Document:

This
      Note
      is a Global Security within the meaning of the Indenture hereinafter referred
      to
      and is registered in the name of the Depository named below or a nominee of
      the
      Depository. This Note is not exchangeable for Notes registered in the name
      of a
      Person other than the Depository or its nominee except in the limited
      circumstances described herein and in the Indenture, and no transfer of this
      Note (other than a transfer of this Note as a whole by the Depository to a
      nominee of the Depository or by a nominee of the Depository to the Depository
      or
      another nominee of the Depository) may be registered except in the limited
      circumstances described herein.

    

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company, a New York corporation (the "Depository"), to the Company or
      its
      agent for registration of transfer, exchange, or payment, and any certificate
      issued is registered in the name of Cede & Co. or in such other name as is
      requested by an authorized representative of the Depository (and any payment
      is
      made to Cede & Co. or to such other entity as is requested by an authorized
      representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
      FOR
      VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
      owner hereof, Cede & Co., has an interest herein.

    

    CITIGROUP
      INC.

    Floating
      Rate Notes due May 15, 2018

     

    
      	
              REGISTERED

            	
              REGISTERED

            

    

    

    CUSIP:
      172967 ET 4

    ISIN:
      US172967ET43

    Common
      Code: 036399937

     

    
      	No. R-___	
              $___________

            

    

    

    CITIGROUP
      INC., a Delaware corporation (the "Company", which term includes any successor
      Person under the Indenture), for value received, hereby promises to pay to
      Cede
& Co., or registered assigns, the principal sum of $___________ on May 15,
      2018 and to pay interest thereon from and including May 13, 2008 or from the
      most recent Interest Payment Date to which interest has been paid or duly
      provided for, quarterly, on February 15, May 15, August 15 and November 15
      of
      each year, commencing November 15, 2008, at the rate per annum for each Interest
      Period of three-month LIBOR, determined as provided herein, plus 1.70% until
      the
      principal hereof is paid or made available for payment. The interest so payable,
      and punctually paid or duly provided for, on any Interest Payment Date will,
      as
      provided in the Indenture, be paid to the Person in whose name this Note is
      registered at the close of business on the Record Date for such interest, which
      shall be the Business Day immediately preceding such Interest Payment
      Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Any
      such
      interest not so punctually paid or duly provided for will forthwith cease to
      be
      payable to the holder on such Record Date and may either be paid to the Person
      in whose name this Note is registered at the close of business on a subsequent
      Record Date, such subsequent Record Date to be not less than five days prior
      to
      the date of payment of such defaulted interest, notice whereof shall be given
      to
      holders of Notes of this series not less than 15 days prior to such subsequent
      Record Date, or be paid at any time in any other lawful manner not inconsistent
      with the requirements of any securities exchange on which the Notes of this
      series may be listed, and upon such notice as may be required by such exchange,
      all as more fully provided in the Indenture.

    

    Interest
      hereon will be calculated on the basis of the actual number of days elapsed
      in
      an Interest Period and a 360-day year. Dollar amounts resulting from such
      calculation will be rounded to the nearest cent, with one-half cent being
      rounded upward. An "Interest Period" shall be the period from and including
      an
      Interest Payment Date (or from May 13, 2008 in the case of the first Interest
      Payment Date) to and including the day immediately preceding the next Interest
      Payment Date.

    

    If
      an
      Interest Payment Date falls on a day that is not a Business Day, such Interest
      Payment Date will be the next succeeding Business Day. If the Maturity of the
      Notes falls on a day that is not a Business Day, the payment due on Maturity
      will be postponed to the next succeeding Business Day, and no further interest
      will accrue in respect of such postponement. If a date for payment of interest
      or principal on the Notes falls on a day that is not a business day in the
      place
      of payment, such payment will be made on the next succeeding business day in
      such place of payment as if made on the date the payment was due. No interest
      will accrue on any amounts payable for the period from and after the due date
      for payment of such principal or interest.

    

    For
      these
      purposes, “Business Day” means any day which is a day on which commercial banks
      settle payments and are open for general business in The City of New York and
      London.

    

    Payment
      of the principal of and interest on this Note will be made at the office or
      agency of the Trustee maintained for that purpose in The City of New
      York.

    

    Reference
      is hereby made to the further provisions of this Note set forth on the reverse
      hereof, which further provisions shall for all purposes have the same effect
      as
      if set forth at this place.

    

    Unless
      the certificate of authentication hereon has been executed by the Trustee or
      by
      an authenticating agent on behalf of the Trustee by manual signature, this
      Note
      shall not be entitled to any benefit under the Indenture or be valid or
      obligatory for any purpose.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      under its corporate seal.

    

    Dated:
      May 13, 2008

    

    CITIGROUP
      INC.

    

    

    

    By:_________________________________

    Title:
      Chief Accounting Officer

    

    

    

    ATTEST:

    

    By:___________________________

    Title:
      Assistant Secretary

     

     

    
 

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    This
      is
      one of the Notes of the series issued under the within-mentioned
      Indenture.

    

    Dated:
      May 13, 2008

    

    THE
      BANK
      OF NEW YORK,

    as
      Trustee

    

    

    By:_________________________________

    Name:

    Title:

     

     

    -or-

    

    

    CITIBANK,
      N.A.,

    as
      Authenticating Agent

    

    

    By:_________________________________

    Name:

    Title:

     

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    This
      Note
      is one of a duly authorized issue of Securities of the Company (the "Notes"),
      issued and to be issued in one or more series under the Indenture, dated as
      of
      March 15, 1987 (as amended and supplemented to date, the "Indenture"), between
      the Company and The Bank of New York, as Trustee (the "Trustee", which term
      includes any successor trustee under the Indenture), to which Indenture and
      all
      indentures supplemental thereto reference is hereby made for a statement of
      the
      respective rights, limitations of rights, duties and immunities thereunder
      of
      the Company, the Trustee and the holders of the Notes and of the terms upon
      which the Notes are, and are to be, authenticated and delivered. This Note
      is
      one of the series designated on the face hereof, initially limited in aggregate
      principal to $550,000,000.

    

    This
      Note
      will bear interest for each Interest Period at a rate determined by Citibank,
      N.A., acting as Calculation Agent. The interest rate on this Note for a
      particular Interest Period will be a per annum rate equal to three-month LIBOR
      as determined on the related Interest Determination Date, plus 1.70%. The
      Interest Determination Date for an Interest Period will be the second London
      business day preceding such Interest Period. The Interest Determination Date
      for
      the first Interest Period was May 9, 2008. Promptly upon determination, the
      Calculation Agent will inform the Trustee and the Company of the interest rate
      for the next Interest Period. Absent manifest error, the determination of the
      interest rate by the Calculation Agent shall be binding and conclusive on the
      holders of Notes, the Trustee and the Company.

    

    A
      London
      business day is a day on which dealings in deposits in U.S. dollars are
      transacted in the London interbank market.

    

    On
      any
      Interest Determination Date, LIBOR will be equal to the offered rate for
      deposits in U.S. dollars having an index maturity of six months for the next
      Interest Period, in amounts of at least $1,000,000, as such rate appears on
      Telerate Page 3750 at approximately 11:00 a.m., London time, on such Interest
      Determination Date. If the Telerate Page 3750 is replaced by another service
      or
      ceases to exist, the Calculation Agent will use the replacing service or such
      other service that may be nominated by the British Bankers' Association for
      the
      purpose of displaying London interbank offered rates for U.S. dollar
      deposits.

    

    If
      no
      offered rate appears on Telerate Page 3750 on an Interest Determination Date
      at
      approximately 11:00 a.m., London time, then the Calculation Agent (after
      consultation with the Company) will select four major banks in the London
      interbank market and shall request each of their principal London offices to
      provide a quotation of the rate at which six-month deposits in U.S. dollars
      in
      amounts of at least $1,000,000 are offered by it to prime banks in the London
      interbank market, on that date and at that time, that is representative of
      single transactions at that time. If at least two quotations are provided,
      LIBOR
      will be the arithmetic average of the quotations provided. Otherwise, the
      Calculation Agent will select three major banks in New York City and shall
      request each of them to provide a quotation of the rate offered by them at
      approximately 11:00 a.m., New York City time, on the Interest Determination
      Date
      for loans in U.S. dollars to leading European banks having an index maturity
      of
      six months for the applicable Interest Period in an amount of at least
      $1,000,000 that is representative of single transactions at that time. If three
      quotations are provided, LIBOR will be the arithmetic average of the quotations
      provided. Otherwise, the rate of LIBOR for the next Interest Period will be
      set
      equal to the rate of LIBOR for the current Interest Period.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    The
      Luxembourg Stock Exchange shall be notified of the interest rate, the amount
      of
      the interest payment and the Interest Payment Date for a particular Interest
      Period not later than the first day of such Interest Period. Upon request from
      any Noteholder, the Calculation Agent will provide the interest rate in effect
      on this Note for the current Interest Period and, if it has been determined,
      the
      interest rate to be in effect for the next Interest Period.

    

    If
      an
      event of default (as defined in the Indenture) with respect to Notes of this
      series shall occur and be continuing, the principal of the Notes of this series
      may be declared due and payable in the manner and with the effect provided
      in
      the Indenture.

    

    The
      Indenture contains provisions for defeasance at any time of the entire
      indebtedness of this Note upon compliance by the Company with certain conditions
      set forth in Sections 11.03 and 11.04 thereof, which provisions apply to this
      Note.

    

    The
      Indenture contains provisions permitting the Company and the Trustee, without
      the consent of the holders of the Securities, to establish, among other things,
      the form and terms of any series of Securities issuable thereunder by one or
      more supplemental indentures, and, with the consent of the holders of not less
      than 66 2/3% in aggregate principal amount of Securities at the time outstanding
      which are affected thereby, to modify the Indenture or any supplemental
      indenture or the rights of the holders of Securities of such series to be
      affected, provided that no such modification will (i) extend the fixed maturity
      of any Securities, reduce the rate or extend the time of payment of interest
      thereon, reduce the principal amount thereof or the premium, if any, thereon,
      reduce the amount of the principal of Original Issue Discount Securities payable
      on any date, change the currency in which Securities are payable, or impair
      the
      right to institute suit for the enforcement of any such payment on or after
      the
      maturity thereof, without the consent of the holder of each Security so
      affected, or (ii) reduce the aforesaid percentage of Securities of any series
      the consent of the holders of which is required for any such modification
      without the consent of the holders of all Securities of such series then
      outstanding, or (iii) modify, without the written consent of the Trustee, the
      rights, duties or immunities of the Trustee.

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and interest on this Note at the
      times, place and rate, and in the coin or currency, herein
      prescribed.

    

    This
      Note
      is a Global Security registered in the name of a nominee of the Depository.
      This
      Note is exchangeable for Notes registered in the name of a person other than
      the
      Depository or its nominee only in the limited circumstances hereinafter
      described. Unless and until it is exchanged in whole or in part for definitive
      Notes in certificated form, this Note may not be transferred except as a whole
      by the Depository to a nominee of the Depository or by a nominee of the
      Depository to the Depository or another nominee of the Depository.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    The
      Notes
      represented by this Global Security are exchangeable for definitive Notes in
      certificated form of like tenor as such Notes in denominations of $1,000 and
      whole multiples of $1,000 in excess thereof only if (i) the Depository
      notifies the Company that it is unwilling or unable to continue as Depository
      for the Notes or (ii) the Depository ceases to be a clearing agency registered
      under the Securities Exchange Act of 1934, as amended, or (iii) the Company
      in
      its sole discretion decides to allow the Notes to be exchanged for definitive
      Notes in registered form. Any Notes that are exchangeable pursuant to the
      preceding sentence are exchangeable for certificated Notes issuable in
      authorized denominations and registered in such names as the Depository shall
      direct. As provided in the Indenture and subject to certain limitations therein
      set forth, the transfer of definitive Notes in certificated form is registrable
      in the register maintained by the Company in The City of New York for such
      purpose, upon surrender of the definitive Note for registration of transfer
      at
      the office or agency of the registrar, duly endorsed by, or accompanied by
      a
      written instrument of transfer in form satisfactory to the Company and the
      registrar duly executed by, the holder thereof or his attorney duly authorized
      in writing, and thereupon one or more new Notes of this series and of like
      tenor, of authorized denominations and for the same aggregate principal amount,
      will be issued to the designated transferee or transferees. Subject to the
      foregoing, this Note is not exchangeable, except for a Global Security or Global
      Securities of this issue of the same principal amount to be registered in the
      name of the Depository or its nominee.

    

    No
      service charge shall be made for any such registration of transfer or exchange,
      but the Company may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

    

    Prior
      to
      due presentment of this Note for registration of transfer, the Company, the
      Trustee and any agent of the Company or the Trustee may treat the Person in
      whose name this Note is registered as the owner hereof for all purposes, whether
      or not this Note be overdue, and neither the Company, the Trustee nor any such
      agent shall be affected by notice to the contrary.

    

    The
      Company will pay additional amounts ("Additional Amounts") to the beneficial
      owner of any Note that is a non-United States person in order to ensure that
      every net payment on such Note will not be less, due to payment of U.S.
      withholding tax, than the amount then due and payable. For this purpose, a
      "net
      payment" on a Note means a payment by the Company or a paying agent, including
      payment of principal and interest, after deduction for any present or future
      tax, assessment or other governmental charge of the United States. These
      Additional Amounts will constitute additional interest on the Note.

    

    The
      Company will not be required to pay Additional Amounts, however, in any of
      the
      circumstances described in items (1) through (13) below.

    

    
      	 	
              (1)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial
                owner:

            

    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
 

    
      	 	 	
              (a)

            	
              having
                a relationship with the United States as a citizen, resident or
                otherwise;

            

    

    
      	 	 	
              (b)

            	
              having
                had such a relationship in the past
                or

            

    

    
      	 	 	
              (c)

            	
              being
                considered as having had such a
                relationship.

            

    

    

    
      	 	
              (2)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial
                owner:

            

    

    

    
      	 	
               

            	
              (a)

            	
              being
                treated as present in or engaged in a trade or business in the United
                States;

            

    

    
      	 	
               

            	
              (b)

            	
              being
                treated as having been present in or engaged in a trade or business
                in the
                United States in the past or

            

    

    
      	 	
               

            	
              (c)

            	
              having
                or having had a permanent establishment in the United
                States.

            

    

    

    
      	 	
              (3)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld in whole or in part by reason of the beneficial owner being
                or
                having been any of the following (as such terms are defined in the
                Internal Revenue Code of 1986, as
                amended):

            

    

    

    
      	 	
               

            	
              (a)

            	
              personal
                holding company;

            

    

    
      	 	
               

            	
              (b)

            	
              foreign
                personal holding company;

            

    

    
      	 	
               

            	
              (c)

            	
              foreign
                private foundation or other foreign tax-exempt
                organization;

            

    

    
      	 	
               

            	
              (d)

            	
              passive
                foreign investment company;

            

    

    
      	 	
               

            	
              (e)

            	
              controlled
                foreign corporation or

            

    

    
      	 	
               

            	
              (f)

            	
              corporation
                which has accumulated earnings to avoid United States federal income
                tax.

            

    

    

    
      	 	
              (4)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial owner owning or having
                owned,
                actually or constructively, 10 percent or more of the total combined
                voting power of all classes of stock of the Company entitled to vote
                or by
                reason of the beneficial owner being a bank that has invested in
                a Note as
                an extension of credit in the ordinary course of its trade or
                business.

            

    

    

    For
      purposes of items (1) through (4) above, "beneficial owner" means a fiduciary,
      settlor, beneficiary, member or shareholder of the holder if the holder is
      an
      estate, trust, partnership, limited liability company, corporation or other
      entity, or a person holding a power over an estate or trust administered by
      a
      fiduciary holder.

    

    
      	 	
              (5)

            	
              Additional
                Amounts will not be payable to any beneficial owner of a Note that
                is
                a:

            

    

    

    
      	 	
               

            	
              (a)

            	
              fiduciary;

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	 	
               

            	
              (b)

            	
              partnership;

            

    

    
      	 	
               

            	
              (c)

            	
              limited
                liability company or

            

    

    
      	 	
               

            	
              (d)

            	
              other
                fiscally transparent entity

            

    

    

    
      	 	 	
              or
                that is not the sole beneficial owner of the Note, or any portion
                of the
                Note. However, this exception to the obligation to pay Additional
                Amounts
                will only apply to the extent that a beneficiary or settlor in relation
                to
                the fiduciary, or a beneficial owner or member of the partnership,
                limited
                liability company or other fiscally transparent entity, would not
                have
                been entitled to the payment of an Additional Amount had the beneficiary,
                settlor, beneficial owner or member received directly its beneficial
                or
                distributive share of the payment.

            

    

    

    
      	 	
              (6)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the failure of the beneficial owner
                or any
                other person to comply with applicable certification, identification,
                documentation or other information reporting requirements. This exception
                to the obligation to pay Additional Amounts will only apply if compliance
                with such reporting requirements is required by statute or regulation
                of
                the United States or by an applicable income tax treaty to which
                the
                United States is a party as a precondition to exemption from such
                tax,
                assessment or other governmental
                charge.

            

    

    

    
      	 	
              (7)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is collected
                or
                imposed by any method other than by withholding from a payment on
                a Note
                by the Company or a paying agent.

            

    

    

    
      	 	
              (8)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld by reason of a change in law, regulation, or administrative
                or
                judicial interpretation that becomes effective more than 15 days
                after the
                payment becomes due or is duly provided for, whichever occurs
                later.

            

    

    

    
      	 	
              (9)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld by reason of the presentation by the beneficial owner of
                a Note
                for payment more than 30 days after the date on which such payment
                becomes
                due or is duly provided for, whichever occurs
                later.

            

    

    

    
      	 	
              (10)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any:

            

    

    

    
      	 	
               

            	
              (a)

            	
              estate
                tax;

            

    

    
      	 	
               

            	
              (b)

            	
              inheritance
                tax;

            

    

    
      	 	
               

            	
              (c)

            	
              gift
                tax;

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	 	
               

            	
              (d)

            	
              sales
                tax;

            

    

    
      	 	
               

            	
              (e)

            	
              excise
                tax;

            

    

    
      	 	
               

            	
              (f)

            	
              transfer
                tax;

            

    

    
      	 	
               

            	
              (g)

            	
              wealth
                tax;

            

    

    
      	 	
               

            	
              (h)

            	
              personal
                property tax or

            

    

    
      	 	
               

            	
              (i)

            	
              any
                similar tax, assessment, withholding, deduction or other governmental
                charge.

            

    

    

    
      	 	
              (11)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment, or other governmental charge required to
                be
                withheld by any paying agent from a payment of principal or interest
                on a
                Note if such payment can be made without such withholding by any
                other
                paying agent.

            

    

    

    
      	 	
              (12)

            	
              Additional
                amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is required
                to be
                made pursuant to any European Union directive on the taxation of
                savings
                income or any law implementing or complying with, or introduced to
                conform
                to, any such directive.

            

    

    

    
      	 	
              (13)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any combination of items (1) through (12)
                above.

            

    

    

    Except
      as
      specifically provided herein, the Company will not be required to make any
      payment of any tax, assessment or other governmental charge imposed by any
      government or a political subdivision or taxing authority of such
      government.

    

    As
      used
      in this Note, "United States person" means:

    

    
      	 	
              (a)

            	
              any
                individual who is a citizen or resident of the United
                States;

            

    

    
      	 	
              (b)

            	
              any
                corporation, partnership or other entity created or organized in
                or under
                the laws of the United States;

            

    

    
      	 	
              (c)

            	
              any
                estate if the income of such estate falls within the federal income
                tax
                jurisdiction of the United States regardless of the source of such
                income
                and

            

    

    
      	 	
              (d)

            	
              any
                trust if a United States court is able to exercise primary supervision
                over its administration and one or more United States persons have
                the
                authority to control all of the substantial decisions of the
                trust.

            

    

    

    Additionally,
      "non-United States person" means a person who is not a United States person,
      and
      "United States" means the states of the United States of America and the
      District of Columbia, but excluding its territories and its
      possessions.

    

    Except
      as
      provided below, the Notes may not be redeemed prior to maturity.

     

    
      	
            	(1)	
              The
                Company may, at its option, redeem the Notes
                if:

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
 

    
      	 	 	
              (a)

            	
              the
                Company becomes or will become obligated to pay Additional Amounts
                as
                described above;

            

    

    
      	 	 	
              (b)

            	
              the
                obligation to pay Additional Amounts arises as a result of any change
                in
                the laws, regulations or rulings of the United States, or an official
                position regarding the application or interpretation of such laws,
                regulations or rulings, which change is announced or becomes effective
                on
                or after May 6, 2008 and

            

    

    
      	 	 	
              (c)

            	
              the
                Company determines, in its business judgment, that the obligation
                to pay
                such Additional Amounts cannot be avoided by the use of reasonable
                measures available to it, other than substituting the obligor under
                the
                Notes or taking any action that would entail a material cost to the
                Company.

            

    

    

    
      	 	
              (2)

            	
              The
                Company may also redeem the Notes, at its option,
                if:

            

    

    

    
      	 	 	
              (a)

            	
              any
                act is taken by a taxing authority of the United States on or after
                May 6,
                2008, whether or not such act is taken in relation to the Company
                or any
                affiliate, that results in a substantial probability that the Company
                will
                or may be required to pay Additional Amounts as described
                above;

            

    

    
      	 	 	
              (b)

            	
              the
                Company determines, in its business judgment, that the obligation
                to pay
                such Additional Amounts cannot be avoided by the use of reasonable
                measures available to it, other than substituting the obligor under
                the
                Notes or taking any action that would entail a material cost to the
                Company and

            

    

    
      	 	 	
              (c)

            	
              the
                Company receives an opinion of independent counsel to the effect
                that an
                act taken by a taxing authority of the United States results in a
                substantial probability that the Company will or may be required
                to pay
                the Additional Amounts described above, and delivers to the Trustee
                a
                certificate, signed by a duly authorized officer, stating that based
                on
                such opinion the Company is entitled to redeem the Notes pursuant
                to their
                terms.

            

    

    

    Any
      redemption of the Notes as set forth in clauses (1) or (2) above shall be in
      whole, and not in part, and will be made at a redemption price equal to 100%
      of
      the principal amount of the Notes Outstanding plus accrued interest thereon
      to
      the date of redemption. Holders shall be given not less than 30 days nor more
      than 60 days prior notice by the Trustee of the date fixed for such
      redemption.

    

    All
      terms
      used in this Note which are defined in the Indenture shall have the meanings
      assigned to them in the Indenture. The Notes are governed by the laws of the
      State of New York.

    

    
      
         

      

      
        11AGREEMENT
        AND PLAN OF MERGER

    

     

    among

     

    GCA
      I
      ACQUISITION CORP., a Delaware Corporation,

    

    BIXBY
      ENERGY ACQUISITION CORP., a Delaware Corporation,

    

    BIXBY
      ENERGY SYSTEMS, INC., a Delaware Corporation

    

    and

    

    ROBERT
      A.
      WALKER, an Individual

    

    _____

    

    Dated:
      May 7, 2008

     

      
        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    
      	
              Section

            	
              Page

            
	 	 
	
              ARTICLE
                I - THE MERGER

            	 
	
              1.1
                

            	
              The
                Merger

            	
              2

            
	
              1.2
                

            	
              Effective
                Time; Closing

            	
              2

            
	
              1.3
                

            	
              Effects
                of the Merger

            	
              2

            
	
              1.4
                

            	
              Post-Merger
                Actions

            	
              3

            
	
              1.5
                

            	
              Further
                Assurances

            	
              3

            
	 	 	 
	
              ARTICLE
                II - CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

            	 
	
              2.1
                

            	
              Conversion
                of Securities

            	
              4

            
	
              2.2
                

            	
              Exchange
                of Securities and Certificates

            	
              9

            
	
              2.3
                

            	
              Dissenters'
                Rights

            	
              12

            
	
              2.4
                

            	
              Withholding

            	
              13

            
	
              2.5
                

            	
              Stock
                Transfer Books

            	
              13

            
	 	 	 
	
              ARTICLE
                III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY PRINCIPAL
                STOCKHOLDER

            	 
	
              3.1
                

            	
              Authority
                Relative To The Operative Agreements

            	
              13

            
	
              3.2
                

            	
              Execution;
                Enforceability

            	
              13

            
	
              3.3
                

            	
              Title
                to Securities of the Company

            	
              13

            
	
              3.4
                

            	
              No
                Conflicts

            	
              14

            
	
              3.5
                

            	
              Governmental
                Approvals and Filings

            	
              14

            
	
              3.6
                

            	
              Legal
                Proceedings

            	
              14

            
	 	 	
               

            
	
              ARTICLE
                IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY

            	 
	
              4.1
                

            	
              Organization
                and Qualification; Subsidiaries

            	
              14

            
	
              4.2
                

            	
              Certificate
                of Incorporation and Bylaws

            	
              15

            
	
              4.3
                

            	
              Books
                and Records

            	
              15

            
	
              4.4

            	
              Capitalization

            	
              15

            
	
              4.5
                

            	
              Authority
                Relative To This Agreement

            	
              16

            
	
              4.6
                

            	
              No
                Conflict; Required Filings and Consents

            	
              17

            
	
              4.7
                

            	
              Permits;
                Compliance

            	
              17

            
	
              4.8
                

            	
              Financial
                Statements

            	
              18

            
	
              4.9
                

            	
              Notes
                and Accounts Receivable

            	
              18

            
	
              4.10
                

            	
              Undisclosed
                Liabilities

            	
              19

            
	
              4.11
                

            	
              Taxes

            	
              19

            
	
              4.12
                

            	
              Title
                To Personal Property

            	
              21

            
	
              4.13
                

            	
              Condition
                of Tangible Fixed Assets

            	
              21

            
	
              4.14
                

            	
              Inventory

            	
              21

            
	
              4.15
                

            	
              Product
                Warranty

            	
              22

            
	
              4.16
                

            	
              Product
                Liability

            	
              22

            
	
              4.17
                

            	
              Real
                Property

            	
              22

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              4.18
                

            	
              Intellectual
                Property

            	
              22

            
	
              4.19
                

            	
              Material
                Contracts

            	
              26

            
	
              4.20
                

            	
              Litigation

            	
              28

            
	
              4.21
                

            	
              Employee
                Benefit Plans

            	
              28

            
	
              4.22
                

            	
              Labor
                and Employment Matters

            	
              31

            
	
              4.23
                

            	
              Environmental

            	
              31

            
	
              4.24
                

            	
              Related
                Party Transactions

            	
              33

            
	
              4.25
                

            	
              Insurance

            	
              33

            
	
              4.26
                

            	
              Absence
                of Certain Changes or Events

            	
              34

            
	
              4.27

            	
              Solvency

            	
              35

            
	
              4.28
                

            	
              Brokers
                or Finders

            	
              35

            
	
              4.29
                

            	
              No
                Illegal Payments

            	
              35

            
	
              4.30
                

            	
              Information
                Supplied

            	
              35

            
	
              4.31
                

            	
              Antitakeover
                Statutes

            	
              35

            
	
              4.32
                

            	
              Compliance
                with Securities Laws

            	
              35

            
	
              4.33
                

            	
              Change
                in Control

            	
              35

            
	
              4.34
                

            	
              Powers
                of Attorney

            	
              35

            
	
              4.35
                

            	
              Material
                Disclosures

            	
              35

            
	
               

            	 	 
	
              ARTICLE
                V - REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
                

            	 
	
              5.1
                

            	
              Corporate
                Organization and Qualification

            	
              36

            
	
              5.2
                

            	
              Certificate
                of Incorporation and Bylaws

            	
              36

            
	
              5.3
                

            	
              Books
                and Records

            	
              36

            
	
              5.4
                

            	
              Capitalization

            	
              36

            
	
              5.5
                

            	
              Authority
                Relative To This Agreement

            	
              37

            
	
              5.6
                

            	
              No
                Conflict; Required Filings and Consents

            	
              38

            
	
              5.7
                

            	
              SEC
                Reports; Financial Statements

            	
              38

            
	
              5.8
                

            	
              Taxes

            	
              39

            
	
              5.9
                

            	
              Absence
                of Litigation

            	
              41

            
	
              5.10
                

            	
              Related
                Party Transactions

            	
              41

            
	
              5.11
                

            	
              Ownership
                of Merger Sub; No Prior Activities

            	
              41

            
	
              5.12
                

            	
              Absence
                of Certain Changes or Events

            	
              41

            
	
              5.13
                

            	
              No
                Illegal Payments

            	
              42

            
	
              5.14
                

            	
              Antitakeover
                Statutes

            	
              43

            
	
              5.15
                

            	
              Compliance
                with Securities Laws

            	
              43

            
	
              5.16
                

            	
              Brokers
                or Finders

            	
              43

            
	 	 	
               

            
	
              ARTICLE
                VI - COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE
                MERGER

            	 
	
              6.1
                

            	
              Conduct
                of Business by the Company Pending the Merger

            	
              43

            
	
              6.2
                

            	
              Conduct
                of Business by Parent Pending the Merger

            	
              45

            
	
              6.3
                

            	
              Conduct
                of Company Principal Stockholder Pending the Merger

            	
              45

            
	 	 	 
