable Stock.

     

    (b) Time-Based Repurchase Option.
A Repurchase Event will also occur if the Stockholder’s relationship with
the Company or any of its Affiliates terminates for any reason (including death
or disability), or for no reason, with or without cause, such that after such
termination Stockholder is no longer an employee of, or consultant to, the
Company or any of its Affiliates. For purposes of the preceding sentence, a
party shall be deemed to control an entity if such party directly or indirectly
owns more than 50% of the voting interests in such entity.

     

    (i) One
hundred percent (100%) of the Repurchasable Stock shall initially be subject to
the Time-Based Repurchase Option. On the first anniversary of the Vesting
Commencement Date, one-third (1/3) of the Time-Based Repurchase Option shares,
or such lesser amount as is determined after giving effect to any exercise of
the Performance Repurchase Option, of the Repurchasable Stock shall lapse and be
released from the Time-Based Repurchase Option. Thereafter, an additional
one-third (1/3) of the Repurchasable Stock shall be released from the Time-Based
Repurchase Option on the second anniversary of the Vesting Commencement Date,
and an additional one-third (1/3) of the Repurchasable Stock shall be released
from the Time-Based Repurchase Option on the third anniversary of the Vesting
Commencement Date.

     

    (ii)           In
the event of Stockholder's death or Disability (as defined below), the
Time-Based Repurchase Option shall lapse with respect to all of Stockholder's
shares of Repurchasable Stock, but remain subject to the Performance Repurchase
Options.

     

    
      
        
        

      

      
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    (iii)           In
the event of a Corporate Transaction (as defined below), the Repurchase Options
shall lapse with respect to all of Stockholder's shares of Repurchasable
Stock.  A “Corporate
Transaction” shall mean either (a) an Acquisition; or (b) an Asset
Transfer where: “Acquisition”
shall mean (A) any consolidation or merger of the Company with or into
any other corporation or other entity or person, or any other corporate
reorganization, in which the capital stock of the Company immediately prior to
such consolidation, merger or reorganization, represents less than 50% of the
voting power of the surviving entity (or, if the surviving entity is a wholly
owned subsidiary, its parent) immediately after such consolidation, merger or
reorganization; or (B) any transaction or series of related transactions to
which the Company is a party in which in excess of fifty percent (50%) of the
Company's voting power is transferred; provided that an Acquisition shall not
include (x) any consolidation or merger effected exclusively to change the
domicile of the Company, or (y) any transaction or series of transactions
principally for bona fide equity financing purposes in which cash is received by
the Company or any successor or indebtedness of the Company is cancelled or
converted or a combination thereof; and “Asset Transfer”
shall mean a sale, lease, exclusive license or other disposition of all
or substantially all of the assets of the Company.

     

    (iv)           For
purposes of the Time-Based Repurchase Option, “Cause”
shall mean misconduct,
including:

     

      (1)
the willful failure of Stockholder to follow the good faith directions of the
Company's Board of Directors (the “Adamis
Board”), or any other Company personnel to whom Stockholder reports after
written notice thereof and a ten (10) day opportunity to cure;

     

     
(2) any act by Stockholder of fraud or dishonesty, misappropriation or
embezzlement, or willful misconduct or gross negligence in connection with the
performance of any of Stockholder's duties to or for the Company, as reasonably
and in good faith determined by the Adamis Board;

     

     
(3) a material breach by Stockholder of this Agreement or his employment
agreement with the Company (the “Employment
Agreement”), the
lawful written policies of the Company, any contractual or legal duty to the
Company or any of its Affiliates, or any guidelines or procedures of the Company
provided such policies, guidelines and procedures have been provided to or
otherwise made available to the Stockholder, after written notice thereof from
the Company and a ten (10) day opportunity to cure in the event that such breach
was not willful;

     

     
(4)           the
conviction of Stockholder of a felony or a crime involving moral turpitude
(including pleading guilty or no contest to such crime), whether or not such
felony or crime was committed in connection with the business of the Company or
its Affiliates; or

     

     
(5)           any act of
Stockholder which injures or could reasonably be expected to injure the
reputation, business or business relationships of the Company or its
Affiliates.

     

    (v)            
For purposes of the Time-Based Repurchase Option, “Good Cause”
shall mean:

     

     
(1)           the Company
commits a material breach of its obligations under the Employment Agreement and
fails to cure such breach within twenty (20) business days following receipt of
notice of such breach; or

     

    
      
        
        

      

      
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(2)           Stockholder’s
principal office is relocated 100 or more miles from its present location,
except for required travel by Stockholder on the Company’s or any of its
Affiliates’ business.

     

    (vi) For
purposes of the Time-Based Repurchase Option, “Disability”
shall mean the inability of a person, in the opinion of a qualified
physician acceptable to the Company, to perform the major duties of that
person’s position with the Company or any of its Affiliates because of the
sickness or injury of the person.

     

    2. EXERCISE OF
REPURCHASE OPTIONS.

     

    (a) If a Repurchase Event, as
defined above, occurs, the Company shall have an irrevocable option, for a
period of ninety (90) days after said Repurchase Event (or such longer period as
may be agreed to by the Company and the Stockholder) to repurchase from
Stockholder (or Stockholder's personal representative, as the case may be) at
$0.001 per share (“Option
Price”), up
to but not exceeding the number of shares of Repurchasable Stock subject to that
Repurchase Option as of the date of such Repurchase Event. Stockholder hereby acknowledges that the Company has no
obligation, either now or in the future, to repurchase any of the shares of
Stock, whether vested or unvested, at any time.

     

    (b) The Repurchase Options
shall be exercised by written notice signed by an officer of the Company or by
any assignee or assignees of the Company and delivered or mailed as provided in
Section 13(a). Such notice shall identify the number of shares of Repurchasable
Stock to be purchased and shall notify Stockholder of the time, place and date
for settlement of such purchase, which shall be scheduled by the Company within
the applicable term of the Repurchase Option set forth in Section 1 above. The
Company shall be entitled to pay for any shares of Repurchasable Stock purchased
pursuant to its Repurchase Option in cash or by offset against any indebtedness
owing to the Company by Stockholder, or by a combination of both, as determined
by the Company in its sole discretion. Upon delivery of such notice and payment
of the purchase price in any of the ways described above, the Company shall
become the legal and beneficial owner of the Repurchasable Stock being
repurchased and all rights and interest therein or related thereto, and the
Company shall have the right to transfer to its own name the Repurchasable Stock
being repurchased by the Company or take any other action with respect to such
Repurchasable Stock, without further action by Stockholder.

     

    3.           ADJUSTMENTS TO REPURCHASABLE
STOCK. If, from time to time, during the term of the Repurchase Options
there is any change affecting the Company's outstanding Common Stock as a class
that is effected without the receipt of consideration by the Company (through
merger, consolidation, reorganization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of
shares, change in corporation structure or other transaction not involving the
receipt of consideration by the Company), then any and all new, substituted or
additional securities or other property to which Stockholder is entitled by
reason of Stockholder's ownership of the Repurchasable Stock shall be
immediately subject to the Repurchase Options and be included in the word
“Repurchasable Stock” for all purposes of the Repurchase Options with the same
force and effect as the shares of the Repurchasable Stock presently subject to
the Repurchase Options, but only to the extent the Repurchasable Stock is, at
the time, covered by such Repurchase Options. While the total Option Price shall
remain the same after each such event, the Option Price per share of
Repurchasable Stock upon exercise of the Repurchase Options shall be
appropriately adjusted.

     

    
      
        
        

      

      
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    4.           [RESERVED
TO RETAIN NUMBERING]

     

    5.          
TERMINATION OF
REPURCHASE OPTIONS. Sections 1, 2, 3, and 4 of this Agreement shall
terminate upon the earlier to occur of the exercise in full or expiration of all
of the Repurchase Options.

     

    6.          
PARACHUTE PAYMENTS.

     

    (a)            If
any payment or benefit Stockholder would receive pursuant to a Corporate
Transaction from the Company, its Affiliates or otherwise (“Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise
Tax”), then
such Payment shall be reduced to the Reduced Amount. The “Reduced Amount”
shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever amount, after
taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in Stockholder's receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax. If a reduction in payments or benefits
constituting "parachute payments" is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the following order unless Stockholder
elects in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date on
which the event that triggers the Payment occurs): reduction of cash payments;
cancellation of accelerated vesting of stock awards; reduction of employee
benefits. In the event that acceleration of vesting of stock award compensation
is to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of Stockholder's stock awards unless Stockholder
elects in writing a different order for cancellation.

     

    (b)             The
accounting firm engaged by the Company for general audit purposes as of the day
prior to the effective date of the Corporate Transaction shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Corporate Transaction, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

    

    (c) The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and Stockholder within fifteen (15) calendar days after the date on which
Stockholder's right to a Payment is triggered (if requested at that time by the
Company or Stockholder) or such other time as requested by the Company or
Stockholder. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, it shall furnish the Company and Stockholder with an
opinion reasonably acceptable to Stockholder that no Excise Tax will be imposed
with respect to such Payment. Any good faith determinations of the accounting
firm made hereunder shall be final, binding and conclusive upon the Company and
Stockholder.

     

    
      
        
        

      

      
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    7. RIGHTS OF STOCKHOLDER. Subject
to the provisions of Sections 8, 10, and 11 herein, Stockholder shall exercise
all rights and privileges of a stockholder of the Company with respect to the
Repurchasable Stock. Stockholder shall be deemed to be the holder for purposes
of receiving any dividends that may be paid with respect to such shares of
Repurchasable Stock and for the purpose of exercising any voting rights relating
to such shares of Repurchasable Stock, even if some or all of such shares of
Repurchasable Stock have not yet been released from the Repurchase
Option.

     

    8.
LIMITATIONS ON TRANSFER.
Stockholder shall not assign, hypothecate, donate, encumber or otherwise
dispose of any interest in the Stock except for any encumbrance by the Company
arising under the Stock Purchase Agreement and except in compliance with the
provisions of this Agreement and applicable securities laws. Furthermore, the
Stock shall be subject to the right of first refusal in favor of the Company or
its assignees that is contained in the Company's Bylaws. In the event the
Company elects not to exercise the right of first refusal the Company may have
on a proposed transfer of the Stock pursuant to the Company's Bylaws, the
Stockholder acknowledges that the Company may, as permitted in the Company's
Bylaws, assign its right of first refusal to other stockholders of the Company.
In the event of such assignment, each assignee of such right of first refusal
shall have a right to purchase its pro rata portion of the
capital stock proposed to be transferred. Each assignee's pro rata portion shall
be equal to the product obtained by multiplying (i) the aggregate number of
shares proposed to be transferred by (ii) a fraction, the numerator of which is
the number of shares of Common Stock held by such assignee at the time of the
proposed transfer and the denominator of which is the total number of shares
owned by all assignees at the time of such proposed transfer. If not all
assignees of such right of first refusal elect to purchase their pro rata
portion of the Stock proposed to be transferred by the Stockholder, then the
Stockholder may transfer the remaining shares of Stock not purchased by such
assignees as provided in the Company’s Bylaws.

     

    9. RESTRICTIVE LEGENDS. All
certificates representing the Stock shall have endorsed thereon legends in
substantially the following forms (in addition to any other legend which may be
required by other agreements between the parties hereto):

    

    (a)            “THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL
OPTION IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE
COMPANY’S BYLAWS.”

     

    (b)            "THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

     

    (c)            Any
additional legend required by the Company's Bylaws, as such may be amended from
time to time.

     

    (d)            Any
legend required by appropriate blue sky officials.

     

    (e)            Any
legend required to enforce the provisions of Section 10 hereof

     

    (f)            With
respect to the Repurchasable Stock only: "THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN OPTIONS AND RESTRICTIONS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY.
ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS VOID
WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE ISSUER OF THESE
SHARES."

     

    
      
        
        

      

      
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    10. MARKET STAND-OFF AGREEMENT.
Stockholder shall not sell, dispose of, transfer, make any short sale of,
grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any Common Stock or other
securities of the Company held by Stockholder, including the Repurchasable Stock
(the "Locked-Up
Securities"), during the 180-day period following the effective date of a
registration statement of the Company filed under the Act (the "Lock Up Period")
(or such longer period, not to exceed 18 days after the expiration of the
180-day period, as the underwriters or the Company shall request in order to
facilitate compliance with NASD Rule 2711), provided, however, that
nothing in this Section 10 shall prevent the exercise of any Repurchase Option
during the Lock Up Period. Stockholder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the managing
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to Stockholder's
Locked-Up Securities until the end of the Lock-Up Period. The underwriters of
the Company's stock are intended third party beneficiaries of this Section 10
and shall have the right, power and authority to enforce the provisions hereof
as though they were a party hereto.

     

    11. REFUSAL TO TRANSFER. The
Company shall not be required (a) to transfer on its books any shares of
Repurchasable Stock of the Company which shall have been transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so
transferred.

    

    12. NO EMPLOYMENT RIGHTS. This
Agreement is not an employment contract and nothing in this Agreement shall
affect in any manner whatsoever the right or power of the Company (or any of the
Company's Affiliates) to terminate Stockholder's employment for any reason at
any time, with or without cause and with or without notice.

     

    
      13.
MISCELLANEOUS.

    

     

    (a)           Notices. All notices required
or permitted hereunder shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified, (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient, and if not during normal business hours of the recipient, then on the
next business day, (iii) five (5) calendar days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the other party hereto at such party's address
hereinafter set forth on the signature page hereof, or at such other address as
such party may designate by ten (10) days advance written notice to the other
party hereto.

     

    (b)           Successors and Assigns. This
Agreement shall inure to the benefit of the successors and assigns of the
Company and, subject to the restrictions on transfer herein set forth, be
binding upon Stockholder, Stockholder's successors, and assigns. The Repurchase
Options of the Company hereunder shall be assignable by the Company at any time
or from time to time, in whole or in part.

     

    
      
        
        

      

      
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    (c)            Attorneys' Fees; Specific
Performance. In any action brought to enforce any provision of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs from the other party to the action or proceeding. For
purposes of this Agreement, the "prevailing party" shall be deemed to be that
party who obtains substantially the result sought, whether by settlement,
mediation, judgment or otherwise, and "attorneys' fees" shall include, without
limitation, the actual attorneys' fees incurred in retaining counsel for advice,
negotiations, suit, or other legal proceeding, including mediation and
arbitration. It is the intention of the parties that the Company, upon exercise
of any of the Repurchase Options and payment therefor, pursuant to the terms of
this Agreement, shall be entitled to receive the Repurchasable Stock, in specie,
in order to have such Repurchasable Stock available for future issuance without
dilution of the holdings of other stockholders. Furthermore, it is expressly
agreed between the parties that money damages are inadequate to compensate the
Company for the Repurchasable Stock and that the Company shall, upon proper
exercise of any of the Repurchase Options, be entitled to specific enforcement
of its rights to purchase and receive said Repurchasable Stock.

     

    (d)            Governing Law; Venue. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware. The parties agree that any action brought by either party to
interpret or enforce any provision of this Agreement shall be brought in, and
each party agrees to, and does hereby, submit to the jurisdiction and venue of,
the appropriate state or federal court for the district encompassing the
Company's principal place of business.

     

    (e)            Further Execution. The parties
agree to take all such further action (s) as may

     

    reasonably
be necessary to carry out and consummate this Agreement as soon as practicable,
and to take whatever steps may be necessary to obtain any governmental approval
in connection with or otherwise qualify the issuance of the securities that are
the subject of this Agreement.

     

    (f)            Independent Counsel.
Stockholder acknowledges that this Agreement has been reviewed on behalf
of the Company by Greenberg Traurig, counsel to the Company and that Greenberg
Traurig does not represent, and is not acting on behalf of, Stockholder.
Stockholder has been provided with an opportunity to consult with Stockholder's
own counsel with respect to this Agreement.

     

    (g)            Entire Agreement; Amendment.
This Agreement, the Stock Purchase Agreement and the Employment Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes and merges all prior agreements or understandings
with respect to the subject matter hereof, whether written or oral. This
Agreement may not be amended, modified or revoked, in whole or in part, except
by an agreement in writing signed by each of the parties hereto.

     

    (h)            Severability. If one or more
provisions of this Agreement are held to be unenforceable under applicable law,
the parties agree to renegotiate such provision in good faith. In the event that
the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement,
(ii) the balance of the Agreement shall be interpreted as if such provision were
so excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.

     

    
      
        
        

      

      
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    (i)            Release. As a condition of
receiving the benefits under Sections 1(d)(ii) and 1(b)(iv) of this Agreement to
which Stockholder would not otherwise be entitled, Stockholder shall execute a
release in the form attached hereto as Exhibit A (the "Release").
Unless the Release is executed by Stockholder, delivered to the Company
within twenty-one (21) days after the termination of Stockholder's employment
with the Company and deemed effective pursuant to its terms, Stockholder shall
not receive any of the accelerated vesting benefits provided for under this
Agreement.

     

    (j)            Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument.

     

    (k) California Corporate Securities
Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT
HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE
OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH
CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
FROM SUCH QUALIFICATION BEING AVAILABLE.

     

    
      
        
        

      

      
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    In Witness
Whereof, the parties hereto have executed this Agreement as of the day
and year first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                       Adamis
      Pharmaceuticals corporation 

                                                    
	   	   
	

                                                       By:  

                                                    	

                                                       /s/
      Dennis J. Carlo 

                                                    	   
	   	   
	

                                                       Title:  

                                                    	 CEO 	
                                                       

                                                    

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                   Address: 

                	
                   2658
      Del Mar Heights Road, #555 

                
	  
      	
                   Del
      Mar, CA 92014 

                

        

      

    

     

    Stockholder
acknowledges and agrees that the vesting of Stock pursuant to Section 1
hereof is earned only by continuing service as an employee or consultant at the
will of the Company or its Affiliates. Stockholder further acknowledges and
agrees that nothing in this agreement shall confer upon Stockholder any right
with respect to continuation of such employment or consulting relationship with
the Company or its Affiliates, nor shall it interfere in any way with
Stockholder’s right or the right of the Company or its Affiliates to terminate
Stockholder’s employment or consulting relationship at any time, with or without
cause.

     

    Stockholder
acknowledges and agrees that Stockholder must bear the economic risk of this
investment indefinitely unless the repurchasable Stock is registered pursuant to
the Securities Act or an exemption from registration is available, and that the
Company has no obligation to repurchase such repurchasable Stock. Stockholder
further acknowledges that any risk related to the fluctuation in the value of
the repurchasable stock from and after the date hereof, including any losses to
Stockholder as a result of Company’s exercise of any of its repurchase options
pursuant to Section 1, shall be borne by Stockholder.

    

    Stockholder
acknowledges that Stockholder has had an opportunity to consult Stockholder’s
own tax, legal and financial Advisors regarding the acquisition of common stock
under the Stock Purchase Agreement and the restrictions relating to such stock
under this Agreement.