	
              ARTICLE
                VII - ADDITIONAL AGREEMENTS

            	 
	
              7.1
                

            	
              Voting
                Agreement

            	
              45

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              7.2
                

            	
              Certain
                Corporate and Securities Compliance

            	
              45

            
	
              7.3
                

            	
              Regulatory
                Approvals

            	
              49

            
	
              7.4
                

            	
              Public
                Announcements

            	
              50

            
	
              7.5

            	
              Tax-Free
                Reorganization

            	
              50

            
	
              7.6

            	
              Affiliates

            	
              50

            
	
              7.7

            	
              Consents

            	
              50

            
	
              7.8
                

            	
              Notification
                of Certain Matters

            	
              51

            
	
              7.9
                

            	
              Conveyance
                Taxes

            	
              51

            
	
               
                7.10 

            	
              Dissenters'
                Rights

            	
              51

            
	
                7.11
                

            	
              Post-Closing
                Current Report Filing on Form 8-K

            	
              51

            
	
               
                7.12 

            	
              Post-Closing
                Establishment of Trading Market; Quotation; Listing

            	
              51

            
	
               
                7.13 

            	
              Certain
                Registration Obligations

            	
              51

            
	
               
                7.14 

            	
              Certain
                Liability & Indemnification

            	
              54

            
	
               
                7.15 

            	
              Further
                Assurances

            	
              55

            
	
               

            	 	 
	
              ARTICLE
                VIII - CONDITIONS TO THE MERGER

            	 
	
              8.1
                

            	
              Conditions
                to the Obligations of Each Party to Effect the Merger

            	
              55

            
	
              8.2
                

            	
              Conditions
                to the Obligations of Parent and Merger Sub to Effect the
                Merger

            	
              55

            
	
              8.3
                

            	
              Conditions
                to the Obligations of the Company to Effect the Merger

            	
              57

            
	 	 	 
	
              ARTICLE
                IX - TERMINATION, AMENDMENT AND WAIVER

            	 
	
              9.1
                

            	
              Termination

            	
              57

            
	
              9.2
                

            	
              Amendment

            	
              58

            
	
              9.3
                

            	
              Waiver

            	
              59

            
	 	 	 
	
              ARTICLE
                X - MISCELLANEOUS

            	 
	
              10.1
                

            	
              Notices

            	
              59

            
	
              10.2
                

            	
              Certain
                Definitions

            	
              60

            
	
              10.3
                

            	
              Index
                of Other Defined Terms

            	
              66

            
	
              10.4
                

            	
              Interpretation

            	
              68

            
	
              10.5
                

            	
              Survival

            	
              69

            
	
              10.6
                

            	
              Severability

            	
              69

            
	
              10.7
                

            	
              Assignment;
                Binding Effect; Benefit

            	
              69

            
	
              10.8
                

            	
              Fees
                and Expenses

            	
              69

            
	
              10.9
                

            	
              Incorporation
                of Schedules

            	
              70

            
	
               
                10.10 

            	
              Specific
                Performance

            	
              70

            
	
               
                10.11 

            	
              Governing
                Law

            	
              70

            
	
                10.12
                

            	
              Consent
                to Jurisdiction;Waiver of Jury Trial

            	
              70

            
	
                10.13
                

            	
              Headings

            	
              71

            
	
               
                10.14 

            	
              Counterparts

            	
              71

            
	
               
                10.15 

            	
              Entire
                Agreement

            	
              71

            

    

    

    
      	EXHIBITS	 
	
              Exhibit
                A 

            	
              Form
                of Voting Agreement

            
	
              Exhibit
                B 

            	
              Form
                of Certificate of Merger

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    
      	
              Exhibit
                C 

            	
              Articles
                of Incorporation – Merger Sub

            
	
              Exhibit
                D 

            	
              Bylaws
                – Merger Sub

            
	
              Exhibit
                E 

            	
              Form
                of Affiliate Agreement

            
	
              Exhibit
                F 

            	
              Form
                of Registrable Securities Lock-Up
                Agreement

            

    

    

    
      	SCHEDULES	 
	
              Schedule
                A 

            	
              Company
                Disclosure Schedule

            
	
              Organization
                and Qualification; Subsidiaries

            	
              Section
                4.1 

            
	
              Capitalization

            	
              Section
                4.4 

            
	
              No
                Conflict; Required Filings and Consents

            	
              Section
                4.6

            
	
              Permits;
                Compliance

            	
              Section
                4.7

            
	
              Financial
                Statements

            	
              Section
                4.8

            
	
              Taxes

            	
              Section
                4.11

            
	
              Inventory

            	
              Section
                4.14

            
	
              Product
                Warranty

            	
              Section
                4.15

            
	
              Real
                Property

            	
              Section
                4.17

            
	
              Intellectual
                Property

            	
              Section
                4.18

            
	
              Material
                Contracts

            	
              Section
                4.19

            
	
              Litigation

            	
              Section
                4.20

            
	
              Employee
                Benefit Plans

            	
              Section
                4.21

            
	
              Environmental

            	
              Section
                4.23

            
	
              Related
                Party Transactions

            	
              Section
                4.24

            
	
              Insurance

            	
              Section
                4.25

            
	
              Absence
                of Certain Changes or Events

            	
              Section
                4.26

            
	
              Change
                in Control

            	
              Section
                4.33

            
	
              Conduct
                of Business by the Company Pending the Merger

            	
              Section
                6.1

            
	
               

            	 
	
              Schedule
                B 

            	
              Parent
                Disclosure Schedule

            
	
              Capitalization

            	
              Section
                5.4 

            
	
              No
                Conflict; Required Filings and Consents

            	
              Section
                5.6

            
	
              Taxes

            	
              Section
                5.8

            
	
              Absence
                of Certain Changes or Events

            	
              Section
                5.12

            
	
              Conduct
                of Business by the Parent Pending the Merger 

            	
              Section
                6.2

            

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    This
      AGREEMENT AND PLAN OF MERGER, dated as of May 7, 2008 (this “Agreement”),
      among
      GCA I Acquisition Corp., a Delaware corporation (“Parent”),
      Bixby
      Energy Acquisition Corp., a Delaware corporation and a direct, wholly-owned
      Subsidiary of Parent (“Merger
      Sub”),
      Bixby
      Energy Systems, Inc., a Delaware corporation (the “Company”)
      and
      Robert A. Walker, the President, Chief Executive Officer, and a principal
      shareholder of the Company (the “Company
      Principal Stockholder”)
      (Parent, Merger Sub, Company, and the Company Principal Stockholder may
      hereinafter be referred to individually as a “Party”
or
      collectively as the “Parties”).

    

    WHEREAS,
      upon the terms and subject to the conditions of this Agreement and in accordance
      with the Delaware General Corporation Law (the “DGCL”),
      Parent, Merger Sub, and the Company intend to enter into a certain business
      combination transaction; 

    

    WHEREAS,
      for federal income tax purposes, it is intended that the acquisition of the
      Company by Parent pursuant to this Agreement qualify as a tax-free
      reorganization under the provisions of Section 368(a) of the U.S. Internal
      Revenue Code of 1986, as amended (the “Code”);

    

    WHEREAS,
      the board of directors of the Company (i) has determined that the Merger (as
      defined in Section 1.1 below) is in the best interests of the Company and its
      shareholders (ii) has approved this Agreement, the Merger, and the other
      transactions contemplated hereby (collectively, the “Transactions”)
      (iii)
      has adopted a resolution declaring the Merger advisable, and (iv) has determined
      to recommended approval of this Agreement by, and directed that this Agreement
      be submitted to a vote of, the shareholders of the Company; 

    

    WHEREAS,
      the board of directors of Parent (i) has determined that the Merger is
      consistent with and in furtherance of the long-term business strategy of Parent
      and fair to, and in the best interests of, Parent and its stockholders, (ii)
      has
      approved this Agreement, the Merger and the Transactions, (iii) has adopted
      a
      resolution declaring the Merger advisable, and (iv) has approved the issuance
      of
      certain shares of the common stock of Parent, $.0001
      par value per share (“Parent
      Common Stock”),
      pursuant
      to the Merger; and

    

    WHEREAS,
      the board of directors of Merger Sub (i) has determined that the Merger is
      consistent with and in furtherance of the long-term business strategy of Merger
      Sub, and fair to and in the best interests of Merger Sub and its stockholders,
      (ii) has approved this Agreement, the Merger and the Transactions, (iii) has
      adopted a resolution declaring the Merger advisable, and (iv) has determined
      to
      recommend that the sole stockholder of Merger Sub adopt this
      Agreement;

     

    WHEREAS,
      contemporaneously with the execution of this Agreement, and as a condition
      and
      inducement to Parent’s willingness to enter into this Agreement, the Company
      Principal Stockholder is entering into a voting agreement with Parent in
      substantially the form annexed hereto as Exhibit A and made a part hereof
      (collectively, the “Voting
      Agreement”);
      and

     

    WHEREAS,
      capitalized terms used throughout this Agreement shall have the meanings
      assigned to them in Section 10.2 or in the applicable Section of this Agreement
      to which reference is made within Section 10.3.

     

    NOW,
      THEREFORE, in consideration of the covenants, promises and representations
      set
      forth herein, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Parties agree as
      follows:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I

    

    THE
      MERGER

    

    1.1 The
      Merger.
      Upon
      the terms and subject to the conditions set forth in this Agreement, and
      pursuant to the certificate of merger in such form as is required by and
      executed in accordance with the relevant provisions of the DGCL, a form of
      which
      is annexed hereto as Exhibit B (the “Certificate
      of Merger”),
      at
      the Effective Time (as hereinafter defined), Merger Sub shall be merged with
      and
      into the Company and the separate corporate existence of Merger Sub shall
      thereupon cease, and the Company shall continue as the surviving corporation
      (the “Surviving
      Corporation”)
      of the
      Merger (the “Merger”)
      (Merger Sub and the Company are sometimes referred to herein jointly as the
      “Constituent
      Corporations”).
      As a
      result of the Merger, the outstanding shares of capital stock of the Company
      and
      Merger Sub shall be converted or canceled in the manner provided in Article
      II
      of this Agreement. 

    

    1.2 Effective
      Time; Closing.
      The
      closing of the Merger (the “Closing”)
      shall
      take place at the offices of the Company at 10:00 a.m. on a date to be specified
      by the Parties which shall be no later than two (2) Business Days following
      the
      satisfaction or waiver (as provided herein) of the conditions set forth in
      Article VII ( other than those conditions that by their nature are to be
      satisfied at the Closing), unless another time, date and/or place is agreed
      to
      in writing by the Parties (the date upon which the Closing occurs is referred
      to
      hereinafter as the “Closing
      Date”).
      Simultaneously with, or as soon as practicable following the Closing, the
      Company, as the surviving corporation, shall file the Certificate of Merger
      with
      the Secretary of State of the State of Delaware (the “Delaware
      Secretary of State”)
      as
      provided in Section 252(c) of the DGCL. The Merger shall become effective at
      such time as the Certificate of Merger is so filed or at such later time as
      may
      be specifically set forth in the Certificate of Merger, if different, which
      time
      is hereinafter referred to as the “Effective
      Time”.

     

    1.3 Effects
      of the Merger.
      At and
      after the Effective Time:

    

    (a) the
      Merger shall have the effects as set forth in the applicable provisions of
      the
      DGCL, including without limitation Section 259(a) thereof. Without limiting
      the
      generality of the foregoing, and subject thereto, at the Effective Time, all
      the
      rights, privileges, immunities, powers and franchises (of a public as well
      as of
      a private nature) of the Company and Merger Sub and all property (real, personal
      and mixed) of the Company and Merger Sub and all debts due to either the Company
      or Merger Sub on any account, including subscriptions to shares, and all other
      choses in action, and every other interest of or belonging to or due to each
      of
      the Company and Merger Sub shall vest in the Surviving Corporation, and all
      debts, Liabilities, obligations and duties of each of the Company and Merger
      Sub
      shall become the debts, Liabilities, obligations and duties of the Surviving
      Corporation and may be enforced against the Surviving Corporation to the same
      extent as if such debts, Liabilities, obligations and duties had been incurred
      or contracted by the Surviving Corporation, and all rights of creditors and
      all
      Liens upon any property of the Company or Merger Sub shall be preserved
      unimpaired in the Surviving Corporation following the Merger;

    

    (b) the
      certificate of incorporation of the Company shall be the certificate of
      incorporation of the Surviving Corporation until such time as it may thereafter
      be amended in accordance with applicable Delaware Law;

    

    (c) the
      bylaws of the Company shall be the bylaws of the Surviving Corporation until
      such time as they may thereafter be amended in accordance with applicable
      Delaware Law;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (d) the
      directors and officers of the Company immediately prior to the Effective Time
      shall remain the directors and officers of the Surviving Corporation, each
      to
      hold office until their respective death, permanent disability, resignation
      or
      removal or until their respective successors are duly elected and qualified,
      all
      in accordance with the certificate of incorporation and bylaws of the Surviving
      Corporation and applicable Law. 

    

    1.4 Post-Merger
      Actions.
      

    

    (a) Immediately
      following the Effective Time:

    

    (i) the
      officers of Parent prior to the Effective Time shall resign their respective
      positions as officers of Parent;

    

    (ii) the
      sole
      director of Parent (Michael M. Membrado) shall resign from his seat on the
      board
      of directors of Parent; and

    

    (b) As
      soon
      as practicable following the Effective Time:

    

    (i) the
      board
      of directors of Parent, through appropriate action duly taken, shall amend
      the
      bylaws of Parent to permit a board of directors of not less than one
      (1) nor more than twelve (12) directors;

    

    (ii) the
      board
      of directors of Parent, through appropriate action duly taken, shall appoint
      as
      directors to fill some or all of such vacancies such persons as the management
      of the Company shall have had appointed to such positions as they shall have
      held respectively prior to the Merger, which persons shall include a majority
      of
“independent” directors as such term is defined under the Rules of the American
      Stock Exchange;

    

    (iii) the
      board
      of directors of Parent, through appropriate action duly taken, shall elect
      new
      officers of Parent who shall be the same officers as the Company had prior
      to
      the Merger.

    

    1.5 Further
      Assurances.
      If, at
      any time after the Effective Time, the Surviving Corporation shall consider
      or
      be advised that any deeds, bills of sale, assignments or assurances or any
      other
      acts or things are necessary, desirable or proper (a) to vest, perfect or
      confirm, of record or otherwise, in the Surviving Corporation its right, title
      and interest in, to or under any of the rights, privileges, powers, franchises,
      properties or assets of either of the Constituent Corporations, or
      (b) otherwise to carry out the purposes of this Agreement, the Surviving
      Corporation and its proper officers and directors or their designees shall
      be
      authorized to execute and deliver, in the name and on behalf of either
      Constituent Corporation, all such deeds, bills of sale, assignments and
      assurances and to do, in the name and on behalf of either Constituent
      Corporation, all such other acts and things as may be necessary, desirable
      or
      proper to vest, perfect or confirm the Surviving Corporation’s right, title and
      interest in, to and under any of the rights, privileges, powers, franchises,
      properties or assets of such Constituent Corporation and otherwise to carry
      out
      the purposes of this Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      II

    

    CONVERSION
      OF SECURITIES; EXCHANGE OF CERTIFICATES

    

    2.1 Conversion
      of Securities.
      At the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      Parent, Merger Sub, the Company or any shareholders of Parent, Merger Sub or
      the
      Company (each stockholder of the Company being referred to individually
      hereinafter as a “Company
      Stockholder”):

    

    (a) Subject
      to the other provisions of this Section 2.1 and to Section 2.2:

    

    (i) Each
      share of common
      stock, par value
      $0.001
      per
      share, of the Company (“Company
      Common Stock”)
      issued
      and outstanding immediately prior to the Effective Time (each, a “Cancelable
      Common Share”)
      shall
      be automatically converted without payment of any consideration (subject to
      any
      required adjustment pursuant to Subsection (c) of this Section 2.1) into the
      right to receive one (1) share of fully paid and nonassessable Parent Common
      (the “Exchange
      Ratio”);
      provided,
      however,
      that,
      in the event that any shares of Company Common Stock outstanding immediately
      prior to the Effective Time are unvested or otherwise subject to a repurchase
      option, risk of forfeiture, or other condition under any applicable restricted
      stock purchase or other agreement with the Company, then the shares of Parent
      Common Stock to be issued in exchange for such shares of Company Common Stock
      shall also be unvested and subject to the same repurchase option, risk of
      forfeiture or other condition without regard, however, to any provisions
      regarding the acceleration of vesting in the event of certain transactions
      that
      may otherwise be applicable.
      At the
      Effective Time, (a)
      all
      such shares of Company Common Stock shall be deemed no longer to be outstanding
      and shall automatically be canceled and cease to exist, and each certificate
      previously evidencing any such shares shall thereafter represent the right
      to
      receive a certificate representing the shares of Parent Common Stock into which
      such shares of Company Common Stock shall have been converted in the Merger
      pursuant to this Section 2.1(a)(i), (b)
      the
      holders of certificates previously evidencing shares of Company Common Stock
      outstanding immediately prior to the Effective Time shall cease to have any
      rights with respect to such shares of Company Common Stock except as otherwise
      provided herein or under the DGCL, (c)
      any
      certificates previously evidencing shares of Company Common Stock shall be
      exchanged for certificates representing whole shares of Parent Common Stock
      issued in consideration therefor upon the surrender of such certificates in
      accordance with the provisions of Section 2.2 of this Agreement, and
      (d)
      the
      certificates representing any shares of Parent Common Stock which have been
      exchanged for shares of Company Common Stock which, immediately prior to the
      Effective Time, had been unvested or otherwise subject to a repurchase option,
      risk of forfeiture, or other condition under any applicable restricted stock
      purchase or other agreement with the Company, shall contain an appropriate
      legend evidencing such continuing restriction. 

     

    
      
        
        

      

      
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    (ii) Each
      share of convertible preferred stock, $0.001 par value per share, of the Company
      (“Company
      Convertible Preferred Stock”)
      issued
      and outstanding as of the date hereof and which remains issued and outstanding
      immediately prior to the Effective Time (each, a “Cancelable
      Pre-Definitive Agreement Convertible Preferred Share”)
      shall
      be automatically converted without payment of any consideration (subject to
      any
      required adjustment pursuant to Subsection (c) of this Section 2.1) into the
      right to receive a number of shares (rounded down to the nearest whole number)
      of fully paid and nonassessable Parent Common Stock equal to the number of
      shares of Company Common Stock into which each such Cancelable Pre-Definitive
      Agreement Convertible Preferred Share of Company Convertible Preferred Stock
      would have been convertible as of the Effective Time adjusted to give effect
      to
      the Exchange Ratio; provided,
      however,
      that,
      in the event that any Cancelable Pre-Definitive Agreement Convertible Preferred
      Shares of Company Convertible Preferred Stock outstanding immediately prior
      to
      the Effective Time are unvested or otherwise subject to a repurchase option,
      risk of forfeiture, or other condition under any applicable restricted stock
      purchase or other agreement with the Company, then the shares of Parent Common
      Stock to be issued in exchange for such shares of Company Convertible Preferred
      Stock shall also be unvested and subject to the same repurchase option, risk
      of
      forfeiture or other condition without regard, however, to any provisions
      regarding the acceleration of vesting in the event of certain transactions
      that
      may otherwise be applicable.
      At the
      Effective Time, (a)
      all
      such Cancelable Pre-Definitive Agreement Convertible Preferred Shares of Company
      Convertible Preferred Stock shall be deemed no longer to be outstanding and
      shall automatically be canceled and cease to exist, and each certificate
      previously evidencing any such shares shall thereafter represent the right
      to
      receive a certificate representing the shares of Parent Common Stock into which
      such Cancelable Pre-Definitive Agreement Convertible Preferred Shares of Company
      Convertible Preferred Stock shall have been converted in the Merger pursuant
      to
      this Section 2.1(a)(ii), (b)
      the
      holders of certificates previously evidencing Cancelable Pre-Definitive
      Agreement Convertible Preferred Shares of Company Convertible Preferred Stock
      outstanding immediately prior to the Effective Time shall cease to have any
      rights with respect to such Cancelable Pre-Definitive Agreement Convertible
      Preferred Shares of Company Convertible Preferred Stock except as otherwise
      provided herein or under the DGCL, (c)
      any
      certificates previously evidencing Cancelable Pre-Definitive Agreement
      Convertible Preferred Shares of Company Convertible Preferred Stock shall be
      exchanged for certificates representing whole shares of Parent Common Stock
      issued in consideration therefor upon the surrender of such certificates in
      accordance with the provisions of Section 2.2 of this Agreement, and
      (d)
      the
      certificates representing any shares of Parent Common Stock which have been
      exchanged for Cancelable Pre-Definitive Agreement Convertible Preferred Shares
      of Company Convertible Preferred Stock which, immediately prior to the Effective
      Time, had been unvested or otherwise subject to a repurchase option, risk of
      forfeiture, or other condition under any applicable restricted stock purchase
      or
      other agreement with the Company, shall contain an appropriate legend evidencing
      such continuing restriction. 

    

    (iii) Unless
      otherwise agreed by the Parties in writing prior to the Effective Time to be
      treated as Cancelable Pre-Definitive Agreement Convertible Preferred Shares,
      each share of Company Convertible Preferred Stock issued and outstanding
      immediately prior to the Effective Time (each, a “Cancelable
      Post-Definitive Agreement Convertible Preferred Share”)
      shall
      be automatically converted without payment of any consideration (subject to
      any
      required adjustment pursuant to Subsection (c) of this Section 2.1) into the
      right to receive one share of fully paid and nonassessable convertible preferred
      stock, par value $0.0001 per share, of Parent (“Parent
      Convertible Preferred Stock”)
      of the
      series designated by the same letter (e.g.
      A, B, C)
      as the series of Cancelable Post-Definitive Agreement Convertible Preferred
      Shares of the Company Convertible Preferred Stock from which such shares are
      being converted; provided,
      however,
      that,
      in the event that any Cancelable Post-Definitive Agreement Convertible Preferred
      Shares of Company Convertible Preferred Stock outstanding immediately prior
      to
      the Effective Time are unvested or otherwise subject to a repurchase option,
      risk of forfeiture, or other condition under any applicable restricted stock
      purchase or other agreement with the Company, then the shares of Parent
      Convertible Preferred Stock to be issued in exchange for such shares of Company
      Convertible Preferred Stock shall also be unvested and subject to the same
      repurchase option, risk of forfeiture or other condition without regard,
      however, to any provisions
      regarding the acceleration of vesting in the event of certain transactions
      that
      may otherwise be applicable.
      At the
      Effective Time, (a)
      all
      such Cancelable Post-Definitive Agreement Convertible Preferred Shares of the
      Company Convertible Preferred Stock shall be deemed no longer to be outstanding
      and shall automatically be canceled and cease to exist, and each certificate
      previously evidencing any such shares shall thereafter represent the right
      to
      receive a certificate representing the shares of Parent Convertible Preferred
      Stock into which such Cancelable Post-Definitive Agreement Convertible Preferred
      Shares of Company Convertible Preferred Stock shall have been converted in
      the
      Merger pursuant to this Section 2.1(a)(iii), (b)
      the
      holders of certificates previously evidencing Cancelable Post-Definitive
      Agreement Convertible Preferred Shares of Company Convertible Preferred Stock
      outstanding immediately prior to the Effective Time shall cease to have any
      rights with respect to such Cancelable Post-Definitive Agreement Convertible
      Preferred Shares of Company Convertible Preferred Stock except as otherwise
      provided herein or under the DGCL, (c)
      any
      certificates previously evidencing Cancelable Post-Definitive Agreement
      Convertible Preferred Shares of the Company Convertible Preferred Stock shall
      be
      exchanged for certificates representing whole shares of Parent Convertible
      Preferred Stock issued in consideration therefor upon the surrender of such
      certificates in accordance with the provisions of Section 2.2 of this Agreement,
      and (d)
      the
      certificates representing any shares of Parent Convertible Preferred Stock
      which
      have been exchanged for Cancelable Post-Definitive Agreement Convertible
      Preferred Shares of Company Convertible Preferred Stock which, immediately
      prior
      to the Effective Time, had been unvested or otherwise subject to a repurchase
      option, risk of forfeiture, or other condition under any applicable restricted
      stock purchase or other agreement with the Company, shall contain an appropriate
      legend evidencing such continuing restriction. 

     

    
      
        
        

      

      
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    (iv) Each
      share of non-convertible preferred stock, $0.001 par value per share, of the
      Company (“Company
      Non-Convertible Preferred Stock”)
      issued
      and outstanding immediately prior to the Effective Time (each a “Cancelable
      Non-Convertible Preferred Share”)
      shall
      be automatically converted without payment of any consideration into the right
      to receive one share of fully paid and nonassessable non-convertible preferred
      stock, par value $0.0001 per share, of Parent (“Parent
      Non-Convertible Preferred Stock”)
      of the
      series designated by the same letter (e.g.
      A, B, C)
      as the series of Cancelable Non-Convertible Preferred Shares of Company
      Non-Convertible Preferred Stock from which such shares are being converted.
      At
      the Effective Time, (a)
      all
      such Cancelable Non-Convertible Preferred Shares of Company Non-Convertible
      Preferred Stock shall be deemed no longer to be outstanding and shall
      automatically be canceled and cease to exist, and each certificate previously
      evidencing any such shares shall thereafter represent the right to receive
      a
      certificate representing a number of shares of Parent Non-Convertible Preferred
      Stock into which such Cancelable Non-Convertible Preferred Shares of Company
      Non-Convertible Preferred Stock shall have been converted in the Merger pursuant
      to this Section 2.1(a)(iv), (b)
      the
      holders of certificates previously evidencing Cancelable Non-Convertible
      Preferred Shares of Company Non-Convertible Preferred Stock outstanding
      immediately prior to the Effective Time shall cease to have any rights with
      respect to such Cancelable Non-Convertible Preferred Shares of Company
      Non-Convertible Preferred Stock except as otherwise provided herein or under
      the
      DGCL, and (c)
      any
      certificates previously evidencing Cancelable Non-Convertible Preferred Shares
      of Company Non-Convertible Preferred Stock shall be exchanged for certificates
      representing whole shares of Parent Non-Convertible Preferred Stock issued
      in
      consideration therefor upon the surrender of such certificates in accordance
      with the provisions of Section 2.2 of this Agreement.

    

    (v) Each
      convertible note and/or debenture of the Company (“Company
      Convertible Debentures”)
      issued
      and outstanding as of the date hereof and which remains issued and outstanding
      immediately prior to the Effective Time (each, a “Cancelable
      Pre-Definitive Agreement Convertible Debenture”)
      shall
      be automatically converted without payment of any consideration (subject to
      any
      required adjustment pursuant to Subsection (c) of this Section 2.1) into the
      right to receive a number of shares (rounded down to the nearest whole number)
      of fully paid and nonassessable Parent Common Stock equal to the number of
      shares of Company Common Stock into which each such Cancelable Pre-Definitive
      Agreement Convertible Debenture would have been convertible as of the Effective
      Time adjusted to give effect to the Exchange Ratio. At the Effective Time,
      (a)
      all
      such Cancelable Pre-Definitive Agreement Convertible Debentures shall be deemed
      no longer to be outstanding and shall automatically be canceled and cease to
      exist, and each not or certificate previously evidencing any such Company
      Convertible Debentures shall thereafter represent the right to receive a
      certificate representing the shares of Parent Common Stock into which such
      Cancelable Pre-Definitive Agreement Convertible Debentures shall have been
      converted in the Merger pursuant to this Section 2.1(a)(v), (b)
      the
      holders of notes or certificates previously evidencing Cancelable Pre-Definitive
      Agreement Convertible Debentures outstanding immediately prior to the Effective
      Time shall cease to have any rights with respect to such Cancelable
      Pre-Definitive Agreement Convertible Debentures except as otherwise provided
      herein or under the DGCL, and (c)
      any
      notes or certificates previously evidencing Cancelable Pre-Definitive Agreement
      Convertible Debentures shall be exchanged for certificates representing whole
      shares of Parent Common Stock issued in consideration therefor upon the
      surrender of such certificates in accordance with the provisions of Section
      2.2
      of this Agreement.