    

    Stockholder
acknowledges and agrees that in making the decision to acquire the common stock
under the Stock Purchase Agreement Stockholder has not relied on any statement,
whether written or oral, regarding the subject matter hereof, except as
expressly provided in the Stock Purchase Agreement and herein and in the
attachments and exhibits thereto and hereto.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                 Stockholder: 

                                 

                              
	
                                 /s/ David J.
      Marguglio 

                              	   
	
                                 David
      J.
Marguglio 

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

     

    RELEASE
AGREEMENT

     

    I
understand that my position with Adamis Pharmaceuticals Corporation. (the "Company")
terminated effective ______________ (the "Separation
Date"). The Company has agreed that if I
choose to sign this Release, the Company will extend to me certain benefits
(minus the standard withholdings and deductions, if applicable) pursuant to the
terms of the Stock Repurchase Agreement (the "Agreement')
entered into as of November 3, 2008, between myself and the Company, and
any agreements incorporated therein by reference. I understand that I am not
entitled to such benefits unless I sign this Release. I understand that,
regardless of whether I sign this Release, the Company will pay me all of my
accrued salary and vacation through the Separation Date, to which I am entitled
by law.

     

    In
consideration for the benefits I am receiving under the Agreement, I hereby
release the Company and its officers, directors, agents, attorneys, employees,
stockholders, and Affiliates from any and all claims, liabilities, demands,
causes of action, attorneys' fees, damages, or obligations of every kind and
nature, whether they are now known or unknown, arising at any time prior to the
date I sign this Release. This general release includes, but is not limited to:
all federal and state statutory and common law claims, claims related to my
employment or the termination of my employment or related to breach of contract,
tort, wrongful termination, discrimination, wages or benefits, or claims for any
form of equity or compensation. Notwithstanding the release in the preceding
sentence, I am not releasing any right of indemnification I may have for any
liabilities arising from my actions within the course and scope of my employment
with the Company.

     

    In
releasing claims unknown to me at present, I am waiving all rights and benefits
under Section 1542 of the California Civil Code, and any law or legal principle
of similar effect in any jurisdiction: "A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor."

     

    If I am
forty (40) years of age or older as of the Separation Date, I acknowledge that I
am knowingly and voluntarily waiving and releasing any rights I may have under
the federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"). I
also acknowledge that the consideration given for the waiver in the above
paragraph is in addition to anything of value to which I was already entitled. I
have been advised by this writing, as required by the ADEA that: (a) my waiver
and release do not apply to any claims that may arise after my signing of this
Release; (b) I should consult with an attorney prior to executing this Release;
(c) I have twenty-one (21) days within which to consider this Release (although
I may choose to voluntarily execute this Release earlier); (d) I have seven (7)
days following the execution of this release to revoke the Release; and (e) this
Release will not be effective until the eighth day after this Release has been
signed both by me and by the Company ("Effective
Date").

     

    
      
        
          
            
              
                
                  
                    	
                            Agreed:

                          	 	 
      
	__________________________________	 	_______________________________________________________  
	
                            Date

                          	 	
                            David
      J.
Marguglio

                          

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

     

    ADAMIS
PHARMACEUTICALS CORPORATION.

     

    
      
        
          
            	
                    By:
      __________________________________________

                  	 
      
	 	 
	
                    Name:________________________________________

                  	 
      
	 	 
	
                    Title:_________________________________________

                  	 
      

          

        

      

    

     

    
      
        
        

      

      
        12.Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

                                   DATED AS OF

                                DECEMBER 31, 2008

                                     BETWEEN

                       AIR TRANSPORT GROUP HOLDINGS, INC.

                                       AND

                                DANIEL J. PIERSON

                            FOR THE PURCHASE AND SALE

                                       OF

                            100% OF THE COMMON STOCK

                                       OF

                          TECHNICAL AERO SERVICES, INC.
<PAGE>
                            STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE  AGREEMENT  (this  "AGREEMENT") is dated as of December
31,  2008,  by  and  between  AIR  TRANSPORT  GROUP  HOLDINGS,  INC.,  a  Nevada
corporation  ("BUYER")  and  DANIEL J.  PIERSON  ("SELLER").  Buyer  and  Seller
individually  may be referred to individually  as a "PARTY" and  collectively as
the "PARTIES."

                                    RECITALS

     WHEREAS, Seller is the beneficial owner of all of the outstanding shares of
common stock  (collectively,  the "SHARES") of TECHNICAL AERO SERVICES,  INC., a
Florida corporation (the "COMPANY"); and

     WHEREAS,  Seller desires to sell the Shares to Buyer,  and Buyer desires to
purchase  the Shares from Seller,  upon the terms and subject to the  conditions
hereinafter set forth.

                                    AGREEMENT

     NOW  THEREFORE,  in  consideration  of the mutual  covenants  and  promises
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency  of which is  hereby  acknowledged,  the  Parties,  intending  to be
legally bound, hereby agree as follows:

                                   ARTICLE 1
                                   DEFINITIONS

     Section 1.01.  DEFINITIONS.  (a) The following terms, as used herein,  have
the following meanings:

     "AFFILIATE"  means,  with  respect to any  Person,  any entity or any other
Person directly or indirectly controlling, controlled by or under common control
with such Person.

     "AFFILIATED  GROUP"  means,  with  respect to  federal  income  Taxes,  any
affiliated  group of corporations (as defined in Section 1504(a) of the Code) of
which the Company are members and,  with respect to any state,  local or foreign
income,  franchise or similar  income-based Tax, the  consolidated,  combined or
unitary group of which the Company is a member.

     "BALANCE SHEET" means the unaudited  balance sheet of the Company as of the
Balance Sheet Date.

     "BALANCE SHEET DATE" means December 31st, 2008.

     "BUSINESS"  means the  business and  operations  of the Company as such are
conducted  by the  Company  as of the date  hereof  in the  ordinary  course  of
business for the industry.

                                       2
<PAGE>
     "BUSINESS DAY" means a day other than Saturday,  Sunday or any other day on
which commercial banks in New York, New York are closed.

     "CLOSING" has the meaning set forth in Section 2.02.

     "CLOSING DATE" has the meaning set forth in Section 2.02.

     "CASH CONSIDERATION" has the meaning set forth in Section 2.01(a).

     "CODE" means the Internal  Revenue Code of 1986, as amended,  and the rules
and regulations promulgated thereunder.

     "COMPANY" has the meaning set forth in the Recitals.

     "COMPANY  INTELLECTUAL  PROPERTY  RIGHTS" means all  Intellectual  Property
Rights owned by, or licensed to, the Company.

     "COMPANY  MATERIAL ADVERSE EFFECT" means any event or happening that causes
the  Company to cease  having a positive  net  revenue  stream or  substantially
reduces the  existing  positive  net revenue  stream as a direct  result of such
event or happening.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended, and the rules and regulations promulgated thereunder.

     "ERISA AFFILIATE" means any other entity which would be treated as a single
employer with the Company under Section 414 of the Code.

     "ESCROW AGREEMENT" has the meaning set forth in Section 2.03.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "GOVERNMENTAL  AUTHORITY" shall mean any federal,  state,  local or foreign
government or any subdivision,  agency, instrumentality,  authority, department,
commission,  board or bureau  thereof or any  federal,  state,  local or foreign
court, tribunal or arbitrator.

     "INTELLECTUAL  PROPERTY  RIGHT" means any  trademark,  service mark,  trade
name,  invention,  patent,  trade secret,  copyright,  know how  (including  any
registrations  or applications  for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right.

     "KNOWLEDGE" means, with respect to any Person, the actual knowledge of such
Person but, with respect to the Company, the actual knowledge of the Seller.

     "LAWS"  means any law,  regulation,  rule,  order,  judgment or decree of a
Governmental Authority.

                                       3
<PAGE>
     "LIEN"  means,  with respect to any  property or asset,  any and all liens,
encumbrances,  charges,  security interests,  options,  mortgages,  easements or
pledges in respect of such property or asset.

     "MATERIAL  CONTRACT"  means a contract that is essential to  performance of
Company's business and without which,  Company could not continue its operations
in the manner in which it is being conducted as of the Closing Date.

     "PERMITTED  LIENS" means:  (i) specific Liens reflected or reserved against
in the Balance Sheet or disclosed in the notes  thereto;  (ii) Taxes and general
and special  assessments  not in default and payable without penalty or interest
or being contested in good faith;  (iii) mechanic's,  materialman's,  carrier's,
repairer's and other similar Liens arising or incurred in the ordinary course of
business  or that are not yet due and  payable  or are being  contested  in good
faith;  or (iv) Liens  arising or  incurred in the  ordinary  course of business
since the Balance Sheet Date, which individually or in the aggregate do not have
a Company Material Adverse Effect.

     "PERSON" means an individual,  corporation,  partnership, limited liability
company,  association,  trust or  other  entity  or  organization,  including  a
government or political subdivision or an agency or instrumentality thereof.

     "REAL  PROPERTY"  means  all real  property  that is owned or leased by the
Company.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES  ACT" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations promulgated thereunder.

     "SHARES" has the meaning set forth in the Recitals.

     "STOCK CONSIDERATION" has the meaning set forth in Section 2.01(b).

     "TAX" means any federal,  state,  local or foreign income,  gross receipts,
license, payroll,  employment,  excise, severance,  stamp, occupation,  premium,
windfall  profits,  environmental,   unemployment,  disability,  real  property,
personal property, sales, use, transfer,  registration, value added, alternative
or add-on minimum, estimated or other tax of any kind whatsoever

     "TAX  AUDIT"  shall mean any  notice of  deficiency,  proposed  adjustment,
adjustment,  assessment,  audit,  examination or other  administrative  or court
proceeding, suit, dispute or other claim regarding Taxes.

     "TAX RETURN"  means any return,  declaration,  report,  claim for refund or
information  return or statement  relating to Taxes,  including  any schedule or
attachment thereto, and including any amendment thereof.

     "TAXING AUTHORITY" means any governmental  authority  (domestic or foreign)
responsible for the imposition of any Tax.

                                       4
<PAGE>
     "TRANSPORTATION  CODE" means 49 U.S.C.  Subtitle  VII, as amended,  and any
successor  statute  thereto  and the  Federal  Aviation  Regulations  issued  or
promulgated pursuant thereto.

     Section 1.02. OTHER  DEFINITIONAL  AND  INTERPRETATIVE  PROVISIONS.  Unless
specified  otherwise,  in this Agreement the obligations of any Party consisting
of more than one Person are joint and several. The words "hereof",  "herein" and
"hereunder"  and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.  The
captions  herein are included  for  convenience  of reference  only and shall be
ignored in the construction or  interpretation  hereof.  References to Articles,
Sections,  Exhibits  and  Schedules  are to  Articles,  Sections,  Exhibits  and
Schedules  of this  Agreement  unless  otherwise  specified.  All  Exhibits  and
Schedules  annexed hereto or referred to herein are hereby  incorporated  in and
made a part of this  Agreement as if set forth in full herein.  Any  capitalized
terms used in any Exhibit or Schedule but not  otherwise  defined  therein shall
have the  meaning  as  defined  in this  Agreement.  Any  singular  term in this
Agreement  shall be  deemed to  include  the  plural,  and any  plural  term the
singular.  Whenever the words  "include,"  "includes" or "including" are used in
this  Agreement,  they  shall be deemed  to be  followed  by the words  "without
limitation," whether or not they are in fact followed by those words or words of
like import. "Writing," "written" and comparable terms refer to printing, typing
and other means of reproducing  words (including  electronic media) in a visible
form.  References to any Person include the successors and permitted  assigns of
that  Person.  References  from or  through  any  date  mean,  unless  otherwise
specified, from and including or through and including, respectively.

                                   ARTICLE 2
                               PURCHASE AND SALE

     Section  2.01.  PURCHASE AND SALE.  Subject to the terms and  conditions of
this  Agreement,  the Buyer hereby  purchases the Shares from the Seller and the
Seller hereby  sells,  assigns,  conveys,  and transfers to the Buyer all of the
Seller's right, title, and interest in and to the Shares for a purchase price of
Two Million Five Hundred Thousand Dollars  ($2,500,000) (the "PURCHASE  PRICE").
The Buyer shall pay to the Seller the Purchase Price as follows:

     (a) One Million Eight Hundred  Seventy-Five  Thousand Dollars  ($1,875,000)
(the "CASH  CONSIDERATION")  shall be paid to the Seller on or before  March 31,
2009 by wire  transfer  of  immediately  available  funds  to the  bank  account
designated  in  writing  by the  Seller.  The  payment  obligation  for the Cash
Consideration is evidenced by that certain  promissory note substantially in the
form  attached   hereto  as  EXHIBIT  A  (the  "NOTE").   Payment  of  the  Cash
Consideration shall be not be subject to any right of set off by the Purchaser.

     (b) Shares of the Buyer with an aggregate value of Six Hundred  Twenty-Five
Thousand  Dollard  ($625,000),  issued at the highest ask price on December  31,
2008 (the  "STOCK  CONSIDERATION"),  shall be issued to the  Seller on or before
March 31,  2009.  Upon  issuance  of the Stock  Consideration,  the Buyer  shall
deliver  to the  Seller,  free and clear of all  Liens,  the stock  certificates
representing the Shares, in such denominations as the Seller may request,  dated
the issuance date, in the name of the Seller.

                                       5
<PAGE>
     Section  2.02.  CLOSING.  Upon mutual  execution of this  Agreement and the
Escrow Agreement, as defined below, on or before December 31, 2008 (the "CLOSING
DATE"), via electronic counterparts with original copies to follow:

     (a) Seller  shall  deliver  to the Escrow  Agent,  as  defined  below,  the
certificates  representing the Shares (the "SELLER'S CERTIFICATES") and executed
stock powers separate from the Seller's  Certificates which will allow the Buyer
to transfer the Shares as necessary.

     (b) The Buyer shall deliver to the Seller the executed Note.

     Section 2.03.  ESCROW  AGREEMENT.  As security for the Buyer's  obligations
under this Agreement,  the Seller's Certificates shall be delivered to K&L Gates
LLP,  as  "ESCROW  AGENT,"  who  shall  maintain   possession  of  the  Seller's
Certificates   along  with  fully  executed  stock  powers   separate  from  the
Certificates. In accordance with the escrow agreement, substantially in the form
attached  hereto as EXHIBIT B (the "ESCROW  AGREEMENT"),  the Escrow Agent shall
release the Seller's Certificates as more fully set forth therein.

     Section 2.04. USE OF CORPORATE  FUNDS AND ASSETS.  Prior to payment in full
of the Purchase Price, all proceeds of the Company shall remain in the Company's
bank  accounts and shall not be removed  except for payments to vendors or other
payments in the ordinary course of business.  In no event shall the Buyer remove
any  funds  from  the  Company's  bank  accounts  except  as  set  forth  above.
Additionally,  prior to  payment  in full of the  Purchase  Price,  neither  the
inventory  nor the assets of the Company  shall be sold,  disposed of,  pledged,
leased or used other than in the  ordinary  course of  business.  Breach of this
Section 2.04 shall be an Event of Default under Section 8.01, below.

     Section  2.05  ESCROW  OF  PROFITS.  Prior  to the  payment  in full of the
Purchase  Price,  any and all profits of the Company shall be deposited with the
Escrow Agent and disbursed in accordance with the Escrow Agreement.

                                   ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

     Seller makes the  following  representations  and  warranties to Buyer with
respect  to  Company  as of the date  hereof  (except  to the  extent  expressly
relating  to a specific  date,  in which event such  representation  or warranty
shall be made as of such date),  which shall be unaffected by any  investigation
heretofore or hereafter made by or on behalf of Buyer:

     Section 3.01.  CORPORATE EXISTENCE AND POWER. Company is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction of incorporation  and has all corporate powers required to carry on
its business as now conducted.

     Section 3.02.  CORPORATE  AUTHORIZATION AND BINDING EFFECT.  The execution,
delivery and  performance by Seller of this Agreement,  and the  consummation by
Seller and Company of the transactions  contemplated  hereunder and thereby have

                                       6
<PAGE>
been duly authorized by all necessary corporate and shareholder action by Seller
and  Company.  Seller and Company  have full power and  authority to execute and
deliver this Agreement and to perform its obligations hereunder.  This Agreement
is a valid  and  binding  obligation  of  Seller  and  Company,  enforceable  in
accordance with its terms and conditions.

     Section  3.03.  GOVERNMENTAL  AUTHORIZATION.  The  execution,  delivery and
performance  by Seller of this Agreement and the  consummation  by Seller of the
transactions  contemplated  hereby  require  no action by or in  respect  of, or
filing with, any Governmental Authority.

     Section 3.04. NONCONTRAVENTION.  The execution, delivery and performance by
Seller of this  Agreement  and the  consummation  by Seller  and  Company of the
transactions  contemplated  hereby  does not and will  not;  (i)  contravene  or
conflict with the  certificates  or articles of  incorporation  or bylaws of the
Company;  contravene or conflict with or constitute a violation of any provision
of any Law  binding  upon or  applicable  to Seller or  Company  or any of their
respective  properties  or  assets;  result in a  violation  or a breach  of, or
constitute  a default or require  any  consent  under or give rise to a right of
termination,  cancellation or acceleration of any right or obligation of Company
or to a loss of any benefit to which Company is entitled  under any provision of
any note, bond, mortgage,  indenture, lease, agreement,  contract, obligation or
other instrument to which Company is bound, or any license, franchise, permit or
other similar  authorization held by Company;  or (iv) result in the creation or
imposition of any Lien on any asset of Company, except for any Permitted Liens.

     Section 3.05.  CAPITALIZATION.  The Shares  represent all of the issued and
outstanding capital stock of Company. All outstanding shares of capital stock of
Company are duly authorized,  validly issued, fully paid, nonassessable and free
from preemptive  rights.  Except as set forth in this Section 3.05, there are no
outstanding  shares of  capital  stock or other  voting  securities  of or other
ownership  interests in Company;  ) securities  of Company  convertible  into or
exchangeable  for  shares  of  capital  stock or voting  securities  of or other
ownership  interests  in  Company;  or options or other  rights to acquire  from
Company,  or any  obligation of Company to issue,  transfer or sell, any capital
stock or  voting  securities  of or other  ownership  interests  in  Company  or
securities  convertible  into  or  exchangeable  for  capital  stock  or  voting
securities of or other ownership interests in Company (the items in clauses (i),
(ii) and (iii) being  referred to  collectively  as the  "COMPANY  SECURITIES").
There  are no  outstanding  obligations  of  Company  to  repurchase,  redeem or
otherwise   acquire  any  Company   Securities.   Company   does  not  have  any
subsidiaries.

     Section  3.06.  OWNERSHIP  OF SHARES.  Seller is the record and  beneficial
owner of the Shares,  free and clear of any Lien,  and will transfer and deliver
to Buyer at the Closing valid title to the Shares, free and clear of any Lien.

     Section  3.07.  PERMITS;  COMPLIANCE.  (a) Company is in  possession of all
franchises,  grants,  authorizations,  licenses, permits, easements,  variances,
exceptions,  consents,  certificates,  approvals,  clearances  and orders of any
Governmental  Authority  necessary  for  Company  to  operate  its  Business  as
currently  conducted,  to own,  lease and operate its properties and to carry on

                                       7
<PAGE>
the Business (the "COMPANY PERMITS") and the use and operation by Company of its
properties  and the conduct of the  Business  comply with the  requirements  and
conditions of all Company  Permits.  A true and correct copy of each such Permit
is attached as SCHEDULE 2.

     (b) All  Company  Permits  are valid and in full force and  effect.  To the
Knowledge of Seller and/or Company, no suspension, cancellation or limitation of
any of Seller and/or Company Permits is threatened.