     

    
      
        
        

      

      
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    (vi) Unless
      otherwise agreed by the Parties in writing prior to the Effective Time to be
      treated as Cancelable Pre-Definitive Agreement Convertible Debentures, each
      Company Convertible Debenture issued and outstanding immediately prior to the
      Effective Time other than any Company Convertible Debentures constituting
      Cancelable Pre-Definitive Agreement Convertible Debentures (each, a
“Cancelable
      Post-Definitive Agreement Convertible Debenture”)
      shall
      be automatically converted without payment of any consideration (subject to
      any
      required adjustment pursuant to Subsection (c) of this Section 2.1) into a
      debenture of Parent (each, an “Parent
      Convertible Debenture”)
      carrying precisely the same substantive rights, obligations and other terms
      as
      the Cancelable Post-Definitive Agreement Convertible Debentures in exchange
      for
      which they are issued, provided,
      however,
      that
      such Parent Convertible Debentures shall be convertible, in each respective
      case, into the right to receive a number of shares of Parent Common Stock equal
      to the number of shares of Company Common Stock into which each such Cancelable
      Post-Definitive Agreement Convertible Debenture would have been convertible
      as
      of the Effective Time adjusted as appropriate based on the Exchange Ratio.
      At
      the Effective Time, (a)
      all
      such Cancelable Post-Definitive Agreement Convertible Debentures shall be deemed
      no longer to be outstanding and shall automatically be canceled and cease to
      exist, and each note or certificate previously evidencing any such Cancelable
      Post-Definitive Agreement Convertible Debentures shall thereafter represent
      the
      right to receive a certificate representing the Parent Convertible Debenture
      into which such Cancelable Post-Definitive Agreement Convertible Debentures
      shall have been converted in the Merger pursuant to this Section 2.1(a)(vi),
      (b)
      the
      holders of notes or certificates previously evidencing Cancelable
      Post-Definitive Agreement Convertible Debentures outstanding immediately prior
      to the Effective Time shall cease to have any rights with respect to such
      Cancelable Post-Definitive Agreement Convertible Debentures except as otherwise
      provided herein or under the DGCL, and (c)
      any
      notes or certificates previously evidencing Cancelable Post-Definitive Agreement
      Convertible Debentures shall be exchanged for certificates representing Parent
      Convertible Debentures issued in consideration therefor upon the surrender
      of
      such certificates in accordance with the provisions of Section 2.2 of this
      Agreement. 

    

    (vii) Each
      non-convertible note, bond or other debt security of the Company (“Company
      Non-Convertible Debt Security”)
      issued
      and outstanding immediately prior to the Effective Time, and all obligations
      arising and existing thereunder, shall, by virtue of the Merger, be
      automatically assumed by Parent as of the Effective Time; provided,
      however,
      that
each
      Company Non-Convertible Debt Security so assumed by Parent under this Agreement
      shall continue to have, and be subject to, the same terms and conditions of
      such
      securities as shall have been in effect immediately prior to the Effective
      Time.

     

    
      
        
        

      

      
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    (viii) Each
      warrant to purchase shares of Company Common Stock (each, a “Company
      Common Stock Purchase Warrant”)
      issued
      and outstanding immediately prior to the Effective Time, and all obligations
      arising and existing thereunder,
      shall,
      by virtue of the Merger, be automatically assumed by Parent; provided,
      however,
      that
      each
      Company Common Stock Purchase Warrant so assumed by Parent under this Agreement
      (each, a “Replacement
      Common Warrant”)
      shall
      (a)
      continue to have, and be subject to, the same terms and conditions of such
      warrants as shall have been in effect immediately prior to the Effective Time,
      including without limitation any repurchase rights, risk of forfeiture, or
      vesting provisions and any related provisions regarding the acceleration of
      vesting and exercisability in the event of certain transactions, (b)
      be
      exercisable (or become exercisable in accordance with its terms) for that number
      of whole shares of Parent Common Stock for which such Company Common Stock
      Purchase Warrant had been exercisable (for shares of Company Common Stock)
      immediately prior to the Effective Time, adjusted
      to give effect to
      the
      Exchange Ratio (rounded down to the nearest whole share), (c)
      be
      exercisable (or become exercisable in accordance with its terms) at a price
      per
      share of Parent Common Stock equal to the exercise price per share of Company
      Common Stock at which such Company Common Stock Purchase Warrant was exercisable
      immediately prior to the Effective Time, adjusted
      to give effect to
      the
      Exchange Ratio (the exercise price per share, as so determined, being rounded
      up
      to the nearest full cent), and (d)
      be
      deemed to refer to Parent wherever reference is made to the Company in and
      throughout any agreement and/or certificates representing the Company Common
      Stock Purchase Warrant.

    

    (ix) Each
      warrant to purchase shares of Company Convertible Preferred Stock (each, a
      “Company
      Convertible Preferred Purchase Warrant”)
      issued
      and outstanding immediately prior to the Effective Time, and all obligations
      arising and existing thereunder,
      shall,
      by virtue of the Merger, be automatically assumed by Parent; provided,
      however,
      that
      each
      Company Convertible Preferred Stock Purchase Warrant so assumed by Parent under
      this Agreement (each, a “Replacement
      Preferred Warrant”)
      shall
      (a)
      continue to have, and be subject to, the same terms and conditions of such
      warrants as shall have been in effect immediately prior to the Effective Time,
      including without limitation any repurchase rights, risk of forfeiture, or
      vesting provisions and any related provisions regarding the acceleration of
      vesting and exercisability in the event of certain transactions, (b)
      be
      exercisable (or become exercisable in accordance with its terms) for that number
      of whole shares of Parent Common Stock for which the Company Convertible
      Preferred Stock into which the Company Convertible Preferred Stock Purchase
      Warrant would have been exercisable would have been convertible immediately
      prior to the Effective Time, adjusted
      to give effect to
      the
      Exchange Ratio (rounded down to the nearest whole share), (c)
      be
      exercisable (or become exercisable in accordance with its terms) at a price
      per
      share of Parent Common Stock equal to the exercise price per share of Company
      Convertible Preferred Stock at which such Company Convertible Preferred Stock
      Purchase Warrant was exercisable immediately prior to the Effective Time,
adjusted
      to give effect to
      the
      Exchange Ratio and the conversion ratio of the underlying Company Convertible
      Preferred Stock (the exercise price per share, as so determined, being rounded
      up to the nearest full cent), and (d)
      be
      deemed to refer to Parent wherever reference is made to the Company in and
      throughout any agreement and/or certificates representing the Company
      Convertible Preferred Stock Purchase Warrant.

     

    (x) The
      Bixby
      Energy Systems, Inc. 2001 Stock Option Plan (the “Bixby
      Option Plan”),
      and
      each option to purchase shares of Company Common Stock issued and outstanding
      thereunder prior to the Effective Time (each, a “Company
      Stock Option”),
      whether or not vested, shall, by virtue of the Merger, be assumed by Parent;
      provided,
      however,
      that
      each
      Company Stock Option so assumed by Parent under this Agreement (each, a
“Replacement
      Option”)
      shall
      (a)
      continue to have, and be subject to, the same terms and conditions of such
      warrants as shall have been in effect immediately prior to the Effective Time,
      including without limitation any repurchase rights, risk of forfeiture, or
      vesting provisions and any related provisions regarding the acceleration of
      vesting and exercisability in the event of certain transactions, (b)
      be
      exercisable (or become exercisable in accordance with its terms) for that number
      of whole shares of Parent Common Stock for which such Company Stock Option
      had
      been exercisable (for shares of Company Common Stock) immediately prior to
      the
      Effective Time, adjusted
      to give effect to
      the
      Exchange Ratio (rounded down to the nearest whole share), (c)
      be
      exercisable (or become exercisable in accordance with its terms) at a price
      per
      share of Parent Common Stock equal to the exercise price per share of Company
      Common Stock at which such Company Stock Option was exercisable immediately
      prior to the Effective Time, adjusted
      to give effect to
      the
      Exchange Ratio (the exercise price per share, as so determined, being rounded
      up
      to the nearest full cent), and (d)
      be
      deemed to refer to Parent wherever reference is made to the Company in and
      throughout any agreement and/or certificates representing the Company Stock
      Option. It is intended that the Company Stock Options assumed by Parent pursuant
      hereto shall qualify following the Effective Time as incentive stock options
      as
      defined in Section 422 of the Code to the extent the Company Stock Options
      qualified as incentive stock options immediately prior to the Effective Time
      and
      the provisions of this Section 2.1(a)(x) shall be applied consistently with
      such
      intent, it being understood that Parent makes no representation or warranty
      whatsoever that such options shall so qualify.

     

    
      
        
        

      

      
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    (xi) each
      share of common stock, par value $.0001 per share, of Merger Sub (“Merger
      Sub Common Stock”)
      issued
      and outstanding immediately prior to the Effective Time shall be converted
      into
      one (1) validly issued, fully paid and nonassessable share of common stock
      of
      the Surviving Corporation at the Effective Time, and the Surviving Corporation
      thereafter shall have no other equity securities; and

     

    (xii) any
      outstanding options to purchase shares of Parent Common Stock or Parent
      Preferred Stock (each, an “Parent
      Stock Option”),
      whether or not vested, and any outstanding warrants to purchase shares of Parent
      Common Stock or Parent Preferred Stock (each, an “Parent
      Warrant”),
      whether or not then exercisable, shall, by virtue of the Merger, be
      cancelled.

    

    (b) It
      is
      expressly understood and acknowledged that no fractional shares of Parent Common
      Stock shall be issued in connection with the Merger and that no holder of
      Cancelable Common Shares, Cancelable Pre-Definitive Agreement Convertible
      Preferred Shares, or Cancelable Pre-Definitive Agreement Convertible Debentures
      shall be entitled to receive a cash payment in lieu of any fractional share
      of
      Parent Common Stock. 

    

    (c) Except
      for any changes resulting from the Parent Stock-Split, if between the date
      of
      this Agreement and the Effective Time the outstanding shares of Parent Common
      Stock shall have been changed into a different number of shares or a different
      class, by reason of any stock dividend, reclassification, recapitalization,
      split, division, subdivision, combination or exchange of shares, the Exchange
      Ratio shall be correspondingly adjusted to reflect such stock dividend,
      reclassification, recapitalization, split, division, subdivision, combination
      or
      exchange of shares. 

    

    2.2 Exchange
      of Securities and Certificates.
      

    

    (a) Following
      the execution hereof, and as of or before the Effective Time, Parent shall
      enter
      into an agreement with such transfer agent, bank, or trust company of recognized
      standing that may be designated by Parent and is reasonably satisfactory to
      the
      Company (the “Exchange
      Agent”).
      Upon
      the Company’s receipt of Company Stockholder Approval, Parent shall deposit, or
      shall cause to be deposited, with the Exchange Agent, for the benefit of the
      holders of Cancelable Common Shares, Cancelable Pre-Definitive Agreement
      Convertible Preferred Shares, Cancelable Post-Definitive Agreement Convertible
      Preferred Shares, Cancelable Non-Convertible Preferred Shares, Cancelable
      Pre-Definitive Agreement Convertible Debentures, and Cancelable Post-Definitive
      Agreement Convertible Debentures (collectively, the “Cancelable
      Securities”)for
      exchange in accordance with this Article II, through the Exchange Agent,
      certificates representing (i) the whole shares of Parent Common Stock issuable
      pursuant to Sections 2.1(a)(i), (ii), and (v) in exchange for Cancelable Common
      Shares, Cancelable Pre-Definitive Agreement Convertible Preferred Shares and
      Cancelable Pre-Definitive Agreement Convertible Debentures, respectively, (ii)
      the whole shares of Parent Convertible Preferred Stock issuable pursuant to
      Section 2.1(a)(iii) in exchange for Cancelable Post-Definitive Agreement
      Convertible Preferred Shares, (iii) the whole shares of Parent Non-Convertible
      Preferred Stock issuable pursuant to Section 2.1(a)(iv) in exchange for
      Cancelable Non-Convertible Preferred Shares, and (iv) Parent Convertible
      Debentures issuable pursuant to Section 2.1(a)(vi) in exchange for Cancelable
      Post-Definitive Agreement Convertible Debentures (such Certificates being
      hereinafter referred to collectively as the “Exchange
      Fund”).
      The
      Exchange Agent shall, pursuant to irrevocable instructions from Parent, deliver
      the various certificates for securities to be issued pursuant to Section 2.1
      out
      of the Exchange Fund (collectively, the “Merger
      Securities”).
      

     

    
      
        
        

      

      
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    (b) The
      provisions of Section 2.2(a) notwithstanding, in the event that the Exchange
      Agent shall only be willing to accept the assignment as Exchange Agent to the
      extent that it excludes from its responsibilities those relating to the exchange
      of Cancelable Post-Definitive Agreement Convertible Debentures for Parent
      Convertible Debentures pursuant to Section 2.1(vi) above, then, and, in such
      event, any responsibilities relating to the exchange of Cancelable
      Post-Definitive Agreement Convertible Debentures for Parent Convertible
      Debentures pursuant to Section 2.1(vi) above shall be assigned to a separate
      third-party agent to be reasonably agreed upon between Parent and the Company,
      who will be subject to the same responsibilities in relation to the exchange
      of
      Cancelable Post-Definitive Agreement Convertible Debentures for Parent
      Convertible Debentures as Exchange Agent bears in relation to the exchange
      of
      all other securities under this Article II.

    

    (c) As
      promptly as reasonably practicable after the Effective Time, Parent will
      instruct the Exchange Agent to mail to each holder of record of a certificate
      or
      certificates which immediately prior to the Effective Time evidenced Cancelable
      Securities (i) a letter of transmittal, and (ii) instructions for use in
      effecting the surrender of such certificates for Cancelable Securities in
      exchange for certificates evidencing the Merger Securities, which instructions
      shall
      be
      in customary form and shall specify that delivery shall be effected, and risk
      of
      loss and title to the Merger Securities shall pass, only upon proper delivery
      of
      the certificates representing the Merger Securities to the Exchange Agent for
      use in exchanging the Cancelable Securities for the Merger
      Securities.
      Upon
      surrender of a certificate for cancellation to the Exchange Agent, together
      with
      such letter of transmittal, duly executed and completed in accordance with
      the
      instructions thereto, and such other documents as may be reasonably required
      pursuant to such instructions, the holder of such Cancelable Securities shall
      be
      entitled to receive certificates evidencing the Merger Securities due to such
      holder in accordance with Section 2.1(a), together with any dividends or
      distribution to which such holder may otherwise be entitled, and the
      certificate(s) so surrendered shall immediately be canceled. Subject to Section
      2.2(h), under no circumstances will any holder of a certificate representing
      Cancelable Securities be entitled to receive any of the Merger Securities or
      certificates evidencing the same until such holder shall have surrendered any
      and all certificates reflecting the corresponding Cancelable Securities from
      which such entitlement derives. 

    

    (d) In
      the
      event of a transfer of ownership of Cancelable Securities which has not been
      registered in the transfer records of the Company, the Merger Securities into
      which the Cancelable Securities were converted in the Merger may be delivered
      by
      the Exchange Agent in accordance with this Article II to the Person other than
      the Person in whose name the surrendered certificate is surrendered if (i)
      the
      certificate(s) evidencing such Cancelable Securities is/are presented to the
      Exchange Agent, properly endorsed and accompanied by all documents required
      to
      evidence and effect such transfer, including without limitation an opinion
      of
      counsel for the Company that such transfer was effected in compliance with
      all
      federal and state securities Laws, and (ii) evidence is presented in form
      satisfactory to Exchange Agent that any applicable Taxes have been duly paid,
      or, if not paid, the Person requesting such issuance pays to the Exchange Agent
      any and all Taxes required as a result of the issuance to a Person other than
      the registered holder of the certificate. Until
      surrendered or transferred as contemplated by this Section 2.2, each certificate
      representing Cancelable Securities, other than any certificates representing
      Dissenting Shares, shall represent at all times after the Effective Time solely
      the right to receive, upon such surrender or transfer, in accordance with the
      terms hereof, the Merger Securities, together with any amounts payable pursuant
      to Section 2.1(e) of this Agreement. 

     

    
      
        
        

      

      
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    (e) Notwithstanding
      any other provisions of this Agreement, no dividends or other distributions
      declared or made after the Effective Time with respect to the Merger Securities
      with a record date after the Effective Time shall be paid to the holder of
      any
      unsurrendered certificate(s) evidencing Cancelable Securities until the holder
      of such Cancelable Securities shall surrender such certificate(s) to the
      Exchange Agent in accordance with Section 2.2(c). Subject to the effect of
      applicable Laws, following surrender of any such certificate(s) reflecting
      Cancelable Securities, there shall be paid to the holder of such certificate(s),
      in addition to the Merger Securities to which such holder is entitled pursuant
      to Section 2.1(a), without interest, the corresponding amount of dividends
      or
      other distributions with a record date after the Effective Time theretofore
      paid
      with respect to any of such Merger Securities, less the amount of any
      withholding Taxes which may be required thereon. No
      holder
      of Cancelable Securities shall be entitled, until the surrender of any
      certificate for any such Cancelable Securities, to vote any shares of Parent
      Common Stock or other capital stock which such holder shall have the right
      to
      receive pursuant to this Article II.

    

    (f) All
      Merger Securities issued upon conversion of the Cancelable Securities in
      accordance with Section 2.1(a), and any cash paid or other distributions made
      pursuant to Section 2.2(e), shall be deemed to have been issued or paid,
      respectively, in full satisfaction of all rights pertaining to such Cancelable
      Securities. At 5:00 p.m. on the day immediately
      preceding the Effective Time, the stock transfer books of the Company shall
      be
      closed and there shall be no further registration of transfers of Cancelable
      Securities thereafter on the records of the Company. From and after the
      Effective Time, holders of Cancelable Securities shall cease to have any rights
      with respect to such Cancelable Securities outstanding immediately prior to
      the
      Effective Time, except as otherwise provided in this Agreement or by Law.

    

    (g) Any
      portion of the Exchange Fund which remains undistributed to the holders of
      Cancelable Securities for six (6) months after the Effective Time shall be
      returned to Parent, and, subject to Section 2.2(h), any holders of Cancelable
      Securities which have not theretofore complied with this Article II shall
      thereafter look only to Parent for the Merger Securities and any dividends
      or
      other distributions to which they are entitled pursuant to Section 2.1(a).
      Any
      portion of the Exchange Fund remaining unclaimed by holders of Cancelable
      Securities as of a date that is immediately prior to such time as such amounts
      would otherwise escheat to or become property of any government entity shall,
      to
      the extent permitted by applicable Law, become the property of Parent free
      and
      clear of any claims or interest of any Person previously entitled thereto.
      To
      the fullest extent permitted by Law, neither Parent nor the Surviving
      Corporation shall be liable to any holders of Cancelable Securities for any
      Merger Securities, cash or other property delivered from the Exchange Fund
      to a
      public official pursuant to any applicable abandoned property, escheat or
      similar Law.

     

    
      
        
        

      

      
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    (h) If
      any
      certificate representing Cancelable Securities shall have been lost, stolen
      or
      destroyed, upon the making of an affidavit of that fact by the party claiming
      such certificate to be lost, stolen or destroyed and, if required by the
      Surviving Corporation or the Exchange Agent, the posting by such party of a
      bond, in such reasonable amount as the Surviving Corporation or the Exchange
      Agent may direct, as indemnity against any claim that may be made against it
      with respect to such certificate and the amount of any fee charged by the
      Exchange Agent for such service, the Exchange Agent shall issue in exchange
      for
      such lost, stolen or destroyed certificate the Merger Securities, together
      with
      any unpaid dividends and distributions deliverable in respect
      thereof.

     

    (i) Notwithstanding
      anything to the contrary contained herein, each Person entitled to receive
      shares of Parent Common Stock under this Section 2.2 shall receive them on
      the condition and subject to the requirement that, whether or not registered
      or
      otherwise eligible for resale, (i) ninety percent (90%) of such shares may
      not be sold (but may be transferred (A) by gift to an immediate family member,
      (B) by will or intestacy or distribution, or (C) to a trust for the
      benefit of the transferor or a family member) except in accordance with the
      following schedule (calculated on a cumulative basis):

    

    
      	
              Up
                to Five Percent (5%) 

            	
              Ninety
                (90) Days Following Closing 

            
	
              Up
                to Additional Five Percent (5%) 

            	
              One
                Hundred and Eighty (180) Days Following Closing

            
	
              Up
                to Additional Five Percent (5%) 

            	
              Two
                Hundred and Seventy (270) Days Following Closing

            
	
              Up
                to Additional Five Percent (5%) 

            	
              Three
                Hundred and Sixty-Five (365) Days Following Closing

            
	
              Up
                to Additional Ten Percent (10%) 

            	
              Four
                Hundred and Fifty-Five (455) Days Following Closing

            
	
              Up
                to Additional Fifteen Percent (15%) 

            	
              Five
                Hundred and Forty-Five (545) Days Following Closing

            
	
              Up
                to Additional Twenty Percent (20%) 

            	
              Six
                Hundred and Thirty-Five (635) Days Following Closing

            
	
              Up
                to Additional Twenty-Five Percent (25%)

            	
              Seven
                Hundred and Thirty (730) Days Following
                Closing

            

    

    

    and
      the
      certificates evidencing such shares shall have a legend reflecting such
      restriction, and (ii) the remaining ten percent (10%) of such shares may be
      freely sold or transferred at any time following the Closing Date, provided,
      however,
      that
      such shares of Parent Common Stock are, as a class, duly authorized and
      qualified for trading at the time of any such sale on the NASDAQ Capital Market
      and/or the OTCBB.

    

    (j) Notwithstanding
      anything to the contrary contained herein, no certificates representing Merger
      Securities shall be delivered to a Person who is an “affiliate” of the Company
      for purposes of Rule 145 under the Securities Act until such Person shall
      have executed and delivered to Parent a written agreement substantially in
      the
      form attached hereto as Exhibit F (the “Affiliate
      Agreement”).

    

    2.3 Dissenters’
      Rights.

    

    (a) Notwithstanding
      anything in this Agreement to the contrary, any shares of Company Common Stock
      or other Cancelable Securities which, under the DGCL entitle the holder to
      appraisal rights (“Dissentable
      Shares”),
      and
      which are held by any holder (a “Dissenting
      Holder”)
      who
      shall have demanded and not lost or withdrawn, or who shall be eligible to
      demand, appraisal rights with respect to such Dissentable Shares in the manner
      provided in the DGCL (“Dissenting
      Shares”)
      shall
      not represent the right to receive any portion of the Merger Securities (or
      any
      dividends or distributions associated therewith). If any holder of Dissentable
      Shares shall fail to perfect or shall effectively withdraw or lose its right
      to
      appraisal and payment under the DGCL, as the case may be, all Dissentable Shares
      held by such holder shall thereupon, in accordance with and subject to the
      provisions set forth in this Article II, represent the right to receive its
      portion of the Merger Securities, together with any dividends or distributions
      due in connection therewith pursuant to Section 2.2(e).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b) Both
      the
      Company and Parent, as the case may be, shall give one another prompt notice
      of
      any demands for appraisal received by the Company or Parent, withdrawals of
      such
      demands and any other communications received by the Company or Parent in
      connection with any demands for appraisal. The Company may voluntarily make
      any
      payment with respect to any such demands. The Company shall have the right
      to
      control all negotiations and Proceedings with respect to demands for appraisal,
      including the right to settle any such demands.

    

    2.4 Withholding.
      Each of
      the Surviving Corporation, Parent and the Exchange Agent shall be entitled
      to
      deduct and withhold from the consideration payable pursuant to this Agreement
      to
      any holder of Cancelable Securities or Dissenting Shares such amounts as it
      is
      required to deduct and withhold with respect to the making of such payment
      under
      the Code or any provision of applicable state, local or foreign Tax Law. To
      the
      extent that amounts are so withheld by the Surviving Corporation, Parent or
      the
      Exchange Agent, as the case may be, such withheld amounts shall be treated
      for
      all purposes of this Agreement as having been paid to the holder of Cancelable
      Securities or Dissenting Shares in respect of which such deduction and
      withholding was made by the Surviving Corporation, Parent or the Exchange Agent,
      as the case may be.

    

    2.5 Stock
      Transfer Books.
      At the
      Effective Time, the stock transfer books of the Company shall be closed and
      there shall be no further registration of transfers of Cancelable Securities
      thereafter on the records of the Company. On or after the Effective Time, any
      certificates reflecting Cancelable Securities presented to the Exchange Agent
      or
      Parent for any reason shall carry only those rights as expressly stated in
      this
      Article II.

    

    ARTICLE
      III

    

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY PRINCIPAL STOCKHOLDER

    

    The
      Company Principal Stockholder represents and warrants to Parent and Merger
      Sub
      that the statements contained in this Article III are true and
      correct.

    

    3.1 Authority
      Relative To The Operative Agreements.
      He has
      all legal right, power and capacity to execute and deliver and to perform his
      obligations under this Agreement and the Operative Agreements to which he is
      a
      party and to consummate the Transactions. 

    

    3.2 Execution;
      Enforceability.
      He has
      duly
      and
      validly executed and delivered this Agreement and the other Operative Agreements
      and, assuming the due authorization, execution and delivery of this Agreement
      and the other Operative Agreements by Parent, Merger Sub, and the Company,
      as
      required, constitutes his legal, valid and binding obligations, enforceable
      against him in accordance with their respective terms,
      except
      as the enforceability thereof may be limited by (i) applicable bankruptcy,
      insolvency, reorganization, moratorium or other similar Laws affecting or
      relating to creditors’ rights generally, and (ii) the availability of
      injunctive relief and other equitable remedies.

    

    3.3 Title
      to Securities of the Company.
      He is
      the record and Beneficial Owner of the securities of the Company as specifically
      reflected in the Voting Agreement which he has executed and delivered in
      connection and contemporaneously herewith, and immediately prior to the
      Effective Time, he will own such securities free and clear of any Liens.

     

    
      
        
        

      

      
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    3.4 No
      Conflicts.
      To the
      best of his knowledge, the execution and delivery by him of this Agreement
      and
      each of the other Operative Agreements to which he is a party does not, and
      the
      performance by him of his obligations under this Agreement and such other
      Operative Agreements, and the consummation of the Transactions do not and will
      not:

     

    (a) subject
      to obtaining the consents, approvals and actions, making the filings and
      providing the notices referred to in Section 3.5 below, if any, conflict
      with or result in a violation or breach of any term or provision of any Law
      or
      Order applicable to him or any of his assets and properties; or

    

    (b)
       (i) conflict
      with or result in a violation or breach of, (ii) constitute (with or
      without notice or lapse of time or both) a default under, (iii) require him
      to obtain any consent, approval or action of, make any filing with or give
      any
      notice to any Person as a result or under the terms of, (iv) result in or
      give to any Person any right of termination, cancellation, acceleration or
      modification in or with respect to, (v) result in or give to any Person any
      additional rights or entitlement to increased, additional, accelerated or
      guaranteed payments under, or (vi) result in the creation or imposition of
      any Lien upon him or any of his assets and properties under, any Contract to
      which he is a party or by which any of his assets and properties is
      bound.

    

    3.5 Governmental
      Approvals and Filings.
      Except
      as may otherwise be set forth in this Agreement, to the best of his knowledge,
      no consent, approval or action of, filing with or notice to, any Governmental
      Authority on his part is required in connection with the execution, delivery
      and
      performance of this Agreement or any of the other Operative
      Agreements.

    

    3.6 Legal
      Proceedings.
      To the
      best of his knowledge, there are no Proceedings pending or threatened against,
      relating to or affecting either him or any of his assets and properties which
      could reasonably be expected to result in the issuance of an Order restraining,
      enjoining or otherwise prohibiting or making illegal any of the Transactions
      or
      otherwise result in a material diminution of the benefits contemplated by this
      Agreement or any of the other Operative Agreements to Parent, Merger Sub, the
      Company, or the Surviving Corporation.

    

    ARTICLE
      IV

    

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

    

    Except
      as
      set forth in the Disclosure Schedule delivered by the Company and signed by
      the
      Company and Parent for identification prior to the execution and delivery of
      this Agreement (the “Company
      Disclosure Schedule”),
      which
      shall identify exceptions by specific section references, the Company hereby
      represents and warrants to Parent and Merger Sub that the statements contained
      in this Article IV are correct and complete as of the date of this Agreement
      and
      will be correct and complete as of the Closing Date (as though made then and
      as
      though the Closing Date were substituted for the date of this Agreement
      throughout this Article IV).

    

    4.1 Organization
      and Qualification; Subsidiaries.
      The
      Company is a corporation, and each Subsidiary of the Company is a corporation,
      in each case duly organized, validly existing and in good standing under the
      Laws of the jurisdiction of its incorporation and has the requisite corporate
      power and authority to own, lease and operate its properties and to carry on
      its
      business as it is now being conducted. The Company and each Subsidiary are
      duly
      qualified or licensed as a foreign corporation to do business, and are in good
      standing, in each jurisdiction where the character of the properties owned,
      leased or operated by them or the nature of their business makes such
      qualification or licensing necessary, except for such failures to be so
      qualified or licensed and in good standing that would not, individually or
      in
      the aggregate, have a Material Adverse Effect on the Company. As of the date
      hereof, a true and correct list of all Subsidiaries, together with the
      jurisdiction of organization of each Subsidiary and the percentage of the
      outstanding capital stock or other equity interests of each Subsidiary owned
      by
      the Company and each other Subsidiary, is set forth in Section 4.1 of the
      Company Disclosure Schedule. Except as disclosed in Section 4.1 of the Company
      Disclosure Schedule, the Company does not directly or indirectly own any equity
      or similar interest in, or any interest convertible into or exchangeable or
      exercisable for any equity or similar interest in, any corporation, partnership,
      joint venture or other business association or entity.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    4.2 Certificate
      of Incorporation and Bylaws.
      The
      Company has previously furnished or made available to Parent a complete and
      correct copy of the certificate of incorporation and bylaws or equivalent
      organizational documents, each as amended to date, of the Company and each
      of
      its Subsidiaries. Neither the Company nor any such Subsidiary is in violation
      of
      any provision of its certificate of incorporation or bylaws.