     Section 3.08.  FINANCIAL  STATEMENTS.  The unaudited  consolidated  balance
sheets of the  Company  as of  December  31,  2008,  and the  related  unaudited
consolidated  statements of income,  cash flows and stockholders equity for each
of the years ending  December 31, 2006 and 2007  (collectively,  the  "FINANCIAL
STATEMENTS"),  the financial position of the Company as of the dates thereof and
their consolidated results of operations, cash flows and stockholders equity for
the periods then ended have been provided to the Buyer. The Financial Statements
are attached as SCHEDULE 3.

     Section  3.09.  BOOKS AND RECORDS.  The books of account,  minute books and
stock record books of Company are complete and correct in all material  respects
and have been maintained in accordance  with  reasonable and customary  business
practices.  The minute  books of Company  contain  records that are complete and
correct in all material  respects of all meetings of, and corporate action taken
by (including all actions by unanimous  written  consent),  the shareholders and
directors of Company since its inception. True and complete copies of all minute
books and all stock record books of Company have  heretofore been made available
to Buyer.

     Section 3.10. ABSENCE OF CERTAIN CHANGES. As of the date of this Agreement,
Company has conducted its business in the ordinary  course  consistent with past
practices and there has not been, since December 31, 2008:

     (a) any event,  occurrence or development that has been the proximate cause
of any Company Material Adverse Effect;

     (b) any  declaration,  setting  aside or payment of any  dividend  or other
distribution  with  respect to any shares of capital  stock of  Company,  or any
repurchase, redemption or other acquisition by Company of any outstanding shares
of capital stock or other  securities of, or other  ownership  interests in, the
Company;

     (c) any amendment of any material term of any  outstanding  security of the
Company;

     (d) any  incurrence,  assumption,  amendment or guarantee by the Company of
any indebtedness for borrowed money, or any foreign currency, hedging, financial
derivatives  or  similar  transactions,  other  than in the  ordinary  course of
business and consistent with past practices;

     (e) any creation or assumption by Company of any Lien, other than Permitted
Liens, on any asset of Company;

                                       8
<PAGE>
     (f) (i) any  making of any loan,  advance  or  capital  contribution  to or
investment  in any  Person  by  Company  other  than  loans,  advances,  capital
contributions or investments made in the ordinary course of business  consistent
with past practices; or (ii) any amendment of the terms of any loan to executive
officers or directors;

     (g) any  transaction  or  commitment  made,  or any  contract or  agreement
entered into, by Company  relating to its assets or the Business  (including the
acquisition or disposition of any assets),  in either case, material to Company,
other than  transactions  and  commitments  in the  ordinary  course of business
consistent with past practices and those contemplated by this Agreement;

     (h) any material change in any method of accounting or accounting  practice
by Company.

     (i) any payment, discharge or satisfaction of any material claim, liability
or  obligation,  except in the  ordinary  course of  business or pursuant to the
terms of any Material Contract;

     (j) any material modification to a Material Contract;

     (k)  except as  required  under  applicable  law or  pursuant  to  existing
agreements,  any grant of any  severance  or  termination  pay to any  director,
officer  or  employee  of  Company,  increase  in  compensation,  bonus or other
benefits  payable under any severance or retirement or termination  pay policies
of Company,  entering into of any  employment,  deferred  compensation  or other
similar  agreement (or any amendment to any such  existing  agreement)  with any
director,  officer or employee of  Company,  except as provided in Section  7.03
below,  or adoption of any new  employee  plan or  modification  of any employee
plan,  in the  case of each of  clauses  (i)  through  (iv),  other  than in the
ordinary course of business consistent with past practices; or

     (l)  any  disposal  or  lapse  of  any  rights  to the  use of any  Company
Intellectual Property Right, which would have a Company Material Adverse Effect.

     Section 3.11. NO UNDISCLOSED  MATERIAL  LIABILITIES.  There are no material
liabilities or obligations of Company of any kind, other than:

     (a)  liabilities  or  obligations  disclosed or provided for in the Balance
Sheet or expressly set forth on SCHEDULE 4;

     (b) liabilities or obligations  incurred in the ordinary course of business
since the Balance Sheet Date, which shall be disclosed on SCHEDULE 5;

     (c)  liabilities or obligations  under existing  Material  Contracts of the
Company, which shall be disclosed on SCHEDULE 6;

     (d) liabilities or obligations under this Agreement; and

                                       9
<PAGE>
     (e) other  liabilities  or  obligations  which in the  aggregate  would not
result in a Company Material Adverse Effect.

     Section  3.12.  LITIGATION.  As of  the  date  of  this  Agreement,  to the
Knowledge of Seller and Company,  there is no judicial or administrative action,
suit or proceeding  pending or threatened  against Seller or Company or relating
to the  Business,  any of the  Company's  properties  or any of the  officers or
directors of such  Company  before any court or  arbitrator  or before or by any
Governmental  Authority that would,  individually  or in the  aggregate,  have a
Company  Material  Adverse  Effect.  The Company is not subject to any judgment,
order or decree that would result in a Company Material Adverse Effect.  Any and
all litigation which Seller has Knowledge of, whether  threatened,  pending,  or
resolved, shall be disclosed to Buyer before the Closing.

     Section  3.13.  TAXES.  (a) Seller has filed all  material  Tax Returns for
Company due prior to the date of this Agreement.  All such Tax Returns have been
correct  and  complete  in all  material  respects  and have  been  prepared  in
substantial  compliance  with all applicable  laws and  regulations  when filed.
Seller  has paid  all  material  Taxes  shown  or  required  to be shown on such
separate Tax Returns.

     (b) There are no Liens for Taxes (other than Taxes not yet due and payable)
upon any of the Company Assets.

     (c) Company has  withheld  and paid all  employment,  sales,  use and other
Taxes  required to have been  withheld and paid in  connection  with any amounts
paid or owing to any employee,  independent contractor,  creditor or other third
party.

     (d) To the  Knowledge  of Seller,  there is no  pending  or any  threatened
dispute or claim  concerning  any  material  Tax  liability  of Company  for any
taxable period during which Company was a member of Seller's Affiliated Group.

     Section  3.14.   EMPLOYEE  PLANS.   Seller  has  provided  Buyer  with  all
information regarding employee compensation plans.

     (a) Company does not presently sponsor,  maintain or contribute to, and has
not in the past  sponsored,  maintained or contributed to, or agreed to sponsor,
maintain or  contribute  to, any pension  plan,  nor is it required to under any
existing law of the United States.

     (b)  Labor  Matters.  As of the date of this  Agreement  and to the best of
Seller's Knowledge:

          (i) there are no controversies  pending or threatened  between Company
     and any of its employees;

          (ii)  Company has not  breached in any  material  respect or otherwise
     failed  to  comply  in any  material  respect  with  any  provision  of any
     collective  bargaining agreement applicable to persons employed by Company,

                                       10
<PAGE>
     nor has any such breach or failure been alleged,  and there are no material
     grievances outstanding against Company thereunder;

          (iii)  there is no  petition  pending  before the  National  Mediation
     Board, as defined in 45 U.S.C. ss. 8, as amended,  seeking certification or
     any change in certification of a labor  representative  with respect to any
     craft or class of employees of Company;

          (iv) there is no strike,  slowdown,  work  stoppage,  labor  action or
     lockout or threat thereof,  by or with respect to any employees of Company;
     and

          (v) there is no complaint  for  violation of the Railway Labor Act, 45
     U.S.C.  ss. 8, as amended,  against Company pending before any Governmental
     Authority.

     Section 3.15.  CERTAIN BUSINESS  PRACTICES.  Neither Company nor any of its
directors,  officers,  employees or any other person authorized to act on behalf
of the Company has used any corporate funds for unlawful  contributions,  gifts,
entertainment or other unlawful  expenses relating to political  activity,  made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic  political  parties or campaigns  from  corporate  funds,
violated any provision of the Foreign  Corrupt  Practices Act of 1977, 15 U.S.C.
ss.ss. 78dd-1, et seq., as amended, or made any bribe, rebate, payoff, influence
payment,  kickback or other similar  unlawful payment to any foreign or domestic
government official or employee from corporate funds.

     Section 3.16.  ENVIRONMENTAL  MATTERS.  Except as to matters that would not
have a Company Material Adverse Effect, to the best of Seller's Knowledge:

     (a) no  complaint  has been  filed,  no penalty has been  assessed,  and no
third-party  investigation,  claim, suit,  proceeding or review is pending or is
threatened by any Governmental Authority or other Person against Company and, in
each case, alleging or relating to any violation by Company of any environmental
law;

     (b) Company is in compliance with all  environmental  laws and has obtained
and is in  compliance  with all  permits,  licenses,  franchises,  certificates,
approvals  and other  similar  authorizations  from any  Governmental  Authority
(collectively,  "ENVIRONMENTAL  PERMITS")  charged with enforcing  environmental
laws as they pertain to conduct the Business performed by Company.

     Section  3.17.  COMPLIANCE  WITH LAWS AND COURT  ORDERS.  The Company is in
compliance with all, and is not under  investigation with respect to, applicable
Laws

     Section 3.18.  EMPLOYEE  MATTERS.  Company is in compliance in all material
respects  with  all  applicable  Laws   respecting   employment  and  employment
practices,  terms, and conditions of employment,  and wages and hours and is not
engaged in any unfair labor practice.

                                       11
<PAGE>
     Section  3.19.  TITLE TO ASSETS;  LIENS.  Company has good title to all the
properties and assets reflected in the Balance Sheet and all assets purchased by
the Company since the Balance Sheet Date free and clear of all Liens (other than
Permitted Liens). At the time of the Closing, the assets of the Company shall be
adequate  in all  material  respects  to allow Buyer at such time to conduct the
Business substantially as it is currently being conducted.

     Section 3.20. MATERIAL CONTRACTS.