    

    4.3 Books
      and Records.

    

    (a) The
      books
      of account, minute books, stock record books, and other records of the Company
      and its Subsidiaries are complete and correct and have been maintained in
      accordance with sound business practices, including the maintenance of an
      adequate system of internal controls. The minute books of the Company and its
      Subsidiaries contain accurate and complete records of all meetings held of,
      consents of, and corporate action taken by, the stockholders, the boards of
      directors, and any committees of the boards of directors of each of Company
      and
      such Subsidiaries, and no meeting of such stockholders, boards of directors
      or
      committees has been held for which minutes have not been prepared and are not
      contained in such minute books.

    

    (b) None
      of
      the records, systems, data or information of either the Company or any of its
      Subsidiaries is recorded, stored, maintained, operated or otherwise wholly
      or
      partly dependent on or held or accessible by any means (including, but not
      limited to, an electronic, mechanical or photographic process computerized
      or
      not) which are not under the exclusive ownership and direct control of either
      the Company or its Subsidiaries, as the case may be.

    

    4.4 Capitalization.
      

    

    (a) The
      authorized capital stock of the Company consists of one hundred twenty five
      million (125,000,000) shares of Company Common Stock and five million
      (5,000,000) shares of blank-check preferred stock, par value $0.001 per share.
      As of the date of this Agreement, thirty-two million one hundred ninety-four
      thousand eight hundred eighty (32,194,880) shares of Company Common Stock,
      and
      one million forty-six thousand eight hundred and forty-six (1,046,846) shares
      of
      Series A convertible preferred stock (the “Company
      Series A Convertible Preferred Stock”),
      were
      issued and outstanding, all of which are validly issued, fully paid and
      nonassessable and not subject to preemptive rights, and there were no other
      shares of capital stock issued and outstanding. Except as set forth in this
      Section 4.4(a) or as may be specified in Section 4.4(a) of the Company
      Disclosure Schedule, as of the date of this Agreement, (i) there are no options,
      warrants or other rights, agreements, arrangements or commitments of any
      character relating to the issued or unissued capital stock of, or other equity
      interests in, the Company or any Subsidiary obligating the Company or any
      Subsidiary to issue or sell any shares of capital stock of, or other equity
      interests in, the Company or any Subsidiary, (ii) there are no outstanding
      contractual obligations of the Company or any Subsidiary to repurchase, redeem
      or otherwise acquire any shares of Company Common Stock, Company Series A
      Convertible Preferred Stock or any other capital stock of the Company, nor
      any
      capital stock of, or any equity interest in, any of its Subsidiaries, (iii)
      there are no declared or accrued unpaid dividends with respect to any of the
      Company’s outstanding securities, and (iv) the Company does not have outstanding
      or authorized any stock appreciation, phantom stock, profit participation,
      or
      similar rights. Each outstanding share of capital stock of, or other equity
      interest in, each Subsidiary is duly authorized, validly issued, fully paid
      and
      nonassessable.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    (b) Except
      as
      may be specified in Section 4.4(b) of the Company Disclosure Schedule, as of
      the
      date of this Agreement, of the Company’s outstanding equity, convertible and/or
      equity-linked securities (including options and warrants), only the Company
      Common Stock and Company Series A Convertible Preferred Stock provide the
      holders thereof with any voting rights of any kind.

    

    (c) Except
      as
      may be specified in Section 4.4(c) of the Company Disclosure Schedule, as of
      the
      date of this Agreement, neither the Company nor any of its Subsidiaries have
      outstanding any bonds, debentures, notes or other obligations or debt
      securities, and also except as set forth in Section 4.4(c) of the Company
      Disclosure Schedule, no outstanding bonds, debentures, notes or other
      obligations or debt securities carry with them any voting rights of any
      kind.

    

    4.5 Authority
      Relative To This Agreement.
      

    

    (a) The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement and the other Operative Agreements and, with respect to the
      Merger, upon the approval of this Agreement and the Merger by the Company’s
      shareholders in accordance with this Agreement and applicable Law, to perform
      its obligations hereunder and to consummate the Transactions. The execution
      and
      delivery of this Agreement and the other Operative Agreements by the Company
      and
      the consummation by the Company of the Transactions have been duly and validly
      authorized by all necessary corporate action and no other corporate proceedings
      on the part of the Company are necessary to authorize this Agreement or to
      consummate the Transactions, other than, with respect to the Merger, the
      approval of this Agreement and the Merger by the Company’s shareholders in
      accordance with applicable Law and the filing and recordation of the Certificate
      of Merger with the Delaware Secretary of State in accordance with this Agreement
      and applicable Law. This Agreement has been duly and validly executed and
      delivered by the Company, and, assuming the due authorization, execution and
      delivery of this Agreement by Parent and Merger Sub, and the Company Principal
      Stockholder, constitutes a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms,
      except
      as the enforceability thereof may be limited by (i) applicable bankruptcy,
      insolvency, reorganization, moratorium or other similar Laws affecting or
      relating to creditors’ rights generally, and (ii) the availability of
      injunctive relief and other equitable remedies.

    

    (b) At
      a
      meeting duly called and held in compliance with the DGCL and the bylaws of
      the
      Company, or otherwise through unanimous written consent if permitted pursuant
      thereto, the board of directors of the Company has duly taken action (i)
      approving the Merger, based on a determination that the Merger is fair to the
      holders of Company Common Stock and Series A Convertible Preferred Stock and
      in
      the best interests of such Company Stockholders, and (ii) approving this
      Agreement and the Transactions and recommending approval of this Agreement
      and
      the Transactions by the shareholders of the Company. As of the date hereof,
      such
      action has not been rescinded and is in full force and effect.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    (c) In
      accordance with the Company’s certificate of incorporation, bylaws, and the
      DGCL, the affirmative vote of the combined holders of at least fifty percent
      (50%) of the then-outstanding shares of Company Common Stock and Series A
      Convertible Preferred Stock (voting on an as-converted-to-Company-Common-Stock
      basis) is the only vote of the holders of any class or series of capital stock
      of the Company necessary to approve the Merger, and such vote, in accordance
      with the Company’s certificate of incorporation, bylaws, and the DGCL, may be
      duly obtained by written consent in lieu of a meeting. 

    

    4.6 No
      Conflict; Required Filings and Consents.
      

    

    (a)
      The
      execution and delivery of this Agreement and the other Operative Agreements
      by
      the Company do not, and the performance of this Agreement and the other
      Operative Agreements by the Company will not (in each case, with or without
      the
      giving of notice or lapse of time, or both), subject to (x)
      with
      respect to the Merger, obtaining the requisite approval of this Agreement and
      the Merger by the Company’s shareholders in accordance with this Agreement and
      applicable Law, and (y)
      obtaining the consents (the “Required
      Company Consents”),
      approvals, Authorizations and permits and making the filings described in
      Section 4.6(b) and Section 4.6(b) of the Company Disclosure Schedule, (i)
      conflict with or violate the certificate of incorporation, bylaws or equivalent
      organizational documents of the Company or any of its Subsidiaries, (ii)
      conflict with or violate any Law applicable to the Company or any of its
      Subsidiaries or by which any property or asset of the Company or any of its
      Subsidiaries is bound or affected, or (iii) except as may be specified in
      Section 4.6(a)(iii) of the Company Disclosure Schedule, result in any breach
      of
      or constitute a default (or an event which with notice or lapse of time or
      both
      would become a default) under, or give to others any right of termination,
      unilateral amendment, acceleration or cancellation of, or result in the creation
      of a Lien or other encumbrance on any property or asset of the Company or any
      of
      its Subsidiaries, or require the consent of any third party pursuant to, any
      note, bond, mortgage, indenture, Contract, agreement, lease, license, permit,
      franchise or other instrument or obligation to which the Company or any of
      its
      Subsidiaries is a party or by which the Company or any of its Subsidiaries
      or
      any property or asset of the Company or any of its Subsidiaries is bound or
      affected, except for such conflicts, violations, breaches, defaults or other
      occurrences, which individually or in the aggregate would not reasonably be
      expected to have a Material Adverse Effect on the Company or any of its
      Subsidiaries.

    

    (b) The
      execution and delivery of this Agreement and the other Operative Agreements
      by
      the Company do not, and the performance of this Agreement and the other
      Operative Agreements by the Company will not, require any consent, approval,
      Authorization or permit of, or filing with or notification to, any governmental
      or regulatory authority, domestic or foreign, except (i) the filing of the
      Form
      S-4 Registration Statement with the SEC in connection with the issuance of
      the
      Merger Securities pursuant to the Merger, (ii) filing and recordation of the
      Certificate of Merger with the Delaware Secretary of State as required by the
      DGCL, (iii) as may be specified in Section 4.6(b) of the Company Disclosure
      Schedule, and (iv) where failure to obtain any such consents, approvals,
      Authorizations or permits, or to make such filings or notifications, would
      not
      prevent or delay consummation of the Merger, or otherwise prevent the Company
      from performing its obligations under this Agreement or the other Operative
      Agreements.

    

    4.7 Permits;
      Compliance.
      Except
      as may be specified in Section 4.7 of the Company Disclosure Schedule, each
      of
      the Company and its Subsidiaries is in possession of all franchises, grants,
      Authorizations, licenses, permits, easements, variances, exceptions, consents,
      certificates, approvals and orders of any Governmental Authority necessary
      for
      the Company or any such Subsidiaries to own, lease and operate its properties
      or
      to carry on its business as it is now being conducted, except for those which
      the failure to possess would not individually or in the aggregate reasonably
      be
      expected to have a Material Adverse Effect on the Company (the “Company
      Permits”)
      and,
      as of the date hereof, no suspension or cancellation of any of the Company
      Permits is pending or, to the Knowledge of the Company, threatened, except
      such
      suspension or termination as would not reasonably be expected to have a Material
      Adverse Effect on the Company. Except as disclosed in Section 4.7 of the Company
      Disclosure Schedule or as would not reasonably be expected to have a Material
      Adverse Effect on the Company, neither the Company nor any of its Subsidiaries
      is in conflict with, or in default or violation of, or, with the giving of
      notice or the passage of time, would be in conflict with, or in default or
      violation of, (a) any Law applicable to the Company or any of its Subsidiaries
      or by which any property or asset of the Company or any of its Subsidiaries
      is
      bound or affected, or (b) any of the Company Permits.

     

    
      
        
        

      

      
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    4.8 Financial
      Statements.
      

     

    (a) Section
      4.8(a) of the Company Disclosure Schedule contains true and complete copies
      of
      the following consolidated financial statements: (i) unaudited consolidated
      income statement for the fiscal year ended May 26, 2007 (the “Most
      Recent Company Income Statement”),
      (ii)
      unaudited consolidated balance sheet at May 26, 2007 (the “Most
      Recent Company Balance Sheet”),
      (ii)
      unaudited consolidated statement of stockholders’ equity for the fiscal year
      ended May 26, 2007 (the “Most
      Recent Company Statement of Stockholders’ Equity”),
      and
      (iv) unaudited consolidated cash flow statement for the fiscal year ended May
      26, 2007 (the “Most
      Recent Company Cash Flow Statement”),
      in
      each case internally prepared by the Company (the Most Recent Company Income
      Statement, the Most Recent Company Balance Sheet, the Most Recent Company
      Statement of Stockholders’ Equity, and the Most Recent Company Cash Flow
      Statement shall be referred to collectively as the “Most
      Recent Company Financial Statements”).
      Each
      of the Most Recent Company Financial Statements (including, in each case, any
      notes thereto) are true, complete and correct, and fairly presented in all
      material respects the financial position, results of operations and changes
      in
      shareholders’ equity and cash flows of the Company and its Subsidiaries as at
      the respective dates thereof and for the respective periods indicated therein
      (subject to normal and recurring year-end adjustments which were not and are
      not
      expected, individually or in the aggregate, to have a Material Adverse Effect
      on
      the Company or any of its Subsidiaries).

    

    (b) Except
      (i) to the extent set forth on the Most Recent Company Balance Sheet, including
      the notes thereto, or (ii) as may be specified in Section 4.8(b) of the Company
      Disclosure Schedule, neither the Company nor any Subsidiary has any Liability
      which would be required to be reflected on a balance sheet, or in the notes
      thereto, prepared in accordance with GAAP, applied on a consistent basis, which
      would not, individually or in the aggregate, be reasonably expected to have
      a
      Material Adverse Effect on the Company.

    

    4.9 Notes
      and Accounts Receivable.
      All
      notes
      and accounts receivables of the Company and its Subsidiaries appearing on the
      Most Recent Company Balance Sheet and all of the receivables which have arisen
      or been acquired by the Company or its Subsidiaries since the date thereof
      (collectively, the “Company Receivables”),
      are
      bona fide trade receivable and have arisen or were acquired in the Ordinary
      Course of Business of the Company or its Subsidiaries and in a manner consistent
      with their normal past credit practices. Since the date of the Most Recent
      Company Balance Sheet, neither the Company nor any of its Subsidiaries has
      cancelled or agreed to cancel, in whole or in part, any Company Receivables
      except in the Ordinary Course of Business consistent with demonstrated past
      practices. All of the Company Receivables are reflected properly on the books
      and records of the Company or its Subsidiaries, and, except as set forth on
      Section 4.9 of the Company Disclosure Schedule, are current and collectible
      and
      not subject to set-off or counterclaim, and will be collected in accordance
      with
      their terms at their recorded amounts, subject only to reserve for bad debts
      or
      doubtful accounts set forth on the Most Recent Company Balance Sheet (as opposed
      to the notes thereto) as adjusted for the passage of time through the Closing
      Date in accordance with the past custom and practice of the Company and its
      Subsidiaries. For purposes of the foregoing, Company Receivables shall be deemed
      to be “collected in accordance with their terms at their recorded amounts” if
      they are collected in full within one hundred and twenty (120) days of the
      date
      such receivables are billed. 

     

    
      
        
        

      

      
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    4.10 Undisclosed
      Liabilities.
      None of
      the Company and its Subsidiaries has any material Liability, except for (i)
      Liabilities set forth on the face of the Most Recent Company Balance Sheet
      (rather than in any notes thereto), and (ii) Liabilities which have arisen
      since
      the date of the Most Recent Company Balance Sheet in the Ordinary Course of
      Business.

    

    4.11 Taxes.
      

    

    (a) Except
      as
      may be specified in Section 4.11(a) of the Company Disclosure Schedule, (i)
      each
      of the Company and its Subsidiaries has duly and timely filed all Tax Returns
      required to have been filed by or with respect to the Company or such
      Subsidiary, (ii) each such Tax Return correctly and completely reflects all
      liability for Taxes and all other information required to be reported thereon,
      (iii) all Taxes owed by the Company and each Subsidiary of the Company (whether
      or not shown on any Tax Return) have been timely paid, and (iv) each of the
      Company and its Subsidiaries has adequately provided for, in its books of
      account and related records, all Liability for unpaid Taxes, being current
      Taxes
      not yet due and payable.

    

    (b) Except
      as
      may be specified in Section 4.11(b) of the Company Disclosure Schedule, each
      of
      the Company and its Subsidiaries has withheld and timely paid all Taxes required
      to have been withheld and paid by it and has complied with all information
      reporting and backup withholding requirements, including maintenance of required
      records with respect thereto.

    

    (c) Except
      as
      may be specified in Section 4.11(c) of the Company Disclosure Schedule, neither
      Company nor any of its Subsidiaries (i) is the beneficiary of any extension
      of
      time within which to file any Tax Return, nor has Company or any of its
      Subsidiaries made (or had made on its behalf) any requests for such extensions,
      or (ii) has waived (or is subject to a waiver of) any statute of limitations
      in
      respect of Taxes or has agreed to (or is subject to) any extension of time
      with
      respect to a Tax assessment or deficiency.

    

    (d) Section
      4.11(d) of the Company Disclosure Schedule indicates those Tax Returns that
      have
      been audited and those Tax Returns that currently are the subject of audit.
      Except as set forth in Section 4.11(d) of the Company Disclosure Schedule (i)
      there is no Action now pending or threatened against or with respect to the
      Company or any of its Subsidiaries in respect of any Tax or any assessment
      or
      deficiency, and (ii) there are no liens for Taxes (other than current Taxes
      not
      yet due and payable) upon the assets of the Company. 

    

    (e) Section
      4.11(e) of the Company Disclosure Schedule lists, as of the date of this
      Agreement, all jurisdictions in which the Company or any of its Subsidiaries
      currently files Tax Returns. No claim has been made by any Taxing Authority
      in a
      jurisdiction where the Company or any of its Subsidiaries does not file Tax
      Returns that any of them is or may be subject to taxation by that jurisdiction
      or that any of them must file Tax Returns.

     

    
      
        
        

      

      
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    (f) None
      of
      the assets or properties of the Company or any of its Subsidiaries constitutes
      tax-exempt bond financed property or tax-exempt use property within the meaning
      of Section 168 of the Code. Neither the Company nor any of its Subsidiaries
      is a party to any “safe harbor lease” within the meaning of
      Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax
      Equity and Fiscal Responsibility Act of 1982, or to any “long-term contract”
within the meaning of Section 460 of the Code. Neither the Company nor any
      of its Subsidiaries has ever been a United States real property holding
      corporation within the meaning of Section 897(c)(2) of the Code. Company is
      not a “foreign person” within the meaning of Section 1445 of the
      Code.

    

    (g) Neither
      the Company nor any of its Subsidiaries has agreed to or is required to make
      by
      reason of a change in accounting method or otherwise, or could be required
      to
      make by reason of a proposed or threatened change in accounting method or
      otherwise, any adjustment under Section 481(a) of the Code. Neither the Company
      nor any of its Subsidiaries has been the “distributing corporation” (within the
      meaning of Section 355(c)(2) of the Code) with respect to a transaction
      described in Section 355 of the Code within the 5-year period ending as of
      the
      date of this Agreement.

    

    (h) No
      Subsidiary of the Company that is incorporated in a non-U.S. jurisdiction has,
      or at any time has had, an investment in “United States property” within the
      meaning of Section 956(c) of the Code. No Subsidiary of the Company is, or
      at
      any time has been, a passive foreign investment company within the meaning
      of
      Section 1297 of the Code and neither Company nor any of its Subsidiaries is
      a shareholder, directly or indirectly, in a passive foreign investment company.
      No Subsidiary of the Company that is incorporated in a non-U.S. jurisdiction
      is,
      or at any time has been, engaged in the conduct of a trade or business within
      the United States, or treated as or considered to be so engaged.

    

    (i) Neither
      the Company nor any of its Subsidiaries (i) has ever been a party to any
      Tax allocation or sharing agreement or Tax indemnification agreement,
      (ii) has ever been a member of an affiliated, consolidated, condensed or
      unitary group, or (iii) has any Liability for or obligation to pay Taxes of
      any other Person under Treas. Reg. 1.1502-6 (or any similar provision of Tax
      Law), or as transferee or successor, by Contract or otherwise. Neither the
      Company nor any of its Subsidiaries is a party to any joint venture,
      partnership, or other arrangement that is treated as a partnership for federal
      income tax purposes.

    

    (j) Neither
      the Company nor any of its Subsidiaries will be required to include any item
      of
      income in, or exclude any item of deduction from, taxable income for any taxable
      period (or portion thereof) ending after the Effective Time as a result of
      any:
      (i) intercompany transactions or excess loss accounts described in Treasury
      regulations under Section 1502 of the Code (or any similar provision of
      state, local, or foreign Tax Law), (ii) installment sale or open
      transaction disposition made on or prior to the Effective Time, or
      (iii) prepaid amount received on or prior to the Effective
      Time.

    

    (k) The
      Company has not entered into any transaction that constitutes a “reportable
      transaction” within the meaning of Treasury
      Regulation Section 1.6011-4(b).

    

    (l) Section
      4.11(l) of the Company Disclosure Schedule lists each person who the Company
      reasonably believes is, with respect to the Company or any Affiliate of the
      Company, a “disqualified individual” within the meaning of Section 280G of
      the Code and the Regulations thereunder.

    

    (m) Neither
      the Company nor, to the Knowledge of Company, any of its Affiliates has taken
      or
      agreed to take any action (other than actions contemplated by this Agreement)
      that would reasonably be expected to prevent the Merger from constituting a
      “reorganization” under Section 368 of the Code. The Company is not aware of
      any agreement or plan to which the Company or any of its Affiliates is a party
      or other circumstances relating to the Company or any of its Affiliates that
      could reasonably be expected to prevent the Merger from so qualifying as a
      “reorganization” under Section 368 of the Code.

     

    
      
        
        

      

      
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    (n) Except
      as
      may be specified in Section 4.11(l) of the Company Disclosure Schedule, the
      unpaid Taxes of the Company (i) did not, as of the date of the Most Recent
      Company Balance Sheet, exceed the reserve for Tax liability (rather than any
      reserve for deferred Taxes established to reflect timing differences between
      book and Tax income) set forth on the face of the Most Recent Company Balance
      Sheet (rather than in any notes thereto), and (ii) will not exceed that
      reserve as adjusted for the passage of time through the Closing Date in
      accordance with the past custom and practice of the Company in filing its Tax
      Returns. Since the date of the Most Recent Company Balance Sheet, the Company
      has not incurred any liability for Taxes arising from extraordinary gains or
      losses, as that term is used in GAAP, outside the Ordinary Course of Business
      consistent with past custom and practice.

    

    4.12 Title
      to Personal Property.

    

    (a) With
      respect to personal properties and assets that are purported to be owned by
      the
      Company and its Subsidiaries, including all properties and assets reflected
      as
      owned on the Most Recent Company Balance Sheet (other than inventory sold and
      items of obsolete equipment disposed of in the Ordinary Course of Business
      since
      the date thereof), the Company or one of its Subsidiaries has good and valid
      title to all of such properties and assets, free and clear of all Liens other
      than Permitted Liens. 

    

    (b) With
      respect to personal properties and assets that are leased, the Company or one
      of
      its Subsidiaries has a valid leasehold interest in such properties and assets
      and all such leases are in full force and effect and constitute valid and
      binding obligations of the other party(ies) thereto. Neither the Company nor
      any
      of its Subsidiaries nor any other party thereto is in violation of any of the
      terms of any such lease.

    

    4.13 Condition
      of Tangible Fixed Assets.
      All
      buildings, plants, leasehold improvements, structures, facilities, equipment
      and
      other items of tangible property and assets which are owned, leased or used
      by
      the Company or any of its Subsidiaries are structurally sound, free from
      material defects (patent and latent), have been maintained in accordance with
      normal industry practice, are in good operating condition and repair (subject
      to
      normal wear and tear given the use and age of such assets), are usable in the
      regular and Ordinary Course of Business and conform in all material respects
      to
      all Laws and Authorizations relating to their construction, use and
      operation.

    

    4.14 Inventory.
      Except
      as may be specified in Section 4.14 of the Company Disclosure Schedule, the
      inventory of the Company and its Subsidiaries consists of raw materials and
      supplies, manufactured and processed parts, work-in-process, and finished goods,
      all of which is merchantable and fit for the purpose for which it was procured
      or manufactured, and none of which is slow-moving, obsolete, damaged, or
      defective, subject only to the reserve for inventory writedown set forth on
      the
      face of the Most Recent Company Balance Sheet (rather than in any notes thereto)
      as adjusted for operations and transactions through the Closing Date in
      accordance with the past custom and practice of the Company and its
      Subsidiaries.

     

    
      
        
        

      

      
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    4.15 Product
      Warranty.
      Except
      as may be specified in Section 4.15 of the Company Disclosure Schedule,
      substantially all of the products manufactured, sold, leased, and delivered
      by
      the Company and its Subsidiaries have conformed in all material respects with
      all applicable contractual commitments and all express and implied warranties,
      and none of the Company and its Subsidiaries has any material liability (whether
      known or unknown, whether asserted or unasserted, whether absolute or
      contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
      and whether due or to become due) for replacement or repair thereof or other
      damages in connection therewith, subject only to the reserve for product
      warranty claims set forth on the face of the Most Recent Company Balance Sheet
      (rather than in any notes thereto) as adjusted for operations and transactions
      through the Closing Date in accordance with the past custom and practice of
      the
      Company and its Subsidiaries. Substantially all of the products manufactured,
      sold, leased, and delivered by the Company and its Subsidiaries are subject
      to
      standard terms and conditions of sale or lease. Section 4.15 of the Company
      Disclosure Schedule includes copies of the standard terms and conditions of
      sale
      or lease for each of the Company and its Subsidiaries (containing applicable
      guaranty, warranty, and indemnity provisions).

    

    4.16 Product
      Liability.
      None of
      the Company and its Subsidiaries has any material liability (whether known
      or
      unknown, whether asserted or unasserted, whether absolute or contingent, whether
      accrued or unaccrued, whether liquidated or unliquidated, and whether due or
      to
      become due) arising out of any injury to individuals or property as a result
      of
      the ownership, possession, or use of any product manufactured, sold, leased,
      or
      delivered by any of the Company and its Subsidiaries.

    

    4.17 Real
      Property.

    

    (a) Section
      4.17(a) of the Company Disclosure Schedule contains (i) a list of all real
      property and interests in real property owned in fee by the Company or any
      of
      its Subsidiaries (the “Company-Owned
      Real Property”),
      and
      (ii) a list of all real property and interests in real property leased by
      Company or any of its Subsidiaries with respect to each of which the annual
      rental payments exceed $80,000 (the “Company-Leased
      Real Property”).

    

    (b) With
      respect to each parcel of Company-Owned Real Property, the Company or one of
      its
      Subsidiaries has good and marketable title to each such parcel of Company-Owned
      Real Property free and clear of all Liens, except (A) Permitted Liens and
      (B) zoning and building restrictions, easements, covenants, rights-of-way
      and other similar restrictions of record, none of which materially impairs
      the
      current or proposed use of such Company-Owned Real Property. There are no
      outstanding options or rights of first refusal to purchase such parcel of
      Company-Owned Real Property, or any portion thereof or interest
      therein.

    

    (c) Each
      lease with respect to Company-Leased Real Property (each, a “Company
      Lease”)
      is in
      full force and effect. Neither the Company nor any of its Subsidiaries is in
      default under any such Company Lease and, to the Company’s Knowledge, no other
      party thereto is in default under any such Company Lease.

    

    4.18 Intellectual
      Property
      . Except
      to the extent as would not have a Material Adverse Effect, individually or
      in
      the aggregate, on the Company:

    

    (a) Section
      4.18(a) of the Company Disclosure Schedule lists (by name, owner and, where
      applicable, registration number and jurisdiction of registration, application,
      certification or filing) all Intellectual Property that is owned by Company
      and/or one or more of its Subsidiaries (whether exclusively, jointly with
      another Person or otherwise) (“Company-Owned
      Intellectual Property”);
      provided,
      however, that
      Company Disclosure Schedule does not include items of Company-Owned Intellectual
      Property which are both (i) immaterial to Company and its Subsidiaries and
      (ii) not registered or the subject of an application for registration.
      Except as described in Company Disclosure Schedule, Company or one of its
      Subsidiaries owns the entire right, title and interest to all Company-Owned
      Intellectual Property free and clear of all Liens.

     

    
      
        
        

      

      
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    (b) Section
      4.18(b) of the Company Disclosure Schedule lists all licenses, sublicenses
      and
      other Contracts (“Company
      In-Bound Licenses”)
      pursuant to which a third party authorizes the Company or any of its
      Subsidiaries to use, practice any rights under, or grant sublicenses with
      respect to, any Intellectual Property owned by such third party, including
      the
      incorporation of any such Intellectual Property into the Company’s or any of its
      Subsidiaries’ products and, with respect to each Company In-Bound License,
      whether Company In-Bound License is exclusive or non-exclusive; provided,
      however,
      that
      Company Disclosure Schedule is not required to list Company In-Bound Licenses
      that consist solely of “shrink-wrap” and similar commercially available end-user
      licenses.

    

    (c) Section
      4.18(c) of the Company Disclosure Schedule lists all licenses, sublicenses
      and
      other Contracts (“Company
      Out-Bound Licenses”)
      pursuant to which the Company or any of its Subsidiaries authorizes a third
      party to use, practice any rights under, or grant sublicenses with respect
      to,
      any Company Owned Intellectual Property or pursuant to which Company or any
      of
      its Subsidiaries grants rights to use or practice any rights under any
      Intellectual Property owned by a third party and, with respect to each Company
      Out-Bound License, whether Company Out-Bound License is exclusive or
      non-exclusive.

    

    (d) Except
      as
      may be specified in Section 4.18(d) of the Company Disclosure Schedule, each
      Company In-Bound License and each Company Out-Bound License is in full force
      and
      effect and valid and enforceable in accordance with its terms, and neither
      the
      Company nor any of its Subsidiaries has violated any provision of, or committed
      or failed to perform any act which, with or without the giving of notice or
      lapse of time, or both, would constitute a default in the performance,
      observance or fulfillment of any obligation, covenant, condition or other term
      contained in any Company In-Bound License or Company Out-Bound License, and
      neither the Company nor any of its Subsidiaries has given or received notice
      to
      or from any Person relating to any such alleged or potential default that has
      not been cured.

    

    (e) Except
      as
      may be specified in Section 4.18(e) of the Company Disclosure Schedule, the
      Company and/or one or more of its Subsidiaries (i) exclusively own the
      entire right, interest and title to all Intellectual Property that is used
      in or
      necessary for the businesses of Company and its Subsidiaries as they are
      currently conducted free and clear of Liens (including the design, manufacture,
      license and sale of all products currently under development or in production),
      or (ii) otherwise rightfully use or otherwise enjoy such Intellectual
      Property pursuant to the terms of a valid and enforceable Company In-Bound
      License that is listed in Company Disclosure Schedule or that is a “shrink-wrap”
or similar commercially available end-user license. Company-Owned Intellectual
      Property, together with Company’s and its Subsidiaries’ rights under Company
      In-Bound Licenses listed in Section 4.18(b) of the Company Disclosure Schedule
      or that are “shrink-wrap” and similar commercially available end-user licenses
      (collectively, the “Company
      Intellectual Property”),
      constitutes all the Intellectual Property used in or necessary for the operation
      of Company’s and its Subsidiaries’ businesses as they are currently
      conducted.

    

    (f) Except
      as
      may be specified in Section 4.18(f) of the Company Disclosure Schedule, (i)
      all
      registration, maintenance and renewal fees related to Patents, Marks, Copyrights
      and any other certifications, filings or registrations that are owned by Company
      or any of its Subsidiaries (collectively, “Company
      Registered Intellectual Property”)
      that
      are currently due have been paid and all documents and certificates related
      to
      such Company Registered Intellectual Property have been filed with the relevant
      Governmental Authority or other authorities in the United States or foreign
      jurisdictions, as the case may be, for the purposes of maintaining such Company
      Registered Intellectual Property, (ii) all Company Registered Intellectual
      Property is in good standing, held in compliance with all applicable legal
      requirements and enforceable by Company and/or one or more of its Subsidiaries,
      and (iii) all Patents that have been issued to the Company or any of its
      Subsidiaries are valid.

     

    
      
        
        

      

      
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    (g) Except
      as
      may be specified in Section 4.18(g) of the Company Disclosure Schedule, the
      Company is not aware of any challenges (or any basis therefor) with respect
      to
      the validity or enforceability of any Company Intellectual Property. Neither
      Company nor any of its Subsidiaries has taken any action or failed to take
      any
      action that would reasonably be expected to result in the abandonment,
      cancellation, forfeiture, relinquishment, invalidation, waiver or
      unenforceability of any Company Intellectual Property. Section 4.18(g) of the
      Company Disclosure Schedule lists all previously held Company Registered
      Intellectual Property that the Company or any of its Subsidiaries has abandoned,
      cancelled, forfeited or relinquished during the twelve (12) months
      preceding the date of this Agreement.

    

    (h) Except
      as
      may be specified in Section 4.18(h) of the Company Disclosure Schedule, (i)
      none
      of the products or services currently or formerly developed manufactured, sold,
      distributed, provided, shipped or licensed, by the Company or any of its
      Subsidiaries, or which are currently under development, has infringed or
      infringes upon, or otherwise unlawfully used or uses, the Intellectual Property
      Rights of any third party, (ii) neither the Company nor any of its Subsidiaries,
      by conducting its business as currently conducted, has infringed or infringes
      upon, or otherwise unlawfully used or uses, any Intellectual Property Rights
      of
      a third party, (iii) neither the Company nor any of its Subsidiaries has
      received any communication alleging that Company or any of its Subsidiaries
      or
      any of their respective products, services, activities or operations infringe
      upon or otherwise unlawfully use any Intellectual Property Rights of a third
      party nor, to the Company’s Knowledge, is there any basis therefor, (iv) no
      Action has been instituted, or, to Company’s Knowledge, threatened, relating to
      any Intellectual Property formerly or currently used by the Company or any
      of
      its Subsidiaries and none of Company Intellectual Property is subject to any
      outstanding Order, and (v) to the Company’s Knowledge, no Person has infringed
      or is infringing any Intellectual Property Rights of the Company or any of
      its
      Subsidiaries or has otherwise misappropriated or is otherwise misappropriating
      any Company Intellectual Property.

    

    (i) With
      respect to the Company’s or any of its Subsidiaries’ Proprietary Information,
      the documentation relating thereto is current, accurate and sufficient in detail
      and content to identify and explain it and to allow its full and proper use
      without reliance on the special knowledge or memory of others. The Company
      and
      its Subsidiaries have taken commercially reasonable steps to protect and
      preserve the confidentiality of all Proprietary Information owned by the Company
      and its Subsidiaries that is not covered by an issued Patent. Without limiting
      the generality of the foregoing, the Proprietary Information of the Company
      and
      its Subsidiaries (other than Proprietary Information that is covered by an
      issued Patent) is not part of the public knowledge and has not been used or
      divulged for the benefit of any Person other than the Company and its
      Subsidiaries.

    

    (j) Except
      as
      specified in Section 4.18(j) of the Company Disclosure Schedule, (i) all current
      and former employees, consultants and contractors of the Company and its
      Subsidiaries have executed and delivered, and are in compliance with,
      enforceable agreements regarding the protection of Proprietary Information
      and
      providing valid written assignments of all Intellectual Property conceived
      or
      developed by such employees, consultants or contractors in connection with
      their
      services for the Company and its Subsidiaries, and (ii) no current or former
      employee, consultant or contractor or any other Person has any right, claim
      or
      interest to any of Company Intellectual Property.

     

    
      
        
        

      

      
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    (k) No
      employee, consultant or contractor of the Company or any of its Subsidiaries
      has
      been, is or will be, by performing services for the Company or such Subsidiary,
      in violation of any term of any employment, invention disclosure or assignment,
      confidentiality, noncompetition agreement or other restrictive covenant or
      any
      Order as a result of such employee’s, consultant’s or independent contractor’s
      employment by the Company or any of its Subsidiaries or any services rendered
      by
      such employee, consultant or independent contractor.

    

    (l) The
      execution and delivery of this Agreement and the other Operative Agreements
      by
      the Company does not, and the consummation of the Merger (in each case, with
      or
      without the giving of notice or lapse of time, or both) will not, directly
      or
      indirectly, result in the loss or impairment of, or give rise to any right
      of
      any third party to terminate or reprice or otherwise renegotiate any of the
      Company’s or any of its Subsidiaries’ rights to own any of its Intellectual
      Property or their respective rights under any Company Out-Bound License or
      Company In-Bound License, nor require the consent of any Governmental Authority
      or other third party in respect of any such Intellectual Property.

    

    (m) Software.

    

    (i) The
      Software owned, or purported to be owned by the Company or any of its
      Subsidiaries (collectively, the “Company-Owned
      Software”
),
      has
      been either (A) developed by employees of the Company or one or more of its
      Subsidiaries within the scope of their employment by the Company or such
      Subsidiary, (B) developed by independent contractors who have assigned all
      of their right, title and interest therein to the Company or one of its
      Subsidiaries pursuant to written Contracts, or (C) otherwise acquired by
      the Company or one of its Subsidiaries from a third party pursuant to a written
      Contract in which such third party assigns all of its right, title and interest
      therein. No Company-Owned Software contains any programming code, documentation
      or other materials or development environments that embody Intellectual Property
      Rights of any Person other than the Company and its Subsidiaries, other than
      such materials obtained by the Company and its Subsidiaries from other Persons
      who make such materials generally available to all interested Persons or
      end-users on standard commercial terms.

    

    (ii) Each
      of
      the Company’s and its Subsidiaries’ existing and currently supported and
      marketed Software (including Software-embedded) products performs, in all
      material respects, the functions described in any agreed specifications or
      end-user documentation or other information provided to customers of the Company
      or such Subsidiary on which such customers relied when licensing or otherwise
      acquiring such products, subject only to routine bugs and errors that can be
      corrected promptly by the Company or such Subsidiary in the course of providing
      customer support without further liability to the Company or such Subsidiary,
      and all of the code of such products has been developed in a manner that meets
      common industry practice, including the use of regression test and release
      procedures. To the Company’s Knowledge, each of the Company’s and its
      Subsidiaries’ existing and currently supported and marketed Software (including
      Software-embedded) products is free of all viruses, worms, trojan horses and
      material known Contaminants and does not contain any bugs, errors, or problems
      in each case that would substantially disrupt its operation or have a
      substantial adverse impact on the operation of the Software.

    

    (iii) The
      Company and its Subsidiaries have taken all actions customary in the Software
      industry to document the Company-Owned Software and its operation, such that
      the
      materials comprising the Company-Owned Software, including the source code
      and
      documentation, have been written in a clear and professional manner so that
      they
      may be understood, modified and maintained in an efficient manner by reasonably
      competent programmers.

     

    
      
        
        

      

      
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    (iv) Neither
      the Company nor any of its Subsidiaries has exported or transmitted Software
      or
      other material in connection with the Company’s or such Subsidiaries’ business
      to any country to which such export or transmission is restricted by any
      applicable Law, without first having obtained all necessary and appropriate
      Authorizations.

    

    (v) All
      Company-Owned Software is free of any Disabling Code or Contaminants that may,
      or may be used to, access, modify, delete, damage or disable any Systems or
      that
      may result in damage thereto. The Company and its Subsidiaries have taken
      reasonable steps and implemented reasonable procedures to ensure that its and
      their internal computer systems used in connection with Company’s and its
      Subsidiaries’ business are free from Disabling Codes and Contaminants. The
      Software licensed by the Company is free of any Disabling Codes or Contaminants
      that may, or may be used to, access, modify, delete, damage or disable the
      Systems of the Company or its Subsidiaries or that might result in damage
      thereto. The Company and its Subsidiaries have taken all reasonable steps to
      safeguard their respective Systems and restrict unauthorized access
      thereto.

    

    (vi) No
      Public
      Software: (A) forms part of any Company Intellectual Property;
      (B) was, or is, used in connection with the development of any
      Company-Owned Intellectual Property or any products or services developed or
      provided by the Company or any of its Subsidiaries; or (C) was, or is,
      incorporated or distributed, in whole or in part, in conjunction with Company
      Intellectual Property. 

    

    4.19 Material
      Contracts

    

    (a) Section
      4.19 of the Company Disclosure Schedule contains a complete and accurate list
      of
      each Contract or series of related Contracts to which the Company or any of
      its
      Subsidiaries is a party or is subject, or by which any of their respective
      assets are bound:

    

    (i) for
      the
      purchase of materials, supplies, goods, services, equipment or other assets
      and
      that involves or would reasonably be expected to involve (A) annual
      payments by the Company or any of its Subsidiaries of $50,000 or more, or
      (B) aggregate payments by the Company or any of its Subsidiaries of $50,000
      or more;

    

    (ii) (A)
      for
      the sale by the Company or any of its Subsidiaries of materials, supplies,
      goods, services, equipment or other assets, and that provides for (1) a
      specified annual minimum dollar sales amount by the Company or any of its
      Subsidiaries of $50,000 or more, or (2) aggregate payments to the Company
      or any of its Subsidiaries of $50,000 or more, or (B) pursuant to which the
      Company or any of its Subsidiaries received payments of more than $50,000 in
      the
      year ended May 26, 2007, or expects to receive payments of more than $50,000
      in
      the year ending May 26, 2008;

    

    (iii) that
      continues over a period of more than six (6) months from the date hereof
      and provides for payments to or by the Company or any of its Subsidiaries
      exceeding $50,000, except for arrangements disclosed pursuant to the preceding
      subparagraphs (i) and (ii);

    

    (iv) that
      is
      an employment, consulting, termination or severance Contract that involves
      or
      would reasonably be expected to involve the payment of $50,000 or more by the
      Company or any of its Subsidiaries following the date hereof, except for any
      such Contract that is terminable at-will by the Company or any of its
      Subsidiaries without liability to the Company or any such
      Subsidiary;

     

    
      
        
        

      

      
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    (v) that
      is a
      distribution, dealer, representative or sales agency Contract, other than
      Contracts entered into in the Ordinary Course of Business with distributors,
      representatives and sales agents that are cancelable without penalty on not
      more
      than one hundred eighty (180) days’ notice and does not deviate in any
      material respect from the Company’s standard form;

    

    (vi) that
      is a
      (A) Company Lease, or (B) Contract for the lease of personal property,
      in each case which provides for payments to or by the Company or any of its
      Subsidiaries in any one case of $75,000 or more annually or $250,000 or more
      over the term of such Company Lease or lease;

    

    (vii) which
      provides for the indemnification by the Company or any of its Subsidiaries
      of
      any Person, the undertaking by the Company or any of its Subsidiaries to be
      responsible for consequential damages, or the assumption by the Company or
      any
      of its Subsidiaries of any Tax, environmental or other Liability;

    

    (viii) that
      is a
      note, debenture, bond, equipment trust, letter of credit, loan or other Contract
      for Indebtedness or lending of money (other than to employees for travel
      expenses in the Ordinary Course of Business) or Contract for a line of credit
      or
      guarantee, pledge or undertaking of the Indebtedness of any other
      Person;

    

    (ix) for
      any
      capital expenditure or leasehold improvement in any one case in excess of
      $50,000 or any such Contracts in the aggregate greater than
      $100,000;

    

    (x) that
      restricts or purports to restrict the right of the Company or any of its
      Subsidiaries to engage in any line of business, acquire any property, develop
      or
      distribute any product or provide any service (including geographic
      restrictions) or to compete with any Person or granting any exclusive
      distribution rights, in any market, field or territory;

    

    (xi) that
      is a
      partnership, joint venture, joint development or similar Contract;

    

    (xii) that
      relates to the acquisition or disposition of any business (whether by merger,
      sale of stock, sale of assets or otherwise);

    

    (xiii) that
      is a
      collective bargaining Contract or other Contract with any labor organization,
      union or association; and

    

    (xiv) that
      is a
      Contract or series of Contracts, the termination or breach of which would
      reasonably be expected to have a Material Adverse Effect on the Company and
      not
      previously disclosed pursuant to this Section 4.19.

    

    (b) Each
      Contract required to be listed in Schedule 4.19 of the Company Disclosure
      Schedule (collectively, the “Company
      Material Contracts”)
      is in
      full force and effect and valid and enforceable in accordance with its terms,
      except to the extent a failure to be in full force and effect and valid or
      enforceable in accordance with its terms would not have a Material Adverse
      Effect on the Company.

     

    
      
        
        

      

      
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    (c) Neither
      the Company nor any of its Subsidiaries is, and to the Company’s Knowledge, no
      other party thereto is, in default in the performance, observance or fulfillment
      of any obligation, covenant, condition or other term contained in any Company
      Material Contract, and neither the Company nor any of its Subsidiaries has
      given
      or received notice to or from any Person relating to any such alleged or
      potential default that has not been cured. No event has occurred which with
      or
      without the giving of notice or lapse of time, or both, may conflict with or
      result in a violation or breach of, or give any Person the right to exercise
      any
      remedy under or accelerate the maturity or performance of, or cancel, terminate
      or modify, any Company Material Contract.

    

    (d) The
      Company has provided accurate and complete copies of each Company Material
      Contract to Parent.

    

    (e) All
      Contracts other than Company Material Contracts to which the Company or any
      of
      its Subsidiaries is a party or is subject, or by which any of their respective
      assets are bound (collectively, the “Company
      Minor Contracts”),
      are
      in all material respects valid and enforceable in accordance with their terms.
      Neither the Company nor any of its Subsidiaries is in default in the
      performance, observance or fulfillment of any obligation, covenant or condition
      contained therein, and no event has occurred which with or without the giving
      of
      notice or lapse of time, or both, would constitute a default thereunder by
      the
      Company or any of its Subsidiaries, except in either case where any such default
      or defaults could not reasonably be expected have, individually or in the
      aggregate, a Material Adverse Effect on Company taken as a whole.

    

    4.20 Litigation.
      Except
      as may be specified in Section 4.20 of the Company Disclosure Schedule, (i)
      there is no Proceeding pending or, to the Knowledge of the Company, threatened
      against the Company or any if its Subsidiaries, which (a) individually or in
      the
      aggregate, could reasonably be expected to have a Material Adverse Effect on
      the
      Company, or (b) seeks to and is reasonably likely to significantly delay or
      prevent the consummation of the Merger, (ii) there
      is
      no Proceeding against any current or, to Company’s Knowledge, former director or
      employee of the Company or any of its Subsidiaries with respect to which the
      Company or any of its Subsidiaries has or is reasonably likely to have an
      indemnification obligation, and (iii) neither
      the Company or any of its Subsidiaries, nor any property or asset of the Company
      or any of its Subsidiaries is in violation of any Order having, individually
      or
      in the aggregate, a Material Adverse Effect on the Company. 

    

    4.21 Employee
      Benefit Plans.

    

    (a) Section
      4.21(a) of the Company Disclosure Schedule sets forth a complete and accurate
      list of all Benefit Plans sponsored, maintained or contributed to by the
      Company, any of its Subsidiaries, or any Company ERISA Affiliate, or with
      respect to which the Company, any of its Subsidiaries, or any Company ERISA
      Affiliate otherwise has any present or future Liability (each, a “Company
      Benefit Plan”).
      A
      current, accurate and complete copy of each Company Benefit Plan has been
      provided to Parent. Neither the Company nor any of its Subsidiaries has any
      intent or commitment to create any additional Company Benefit Plan or amend
      any
      Company Benefit Plan.  

    

    (b) Each
      Company Benefit Plan has been and is currently administered in compliance in
      all
      material respects with its constituent documents and with all reporting,
      disclosure and other requirements of ERISA and the Code applicable to such
      Company Benefit Plan. Each Company Benefit Plan that is an Employee Pension
      Benefit Plan (as defined in Section 3(2) of ERISA) and which is intended to
      be qualified under Section 401(a) of the Code (a “Company
      Pension Plan”),
      has
      been determined by the Internal Revenue Service to be so qualified and no
      condition exists that would adversely affect any such determination. No Company
      Benefit Plan is a “defined benefit plan” as defined in Section 3(35) of
      ERISA.

     

    
      
        
        

      

      
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    (c) None
      of
      the Company, any Subsidiary of Company, any Company ERISA Affiliate or any
      trustee or agent of any Company Benefit Plan has been or is currently engaged
      in
      any prohibited transactions as defined by Section 406 of ERISA or
      Section 4975 of the Code for which an exemption is not applicable which
      could subject Company, any Subsidiary of the Company, any Company ERISA
      Affiliate or any trustee or agent of any Company Benefit Plan to the tax or
      penalty imposed by Section 4975 of the Code or Section 502 of
      ERISA.

    

    (d) There
      is
      no event or condition existing which could be deemed a “reportable
      event”
      (within
      the meaning of Section 4043 of ERISA) with respect to which the thirty
      (30)-day notice requirement has not been waived. To the Company’s Knowledge, no
      condition exists which could subject the Company or any of its Subsidiaries
      to a
      penalty under Section 4071 of ERISA.

    

    (e) None
      of
      the Company, any Subsidiary of Company, nor any Company ERISA Affiliate is,
      or
      has been, party to any “multi-employer plan,” as that term is defined in
      Section 3(37) of ERISA.

    

    (f) True
      and
      correct copies of the most recent annual report on Form 5500 and any
      attached schedules for each Company Benefit Plan (if any such report was
      required by applicable Law) and a true and correct copy of the most recent
      determination letter issued by the Internal Revenue Service for each Company
      Pension Plan have been provided to Parent.

     

    (g) With
      respect to each Company Benefit Plan, there are no Proceedings (other than
      routine claims for benefits in the ordinary course) pending or, to the Company’s
      Knowledge, threatened against any Company Benefit Plan, the Company, any
      Subsidiary of the Company, any Company ERISA Affiliate or any trustee or agent
      of any Company Benefit Plan.

    

    (h) With
      respect to each Company Benefit Plan to which the Company, any Subsidiary of
      the
      Company or any Company ERISA Affiliate is a party which constitutes a group
      health plan subject to Section 4980B of the Code, each such Company Benefit
      Plan
      complies, and in each case has complied, in all material respects with all
      applicable requirements of Section 4980B of the Code.

    

    (i)  Full
      payment has been made of all amounts which the Company, any Subsidiary of the
      Company or any Company ERISA Affiliate was required to have paid as a
      contribution to any Company Benefit Plan as of the last day of the most recent
      fiscal year of each of the Benefit Plans ended prior to the date of this
      Agreement, and no Company Benefit Plan has incurred any “accumulated funding
      deficiency” (as defined in Section 302 of ERISA and Section 412 of the
      Code), whether or not waived, as of the last day of the most recent fiscal
      year
      of each such Company Benefit Plan ended prior to the date of this
      Agreement.

    

    (j) Each
      Company Benefit Plan is, and its administration is and has been during the
      six-year period preceding the date of this Agreement, in all material respects
      in compliance with, and none of the Company, any Subsidiary of the Company
      or
      any Company ERISA Affiliate has received any claim or notice that any such
      Company Benefit Plan is not in material compliance with, all applicable Laws
      and
      Orders and prohibited transaction exemptions, including to the extent
      applicable, the requirements of ERISA.

    

    (k) None
      of
      the Company, any Subsidiary of the Company and any Company ERISA Affiliate
      is in
      default in any material respect in performing any of its contractual obligations
      under any Company Benefit Plans or any related trust agreement or insurance
      contract.

     

    
      
        
        

      

      
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    (l) There
      are
      no material outstanding Liabilities of any Company Benefit Plan other than
      Liabilities for benefits to be paid to participants in any Company Benefit
      Plan
      and their beneficiaries in accordance with the terms of such Company Benefit
      Plan.

    

    (m) Subject
      to ERISA and the Code, each Company Benefit Plan may be amended, modified,
      terminated or otherwise discontinued by the Company, a Subsidiary of the Company
      or a Company ERISA Affiliate at any time without liability.

    

    (n) No
      Company Benefit Plan other than a Company Pension Plan, retiree medical plan
      or
      severance plan provides benefits to any individual after termination of
      employment.

    

    (o) The
      consummation of the Merger will not (either alone or in conjunction with any
      other event) (i) entitle any current or former director, employee,
      contractor or consultant of the Company or any of its Subsidiaries to severance
      pay, unemployment compensation or any other payment, (ii) accelerate the time
      of
      payment or vesting, or increase the amount of compensation due to any such
      director, employee, contractor or consultant, or result in the payment of any
      other benefits to any Person or the forgiveness of any Indebtedness of any
      Person, (iii) result in any prohibited transaction described in
      Section 406 of ERISA or Section 4975 of the Code for which an exemption is
      not available, or (iv) result in the payment or series of payments by the
      Company or any of its Affiliates to any person of an “excess
      parachute payment”
      within
      the meaning of Section 280G of the Code.

    

    (p) With
      respect to each Company Benefit Plan that is funded wholly or partially through
      an insurance policy, all premiums required to have been paid to date under
      the
      insurance policy have been paid, all premiums required to be paid under the
      insurance policy through the Closing will have been paid on or before the
      Closing and, as of the Closing, there will be no liability of the Company,
      any
      Subsidiary of the Company or any Company ERISA Affiliate under any insurance
      policy or ancillary agreement with respect to such insurance policy in the
      nature of a retroactive rate adjustment, loss sharing arrangement or other
      actual or contingent liability arising wholly or partially out of events
      occurring prior to the Closing.

    

    (q) Each
      Company Benefit Plan that constitutes a “welfare
      benefit plan,”
      within
      the meaning of Section 3(1) of ERISA, and for which contributions are
      claimed by the Company, any Subsidiary of the Company or any Company ERISA
      Affiliate as deductions under any provision of the Code, is in compliance in
      all
      material respects with all applicable requirements pertaining to such deduction.
      With respect to any welfare benefit fund (within the meaning of Section 419
      of the Code) related to a welfare benefit plan, there is no disqualified benefit
      (within the meaning of Section 4976(b) of the Code) that would result in the
      imposition of a tax under Section 4976(a) of the Code. All welfare benefit
      funds
      intended to be exempt from tax under Section 501(a) of the Code have been
      determined by the Internal Revenue Service to be so exempt and no event or
      condition exists which would adversely affect any such
      determination.

    

    (r) Section
      4.21(r) of the Company Disclosure Schedule sets forth all Company Benefit Plans
      covering employees of the Company or any of its Subsidiaries outside of the
      United States (the “Company
      Foreign Plans”).
       The
      Company Foreign Plans have been operated in accordance, and are in compliance,
      in all material respects with their constituent documents and all applicable
      Laws. There are no material unfunded Liabilities under or in respect of any
      Company Foreign Plans, and all contributions or other payments required to
      be
      made to or in respect of the Company Foreign Plans prior to the Closing Date
      have been made or will be made prior to the Closing Date.

     

    
      
        
        

      

      
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    4.22 Labor
      and Employment Matters.

    

    (a) Neither
      the
      Company
      nor any of its Subsidiaries is a party or subject to any labor union or
      collective bargaining Contract. There
      have
      not been since the
      Company began operations
      and
      there are not pending or threatened any labor disputes, work stoppages, requests
      for representation, pickets, work slow-downs due to labor disagreements or
      any
      actions or arbitrations which involve the labor or employment relations of
      the
      Company
      or any of its Subsidiaries.  There
      is
      no unfair labor practice, charge or complaint pending, unresolved or, to the
      Company’s Knowledge, threatened before the National Labor Relations Board. No
      event has occurred or circumstance exist that may provide the basis of any
      work
      stoppage or other labor dispute.

    

    (b) Each
      of
the
      Company
      and its Subsidiaries has complied in all material respects with each, and is
      not
      in violation in any material respect of any, Law relating to anti-discrimination
      and equal employment opportunities and there are, and have been, no material
      violations of any other Law respecting the hiring, hours, wages, occupational
      safety and health, employment, promotion, termination or benefits of any
      employee or other Person. Each of the Company and its Subsidiaries has filed
      all
      reports, information and notices required under any Law respecting the hiring,
      hours, wages, occupational safety and health, employment, promotion, termination
      or benefits of any employee or other Person, and will timely file prior to
      Closing all such reports, information and notices required by any Law to be
      given prior to Closing.

    

    (c) Each
      of
      the Company and its Subsidiaries has paid or properly accrued in the Ordinary
      Course of Business all wages and compensation due to employees, including all
      vacations or vacation pay, holidays or holiday pay, sick days or sick pay,
      and
      bonuses.

    

    (d) Neither
      the Company nor any of its Subsidiaries is a party to any Contract which
      restricts the Company or any of its Subsidiaries from relocating, closing or
      terminating any of its operations or facilities or any portion thereof.
 Neither
      the
      Company
      nor any of its Subsidiaries have effectuated a “plant closing” (as defined in
      the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN
      Act”))
      or
      (ii) a “mass lay-off” (as defined in the WARN Act), in either case
      affecting any site of employment or facility of the
      Company
      or any of its Subsidiaries, except in accordance with the WARN Act. The
      consummation of the Merger will not create Liability for any act by the Company
      or any of its Subsidiaries on or prior to the Closing Date under the WARN Act
      or
      any other Law respecting reductions in force or the impact on employees on
      plant
      closings or sales of businesses.

    

    4.23 Environmental.

    

    (a) Each
      of
      the Company and its Subsidiaries has secured, and is in compliance in all
      material respects with, all Environmental Permits required in connection with
      its operations and the Real Property. Each Environmental Permit, together with
      the name of the Governmental Authority issuing such Environmental Permit, is
      set
      forth in Section 4.23(a) of the Company Disclosure Schedule. All such
      Environmental Permits are valid and in full force and effect and none of such
      Environmental Permits will be terminated or impaired or become terminable as
      a
      result of the Merger. Each of the Company and its Subsidiaries has been, and
      are
      currently, in compliance in all material respects with all Environmental Laws.
      Neither the Company nor any of its Subsidiaries has received any notice alleging
      that the Company or any of its Subsidiaries is not in such compliance with
      Environmental Laws.

     

    
      
        
        

      

      
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    (b) There
      are
      no past, pending or, to the Company’s Knowledge, threatened Environmental
      Actions against or affecting the Company or any of its Subsidiaries, and the
      Company is not aware of any facts or circumstances which could be expected
      to
      form the basis for any Environmental Action against the Company or any of its
      Subsidiaries.

    

    (c) Neither
      the Company nor any of its Subsidiaries has entered into or agreed to any Order,
      and neither the Company nor any of its Subsidiaries is subject to any Order,
      relating to compliance with any Environmental Law or to investigation or cleanup
      of a Hazardous Substance under any Environmental Law.

    

    (d) No
      Lien
      has been attached to, or asserted against, the assets, property or rights of
      the
      Company or any of its Subsidiaries pursuant to any Environmental Law, and,
      to
      the Company’s Knowledge, no such Lien has been threatened. There are no facts,
      circumstances or other conditions that could be expected to give rise to any
      Liens on or affecting any Real Property.

    

    (e) There
      has
      been no treatment, storage, disposal or Release of any Hazardous Substance
      at,
      from, into, on or under any Real Property or any other property currently or
      formerly owned, operated or leased by the Company or any of its Subsidiaries.
      No
      Hazardous Substances are present in, on, about or migrating to or from any
      Real
      Property that could be expected to give rise to an Environmental Action against
      the Company or any of its Subsidiaries.

    

    (f) Neither
      the Company nor any of its Subsidiaries has received a CERCLA 104(e) information
      request nor has the Company or any of its Subsidiaries been named a potentially
      responsible party for any National Priorities List site under CERCLA or any
      site
      under analogous state Law. Neither the Company nor any of its Subsidiaries
      has
      received an analogous notice or request from any non-U.S. Governmental
      Authority.