     (a) Except as set forth in SCHEDULE  6,  Company is not a party to or bound
by:

          (i) any lease or lease of real property  providing for annual  rentals
     of Thirty Thousand Dollars ($30,000) or more;

          (ii) any  agreement for the purchase of  materials,  supplies,  goods,
     services, equipment or other assets (other than pursuant to purchase orders
     made in the  ordinary  course of business  consistent  with past  practice)
     providing  for  annual  payments  by  Company  of  Fifty  Thousand  Dollars
     ($50,000) or more;

          (iii)  any  material  partnership,  joint  venture  or  other  similar
     agreement or arrangement;

          (iv) any agreement  relating to indebtedness for borrowed money or the
     deferred  purchase  price of property  (in either case,  whether  incurred,
     assumed,  guaranteed  or secured by any asset),  except any such  agreement
     with an  outstanding  principal  amount not exceeding One Hundred  Thousand
     Dollars ($100,000);

          (v) any agreement  that limits in any material  respect the freedom of
     Company to compete  in any line of  business,  with any person or entity in
     any area for any length of time; or

          (vi) other than as  contemplated  by this  Agreement,  any contract or
     commitment requiring, after the date hereof, the mortgage, pledge, sale, or
     disposal of assets with a value in excess of One Hundred  Thousand  Dollars
     ($100,000) or release, grant, or transfer of Company rights with a value in
     excess of One Hundred Thousand Dollars ($100,000).

     (b) Each  agreement,  contract,  plan,  lease,  arrangement  or  commitment
required  to be  disclosed  pursuant  to this  section  is a valid  and  binding
agreement of Company and is in full force and effect,  and to the best Knowledge
of both Company and Seller,  Company is not in default or breach under the terms
of any such agreement, contract, plan, lease, arrangement or commitment.

     Section 3.22.  INSURANCE.  Seller has made available to Buyer copies of all
insurance  policies  providing  coverage  in  favor  of  Company  or  any of its
properties,   including  "all  risk"  insurance  policies   (collectively,   the
"INSURANCE POLICIES"). There are no material claims by Company pending under any
of the Insurance  Policies as to which coverage has been  questioned,  denied or

                                       12
<PAGE>
disputed  by the  underwriters  of such  policies  or in  respect  of which such
underwriters  have reserved their rights.  As of the date hereof,  all Insurance
Policies  are in full force and effect,  all premiums due thereon have been paid
and  Company  is in  compliance  in all  material  respects  with the  terms and
provisions of the Insurance  Policies.  True and correct copies of the Insurance
Policies are attached as SCHEDULE 7.

     Section 3.23.  INTELLECTUAL  PROPERTY. (a) No Company Intellectual Property
Right is subject  to any  outstanding  judgment,  injunction,  order,  decree or
agreement  restricting  the  use  thereof  by  Company  or,  for  those  Company
Intellectual Property Rights owned by Company, restricting the licensing thereof
by Company to any Person.

     (b)  Except  as  expressly  disclosed  to Buyer,  Company  has the sole and
exclusive right to use Company  Intellectual  Property Rights, and no consent of
any third party is required for the use thereof by Company following the Closing
Date. To the Knowledge of Company and/or Seller, no claims have been asserted by
any Person challenging the use of any Company  Intellectual  Property Rights, or
challenging or questioning the validity or  effectiveness of any such license or
agreement.  No  additional  Intellectual  Property  Rights  other  than  Company
Intellectual  Property  Rights are  necessary  or material to the conduct of the
Business.

                                   ARTICLE 4
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby makes the following  representations  and warranties to Seller
as of the date  hereof  (except to the extent  expressly  relating to a specific
date, in which event such  representation  or warranty  shall be made as of such
date),  which shall be unaffected by any  investigation  heretofore or hereafter
made.

     Section 4.01.  CORPORATE  EXISTENCE AND POWER.  Buyer is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction of incorporation  and has all corporate powers required to carry on
its business as now conducted.

     Section  4.02.  CORPORATE  AUTHORIZATION.   The  execution,   delivery  and
performance  by Buyer of this  Agreement  and the  consummation  by Buyer of the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
corporate and shareholder action by Buyer. Buyer has full power and authority to
execute and deliver this  Agreement  and to perform its  obligations  hereunder.
This  Agreement has been duly executed and delivered by Buyer and is a valid and
binding  obligation  of  Buyer,  enforceable  in  accordance  with its terms and
conditions.

     Section  4.03.  GOVERNMENTAL  AUTHORIZATION.  The  execution,  delivery and
performance  by Buyer of this  Agreement  and the  consummation  by Buyer of the
transactions  contemplated  hereby  requires  no action by or in respect  of, or
filing with, any Governmental Authority

                                       13
<PAGE>
     Section 4.04. NONCONTRAVENTION.  The execution, delivery and performance by
Buyer of this  Agreement  and the  consummation  by  Buyer  of the  transactions
contemplated  hereby do not and will not (i)  contravene  or  conflict  with the
articles  of  incorporation  or bylaws of Buyer,  assuming  compliance  with the
matters referred to in Section 4.03, contravene or conflict with or constitute a
violation  of any  provision  of any Law binding  upon or  applicable  to Buyer,
result in a  violation  or a breach of, or  constitute  a default or require any
consent  under  or  give  rise  to  a  right  of  termination,  cancellation  or
acceleration  of any right or obligation of Buyer or to a loss of any benefit to
which  Buyer is  entitled  under  any  provision  of any note,  bond,  mortgage,
indenture, lease, agreement,  contract,  obligation or other instrument to which
Buyer is bound, or any license,  permit or other similar  authorization  held by
Buyer.

     Section 4.05.  LITIGATION.  As of the date of this  Agreement,  there is no
judicial  or  administrative  action,  suit  or  proceeding  pending,  or to the
Knowledge of Buyer,  threatened against Buyer before any Governmental  Authority
which in any manner challenges or seeks to prevent,  enjoin, alter or materially
delay the transactions contemplated by this Agreement.

     Section  4.06  TITLE  TO  SHARES;   RESTRICTIONS  ON  TRADING.   The  Stock
Consideration,  as of the date of transfer to Seller, shall be free and clear of
(a) any Liens and (b) any  restrictions  on trading and shall be freely tradable
on the OTC Bulletin Board.

                                   ARTICLE 5
                             COVENANTS OF THE SELLER

     Seller agrees that:

     Section 5.01. CONDUCT OF THE COMPANY.  Except as expressly  contemplated by
this  Agreement  or as otherwise  consented  to by Buyer in writing,  during the
period from the date hereof and continuing until the Closing Date,  Seller shall
cause Company to:

     (a)  conduct  its  business  in the  usual,  regular  and  ordinary  course
consistent with past practices;

     (b) not  mortgage,  pledge,  sell or dispose of any  Company  assets with a
value of Three  Thousand  Dollars  ($3,000)  or more in the  aggregate,  and not
waive,  release,  grant, transfer or permit to lapse any Company rights of value
in excess of Five Thousand Dollars ($5,000) in the aggregate;

     (c) comply in all material  respects  with all  provisions  of any Material
Contracts to which Company is a party;

     (d) not take any action that would result in the  representation  set forth
in Section 3.10(k) being untrue;

                                       14
<PAGE>
     (e) not enter into any new or amended contract,  agreement,  side letter or
memorandum of understanding with any unions representing employees of Company;

     (f) not enter into any  agreement  or  understanding  with any other Person
outside  of the  ordinary  course of  business  consistent  with past  practices
involving  expenditures  in excess of Three  Thousand  Dollars  ($3,000)  in the
aggregate or involving terms of duration or commitments in excess of 3 months;

     (g) not enter into any  agreement  or  understanding  with any other Person
containing any  exclusivity,  non-competition  or similar  provisions that would
materially restrict the ability of Company to compete;

     (h) not  adopt  or  propose  any  change  in its  organizational  documents
(including bylaws); and

     (i) not merge or consolidate with any other Person.

     Section 5.02. CONFIDENTIALITY.

     (a) After the Closing Date, Seller will hold, and will use its best efforts
to cause its respective officers, directors,  employees,  accountants,  counsel,
consultants,  advisors and agents to hold, in  confidence,  unless  compelled to
disclose by judicial or administrative  process or by other requirements of law,
all confidential  documents and information  concerning  Company,  except to the
extent that such  information can be shown to have been: (i) previously known on
a non-confidential  basis by either Seller or Company; (ii) in the public domain
through no fault of Seller or his Affiliates;  or (iii) later lawfully  acquired
by Seller  from  sources  other than those  related  to his prior  ownership  of
Company.  The  obligation of Seller to hold any such  information  in confidence
shall  be  satisfied  if he  exercises  the  same  care  with  respect  to  such
information as he would take to preserve the  confidentiality of his own similar
information.

     Section  5.03.  NOTICES OF CERTAIN  EVENTS.  From the date hereof until the
Closing Date, Seller shall promptly notify Buyer of:

     (a)  any  actions,  suits,  claims,   investigations  or  proceedings:  (i)
commenced  against Company or Seller; or (ii) in respect of which Company has an
indemnification obligation and as to which Seller has Knowledge that, if pending
on the date of this  Agreement,  would have been required to have been disclosed
pursuant to Section 3.12;

     (b) any  material  agreement  or  litigation,  or  consent  or order of the
Federal  Aviation  Administration  or Department of  Transportation,  related to
Company  (other than those that apply  generally to air carriers or companies in
the airline industry); and

     (c) any  incidents  or  accidents  occurring  on or after  the date  hereof
involving any property  owned or operated by Company or Seller that has resulted
or would  reasonably  be  expected  to result in  casualty  damages or losses in
excess of Twenty Thousand Dollars ($20,000).