    

    (g) There
      are
      no aboveground tanks or underground storage tanks on, under or about the Real
      Property. Any aboveground or underground tanks previously situated on the Real
      Property or any other property currently or formerly owned, operated or leased
      by the Company or any of its Subsidiaries have been removed in accordance with
      all Environmental Laws and no residual contamination, if any, remains at such
      sites in excess of applicable standards.

    

    (h) There
      are
      no PCBs
      leaking
      from any article, container or equipment on, under or about the Real Property
      and there are no such articles, containers or equipment containing PCBs. There
      is no asbestos containing material or lead-based paint containing materials
      in
      at, on, under or within the Real Property.

    

    (i) Neither
      the Company nor any of its Subsidiaries has transported or arranged for the
      treatment, storage, handling, disposal, or transportation of any Hazardous
      Material to any off-site location which is an Environmental Clean-up
      Site.

    

    (j) None
      of
      the Real Property is an Environmental Clean-up Site.

    

    (k) The
      Company has provided to Parent true and complete copies of, or access to, all
      written environmental assessment materials and reports that have been prepared
      by or on behalf of the Company or any of its Subsidiaries.

     

    
      
        
        

      

      
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    4.24 Related
      Party Transactions.
       There
      are
      no Contracts of any kind, written or oral, entered into by the Company or any
      of
      its Subsidiaries with, or for the benefit of, any officer, director or
      stockholder of the Company or, to the Knowledge of the Company, any Affiliate
      of
      any of them, except in each case, for (a) employment agreements,
      indemnification agreements fringe benefits and other compensation paid to
      directors, officers and employees consistent with previously established
      policies (including normal merit increases in such compensation in the Ordinary
      Course of Business) and copies of which have been provided to Parent and are
      listed in Section 4.24 of the Company Disclosure Schedule, (b) reimbursements
      of
      ordinary and necessary expenses incurred in connection with their employment
      or
      service, (c) amounts paid pursuant to Company Benefit Plans of which copies
      have been provided to Parent, (d) the occupancy of certain of the Company’s
      facilities which do not provide for the payment of significant amounts of rent,
      and (e) those loans made to the Company listed in, and the details of which
      are
      specifically set forth in, Section 4.24 of the Company Disclosure Schedule.
      To
      the Knowledge of the Company, none of such Persons has any material direct
      or
      indirect ownership interest in any firm or corporation with which the Company
      or
      any of its Subsidiaries has a business relationship, or with any firm or
      corporation that competes with the Company or any of its Subsidiaries (other
      than ownership of securities in a publicly-traded company representing less
      than
      one percent of the outstanding stock of such company). No officer or director
      of
      the Company or any of its Subsidiaries or member of his or her immediate family
      or greater than 5% stockholder of the Company or, to the Knowledge of the
      Company, any Affiliate of any of them or any employee of the Company or any
      of
      its Subsidiaries is directly or indirectly interested in any Company Material
      Contract.

    

    4.25 Insurance.
      Section
      4.25 of the Company Disclosure Schedule sets forth the following information
      with respect to each material insurance policy (including policies providing
      property, casualty, liability, and workers' compensation coverage and bond
      and
      surety arrangements) with respect to which any of the Company and its
      Subsidiaries is a party, a named insured, or otherwise the beneficiary of
      coverage:

    

    (i) the
      name,
      address, and telephone number of the agent;

    

    (ii) the
      name
      of the insurer, the name of the policyholder, and the name of each covered
      insured;

    

    (iii) the
      policy number and the period of coverage;

    

    (iv) the
      scope
      (including an indication of whether the coverage is on a claims made,
      occurrence, or other basis) and amount (including a description of how
      deductibles and ceilings are calculated and operate) of coverage;
      and

    

    (v) a
      description of any retroactive premium adjustments or other material
      loss-sharing arrangements.

    

    With
      respect to each such insurance policy: (A) the policy is legal, valid, binding,
      enforceable, and in full force and effect in all material respects; (B) neither
      the Company, any of its Subsidiaries nor any other party to the policy is in
      material breach or default (including with respect to the payment of premiums
      or
      the giving of notices), and no event has occurred which, with notice or the
      lapse of time, would constitute such a material breach or default, or permit
      termination, modification, or acceleration, under the policy; and (C) no party
      to the policy has repudiated any material provision thereof. Section 4.25 of
      the
      Company Disclosure Schedule describes any material self-insurance arrangements
      affecting the Company and/or any of its Subsidiaries.

     

    
      
        
        

      

      
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    4.26 Absence
      of Certain Changes or Events.
      Since
      May 26, 2007, except as may be contemplated by, or disclosed pursuant to, this
      Agreement, including Section 4.26 of the Company Disclosure
      Schedule:

    

    (a) there
      has
      not been any event or events (whether or not covered by insurance), individually
      or in the aggregate, which have had a Material Adverse Effect on the Company
      or
      any of its Subsidiaries, including without limitation the imposition of any
      security interests on any of the assets of the Company or any of its
      Subsidiaries;

    

    (b) there
      have not been any amendments or other modifications to the certificate of
      incorporation or bylaws of either the Company or any of its Subsidiaries;

    

    (c) there
      has
      not been any entry by the Company nor any of its Subsidiaries into any
      commitment or transaction material to the Company or such Subsidiaries, except
      in the Ordinary Course of Business and consistent with past practice, including
      without limitation any (i) borrowings or the issuance of any guaranties, (ii)
      any capital expenditures in excess of $60,000, or (iii) any grant of any
      increase in the base compensation payable, or any loans, to any directors,
      officers or employees;

     

    (d) there
      has
      not been, other than pursuant to the Plans, any increase in or establishment
      of
      any bonus, insurance, severance, deferred compensation, pension, retirement,
      profit sharing, stock option, stock purchase or other employee benefit plan,
      except in the Ordinary Course of Business consistent with past
      practice.

     

    (e) there
      have not been any material changes by the Company in its accounting methods,
      principles or practices;

    

    (f) neither
      Company nor any of its Subsidiaries has declared, set aside or paid any dividend
      or other distribution (whether in cash, stock or property) with respect to
      any
      of its securities;

    

    (g) neither
      Company nor any of its Subsidiaries has split, combined or reclassified any
      of
      its securities, or issued, or authorized for issuance, any
      securities;

    

    (h) there
      has
      not been any material damage, destruction or loss with respect to the property
      and assets of Company or any of its Subsidiaries, whether or not covered by
      insurance;

    

    (i) there
      has
      not been any revaluation of Company’s or any of its Subsidiaries’ assets,
      including writing down the value of inventory or writing off notes or accounts
      receivable, other than in the Ordinary Course of Business consistent with past
      practice; and

    

    (j) neither
      Company nor any of its Subsidiaries has agreed, whether in writing or otherwise,
      to do any of the foregoing.

     

    
      
        
        

      

      
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    4.27 Solvency. No
      Order
      has been made, petition presented, or resolution passed for the winding up
      (or
      other process whereby the business is terminated and the assets of the subject
      company are distributed among its creditors and/or shareholders) of either
      the
      Company or any of its Subsidiaries. There are no cases or Proceedings of any
      kind pending
      under any applicable insolvency, reorganization or similar Law in any
      jurisdiction concerning the Company or any of its Subsidiaries, and no
      circumstances exist which, under applicable Law, would justify any such cases
      or
      Proceedings. No receiver or trustee has been appointed with respect to all
      or
      any portion of the Company or any of its Subsidiaries business or assets.

    

    4.28 Brokers
      or Finders.
      The
      Company
      shall indemnify and hold harmless Parent and the officers and directors of
      Parent from any obligations or liabilities to any person or entity engaged
      by or
      to whom the Company or any of its Subsidiaries is liable for brokerage,
      investment banking and/or finder’s fees or commissions for services rendered in
      connection with the Transactions.

    

    4.29 No
      Illegal Payments.
       None
      of
      the Company, any of its Subsidiaries or, to the Knowledge of the Company, any
      Affiliate, officer, agent or employee thereof, directly or indirectly, has,
      since inception, on behalf of or with respect to the Company or any of its
      Subsidiaries, (a) made any unlawful domestic or foreign political
      contributions, (b) made any payment or provided services which were not
      legal to make or provide or which the Company, any of its Subsidiaries or any
      Affiliate thereof or any such officer, employee or other Person should
      reasonably have known were not legal for the payee or the recipient of such
      services to receive, (c) received any payment or any services which were
      not legal for the payer or the provider of such services to make or provide,
      (d) had any material transactions or payments which are not recorded in its
      accounting books and records, or (e) had any off-book bank or cash accounts
      or “slush funds.”

    

    4.30 Information
      Supplied.
       None
      of
      the information furnished or to be furnished by or on behalf of the Company
      for
      inclusion or incorporation by reference in the Form S-4 Registration Statement
      to be filed with the SEC by Parent in connection with the issuance of the Merger
      Securities pursuant to the Merger, will, as of the time furnished, contain
      any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein not
      misleading.

    

    4.31 Antitakeover
      Statutes.
      The
      Company
      has taken all action necessary to exempt the Merger, this Agreement, the Voting
      Agreement, and the Transactions from Section 203 of the DGCL.  Neither
      such Section nor any other anti-takeover or similar Law applies or purports
      to
      apply to the Transactions.  No
      other
“control share acquisition,” “fair price,” “moratorium” or other anti-takeover
      Laws apply to this Agreement or any of the Transactions.

    

    4.32 Compliance
      with Securities Laws.
       Except
      to
      the extent as would not have a Material Adverse Effect, individually or in
      the
      aggregate, on the Company or any of its Subsidiaries, the offering and issuance
      by the Company and any of its Subsidiaries of all securities to date were made
      and completed in substantial compliance with all applicable state, federal
      and,
      if applicable, foreign securities Laws.

    

    4.33 Change
      in Control.
      Except
      as may be set forth in Section 4.33 of the Company Disclosure Schedule, the
      Company is not a party to any Contract that contains a “change in control,”
“potential change in control” or similar provision.

    

    4.34 Powers
      of Attorney.
      To the
      Knowledge of the Company, there are no material outstanding powers of attorney
      executed on behalf of the Company or any of its Subsidiaries.

    

    4.35 Material
      Disclosures.
      No
      statement, representation or warranty made by the Company in this Agreement,
      or
      in any certificate, statement, list, schedule or other document furnished or
      to
      be furnished to Parent hereunder, contains, or when so furnished will contain,
      any untrue statement of a material fact, or fails to state, or when so furnished
      will fail to state, a material fact necessary in order to make the statements
      contained herein or therein, in light of the circumstances in which they are
      or
      will be made, not misleading.

     

    
      
        
        

      

      
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    ARTICLE
      V

    

    REPRESENTATIONS
      AND WARRANTIES OF PARENT AND MERGER SUB

    

    Except
      as
      set forth in the Disclosure Schedule delivered by Parent to the Company and
      signed by the Company and Parent for identification prior to the execution
      and
      delivery of this Agreement (the “Parent
      Disclosure Schedule”),
      which
      shall identify exceptions by specific section references, Parent and Merger
      Sub
      hereby, jointly and severally, represent and warrant to the Company
      that:

    

    5.1 Corporate
      Organization and Qualification.
      Parent
      and Merger Sub are corporations duly organized, validly existing and in good
      standing under the Laws of the State of Delaware. Parent and each of its
      Subsidiaries is duly qualified or licensed as a foreign corporation to do
      business, and is in good standing, in each jurisdiction where the character
      of
      the properties owned, leased or operated by it or the nature of its business
      makes such qualification or licensing necessary, except for such failures to
      be
      so qualified or licensed and in good standing as would not, individually or
      in
      the aggregate, have a Material Adverse Effect on either or both of Parent and/or
      Merger Sub. 

    

    5.2 Certificate
      of Incorporation and Bylaws.
      Parent
      has heretofore furnished or made available to the Company a complete and correct
      copy of the certificate of incorporation and bylaws of Parent, and the
      certificate of incorporation and bylaws of Merger Sub, each as amended to date.
      Neither Parent nor Merger Sub is in violation of any provision of its
      certificate of incorporation or bylaws.

    

    5.3 Books
      and Records.

    

    (a) The
      books
      of account, minute books, stock record books, and other records of Parent and
      Merger Sub, all of which have
      heretofore been furnished or made available to the Company,
      are
      complete and correct and have been maintained in accordance with sound business
      practices, including the maintenance of an adequate system of internal controls.
      The minute books of Parent and Merger Sub contain accurate and complete records
      of all meetings held of, consents of, and corporate action taken by, the
      stockholders, the boards of directors, and any committees of the boards of
      directors of each of Parent and Merger Sub, and no meeting of such stockholders,
      boards of directors or committees has been held for which minutes have not
      been
      prepared and are not contained in such minute books.

    

    (b) None
      of
      the records, systems, data or information of either Parent or Merger Sub is
      recorded, stored, maintained, operated or otherwise wholly or partly dependent
      on or held or accessible by any means (including, but not limited to, an
      electronic, mechanical or photographic process computerized or not) which are
      not under the exclusive ownership and direct control of either Parent or Merger
      Sub, as the case may be.

    

    5.4 Capitalization.
      

    

    (a) As
      of the
      date of this Agreement, the authorized capital stock of Parent consists of
      (i)
      one hundred million (100,000,000) shares of Parent Common Stock, $.0001 par
      value, and (ii) twenty million (20,000,000) shares of “blank check” preferred
      stock, $.0001 par value (“Parent
      Preferred Stock”).
      As of
      the date of this Agreement, (A) 5,000,000 shares of Parent Common Stock were
      issued and outstanding, all of which were validly issued, fully paid and
      nonassessable, (B) no shares of Parent Common Stock were held in the treasury
      of
      Parent, (C) no shares of Parent Common Stock were reserved for future issuance
      pursuant to outstanding stock options or stock incentive rights granted pursuant
      to any stock option plan, and (D) no shares of Parent Preferred Stock were
      issued or outstanding. Except as contemplated by this Agreement and as set
      forth
      in Section 5.4(a) of the Parent Disclosure Schedule, as of the date of this
      Agreement, there are no options, warrants or other rights, agreements,
      arrangements or commitments of any character relating to the issued or unissued
      capital stock of Parent obligating Parent to issue or sell any shares of capital
      stock of, or other equity interests in, Parent or Merger Sub. There are no
      outstanding contractual obligations of Parent to repurchase, redeem or otherwise
      acquire any shares of Parent Common Stock, Parent Preferred Stock or any other
      securities of Parent. The shares of Parent Common Stock to be issued pursuant
      to
      the Merger will be duly authorized, validly issued, fully paid and nonassessable
      and not subject to preemptive rights created by statute, Parent’s certificate of
      incorporation or bylaws, or any agreement to which Parent is a party or by
      which
      Parent is bound.

     

    
      
        
        

      

      
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    (b) As
      of the
      date of this Agreement, the authorized capital stock of Merger Sub consists
      of
      (i) 1,000,000 shares of Merger Sub Common stock, $.0001 par value, and (ii)
      1,000,000 shares of “blank check” preferred stock, $.0001 par value
      (“Merger
      Sub Preferred Stock”).
      As of
      the date of this Agreement, (A) 1,000 shares of Merger Sub Common Stock were
      issued and outstanding, each of which are held by Parent, and all of which
      were
      validly issued, fully paid and nonassessable, (B) no shares of Merger Sub Common
      Stock were held in the treasury of Merger Sub, (C) no shares of Merger Sub
      Common Stock were reserved for future issuance pursuant to outstanding stock
      options or stock incentive rights granted pursuant to any stock option plan,
      and
      (D) no shares of Merger Sub Preferred Stock were issued or outstanding. Except
      as contemplated by this Agreement and as set forth in Section 5.4(b) of the
      Parent Disclosure Schedule, as of the date of this Agreement, there are no
      options, warrants or other rights, agreements, arrangements or commitments
      of
      any character relating to the issued or unissued capital stock of Merger Sub
      obligating Merger Sub to issue or sell any shares of capital stock of, or other
      equity interests in, Merger Sub. There are no outstanding contractual
      obligations of Merger Sub to repurchase, redeem or otherwise acquire any shares
      of Merger Sub Common Stock or Merger Sub Preferred Stock. 

    

    5.5 Authority
      Relative To This Agreement.
      Each of
      Parent and Merger Sub has all necessary corporate power and authority to execute
      and deliver this Agreement, to perform its obligations hereunder and to
      consummate the Transactions. The execution and delivery of this Agreement by
      Parent and Merger Sub and the consummation by Parent and Merger Sub of the
      Transactions have been duly and validly authorized by all necessary corporate
      action and no other corporate proceedings on the part of Parent or Merger Sub
      are necessary to authorize this Agreement or to consummate the Transactions
      (other than with respect to the Merger, the filing and recordation of the
      Certificate of Merger with the Delaware Secretary of State, as required by
      this
      Agreement and applicable Law). This Agreement has been duly and validly executed
      and delivered by Parent and Merger Sub and, assuming the due authorization,
      execution and delivery of this Agreement by the Company and the Company
      Principal Stockholder, constitutes a legal, valid and binding obligation of
      each
      of Parent and Merger Sub enforceable against each of Parent and Merger Sub
      in
      accordance with its terms, except as the enforceability thereof may be limited
      by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
      similar Laws affecting or relating to creditors’ rights generally, and
      (ii) the availability of injunctive relief and other equitable
      remedies.

     

    
      
        
        

      

      
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    5.6 No
      Conflict; Required Filings and Consents.
      

    

    (a) The
      execution and delivery of this Agreement by Parent and Merger Sub do not, and
      the performance of this Agreement by Parent and Merger Sub will not, subject
      to
      obtaining the consents, approvals, Authorizations and permits and making the
      filings described in Section 5.6(b) of this Agreement and Section 5.6(b) of
      the
      Parent Disclosure Schedule, (i) conflict with or violate the certificate of
      incorporation or bylaws of either Parent or Merger Sub, (ii) conflict with
      or
      violate any Law applicable to Parent or Merger Sub or by which any property
      or
      asset of any of them is bound or affected, or (iii) result in any breach of
      or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, or result in the creation of a
      Lien
      or other encumbrance on any property or asset of Parent or Merger Sub or require
      the consent of any third party pursuant to, any note, bond, mortgage, indenture,
      Contract, agreement, lease, license, permit, franchise or other instrument
      or
      obligation to which Parent or Merger Sub is a party or by which Parent or Merger
      Sub or any property or asset of any of them is bound or affected, except for
      any
      such conflicts, violations, breaches, defaults or other occurrences which would
      not, individually or in the aggregate, have a Material Adverse Effect on Parent
      or prevent Parent and Merger Sub from performing their respective obligations
      under this Agreement and consummating the Transactions.

    

    (b) The
      execution and delivery of this Agreement by Parent and Merger Sub do not, and
      the performance of this Agreement by Parent and Merger Sub will not, require
      any
      consent, approval, Authorization or permit of, or filing with or notification
      to, any Governmental Authority, domestic or foreign, except (i)  the filing
      of the Form S-4 registration statement with the SEC in connection with the
      issuance of the Merger Securities pursuant to the Merger (including any
      amendments or supplements thereto, the “Form
      S-4 Registration Statement”),
      (ii)
      such filings as may otherwise be required in accordance with federal and state
      securities Law compliance in connection with the issuance of the Merger
      Securities pursuant to the Merger, (iii) the filing of a Schedule 14F in
      accordance with Exchange Act Section 14f, (iv) the filing and recordation of
      the
      Certificate of Merger with the Delaware Secretary as required by this Agreement
      and applicable Law, (v) such filings as may be required under the Exchange
      Act
      and/or by FINRA, (vi) as may be specified in Section 5.6(b) of the Parent
      Disclosure Schedule, and (vii) where failure to obtain such consents, approvals,
      Authorizations or permits, or to make such filings or notifications, would
      not
      have a Material Adverse Effect on Parent or Merger Sub and would not prevent
      or
      delay consummation of the Transactions, or otherwise prevent Parent or Merger
      Sub from performing their respective obligations under this
      Agreement.

     

    5.7 SEC
      Reports; Financial Statements.
      

    

    (a) Parent
      has made available to Company all forms, reports and documents required to
      be
      filed by it with the SEC since April 1, 2007 (collectively, the
“Parent
      SEC Reports”).
      Parent
      SEC Reports (i) at the time they were filed complied as to form in all
      material respects with the applicable requirements of the Exchange Act, and
      (ii) did not at the time they were filed (or if amended or superseded by a
      filing prior to the date of this Agreement, then on the date of such filing)
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.

     

    
      
        
        

      

      
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    (b) The
      consolidated financial statements (including, in each case, any related notes)
      contained in Parent SEC Reports complied as to form in all material respects
      with the applicable rules and regulations of the SEC with respect thereto,
      were
      prepared in accordance with GAAP applied on a consistent basis throughout the
      periods involved (except as may be indicated in the notes to such financial
      statements or, in the case of unaudited statements, as permitted by the SEC)
      and
      fairly presented the consolidated financial position of Parent and its
      Subsidiaries as at the respective dates and the consolidated results of its
      operations and cash flows for the periods indicated (subject, in the case of
      the
      unaudited financial statements, to normal year-end recurring
      adjustments).

     

    (c) Parent
      and its Subsidiaries have no Liabilities except (a) those which are
      adequately reflected or reserved against as noted above in the Financial
      Statements included in the most recently filed Parent SEC Report, and
      (b) those which have been incurred in the Ordinary Course of Business and
      consistent with past practice since the last balance sheet date therein or
      which
      are not, individually or in the aggregate, material in amount.

    

    5.8 Taxes.
      

    

    (a) Except
      as
      may be specified in Section 5.8(a) of the Parent Disclosure Schedule, (i) each
      of the Parent and its Subsidiaries has duly and timely filed all Tax Returns
      required to have been filed by or with respect to the Parent or such Subsidiary,
      (ii) each such Tax Return correctly and completely reflects all liability for
      Taxes and all other information required to be reported thereon, (iii) all
      Taxes
      owed by the Parent and each Subsidiary of the Parent (whether or not shown
      on
      any Tax Return) have been timely paid, and (iv) each of the Parent and its
      Subsidiaries has adequately provided for, in its books of account and related
      records, all Liability for unpaid Taxes, being current Taxes not yet due and
      payable.

    

    (b) Except
      as
      may be specified in Section 5.8(b) of the Parent Disclosure Schedule, each
      of
      the Parent and its Subsidiaries has withheld and timely paid all Taxes required
      to have been withheld and paid by it and has complied with all information
      reporting and backup withholding requirements, including maintenance of required
      records with respect thereto.

    

    (c) Except
      as
      may be specified in Section 5.8(c) of the Parent Disclosure Schedule, neither
      Parent nor any of its Subsidiaries (i) is the beneficiary of any extension
      of
      time within which to file any Tax Return, nor has Parent or any of its
      Subsidiaries made (or had made on its behalf) any requests for such extensions,
      or (ii) has waived (or is subject to a waiver of) any statute of limitations
      in
      respect of Taxes or has agreed to (or is subject to) any extension of time
      with
      respect to a Tax assessment or deficiency.

    

    (d) Section
      5.8(d) of the Parent Disclosure Schedule indicates those Tax Returns that have
      been audited and those Tax Returns that currently are the subject of audit.
      Except as set forth in Section 5.8(d) of the Parent Disclosure Schedule (i)
      there is no Action now pending or threatened against or with respect to the
      Parent or any of its Subsidiaries in respect of any Tax or any assessment or
      deficiency, and (ii) there are no liens for Taxes (other than current Taxes
      not
      yet due and payable) upon the assets of the Parent. 

    

    (e) Section
      5.8(e) of the Parent Disclosure Schedule lists, as of the date of this
      Agreement, all jurisdictions in which the Parent or any of its Subsidiaries
      currently files Tax Returns. No claim has been made by any Taxing Authority
      in a
      jurisdiction where the Parent or any of its Subsidiaries does not file Tax
      Returns that any of them is or may be subject to taxation by that jurisdiction
      or that any of them must file Tax Returns.

     

    
      
        
        

      

      
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    (f) None
      of
      the assets or properties of the Parent or any of its Subsidiaries constitutes
      tax-exempt bond financed property or tax-exempt use property within the meaning
      of Section 168 of the Code. Neither the Parent nor any of its Subsidiaries
      is a party to any “safe harbor lease” within the meaning of
      Section 168(f)(8) of the Code, as in effect prior to amendment by the Tax
      Equity and Fiscal Responsibility Act of 1982, or to any “long-term contract”
within the meaning of Section 460 of the Code. Neither the Parent nor any
      of its Subsidiaries has ever been a United States real property holding
      corporation within the meaning of Section 897(c)(2) of the Code. Parent is
      not a “foreign person” within the meaning of Section 1445 of the
      Code.

    

    (g) Neither
      the Parent nor any of its Subsidiaries has agreed to or is required to make
      by
      reason of a change in accounting method or otherwise, or could be required
      to
      make by reason of a proposed or threatened change in accounting method or
      otherwise, any adjustment under Section 481(a) of the Code. Neither the Parent
      nor any of its Subsidiaries has been the “distributing corporation” (within the
      meaning of Section 355(c)(2) of the Code) with respect to a transaction
      described in Section 355 of the Code within the 5-year period ending as of
      the
      date of this Agreement.

    

    (h) No
      Subsidiary of the Parent that is incorporated in a non-U.S. jurisdiction has,
      or
      at any time has had, an investment in “United States property” within the
      meaning of Section 956(c) of the Code. No Subsidiary of the Parent is, or at
      any
      time has been, a passive foreign investment company within the meaning of
      Section 1297 of the Code and neither Parent nor any of its Subsidiaries is
      a shareholder, directly or indirectly, in a passive foreign investment company.
      No Subsidiary of the Parent that is incorporated in a non-U.S. jurisdiction
      is,
      or at any time has been, engaged in the conduct of a trade or business within
      the United States, or treated as or considered to be so engaged.

    

    (i) Neither
      the Parent nor any of its Subsidiaries (i) has ever been a party to any Tax
      allocation or sharing agreement or Tax indemnification agreement, (ii) has
      ever been a member of an affiliated, consolidated, condensed or unitary group,
      or (iii) has any Liability for or obligation to pay Taxes of any other
      Person under Treas. Reg. 1.1502-6 (or any similar provision of Tax Law), or
      as
      transferee or successor, by Contract or otherwise. Neither the Parent nor any
      of
      its Subsidiaries is a party to any joint venture, partnership, or other
      arrangement that is treated as a partnership for federal income tax
      purposes.

    

    (j) Neither
      the Parent nor any of its Subsidiaries will be required to include any item
      of
      income in, or exclude any item of deduction from, taxable income for any taxable
      period (or portion thereof) ending after the Effective Time as a result of
      any:
      (i) intercompany transactions or excess loss accounts described in Treasury
      regulations under Section 1502 of the Code (or any similar provision of
      state, local, or foreign Tax Law), (ii) installment sale or open
      transaction disposition made on or prior to the Effective Time, or
      (iii) prepaid amount received on or prior to the Effective
      Time.

    

    (k) The
      Parent has not entered into any transaction that constitutes a “reportable
      transaction” within the meaning of Treasury
      Regulation Section 1.6011-4(b).

    

    (l) Section
      5.8(l) of the Parent Disclosure Schedule lists each person who the Parent
      reasonably believes is, with respect to the Parent or any Affiliate of the
      Parent, a “disqualified individual” within the meaning of Section 280G of
      the Code and the Regulations thereunder.

    

    (m) Neither
      the Parent nor, to the Knowledge of Parent, any of its Affiliates has taken
      or
      agreed to take any action (other than actions contemplated by this Agreement)
      that would reasonably be expected to prevent the Merger from constituting a
      “reorganization” under Section 368 of the Code. The Parent is not aware of
      any agreement or plan to which the Parent or any of its Affiliates is a party
      or
      other circumstances relating to the Parent or any of its Affiliates that could
      reasonably be expected to prevent the Merger from so qualifying as a
“reorganization” under Section 368 of the Code.

     

    
      
        
        

      

      
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    (n) Except
      as
      may be specified in Section 5.8(n) of the Parent Disclosure Schedule, the unpaid
      Taxes of the Parent (i) did not, as of the date of the Most Recent Parent
      Balance Sheet, exceed the reserve for Tax liability (rather than any reserve
      for
      deferred Taxes established to reflect timing differences between book and Tax
      income) set forth on the face of the Most Recent Parent Balance Sheet (rather
      than in any notes thereto), and (ii) will not exceed that reserve as
      adjusted for the passage of time through the Closing Date in accordance with
      the
      past custom and practice of the Parent in filing its Tax Returns. Since the
      date
      of the Most Recent Parent Balance Sheet, the Parent has not incurred any
      liability for Taxes arising from extraordinary gains or losses, as that term
      is
      used in GAAP, outside the Ordinary Course of Business consistent with past
      custom and practice.

    

    5.9 Absence
      of Litigation.
      There
      is no claim, action, Proceeding or investigation pending or, to the Knowledge
      of
      Parent, threatened against Parent or any Subsidiary of Parent including Merger
      Sub, before any arbitrator or Governmental Authority, which (a) individually
      or
      in the aggregate, would reasonably be expected to have a Material Adverse Effect
      on Parent, or (b) seeks to delay or prevent the consummation of the Merger.
      Neither Parent nor Merger Sub, nor any property or asset of Parent or Merger
      Sub
      is in violation of any Order, writ, judgment, injunction, decree, determination
      or award having, individually or in the aggregate, a Material Adverse Effect.
      

    

    5.10 Related
      Party Transactions.
       There
      are
      no Contracts of any kind, written or oral, entered into by the Parent or any
      of
      its Subsidiaries with, or for the benefit of, any officer, director or
      stockholder of the Parent or, to the Knowledge of the Parent, any Affiliate
      of
      any of them, except in each case, for (a)  reimbursements of ordinary and
      necessary expenses incurred in connection with their services, (b) the
      occupancy of certain of the Parent’s facilities which do not provide for the
      payment of significant amounts of rent, and (c) as may have otherwise been
      disclosed in the Parent SEC Reports. 

    

    5.11 Ownership
      of Merger Sub; No Prior Activities.
      

    

    (a) Merger
      Sub was formed solely for the purpose of engaging in the transactions
      contemplated by this Agreement.

    

    (b) As
      of the
      date hereof and the Effective Time, except for obligations or Liabilities
      incurred in connection with its incorporation or organization and the
      Transactions, and except for this Agreement and any other agreements or
      arrangements contemplated by this Agreement, Merger Sub has not and will not
      have incurred, directly or indirectly, through any Subsidiary or Affiliate,
      any
      obligations or Liabilities or engaged in any business activities of any type
      or
      kind whatsoever or entered into any agreements or arrangements with any
      Person.

    

    5.12 Absence
      of Certain Changes or Events.
      Since
      the date of the most recently filed Parent SEC Reports that included financial
      statements, and except as may be contemplated by, or disclosed pursuant to,
      this
      Agreement, including Section 5.12 of the Parent Disclosure
      Schedule:

    

    (a) there
      has
      not been any event or events (whether or not covered by insurance), individually
      or in the aggregate, which have had a Material Adverse Effect on the Parent
      or
      any of its Subsidiaries, including without limitation the imposition of any
      security interests on any of the assets of the Parent or any of its
      Subsidiaries;

     

    
      
        
        

      

      
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    (b) there
      have not been any amendments or other modifications to the certificate of
      incorporation or bylaws of either the Parent or any of its Subsidiaries;

    

    (c) there
      has
      not been any entry by the Parent nor any of its Subsidiaries into any commitment
      or transaction material to the Parent or such Subsidiaries, except in the
      Ordinary Course of Business and consistent with past practice, including without
      limitation any (i) borrowings or the issuance of any guaranties, (ii) any
      capital expenditures in excess of $1,000, or (iii) any grant of any increase
      in
      the base compensation payable, or any loans, to any directors, officers or
      employees;

     

    (d) there
      has
      not been, other than pursuant to the Plans, any increase in or establishment
      of
      any bonus, insurance, severance, deferred compensation, pension, retirement,
      profit sharing, stock option, stock purchase or other employee benefit plan,
      except in the Ordinary Course of Business consistent with past
      practice.

     

    (e) there
      have not been any material changes by the Parent in its accounting methods,
      principles or practices;

    

    (f) neither
      Parent nor any of its Subsidiaries has declared, set aside or paid any dividend
      or other distribution (whether in cash, stock or property) with respect to
      any
      of its securities;

    

    (g) neither
      Parent nor any of its Subsidiaries has split, combined or reclassified any
      of
      its securities, or issued, or authorized for issuance, any
      securities;

    

    (h) there
      has
      not been any material damage, destruction or loss with respect to the property
      and assets of Parent or any of its Subsidiaries, whether or not covered by
      insurance;

    

    (i) there
      has
      not been any revaluation of Parent’s or any of its Subsidiaries’ assets,
      including writing down the value of inventory or writing off notes or accounts
      receivable, other than in the Ordinary Course of Business consistent with past
      practice; and

    

    (j) neither
      Parent nor any of its Subsidiaries has agreed, whether in writing or otherwise,
      to do any of the foregoing.

     

    5.13 No
      Illegal Payments.
       None
      of
      the Parent, any of its Subsidiaries or, to the Knowledge of the Parent, any
      Affiliate, officer, agent or employee thereof, directly or indirectly, has,
      since inception, on behalf of or with respect to the Parent or any of its
      Subsidiaries, (a) made any unlawful domestic or foreign political
      contributions, (b) made any payment or provided services which were not
      legal to make or provide or which the Parent, any of its Subsidiaries or any
      Affiliate thereof or any such officer, employee or other Person should
      reasonably have known were not legal for the payee or the recipient of such
      services to receive, (c) received any payment or any services which were
      not legal for the payer or the provider of such services to make or provide,
      (d) had any material transactions or payments which are not recorded in its
      accounting books and records, or (e) had any off-book bank or cash accounts
      or “slush funds.”

     

    
      
        
        

      

      
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    5.14 Antitakeover
      Statutes.
      The
      Parent
      has taken all action believed to be necessary to exempt the Merger, this
      Agreement, the Voting Agreement, and the Transactions from Section 203 of
      the DGCL.  Neither
      such Section nor any other anti-takeover or similar Law applies or purports
      to
      apply to the Transactions.  No
      other
“control share acquisition,” “fair price,” “moratorium” or other anti-takeover
      Laws apply to this Agreement or any of the Transactions.

    

    5.15 Compliance
      with Securities Laws.
       Except
      to
      the extent as would not have a Material Adverse Effect, individually or in
      the
      aggregate, on the Parent or any of its Subsidiaries, the offering and issuance
      by the Parent and any of its Subsidiaries of all securities to date were made
      and completed in substantial compliance with all applicable state and federal
      securities Laws.

    

    5.16 Brokers
      or Finders.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or commission in connection with the Transactions based upon
      arrangements made by or on behalf of Parent or Merger Sub.

    

    ARTICLE
      VI

    

    COVENANTS
      RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER

    

    6.1 Conduct
      of Business by the Company Pending the Merger.
      The
      Company covenants and agrees that, between the date of this Agreement and the
      Effective Time, except as set forth in Section 6.1 of the Company Disclosure
      Schedule or as contemplated by any other provision of this Agreement, and unless
      Parent shall otherwise agree in writing (which agreement shall not be
      unreasonably withheld), (1) the business of the Company and any of its
      Subsidiaries shall be conducted only in, and the Company and any such
      Subsidiaries shall not take any action except in, the Ordinary Course of
      Business, (2) the Company shall use all reasonable efforts to preserve
      substantially intact its business organization, to keep available the services
      of the current officers, employees and consultants of the Company and any of
      its
      Subsidiaries and to preserve the current relationships of the Company and such
      Subsidiaries with customers, suppliers and other persons with which the Company
      and any of its Subsidiaries has significant business relations, (3) comply
      with
      all applicable Laws, (4) prepare and timely file all foreign, Federal, state
      and
      local Tax Returns as required by applicable Law, and make timely payment of
      all
      applicable Taxes when due, (5) use reasonable efforts to obtain, prior to the
      Closing Date, all Required Company Consents, (6) take all actions to be in
      substantial compliance with all Company Permits, (7) make full and timely
      payment of all amounts required to be contributed under the terms of each Plan
      and applicable Law or required to be paid as expenses under any such Plan,
      and
      (8) the Company will not, and will not permit any Subsidiary to:

    

    (a) amend
      or
      otherwise change its Articles of Incorporation or Bylaws;

    

    (b) issue,
      sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale,
      pledge, disposition, grant or encumbrance of, (i) any shares of capital stock
      of
      the Company or any Subsidiary of any class, or any options, warrants,
      convertible securities or other rights of any kind to acquire any shares of
      such
      capital stock, or any other ownership interest (including, without limitation,
      any phantom interest), of the Company (except for shares of the Company Common
      Stock, if any, issuable under agreements currently in effect on the date hereof
      and described in Section 4.4(a) of the Company Disclosure Schedule), shares
      of
      capital stock pursuant to Plans currently in effect as of the date hereof and
      described in Section 4.21(a) of the Company Disclosure Schedule, and such shares
      of Company Common Stock as it otherwise deems appropriate, , or (ii) any of
      the
      Company’s or any Subsidiaries’ assets, except for sales in the Ordinary Course
      of Business and in a manner consistent with past practice;

     

    
      
        
        

      

      
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    (c) declare,
      set aside, make or pay any dividend or other distribution, payable in cash,
      stock, property or otherwise, with respect to any of its capital
      stock;

    

    (d) reclassify,
      combine, split, divide or redeem, purchase or otherwise acquire, directly or
      indirectly, any of its capital stock;

    

    (e) (i)
      acquire (including, without limitation, by merger, consolidation, or acquisition
      of stock or assets) any interest in any Person or any division thereof or any
      assets, other than the acquisition of assets in the Ordinary Course of Business
      consistent with past practice; (ii) merge with any Person (other than Merger
      Sub), (iii) incur any indebtedness for borrowed money or issue any debt
      securities or assume, guarantee or endorse, or otherwise as an accommodation
      become responsible for, the obligations of any Person, or make any loans or
      advances; (iv) enter into any Contract material to the business, results of
      operations or financial condition of the Company other than in the Ordinary
      Course of Business, consistent with past practice; (v) authorize any capital
      expenditure, other than capital expenditures set forth in Section 4.19(a)(ix)
      of
      the Company Disclosure Schedule; or (vi) enter into or amend any Contract with
      respect to any matter set forth in this subsection (e);

    

    (f) 
      (i)
      increase the compensation payable or to become payable to any director, officer
      or other employee, or grant any bonus, to, or grant any severance or termination
      pay to, or enter into any employment or severance agreement with any director,
      officer or other employee of the Company or any Subsidiary or enter into or
      amend any collective bargaining agreement, or (ii) establish, adopt, enter
      into
      or amend any bonus, profit sharing, thrift, compensation, stock option,
      restricted stock, pension, retirement, deferred compensation or other plan,
      trust or fund for the benefit of any director, officer or class of
      employees;

    

    (g) settle
      or
      compromise any pending or threatened litigation which is material or which
      relates to the Transactions; 

    

    (h) grant
      or
      convey to any Person any rights, including, but not limited to, by way of sale,
      license or sub-license, in any of the Company Intellectual
      Property;

    

    (i) make
      any
      Tax election, change its method of Tax accounting or settle any claim relating
      to Taxes;

    

    (j) make
      any
      change in any of the Company’s or any of its Subsidiaries accounting methods or
      in the manner of keeping each of their respective books and records or any
      change in any of their respective current practices with respect to inventory,
      sales, receivables, payables or accrued expenses; 

    

    (k) file
      or
      cause to be filed any registration statements under the Securities Act or
      Exchange Act relating to any of its capital stock or other
      securities;

    

    (l) take
      any
      action or omit to do any act within its reasonable control which action or
      omission is reasonably likely to result in any of the conditions to the Merger
      not being satisfied, except as may be required by applicable Law;

    

    (m) take
      or
      omit to take any action that would result in the representations and warranties
      hereunder being rendered untrue in any material respect; or 

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (n) agree
      to
      do any of the foregoing.

    

    6.2 Conduct
      of Business by Parent Pending the Merger.
      Parent
      covenants and agrees that, between the date of this Agreement and the Effective
      Time, except as may be set forth in Section 6.2 of the Parent Disclosure
      Schedule, as contemplated by any other provision of this Agreement, or as may
      not have a Material Adverse Effect on the Parent or any of its Subsidiaries,
      and
      unless the Company shall otherwise agree in writing (which agreement shall
      not
      be unreasonably withheld), (i) the businesses of the Parent and Merger Sub
      shall
      be conducted only in, and the Parent shall not, and shall cause Merger Sub
      not
      to, take any action except in, the Ordinary Course of Business consistent with
      past practice, (ii) Parent shall timely file all Parent SEC Reports as may
      be
      required under the Exchange Act (including any extensions afforded by way of
      compliance with Rule 12b-25 thereunder, if applicable), (iii) Parent shall
      comply with all applicable Laws, (iv) Parent shall prepare and timely file
      all
      foreign, Federal, state and local Tax Returns as required by applicable Law,
      and
      make timely payment of all applicable Taxes when due, (v) Parent shall not
      amend
      any of the terms or provisions of the Parent Common Stock, (vi) Parent shall
      not
      take any action or omit to do any act within its reasonable control which action
      or omission is reasonably likely to result in any of the conditions to the
      Merger not being satisfied, except as may be required by applicable Law, and
      (vii) Parent shall take or omit to take any action that would result in the
      representations and warranties hereunder being rendered untrue in any material
      respect.

    

    6.3 Conduct
      of Company Principal Stockholder Pending the Merger.
      The
      Company Principal Stockholder covenants and agrees to refrain from taking any
      action, directly or indirectly, that is intended to, would, or that might
      reasonably be likely to, (i) encourage Company Stockholders from approving
      the
      Merger and this Agreement as required under the DGCL and the bylaws of the
      Company, or (ii) encourage,
      or that might otherwise result in, any holder of Dissentable Shares becoming
      a
      Dissenting Holder. 

     

    ARTICLE
      VII

    

    ADDITIONAL
      AGREEMENTS

     

    7.1 Voting
      Agreement.
      Contemporaneously with the execution of this Agreement, the Company Principal
      Stockholder shall have delivered to Parent an executed Voting
      Agreement.

    

    7.2 Certain
      Corporate and Securities Compliance.

     

    (a) As
      may be
      necessary in order to fulfill its obligations pursuant to Section 2.1(a)(iii)
      and (iv) of this Agreement, following execution of this Agreement and prior
      to
      the Closing Date, Parent shall take whatever steps may be necessary to obtain
      the requisite written consent from Parent Stockholders to duly authorize and
      approve (i) amendments to the certificate of incorporation of Parent, in the
      form of certificates of designation, designating one or more series of Parent
      Convertible Preferred Stock and/or Parent Non-Convertible Preferred Stock,
      and
      (ii) the reservation
      of a sufficient number of shares for delivery and issuance upon exercise of
      all
      Replacement Options.
      

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company hereby agrees that, as soon as practicable after the execution of this
      Agreement, it shall take whatever action may be reasonably necessary to (i)
      solicit and obtain, and forward to Parent, completed securityholder
      questionnaires (in form satisfactory to Parent) from all Company securityholders
      regarding their investor qualification, (ii) have its financial statements
      audited by an independent auditing firm duly registered with the PCAOB, and
      immediately make available such audited financial statements to Parent, and
      (iii) obtain and deliver to Parent an opinion of counsel, in form satisfactory
      to Parent, that the Merger will qualify as a tax-free reorganization under
      the
      Code. 

    

    (c) As
      soon
      as practicable after the execution of this Agreement, Parent, with the fullest
      of cooperation and assistance of the Company applying its best efforts, shall
      prepare the Form S-4 Registration Statement. Parent shall give the Company,
      its
      counsel and its independent accountants/auditors a reasonable opportunity to
      review, comment upon, and edit the Form S-4 Registration Statement prior to
      filing with the SEC, and, also prior to filing the Form S-4 Registration
      Statement, Parent shall have obtained the written approval of the Company as
      to
      the accuracy and completeness of the information relating to the Company and
      its
      Subsidiaries contained therein. 

    

    (d) The
      Company hereby agrees to cooperate, and agrees to use all reasonable efforts
      to
      cause its Subsidiaries and Affiliates to cooperate, with Parent’s officers,
      directors, employees, accountants, counsel and/or other agents retained by
      Parent (“Parent
      Representatives”)
      in
      connection with the preparation of any and all information required, as
      determined by Parent, to be disclosed pursuant to applicable securities Laws
      in
      the Form S-4 Registration Statement. The Company shall furnish all information
      concerning itself as may be reasonably requested by Parent or its counsel in
      connection with the foregoing, including without limitation (unless determined
      by Parent in its exclusive discretion otherwise) complete financial statements
      as required under the Securities Act and/or the regulations promulgated
      thereunder, which financial statements shall have been fully audited by a PCAOB
      registered independent auditing firm. The Company shall, and shall cause its
      Subsidiaries to, afford to the Parent Representatives reasonable access to
      its
      properties, assets and records during the period prior to the Effective Time
      to
      obtain all information concerning its business as Parent may reasonably request.
      Parent shall furnish to the Company all such documents and copies of documents
      and records and information with respect to itself and its Subsidiaries, and
      copies of any working papers relating thereto, as Parent may reasonably request.
      Anything to the contrary notwithstanding, nothing in this Section 7.2(d) shall
      require the Company to provide any access, or to disclose any information,
      if
      permitting such access or disclosing such information would (a) violate
      applicable Law, (b) violate any of its obligations with respect to
      confidentiality (provided,
      however,
      that
      the Company shall, upon the request of Parent, use its reasonable best efforts
      to obtain the required consent of any third party to such access or disclosure),
      or (c) result in the loss of attorney-client privilege (provided,
      however,
      that
      the Company shall use its reasonable best efforts to allow for such access
      or
      disclosure in a manner that does not result in a loss of attorney-client
      privilege). The Company shall reasonably avail itself to the Parent regarding
      its business on an as-requested basis.

    

    (e) 
      In
      connection with the issuance of the Merger Securities:

    

    (i) Parent,
      with the fullest of cooperation and assistance of the Company applying its
      reasonable best efforts, shall use its reasonable best efforts to cause the
      Form
      S-4 Registration Statement to be declared effective by the SEC as promptly
      as
      practicable and, prior to the effective date of the Form S-4 Registration
      Statement, Parent shall use its reasonable best efforts to take any and all
      action required under any applicable federal or state securities Laws in
      connection with the issuance of the Merger Securities pursuant to the Merger.
      

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (ii) Parent
      shall give the Company, its counsel and its independent accountants/auditors
      a
      reasonable opportunity to review and comment on any amendment or supplement
      to
      the Form S-4 Registration Statement prior to filing any amendment or supplement
      with the SEC. Parent shall (i) promptly provide the Company, its counsel
      and its independent accountants/auditors with any comments or other
      communications, whether written or oral, that it or its counsel may receive
      from
      time to time from the SEC with respect to the Form S-4 Registration Statement
      promptly after receipt of any such comments or other communications, and (ii)
      provide the Company, its counsel and its independent accountants/auditors a
      reasonable opportunity to participate in the response to those comments and
      any
      corresponding amendments to the Form S-4 Registration Statement, including,
      as
      may be requested, participation in any discussions or meetings with the SEC.
      Parent shall not file any amendment or supplement to the Form S-4 Registration
      Statement without the approval of the Company, which approval shall not be
      unreasonably withheld or delayed. Parent shall advise the Company promptly
      after
      it receives notice of, or otherwise becomes aware of (i) the time at which
      the
      Form S-4 Registration Statement has been declared effective under the Securities
      Act by the SEC, (ii) the time at which any supplements or amendments to the
      Form
      S-4 Registration Statement have been declared effective under the Securities
      Act
      by the SEC, or (iii) the issuance of any stop Order or the suspension of the
      qualification of the shares of Parent Common Stock issuable pursuant to the
      Merger for offering or sale in any jurisdiction.

    

    (iii) As
      soon
      as practicable following the time at which the Form S-4 Registration Statement
      shall have been declared effective under the Securities Act by the SEC, the
      Company, in accordance with the requirements of its bylaws and the DGCL, as
      applicable, and subject to any procedural and/or other directives as may be
      provided by the SEC or any state securities regulators, or as may otherwise
      be
      required in relation to federal and/or state securities compliance in the
      exclusive determination of Parent, shall:

     

    (A) prepare,
      distribute and deliver a package to all Company Stockholders entitled to vote
      on
      the Merger under applicable Law which package shall contain (a) a letter (in
      form satisfactory to Parent) advising that the board of directors of the Company
      recommends that they approve the Merger and this Agreement and soliciting their
      written consent thereto, together with (b) a form of majority written
      stockholders’ consent approving the Merger and this Agreement for them to
      execute and return, and (c) a complete copy of the Form S-4 Registration
      Statement; and 

    

    (B) use
      its
      diligent best efforts thereafter to promptly solicit and obtain the written
      consents from each such Company Stockholders. 

    

    (iv) To
      the
      extent that the Company is successful in obtaining the majority written consent
      of the Company Stockholders approving the Merger and this Agreement, upon the
      obtaining of such consent, the Company, in accordance with the requirements
      of
      its bylaws and the DGCL, as applicable, and subject to any procedural and/or
      other directives as may be provided by the SEC or any state securities
      regulators, or as may otherwise be required in relation to federal and/or state
      securities compliance in the exclusive discretion of Parent, shall promptly
      prepare, distribute and deliver a package to each of the Company Stockholders
      entitled to vote in relation to the Merger exclusive of those from which the
      majority written consent of the Company Stockholders approving the Merger and
      this Agreement was previously obtained, which package shall contain a letter
      (in
      form satisfactory to Parent) indicating that the Company shall have previously
      obtained the written consent of Company Stockholders representing a majority
      of
      the shares of the capital stock of the Company entitled to vote on the Merger
      and this Agreement, and that approval of the Merger and this Agreement shall
      have therefore been duly obtained, but that he/she/it may nonetheless elect
      not
      to have his/her/its Dissentable Shares exchanged in the Merger and pursue
      his/her/its appraisal rights under the DGCL. 

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (v) To
      the
      extent that the Company is unsuccessful in obtaining a majority written consent
      of the Company Stockholders approving the Merger and this Agreement, and subject
      to any procedural and/or other directives as may be provided by the SEC or
      any
      state securities regulators, or as may otherwise be required in relation to
      federal and/or state securities compliance in the exclusive discretion of
      Parent, the Company shall as promptly as practicable take all action necessary
      under the DGCL and its bylaws to duly call, convene and hold a special meeting
      of Company Stockholders for the purposes of considering, among other potential
      proposals, a proposal to approve the Merger and this Agreement, and each of
      the
      Company and the Company Principal Stockholder shall use its best
      efforts to solicit from the Company Stockholders proxies in favor of such
      approval and
      take
      all other action it deems advisable to secure the vote of its stockholders
      required by the DGCL to obtain such approvals. In connection with any such
      special meeting of stockholders, and
      subject to any procedural and/or other directives as may be provided by the
      SEC
      or any state securities regulators, or as may otherwise be required in relation
      to federal and/or state securities compliance in the exclusive discretion of
      Parent, the
      Company agrees to provide a
      proxy
      statement to all Company Stockholders which includes a statement advising that
      the board of directors of the Company recommends that they approve the Merger
      and this Agreement. 

    

    (vi) The
      information provided by the Company for inclusion in the Form S-4 Registration
      Statement shall not, (A) at the time provided, (B) at the time the Form S-4
      Registration Statement is declared effective by the SEC, or (C) at the time
      the Company proxy statement (inclusive of the Form S-4 Registration Statement)
      (or any amendment thereof or supplement thereto) is first mailed to Company
      Stockholders, contain any untrue statement of a material fact or fail to state
      any material fact required to be stated therein or necessary in order to make
      the statements therein, in the light of the circumstances under which they
      were
      made, not misleading. If, at any time prior to the Effective Time, any event
      or
      circumstance relating to the Company and/or its Subsidiaries, or their
      respective officers or directors, should be discovered by the Company that
      should be set forth in an amendment or a supplement to the Form S-4 Registration
      Statement so that any of such documents will not contain any untrue statement
      of
      a material fact or omit to state any material fact necessary in order to make
      the statements therein, in the light of the circumstances under which they
      were
      made, not misleading, the Company shall promptly inform Parent in writing.
      All
      documents that Parent is responsible for filing with the SEC in connection
      with
      the Merger or the other Transactions shall comply as to form and substance
      in
      all material respects with the applicable requirements of the Securities Act
      and
      the Exchange Act, as appropriate.

    

    (vii) Each
      of
      the Company and Parent shall use its reasonable best efforts to cause to be
      delivered to the other party two letters from their respective independent
      accountants/auditors, one dated approximately as of the date the Form S-4
      Registration Statement shall have been declared effective by the SEC and one
      dated approximately as of the Closing Date, each addressed to the other Party,
      in form and substance reasonably satisfactory to the other Party and customary
      in scope and substance for comfort letters delivered by independent public
      accountants in connection with registration statements on Form S-4 under the
      Securities Act.

    

    (viii) Each
      of
      the Company and Parent shall use its reasonable best efforts to cause to be
      delivered to the other party consents from their respective independent
      accountants, dated the date on which the Form S-4 Registration Statement is
      declared effective or a date not more than two (2) days prior to such date,
      in form reasonably satisfactory to the other party and customary in scope and
      substance for consents delivered by independent public accountants in connection
      with registration statements on Form S-4 under the Securities Act.

     

    
      
        
        

      

      
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    (f) At
      such
      time as (1) the Form S-4 Registration Statement shall have been declared
      effective by the SEC, (2) the Company shall have obtained the requisite approval
      of its stockholders to the Merger and this Agreement in accordance with the
      DGCL
      and its bylaws, and (3) each of Parent and the Company shall have agreed in
      writing to a specified date for Closing, Parent shall be given up to twenty
      (20)
      Business Days in which to take whatever steps as may be reasonably necessary,
      in
      accordance with the requirements of its bylaws and the DGCL, to do the
      following: 

    

    (i) obtain
      the requisite written consent from the board of directors of Parent and Parent
      Stockholders to duly authorize and approve amendments to the certificate of
      incorporation of Parent 

    

    (A) changing
      the name of Parent to “Bixby Energy Systems, Inc.”, which name change shall not
      become effective, if at all, until the Effective Time; and 

    

    (B) effecting
      a forward or reverse-split of the Parent Common Stock on the basis of a split
      ratio pursuant to which the number of all outstanding shares of Parent Common
      Stock at the effective time of the reverse-split would be increased or decreased
      as necessary to a number of shares such that, collectively, such shares would
      equal four percent (4%) of the sum of (x)
      the
      number of shares of Parent Common Stock then outstanding, plus (y)
      the
      number of shares of Company Common Stock then outstanding on a Fully-Diluted
      Basis (the “Parent
      Stock-Split”);
      and

    

    (ii) causing
      such amendments to the certificate of incorporation of Parent to be duly filed
      with the Delaware Secretary of State. 

    

    From
      and
      after the Parent Stock-Split, the Company shall be prohibted from issuing any
      securities of any kind (the “Pre-Closing
      Company Standstill Commitment”).
      

    

    (g) It
      is
      acknowledged that each of the Parent and the Company have made a determination,
      and agreed, to forego the obtaining of any fairness opinion in relation to
      the
      Merger.

     

    (h) At
      least
      ten (10) days prior to the Closing Date, and pursuant to the Exchange Act
      Section 14(f), Parent, with the fullest of cooperation and assistance of the
      Company applying its reasonable best efforts, shall prepare, file with the
      SEC,
      and mail to its stockholders at least ten (10) days prior to the Closing Date
      a
      Schedule 14F. 

    

    7.3 Regulatory
      Approvals.

    

    (a) Each
      of
      the Company, Parent and Merger Sub shall promptly apply for, and take all
      reasonably necessary actions to obtain or make, as applicable, all
      Authorizations, Orders, declarations and filings with, and notices to, any
      Governmental Authority required to be obtained or made by it for the
      consummation of the Transactions. Each Party shall cooperate with and promptly
      furnish information to the other Parties necessary in connection with any
      requirements imposed upon such other Parties in connection with the consummation
      of the Merger.

     

    
      
        
        

      

      
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    (b) Each
      of
      the Company and Parent shall give the other reasonable prior notice of any
      communication with, and any proposed understanding or agreement with, any
      Governmental Authority regarding any Authorizations, Orders, declarations and
      filings with, and notices to, any Governmental Authority, and permit the other
      to review and discuss in advance, and consider in good faith the views of the
      other in connection with, any proposed communication, understanding or agreement
      with any Governmental Authority with respect to the Merger and the Transactions.
      Notwithstanding the foregoing, neither the Company nor Parent shall be required
      to nor any of their respective Affiliates shall have any obligation to contest,
      administratively or in court, any ruling, order or other action of any
      Governmental Authority or any other Person respecting the
      Transactions.

    

    7.4 Public
      Announcements.
      If
      there is an initial press release relating to this Agreement, it shall be a
      joint press release the text of which shall have been agreed to in writing
      in
      advance by each of Parent and the Company. Thereafter, each of Parent and the
      Company shall not issue any press release or otherwise make any public
      statements with respect to this Agreement or any of the Transactions without
      the
      prior written consent of the other Party; provided,
      however,
      that a
      Party may, without such consent (but after prior consultation to the extent
      practicable under the circumstances), issue such press releases and make such
      public statements and/or disclosures that it reasonably determines are required
      under applicable Law, including without limitation the Exchange Act, or the
      rules of the OTCBB or, if applicable, the NASDAQ Capital Market. Notwithstanding
      the foregoing, a Party may make public statements in response to questions
      from
      the press, analysts and investors and make internal announcements to employees,
      so long as such statements and announcements are accurate and not misleading,
      consistent with previous press releases or public statements made jointly by
      the
      Company and Parent, and do not contain forward-looking statements of any
      kind.

    

    7.5 Tax
      Free Reorganization.
      Each of
      the Company and Parent shall use their reasonable best efforts, and shall cause
      their respective Subsidiaries to use their reasonable best efforts, to take
      or
      cause to be taken any action necessary for the Merger to qualify as a
“reorganization” within the meaning of Section 368(a) of the Code. Neither the
      Company nor Parent shall (and following the Effective Time, Parent shall cause
      the Surviving Corporation not to) take any action that would cause the Merger
      to
      fail to qualify as a “reorganization” within the meaning of Section 368(a) of
      the Code. This Agreement is intended to constitute a “plan of reorganization”
within the meaning of Section 1.368-2(g) of the income tax regulations
      promulgated under the Code.