                                       15
<PAGE>
                                   ARTICLE 6
                               COVENANTS OF BUYER

     Buyer agrees that:

     Section  6.01.  CONFIDENTIALITY.  Prior to the  Closing  Date and after any
termination of this Agreement,  Buyer and its Affiliates will hold, and will use
their best efforts to cause their  respective  officers,  directors,  employees,
accountants,  counsel, consultants,  advisors and agents to hold, in confidence,
all  confidential  documents  and  information  concerning  Company  and  Seller
furnished  to  Buyer  or its  Affiliates  in  connection  with  the  transaction
contemplated by this Agreement.

     Section 6.02. TRADEMARKS; TRADENAMES. Buyer shall not permit Company to use
any of the marks or names of  Seller  that the  parties  agree  shall  belong to
Seller after the Closing.

     Section 6.03 TRADING OF SHARES.  Buyer covenants and agrees that neither it
nor any of its  Affiliates  will trade any of the Buyer's shares on December 31,
2008.

     Section 6.04 ACCESS TO  INFORMATION.  On and after the Closing Date,  Buyer
will afford, promptly to Seller and its agents reasonable access to its books of
account,  financial  and other  records  (including  accountant's  work papers),
information,  employees  and  auditors to the extent  reasonably  necessary  for
Seller in connection with any audit, investigation, dispute or litigation (other
than any dispute or litigation  involving  the Buyer)  relating to the Business;
PROVIDED  that any such  access  by  Seller  shall be  conducted  during  normal
business  hours  and  shall  not  unreasonably  interfere  with the  conduct  of
Company's  Business  and Seller  shall bear all of the  out-of-pocket  costs and
expenses (including reasonable  attorneys' fees, but excluding  reimbursement of
Buyer for general overhead,  salaries and employee benefits) reasonably incurred
in connection with the foregoing.

     Section  6.05  REPORTS  UNDER  THE  EXCHANGE  ACT.  With a view  to  making
available  to the  Seller  the  benefits  of  Rule  144  promulgated  under  the
Securities Act or any similar rule or regulation of the SEC that may at any time
permit  the  Seller  to sell  securities  of the  Buyer  to the  public  without
registration ("RULE 144") the Buyer agrees to:

     (a)  make  and keep  public  information  available,  as  those  terms  are
understood and defined in Rule 144;

     (b) file with the SEC in a timely  manner all reports  and other  documents
required of the Buyer under the  Securities  Act and the Exchange Act so long as
Buyer remains  subject to such  requirements  and the filing of such reports and
other documents as are required by the applicable provisions of Rule 144; and

     (c) furnish to Seller so long as Seller owns shares of Buyer, promptly upon
request,  (i) a written  statement  by the Buyer that it has  complied  with the
reporting  requirements  of Rule 144,  (ii) a copy of the most recent  annual or
quarterly  report of the Buyer and such other  reports and documents so filed by

                                       16
<PAGE>
Buyer, and (iii) such other information as may be reasonably requested to permit
Seller to sell such securities pursuant to Rule 144 without registration.

                                   ARTICLE 7
                         COVENANTS OF BUYER AND SELLER

     Buyer and Seller agree that:

     Section 7.01. BEST EFFORTS;  FURTHER  ASSURANCES.  (a) Subject to the terms
and conditions of this  Agreement,  Buyer and Seller will use their best efforts
to take, or cause to be taken,  all actions and to do, or cause to be done,  all
things   necessary  or  desirable  under  applicable  laws  and  regulations  to
consummate the  transactions  contemplated by this  Agreement.  Seller and Buyer
shall, and the Seller shall cause Company prior to the Closing,  and Buyer shall
cause the  Company  after  the  Closing,  to  execute  and  deliver  such  other
documents,  certificates,  agreements  and other writings and to take such other
actions as may be necessary or  desirable  in order to  consummate  or implement
expeditiously the transactions contemplated by this Agreement.

     Section 7.02. PUBLIC ANNOUNCEMENTS.  The Parties agree to consult with each
other  before  issuing  any press  release or making any public  statement  with
respect to this Agreement or the  transactions  contemplated  hereby and, except
for any press  releases  and  public  announcements  the  making of which may be
required by applicable law or any listing agreement with any national securities
exchange,  will  not  issue  any such  press  release  or make  any such  public
statement prior to such consultation.

     Section 7.03  EMPLOYMENT  AGREEMENT.  Both Parties agree that within thirty
(30) days of the Closing  Date,  Seller shall have  entered  into an  employment
agreement with Buyer or Company on mutually  acceptable terms.  Buyer and Seller
will negotiate in good faith all of the material terms of the agreement and will
use best faith efforts to complete and execute said agreement within thirty (30)
days of the Closing  Date.  During such  thirty  (30) day period,  Seller  shall
continue to operate the Business in accordance with past practices and shall not
be liable for any losses incurred or sustained by the Business.

                                   ARTICLE 8
                              DEFAULT AND REMEDIES

     Section 8.01. EVENT OF DEFAULT.

     (a)  The  occurrence  of any  one or all  of  the  following  events  shall
constitute an "EVENT OF DEFAULT" under this Agreement:

          (i) Buyer's  failure to pay in full the Purchase  Price in  accordance
     with the terms of this Agreement, the Escrow Agreement and the Note;

                                       17
<PAGE>
          (ii) Any  representation  or warranty  made or deemed made by Buyer in
     this Agreement shall prove to have been false or misleading in any material
     respect on the date when made or deemed to have been made;

          (iii)  Buyer's  breach of any of the  covenants  made by Buyer in this
     Agreement;

          (iv)  Any   bankruptcy,   insolvency,   reorganization,   arrangement,
     readjustment,  liquidation, dissolution, or similar proceeding, domestic or
     foreign,  is  instituted  by or against Buyer or Buyer shall take any steps
     toward, or to authorize, such a proceeding;

          (v) Buyer's breach of the covenant in Section 2.04, above; or

          (vi) Buyer no longer being quoted on the OTC Bulletin Board.

     Section 8.02. REMEDIES Buyer agrees that if an Event of Default occurs, the
Seller  shall have the right to the return of the  Certificates  from the Escrow
Agent and  Seller  shall  also be  entitled  to retain  any  portion of the Cash
Consideration already paid as it sole remedy.

                                   ARTICLE 9
                                EMPLOYEE BENEFITS

     Section  9.01.  EMPLOYEE  BENEFITS.  Nothing  herein  shall be construed to
require Company or Buyer to continue after Closing the employment of any Company
employee or to otherwise  interfere with  Company's  right to terminate any such
employees at any time after Closing.

                                   ARTICLE 10
                              CONDITIONS TO CLOSING

     Section  10.01.   CONDITIONS  TO  OBLIGATIONS  OF  BUYER  AND  SELLER.  The
obligations  of Buyer and Seller to  consummate  the  Closing are subject to the
satisfaction of the following conditions:

     (a) no provision of any Law shall prohibit the consummation of the Closing;
and

     (b) there shall not be in effect any Law  enacted,  enforced,  promulgated,
issued or  deemed  applicable  to the  transactions  contemplated  hereby of any
Governmental  Authority that makes illegal or otherwise  materially restrains or
prohibits the consummation of the transactions contemplated hereby.

     Section 10.02.  CONDITIONS TO OBLIGATION OF BUYER.  The obligation of Buyer
to  consummate  the  Closing  is subject to the  satisfaction  of the  following
further conditions:

     (a) Seller shall have performed or complied with, in all material respects,
all of the covenants and  agreements  required to be performed by it on or prior
to the Closing Date under this Agreement, and the representations and warranties

                                       18
<PAGE>
of Seller  set forth in this  Agreement  shall be true at and as of the  Closing
Date as if  made at and as of such  time  (except  as to any  representation  or
warranty which speaks as of a specific date, which must be true as of such date;
and

     (b) there shall not have occurred any Company Material Adverse Effect after
the date hereof  which is  continuing  on the Closing Date or which has not been
disclosed to Buyer in writing.

     Section 10.03.  CONDITIONS TO OBLIGATION OF THE SELLERS.  The obligation of
Seller to  consummate  the Closing is subject to  satisfaction  of the following
further conditions:

     (a) Buyer's performance and compliance in all material respects with all of
the covenants and  agreements  required to be performed by it on or prior to the
Closing Date under this  Agreement,  and the  representations  and warranties of
Buyer set forth in this Agreement shall be true at and as of the Closing Date as
if made at and as of such time  (except  as to any  representation  or  warranty
which speaks as of a specific date, which must be true as of such date).

                                   ARTICLE 11
                            SURVIVAL; INDEMNIFICATION

     Section   11.01.   SURVIVAL  OF   REPRESENTATIONS   AND   WARRANTIES.   All
representations and warranties  contained in this Agreement shall be true at the
time of  each  Party's  execution  of  this  Agreement  and  shall  survive  the
execution,  delivery and  acceptance  of this  Agreement  and the closing of the
transactions  described  herein for a period of one year from the Closing  Date,
unless otherwise specified herein.

     Section  11.02  INDEMNIFICATION.  Effective at and after the Closing  Date,
Seller hereby  indemnifies  Buyer and its Affiliates  against and agrees to hold
each of them  harmless  from any and all  damage,  loss and  expense  (including
reasonable  expenses of  investigation,  attorneys'  fees and expenses,  and any
fines or penalties imposed) actually suffered ("DAMAGES") by Buyer or any of its
Affiliates arising out of any  misrepresentation  or breach of representation or
warranty (each such misrepresentation and breach, a "WARRANTY BREACH") or breach
of covenant or agreement  made in or to be performed by Seller  pursuant to this
Agreement.

     (b) Effective at and after the Closing, Buyer hereby indemnifies Seller and
its Affiliates against and agrees to hold each of them harmless from any and all
Damages actually suffered by Seller or any of its Affiliates  arising out of any
Warranty  Breach or breach of covenant or  agreement  made or to be performed by
Buyer pursuant to this Agreement.

     Section  11.03.  PROCEDURES.  (a) The party seeking  indemnification  under
Section  11.01 (the  "INDEMNIFIED  PARTY")  agrees to give prompt  notice to the
party  against  whom  indemnity  is sought  (the  "INDEMNIFYING  PARTY")  of the

                                       19
<PAGE>
assertion of any claim, or the  commencement  of any suit,  action or proceeding
("CLAIM")  in respect of which  indemnity  may be sought  under such Section and
will provide the  Indemnifying  Party such information with respect thereto that
the  Indemnifying  Party may  reasonably  request.  The failure to so notify the
Indemnifying  Party shall not relieve the Indemnifying  Party of its obligations
hereunder,  except to the extent such failure shall have adversely  affected the
Indemnifying Party.

     (b) The Indemnifying  Party shall be entitled to participate in the defense
of any Claim  asserted by any third party ("THIRD PARTY CLAIM") and,  subject to
the  limitations  set forth in this  Section,  shall be  entitled  to assume the
control  of and  appoint  lead  counsel  for such  defense,  in each case at its
expense.

     (c) If the  Indemnifying  Party shall  assume the control of the defense of
any Third Party Claim in accordance  with the  provisions of this Section 11.03:
(i) the  Indemnifying  Party  shall  obtain  the prior  written  consent  of the
Indemnified  Party  (which  shall  not  be  unreasonably  withheld,  delayed  or
conditioned)  before entering into any settlement of such Third Party Claim, but
only  if the  settlement  does  not  release  the  Indemnified  Party  from  all
liabilities  and  obligations  with  respect to such Third Party Claim or if the
settlement  imposes injunctive or other equitable relief against the Indemnified
Party;  and (ii) the  Indemnified  Party shall be entitled to participate in the
defense of such Third Party Claim and to employ  separate  counsel of its choice
for such purpose.  The fees and expenses of such separate  counsel shall be paid
by the Indemnified  Party. The Indemnifying  Party shall have no indemnification
obligations  with  respect to any Third Party Claim that shall be settled by the
Indemnified  Party without the prior written consent of the Indemnifying  Party,
which consent shall not be unreasonably withheld, delayed or conditioned.

     (d) Each Party shall cooperate,  and cause their  respective  Affiliates to
cooperate,  in the  defense or  prosecution  of any Third  Party Claim and shall
furnish or cause to be furnished such records,  information  and testimony,  and
attend such conferences,  discovery proceedings, hearings, trials or appeals, as
may be reasonably  requested in connection  therewith.  Indemnified  Party shall
keep  Indemnifying  Party fully informed of the defense of any Third Party Claim
conducted by such Indemnified Party.

     (e) Each  Indemnified  Party  shall use  reasonable  efforts to collect any
amounts available under insurance coverage,  or from any other Person alleged to
be responsible, for any Damages payable under Section 11.01.

     Section 11.04. KNOWLEDGE. Notwithstanding anything in this Agreement to the
contrary,   the  rights  of  the  Parties  to   indemnification   based  on  the
representations and warranties set forth in this Agreement shall not be affected
by any  investigation  conducted with respect to, or any Knowledge  acquired (or
capable of being  acquired)  about the accuracy or  inaccuracy  of or compliance
with, any such representation or warranty.

                                       20
<PAGE>
                                   ARTICLE 12
                                   TERMINATION

     Section 12.01. GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:

     (a) by mutual written agreement of Seller and Buyer;

     (b)  by  either  Seller  or  Buyer  if  consummation  of  the  transactions
contemplated  hereby would  violate any  non-appealable  final order,  decree or
judgment of any Governmental Authority having competent jurisdiction; or

     (c) by Buyer if: (i) Seller  shall have filed a petition  for relief  under
the Bankruptcy  Code prior to the Closing;  or (ii) an involuntary  petition for
relief under the Bankruptcy Code is filed against Seller prior to the Closing by
any party other than (a) Buyer or its  Affiliates;  or (b) any Person  acting at
the direction of or in concert with Buyer or its Affiliates and such petition is
not dismissed prior to the Closing.

     The party desiring to terminate this Agreement  pursuant to clauses of this
Section 12.01 shall give notice of such termination to the other party.

     Section 12.02.  EFFECT OF  TERMINATION.  If this Agreement is terminated as
permitted by Section 12.01,  such termination  shall be without liability of any
Party (or any stockholder,  director,  officer,  employee,  agent, consultant or
representative  of such  Party) to any  other  Party to this  Agreement  and the
Parties will have no further obligations under this Agreement. The provisions of
Section 6.01, 13.03, 13.05, 13.06 and 13.07 shall survive any termination hereof
pursuant to Section 12.01.

                                   ARTICLE 13
                                  MISCELLANEOUS

     Section  13.01.  NOTICES.  All notices and other  communications  hereunder
shall be in writing  (including  facsimile  transmission,  with  confirmation of
receipt)  and  shall be  deemed to have  been  duly  given:  (i) when  delivered
personally;  (ii) when received by the addressee, if sent by Express Mail, FedEx
Express or other express delivery service with proof of delivery; or (iii) three
(3) business  days after being sent by  registered  or certified  mail,  postage
paid, return receipt requested, in each case to the other party at the following
addresses  (or to such other  address for a party as shall be  specified by like
notice,  provided  that notices of a change of address  shall be effective  only
upon receipt thereof):

                                       21
<PAGE>
IF TO BUYER TO:

Air Transport Group Holdings, Inc.
Attn:  Arnold Leonora
7453 Woodruff Way
Stone Mountain, Georgia  30087

IF TO SELLER TO:

Daniel J. Pierson
14750 SW 152nd Court
Miami, Florida  33196

WITH A COPY TO:

K&L Gates, LLP
Attention: Marc H. Auerbach, Esq.
200 S. Biscayne Blvd.
Suite 3900
Miami, Florida 33131

All such notices,  requests and other communications shall be deemed received on
the date of receipt by the recipient  thereof if received prior to 5 p.m. in the
place of  receipt  and  such  day is a  Business  Day in the  place of  receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.

     Section 13.02.  AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement
may be amended or waived only if such  amendment  or waiver is in writing and is
signed, in the case of an amendment,  by each Party to this Agreement, or in the
case of a waiver, by the Party against whom the waiver is to be effective.

     (b) No failure  or delay by any Party in  exercising  any  right,  power or
privilege  hereunder shall operate as a waiver thereof,  nor shall any single or
partial  exercise  thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
provided  shall be  cumulative  and not  exclusive  of any  rights  or  remedies
provided by law.

     Section 13.03. EXPENSES. Except as otherwise provided herein, all costs and
expenses  incurred in connection  with this Agreement shall be paid by the Party
incurring such cost or expense.

     Section  13.04.  SUCCESSORS  AND ASSIGNS.  The provisions of this Agreement
shall be binding  upon and inure to the benefit of the Parties  hereto and their
respective successors and assigns;  provided that no Party may assign,  delegate

                                       22
<PAGE>
or otherwise  transfer  any of its rights or  obligations  under this  Agreement
without the consent of each other Party hereto.

     Section  13.05.  GOVERNING  LAW.  This  Agreement  shall be governed by and
construed in accordance with the law of the State of Florida,  without regard to
the conflicts of law rules of such state.

     Section 13.06.  VENUE.  The parties  hereto agree that any suit,  action or
proceeding  seeking to enforce any provision of, or based on any matter  arising
out of or in connection  with, this Agreement or the  transactions  contemplated
hereby shall be brought in a court of law in the United  States  District  Court
for the Southern  District of Florida.  In any such suit,  action or  proceeding
each party  irrevocably  waives,  to the fullest  extent  permitted  by law, any
objection  that it may now or  hereafter  have to the laying of the venue of any
such suit,  action or proceeding in any such court or that any such suit, action
or  proceeding  brought  in any such court has been  brought in an  inconvenient
forum.

     Section  13.07.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES  HERETO  HEREBY
IRREVOCABLY  WAIVES  ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING
ARISING OUT OF OR RELATED TO THIS  AGREEMENT  OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY.

     Section 13.08. COUNTERPARTS; EFFECTIVENESS; THIRD-PARTY BENEFICIARIES. This
Agreement may be signed in any number of counterparts  which may be delivered by
facsimile or other electronic transmission, including email, each of which shall
be an  original,  with the same effect as if the  signatures  thereto and hereto
were upon the same  instrument.  No provision  of this  Agreement is intended to
confer any rights, benefits, remedies, obligations or liabilities hereunder upon
any Person other than the parties  hereto and their  respective  successors  and
assigns.

     Section 13.09.  ENTIRE AGREEMENT.  This Agreement  (including the Schedules
and Exhibits hereto)  constitutes the entire agreement  between the Parties with
respect  to the  subject  matter  of this  Agreement  and  supersedes  all prior
agreements and understandings,  both oral and written,  between the Parties with
respect to the subject matter of this Agreement.

     Section  13.10.   SEVERABILITY.   If  any  term,  provision,   covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or  invalidated
so long as the economic and legal  substance  of the  transactions  contemplated
hereby is not affected in any manner materially  adverse to any Party. Upon such
a  determination,  the  Parties  shall  negotiate  in good faith to modify  this
Agreement  so as to effect  the  original  intent of the  Parties  as closely as
possible in an  acceptable  manner in order that the  transactions  contemplated
hereby be consummated as originally contemplated to the fullest extent possible.

                            [SIGNATURE PAGE FOLLOWS]

                                       23
<PAGE>
IN WITNESS  WHEREOF,  the Parties  hereto have executed this Agreement as of the
day and year first written above.

                             DANIEL J. PIERSON

                             -------------------------------------
                             Daniel J. Pierson, Individually

                             AIR TRANSPORT GROUP HOLDINGS, INC.

                             By:
                                ----------------------------------

                             Name:
                                  --------------------------------

                             Title:
                                   -------------------------------

                                       24

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