    

    7.6 Affiliates.
      Not
      less than thirty (30) days after the day hereof, the Company shall deliver
      to Parent a letter identifying all Persons who, in the judgment of the Company,
      may be deemed at the time this Agreement is submitted for adoption by Company
      Stockholders, “affiliates” of the Company for purposes of Rule 145 under
      the Securities Act, and such list shall be updated as necessary from time to
      time to reflect changes from the date thereof. The Company shall use its
      reasonable best efforts to cause each Person identified on such list who is
      not
      a Dissenting Holder to deliver to Parent an Affiliate Agreement as of the time
      this Agreement is submitted for adoption by Company Stockholders.

    

    7.7 Consents.
      The
      Company shall, and shall cause each of its Subsidiaries to, use its reasonable
      best efforts to obtain all Required Company Consents.

     

    
      
        
        

      

      
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    7.8 Notification
      of Certain Matters.
      Each of
      the Company and Parent shall give prompt notice to the other Party of any fact,
      event or circumstance known to it (a) that individually or taken together
      with all other facts, events and circumstances known to it, has had or could
      reasonably be expected to have, individually or in the aggregate, a Material
      Adverse Effect on the Company or Parent or a Material Adverse Effect on the
      Company and its Subsidiaries or Parent and its Subsidiaries, in each case taken
      as a whole, (b) that would cause or constitute a breach of any of its
      representations, warranties, covenants or agreements contained herein,
      (c) that would cause the failure of any condition precedent to its
      obligations, (d) regarding any consent of a third party that is or may be
      required in connection with the Merger, (e) relating to any notice or other
      communication from any Governmental Authority in connection with the Merger,
      or
      (f) in respect of any Proceedings commenced relating to it or any of its
      Subsidiaries that, if pending on the date of this Agreement, would have been
      required to have been disclosed pursuant to Section 4.20 or Section 5.9, as
      applicable; provided,
      however,
      that
      (i) the delivery of any notice pursuant to this Section 7.8 shall not
      prevent or cure any misrepresentations, breach of warranty or breach of
      covenant, and (ii) disclosure by the Company or Parent pursuant to this Section
      7.8 shall not be deemed to amend or supplement either the Company Disclosure
      Schedule or the Parent Disclosure Schedule, or constitute an exception to any
      representation or warranty under this Agreement.

    

    7.9 Conveyance
      Taxes.
      Each of
      the Company and Parent shall cooperate in the preparation, execution and filing
      of all returns, questionnaires, applications or other documents regarding any
      Taxes which become payable in connection with the Transactions that are required
      or permitted to be filed on or before the Effective Time.

    

    7.10 Dissenter’s
      Rights.
      Except
      as otherwise required by applicable Law, neither the Company, the Company
      Principal Stockholder, nor Parent shall do anything, either directly or
      indirectly, that is intended to, or would, encourage, or that might otherwise
      result in, any holder of Dissentable Shares becoming a Dissenting Holder.

    

    7.11 Post-Closing
      Current Report Filing on Form 8-K.
      Within
      four Business Days of the Closing Date, Parent shall file with the SEC a current
      report on Form 8-K regarding consummation of the Merger pursuant to
      Items
      5.01, 5.02, and/or 5.06 of such form (or such other Items as may otherwise
      be
      appropriate). 

    

    7.12 Post-Closing
      Establishment of Trading Market; Quotation; Listing.
      As soon
      as practicable following the Closing Date, the Parent shall use its reasonable
      best efforts to cause the Parent Common Stock, as a class, to become authorized
      for quotation, and to be quoted, on the OTCBB, and/or to the extent qualified,
      to become authorized for listing, and to become listed, on the NASDAQ Capital
      Market, including, as applicable, the preparation, filing and prosecution of
      a
      Form 211 with FINRA in accordance with Rule 15c-211 under the Exchange Act
      and/or a listing application. 

    

    7.13 Certain
      Registration Obligations.
      

    

    (a) Within
      twenty (20) Business Days following the Closing Date, Parent shall have
      prepared, and shall file, at its own expense, a registration statement covering
      the resale of the Registrable Securities on Form S-1 or such other appropriate
      registration form of the SEC for the Parent as of such date as shall permit
      the
      disposition of such Registrable Securities in accordance with the intended
      method or methods of disposition specified in the registration statement (the
      “Resale
      Registration Statement”).
      The
      Company shall thereafter use its best efforts to cause the Resale Registration
      Statement to be declared effective by the SEC by the earlier of (i) forty (40)
      Business Days following the filing date thereof, (ii) five (5) Business Days
      following the receipt of a “No Review” or similar letter or communication from
      the SEC, or (iii) one (1) Business Day following the day upon which the SEC
      shall have determined the Resale Registration Statement eligible to be declared
      effective. Anything in this agreement to the contrary notwithstanding, Parent
      shall pay to the holders of Registrable Securities, pro
      rata,
      as
      liquidated damages and not as a penalty, an amount in cash equal to two thousand
      five hundred dollars ($2,500) per day for any delays in meeting any of the
      foregoing timeframes; provided,
      however,
      that,
      in addition to such liquidated damages, the holders of Registrable Securities
      shall be entitled to pursue and obtain specific performance or other equitable
      relief with respect to the registration rights hereunder.

     

    
      
        
        

      

      
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    (b)
      From
      and after the date of effectiveness of the Resale Registration Statement, Parent
      shall do each the following: 

    

    (i) prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such Resale Registration Statement effective and to comply with the
      provisions of the Securities Act with respect to the disposition of all
      Registrable Securities covered by such registration statement until the earlier
      to occur of (x)
      twenty-four (24) months after the date of effectiveness of the Resale
      Registration Statement (subject to the right of Parent, once the Parent Common
      Stock is quoted for trading, to suspend the effectiveness thereof for not more
      than ten (10) consecutive Trading Days or an aggregate of twenty (20) Trading
      Days during each year), or (y)
      such
      time as all of the securities which are the subject of such registration
      statement cease to be Registrable Securities;

    

    (ii)
      furnish to each holder of Registrable Securities covered by such Resale
      Registration Statement such number of conformed copies of such Resale
      Registration Statement and of each such amendment and supplement thereto (in
      each case including all exhibits), such number of copies of the prospectus
      contained in such registration statement (including each preliminary prospectus
      and any summary prospectus) and any other prospectus filed under Rule 424 under
      the Securities Act, in conformity with the requirements of the Securities,
      and
      such other documents, as such holder of Registrable Securities may reasonably
      request in order to facilitate the public sale or other disposition of the
      Registrable Securities owned by such holder of Registrable Securities;

    

    (iii)
      use
      its reasonable best efforts to register or qualify all Registrable Securities
      and other securities covered by such Resale Registration Statement under such
      other state securities Laws as any holder of Registrable Securities thereof
      shall reasonably request, to keep such registrations or qualifications in effect
      for so long as such Resale Registration Statement remains in effect, and take
      any other action which may be reasonably necessary to enable such holder of
      Registrable Securities to consummate the disposition in such jurisdictions
      of
      the Registrable Securities owned by such holder; provided, however, that Parent
      shall not for any such purpose be required to qualify generally to do business
      as a foreign corporation in any jurisdiction wherein it would not but for the
      requirements of this subdivision (iii) be obligated to be so qualified or to
      consent to general service of process in any such jurisdiction;

    

    (iv) use
      its
      reasonable best efforts to cause all Registrable Securities covered by such
      Resale Registration Statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to enable the holders
      of Registrable Securities to consummate the disposition of such Registrable
      Securities;

    

    (v) furnish
      to each holder of Registrable Securities a signed counterpart, addressed to
      such
      holder of Registrable Securities, and the underwriters, if applicable, of an
      opinion of counsel for Parent, dated the effective date of such Resale
      Registration Statement (or, if such registration includes an underwritten public
      offering, an opinion dated the date of the closing under the underwriting
      agreement), reasonably satisfactory in form and substance to such holder of
      Registrable Securities, including that the prospectus and any prospectus
      supplement forming a part of the Resale Registration Statement does not contain
      an untrue statement of a material fact or omit a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they were made, not misleading; and

     

    
      
        
        

      

      
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    (vi) notify
      the holders of Registrable Securities promptly and confirm such advice in
      writing promptly after Parent has Knowledge thereof:

    

    (A) when
      the
      Resale Registration Statement, the prospectus or any prospectus supplement
      related thereto or post-effective amendment to the Resale Registration Statement
      has been filed, and, with respect to the Resale Registration Statement or any
      post-effective amendment thereto, when the same has become
      effective;

    

    (B) of
      any
      request by the SEC for amendments or supplements to the Resale Registration
      Statement or the prospectus or for additional information;

    

    (C) of
      the
      issuance by the SEC of any stop order suspending the effectiveness of the Resale
      Registration Statement or the initiation of any proceedings by any Person for
      that purpose; and

    

    (D) of
      the
      receipt by Parent of any notification with respect to the suspension of the
      qualification of any Registrable Securities for sale under any federal or state
      securities Laws or the initiation or threat of any Proceeding for such
      purpose.

    

    (vii) notify
      each holder of Registrable Securities covered by such Resale Registration
      Statement, at any time when a prospectus relating thereto is required to be
      delivered under the Securities Act, upon discovery that, or upon the happening
      of any event as a result of which, the prospectus included in such Resale
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omits to state any material facts required to be stated therein
      or necessary to make the statements therein not misleading in the light of
      the
      circumstances then existing, and, at the request of any such holder of
      Registrable Securities, promptly prepare and furnish to such holder of
      Registrable Securities a reasonable number of copies of a supplement to or
      an
      amendment of such prospectus as may be necessary so that, as thereafter
      delivered to the purchasers of such securities, such prospectus shall not
      include an untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading in the light of the circumstances then existing;

    

    (viii) use
      its
      best efforts to obtain the withdrawal of any order suspending the effectiveness
      of the Resale Registration Statement at the earliest possible
      moment;

    

    (ix)
      otherwise use its reasonable best efforts to comply with all applicable rules
      and regulations of the SEC, and make available to its security holders, as
      soon
      as reasonably practicable, an earnings statement covering the period of at
      least
      twelve (12) months, but not more than eighteen (18) months, beginning with
      the
      first full calendar month after the effective date of such registration
      statement, which earnings statement shall satisfy the provisions of Section
      11(a) of the Securities Act and Rule 158 thereunder;

    

    (x) enter
      into such agreements and take such other actions as the holders of Registrable
      Securities shall reasonably request in writing in order to expedite or
      facilitate the disposition of the Registrable Securities; and

     

    
      
        
        

      

      
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    (xi) use
      its
      reasonable best efforts to list all Registrable Securities covered by such
      Resale Registration Statement on any national securities exchange on which
      any
      of the Registrable Securities are then listed.

    

    (c) Notwithstanding
      anything to the contrary contained herein, the obligations of Parent under
      this
      Section 7.13 shall only be enforceable by the holders of Registrable Securities
      if and to the extent that such holders of Registrable Securities individually
      execute and deliver to the Parent after the Effective Time a separate agreement
      in substantially the form annexed hereto as Exhibit F and made a part hereof
      (the “Registrable
      Securities Lock-Up Agreement”).
      

    

    (d) This
      Section 7.13 is intended to be for the benefit of, and shall be enforceable
      by, the holders of Registrable Securities and their heirs and personal
      representatives, and shall be binding on the Parent and its successors and
      assigns. In the event that Parent or any of its successors or assigns (i)
      consolidates with or merges into any other Person and shall not be the
      continuing or surviving corporation or entity in such consolidation or merger,
      or (ii) transfers all or substantially all of its properties and assets to
      any Person, then, and in each case, proper provision shall be made so that
      the
      successors and assigns of the Parent shall be legally bound to honor the
      registration obligations set forth in this Section 7.13.

    

    7.14 Certain
      Liability & Indemnification.

    

    (a) With
      an
      understanding that all material information regarding the post-merger Parent
      to
      be provided in the Form S-4 registration Statement furnished to Company
      Stockholders in connection with the issuance of the Merger Securities is
      information that, of necessity, shall have originated with, and been provided
      by, the Company, and provided that the written authorization of the Company
      in
      relation to the Form S-4 Registration Statement shall have been obtained by
      Parent pursuant to Section 7.2(c), from and after the Effective Time, the Parent
      and the Company Principal Stockholder shall have full and complete direct and
      primary joint and several liability for any and all amounts for which any
      officer or director of Parent is otherwise found to be liable in connection
      with
      any actions arising, directly or indirectly, out of the offering by Parent
      of
      the Merger Securities. 

    

    (b) From
      and
      after the Effective Time, the Parent and the Company Principal Stockholder,
      shall, jointly and severally and to the fullest extent permitted by applicable
      Law, indemnify, defend and hold harmless, and provide advancement of expenses
      to, each Person who is now, or has been at any time prior to the date hereof
      or
      who becomes prior to the Effective Time, an officer, director or employee of
      Parent (the “Indemnified
      Parties”)
      against all Damages, Liabilities or Orders or amounts that are paid in
      settlement of or in connection with any claim or Proceeding that is based in
      whole or in part on, or arises in whole or in part out of, the fact that such
      Person is or was a director, officer or employee of Parent, and pertaining
      to
      any matter existing or occurring, or any acts or omissions occurring, at or
      prior to the Effective Time, whether asserted or claimed prior to, or at or
      after, the Effective Time (including matters, acts or omissions occurring in
      connection with the approval of this Agreement and the consummation of the
      Transactions, as well as matters arising out of any failures of disclosure
      in
      relation to the Form S-4 Registration Statement) to the same extent such Persons
      are entitled to be indemnified or have the right to advancement of expenses
      as
      of the date of this Agreement by Parent pursuant to its certificate of
      incorporation, bylaws, and/or any indemnification agreements in effect as of
      the
      date hereof.

     

    
      
        
        

      

      
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    (c) This
      Section 7.14 is intended to be for the benefit of, and shall be enforceable
      by, the Indemnified Parties and their heirs and personal representatives, and
      shall be binding on the Parent, the Company Principal Stockholder, and their
      respective successors and assigns. In the event that Parent or the Company
      Principal Stockholder, or any of their respective successors or assigns (i)
      consolidates with or merges into any other Person and shall not be the
      continuing or surviving corporation or entity in such consolidation or merger,
      or (ii) transfers all or substantially all of its properties and assets to
      any Person, then, and in each case, proper provision shall be made so that
      the
      successors and assigns of the Parent or Company Principal Stockholder, as
      applicable, shall be legally bound to honor the indemnification obligations
      set
      forth in this Section 7.14.

    

    7.15 Further
      Assurances.
      Upon
      the terms and subject to the conditions hereof, each of the Parties hereto
      shall
      execute such documents and other instruments and take such further actions
      as
      may be reasonably required from time to time to carry out the provisions hereof
      and consummate the Merger and the other Transactions.

    

    ARTICLE
      VIII

    

    CONDITIONS
      TO THE MERGER

    

    8.1 Conditions
      to the Obligations of Each Party to Effect the Merger.
      In
      addition to the other conditions set forth in this Article VIII, the obligations
      of the Company, Parent and Merger Sub to consummate the Merger are subject
      to
      the satisfaction on or prior to the Closing Date of the following
      conditions:

    

    (a) the
      Merger and this Agreement shall have been approved by the affirmative vote
      (or
      written consent) of a majority of the shares of Company Common Stock and other
      Cancelable Securities entitled to vote on the matter; 

    

    (b) all
      Authorizations and Orders of, declarations and filings with, and notices to
      any
      Governmental Authority required to permit the consummation of the Merger shall
      have been obtained or made and shall be in full force and effect;

    

    (c) no
      temporary restraining order, preliminary or permanent injunction or other Order
      prohibiting the consummation of the Merger shall be in effect, and no Law shall
      have been enacted or shall be deemed applicable to the Merger which makes the
      consummation of the Merger unlawful;

    

    (d) the
      shares of Parent Common Stock and, if applicable, other Merger Securities
      issuable as part of the Merger in accordance with Section 2.1 of this Agreement
      shall have been duly authorized; and 

    

    (e) the
      Form
      S-4 Registration Statement shall have been declared effective under the
      Securities Act by the SEC, delivered to all holders of Cancelable Securities,
      and shall not be the subject of any stop order or Proceeding seeking a stop
      order.

    

    8.2 Conditions
      to the Obligations of Parent and Merger Sub to Effect the Merger.
      The
      obligations of Parent and Merger Sub to consummate the Merger are subject to
      satisfaction (or waiver by Parent in its sole discretion) on or prior to the
      Closing Date of the following conditions:

     

    
      
        
        

      

      
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    (a) Company
      Principal Stockholder shall have delivered an executed Voting
      Agreement;

    

    (b) each
      of
      the representations and warranties of the Company set forth in this Agreement
      that is qualified by a Material Adverse Effect on the Company shall be true
      and
      correct at and as of the Closing Date as if made at and as of the Closing Date
      and each of such representations and warranties that is not so qualified shall
      be true and correct in all material respects at and as of the Closing Date
      as if
      made at and as of the Closing Date, except to the extent that such
      representations and warranties refer specifically to an earlier date, in which
      case such representations and warranties shall have been true and correct as
      of
      such earlier date;

    

    (c) each
      of
      the representations and warranties of the Company Principal Stockholder set
      forth in this Agreement that is qualified by a Material Adverse Effect on the
      Company shall be true and correct at and as of the Closing Date as if made
      at
      and as of the Closing Date and each of such representations and warranties
      that
      is not so qualified shall be true and correct in all material respects at and
      as
      of the Closing Date as if made at and as of the Closing Date, except to the
      extent that such representations and warranties refer specifically to an earlier
      date, in which case such representations and warranties shall have been true
      and
      correct as of such earlier date;

     

    (d) the
      Parent, at the expense of the Company, shall have procured directors and
      officers liability insurance coverage in an aggregate amount satisfactory to
      Parent from a carrier rated A++XV by A.M. Best & Company (or toherwise
      satisfactory to Parent) which coverage shall specifically include liability
      arising out of any errors or omissions that shall have occurred in connection
      with the offering and issuance of the Merger Securities;

    

    (e) the
      Company shall not have violated the Pre-Closing Company Standstill Commitment;
      

    

    (f) the
      Company shall have delivered an opinion of counsel to Parent, in form
      satisfactory to Parent, that the Merger will qualify as a tax-free
      reorganization under the Code; 

    

    (g) the
      Company shall have performed, or complied with, in all material respects all
      obligations required to be performed or complied with by it under this Agreement
      at or prior to the Closing Date, and the Company shall have delivered to Parent
      a certificate signed by the Chief Executive Officer of the Company to such
      effect;

    

    (h) there
      shall not have occurred any event, occurrence or change that has had, or could
      reasonably be expected to have, individually or in the aggregate, a Material
      Adverse Effect on the Company;

    

    (i) each
      of
      Parent and Merger Sub shall have received a certificate signed by the Chief
      Executive Officer of the Company certifying as to the satisfaction of the
      conditions set forth in Sections 8.1 and 8.2 as of the Closing Date; and

    

    (j) all
      actions to be taken by the Company in connection with consummation of the
      Transactions and all certificates, opinions, instruments, and other documents
      required to effect the Transactions will be reasonably satisfactory in form
      and
      substance to the Parent or its counsel.

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    8.3 Conditions
      to the Obligations of the Company to Effect the Merger.
      The
      obligation of the Company to consummate the Merger is subject to satisfaction
      (or waiver by the Company in its sole discretion) on or prior to the Closing
      Date of the following conditions:

    

    (a) each
      of
      the representations and warranties of Parent set forth in this Agreement that
      is
      qualified by a Material Adverse Effect on Parent shall be true and correct
      at
      and as of the Closing Date as if made at and as of the Closing Date and each
      of
      such representations and warranties that is not so qualified shall be true
      and
      correct in all material respects at and as of the Closing Date as if made at
      and
      as of the Closing Date, except to the extent that such representations and
      warranties refer specifically to an earlier date, in which case such
      representations and warranties shall have been true and correct as of such
      earlier date;

    

    (b) the
      Company shall have obtained the requisite approval of its stockholders to the
      Merger and this Agreement in accordance with the DGCL and its
      bylaws;

    

    (c) the
      holders of no more than twenty percent (20%) of the Dissentable Shares shall
      be
      in a position to perfect their appraisal rights under the DGCL as determined
      immediately prior to the Effective Time; 

     

    (d) Parent
      shall have performed, or complied with, in all material respects all obligations
      required to be performed or complied with by it under this Agreement at or
      prior
      to the Closing Date, and Parent shall have delivered to the Company a
      certificate signed by the Chief Executive Officer of Parent to such
      effect;

    

    (e) there
      shall not have occurred any event, occurrence or change that has had, or could
      reasonably be expected to have, individually or in the aggregate, a Material
      Adverse Effect on Parent;

    

    (f) the
      Company shall have received resignations of each of the officers of Parent,
      effective, in each case, as of the Effective Time; 

    

    (g) the
      Company shall have received a certificate signed by the Chief Executive Officer
      of Parent certifying as to the satisfaction of the conditions set forth in
      Sections 8.1 and 8.3 as of the Closing Date; and 

    

    (h) all
      actions to be taken by Parent in connection with consummation of the
      Transactions and all certificates, opinions, instruments, and other documents
      required to effect the Transactions will be reasonably satisfactory in form
      and
      substance to the Company or its counsel.

    

    (i)
       Parent
      shall have duly effected the Parent Stock-Split.

    

    ARTICLE
      IX

    

    TERMINATION,
      AMENDMENT AND WAIVER

    

    9.1 Termination.
      This
      Agreement may be terminated and the Merger and the other Transactions may be
      abandoned at any time prior to the Effective Time, notwithstanding any requisite
      approval of this Agreement and the Transactions, as follows:

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    (a) by
      mutual
      written consent duly authorized by the boards of directors of each of Parent,
      Merger Sub and the Company;

    

    (b) by
      Parent:

    

    (i) to
      the
      extent that the Effective Time shall not have occurred on or before January
      31,
      2009; provided,
      however,
      that
      the right to terminate this Agreement under this Section 9.1(b) shall not be
      available to Parent if Parent’s failure to fulfill any obligation under this
      Agreement has been the cause of, or resulted in, the failure of the Effective
      Time to occur on or before such date; 

    

    (ii) if
      the
      Parent reasonably concludes that material information regarding the Company
      and/or its Subsidiaries that it determines to include in the Form S-4
      Registration Statement has been unreasonably withheld by the Company and/or
      its
      Subsidiaries;

    

    (iii) if
      the
      Company unreasonably withholds its approval as to the accuracy and completeness
      of the Form S-4 Registration Statement;

    

    (iv) if
      the
      Company’s independent auditors resign at any time after having been engaged
      citing a disagreement with management of the Company or any of its officers
      and/or directors as the reason therefor; 

    

    (v) upon
      a
      breach of any representation, warranty, covenant or agreement on the part of
      the
      Company set forth in this Agreement, or if any representation or warranty of
      the
      Company shall have become untrue, in either case such that the conditions set
      forth in Section 8.2(a)-(j) would not be satisfied (a “Terminating
      Company Breach”);
      provided,
      however,
      that, if
      such Terminating Company Breach is curable by the Company through the exercise
      of its best efforts and for so long as the Company continues to exercise such
      best efforts, Parent may not terminate this Agreement under this Section
      9.1(b)(v); or

     

    (c) by
      the
      Company:

    

    (i) if
      the
      Company Stockholders shall have failed to duly approve the Merger and this
      Agreement within a reasonable period following good faith compliance by the
      Company with all of its obligations under Sections 7.3 and 7.11;

    

    (ii) upon
      breach of any representations, warranty, covenant or agreement on the part
      of
      Parent set forth in this Agreement, or if any representation or warranty of
      Parent shall have become untrue, in either case such that the conditions set
      forth in Section 8.3(a)-(h) would not be satisfied (“Terminating
      Parent Breach”);
      provided,
      however,
      that,
      if such Terminating Parent Breach is curable by Parent through best efforts
      and
      for so long as Parent continues to exercise such best efforts, the Company
      may
      not terminate this Agreement under this Section 9.1(c)(ii).

    

    9.2 Amendment.
      This
      Agreement may be amended by the Company, Parent and Merger Sub by action taken
      by or on behalf of their respective boards of directors at any time prior to
      the
      Effective Time; provided,
      however,
      that,
      (i) any such amendment is in writing signed by each of the Parties, and (ii)
      after approval of the matters presented in connection with the Merger by the
      Company Stockholders, no amendment shall be made which by Law requires further
      approval by the Company Stockholders without such further approval, including
      without limitation any amendment which would reduce the amount or change the
      type of consideration into which each share of Company Common Stock shall be
      converted upon consummation of the Merger. 

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    9.3 Waiver.
      At any
      time prior to the Effective Time, any Party hereto may (a) extend the time
      for
      the performance of any obligation or other act of any other Party hereto, (b)
      waive any inaccuracy in the representations and warranties contained herein
      or
      in any document delivered pursuant hereto, and (c) waive compliance with any
      agreement or condition contained herein. Any such extension or waiver shall
      be
      valid only if set forth in an instrument in writing signed by the Party or
      Parties to be bound thereby. No failure or delay by any Party in exercising
      any
      right 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. To the maximum
      extent permitted by Law, (i) no waiver that may be given by a Party shall
      be applicable except in the specific instance for which it was given, and
      (ii) no notice to or demand on one Party shall be deemed to be a waiver of
      any obligation of such Party or the right of the Party giving such notice or
      demand to take further action without notice or demand.

    

    ARTICLE
      X

    

    GENERAL
      PROVISIONS

    

    10.1 Notices.
      Any
      notice, request, demand, waiver, consent, approval or other communication which
      is required or permitted hereunder shall be in writing and shall be deemed
      given: (a) on the date established by the sender as having been delivered
      personally; (b) on the date delivered by FedEx, UPS, USPS, or DHL as
      established by the sender by evidence obtained from such courier; (c) on
      the date sent by facsimile, with confirmation of transmission, if sent during
      normal business hours of the recipient, if not, then on the next Business Day;
      or (d) on the fifth (5th)
      day
      after the date mailed, by certified or registered mail, return receipt
      requested, postage prepaid. Such communications, to be valid, must be addressed
      as follows:

    

    If
      to
      Parent or Merger Sub:

    

    GCA
      I Acquisition Corp.

    115
      East
      57th
      Street,
      Suite 1006

    New
      York,
      New York 10022

    Att:
      Michael M. Membrado, President & CEO

    

    Fax:
      646-486-9771

    

    with
      a copy to:

    

    M.M.
      Membrado, PLLC

    115
      East
      57th
      Street,
      Suite 1006

    New
      York,
      New York 10022

    Att:
      Michael M. Membrado

    

    Fax:
      646-486-9771

     

    
      
        
        

      

      
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    If
      to
      the Company:

    

    Bixby
      Energy Systems, Inc.

    6893
      139th
      Lane
      N.W.

    Ramsey,
      MN 55303

    Att:
      Robert Walker, CEO

    

    Fax:
      763-428-7903

     

    with
      a copy to:

    

    Davisson
      & Associates, PA

    3649
      Brunswick Avenue North

    Minneapolis,
      MN 55422

    Att:
      Peder K. Davisson, Esq.

    

    Fax:
      763-535-0490

    

    or
      to
      such other address or to the attention of such Person or Persons as the
      recipient party has specified by prior written notice to the sending party
      (or
      in the case of counsel, to such other readily ascertainable business address
      as
      such counsel may hereafter maintain). If more than one method for sending notice
      as set forth above is used, the earliest notice date established as set forth
      above shall control.

    

    10.2 Certain
      Definitions.
      For
      purposes of this Agreement, the following terms, in their capitalized forms,
      shall have the correspondingly ascribed meanings:

    

    “Affiliate”
means,
      with respect to any specified Person, any other Person who, directly or
      indirectly, through one or more intermediaries, Controls, is Controlled By,
      or
      is Under Common Control With, such specified Person.

    

    “Applicable
      Rate”
means
      the corporate base rate of interest publicly announced from time to time by
      Citibank N.A. plus 2% per annum.

    

    “Authorization”
means
      any authorization, approval, consent, certificate, license, permit or franchise
      of or from any Governmental Authority or pursuant to any Law.

    

    “Beneficial
      Owner”
with
      respect to any shares means a Person who shall be deemed to be the beneficial
      owner of such shares (i) which such Person or any of its Affiliates or
      associates (as such term is defined in Rule 12b-2 promulgated under the Exchange
      Act) beneficially owns, directly or indirectly, (ii) which such Person or any
      of
      its Affiliates or associates has, directly or indirectly, (A) the right to
      acquire (whether such right is exercisable immediately or subject only to the
      passage of time), pursuant to any agreement, arrangement or understanding or
      upon the exercise of consideration rights, exchange rights, warrants or options,
      or otherwise, or (B) the right to vote pursuant to any agreement, arrangement
      or
      understanding, (iii) which are beneficially owned, directly or indirectly,
      by
      any other Persons with whom such Person or any of its Affiliates or associates
      or any Person with whom such Person or any of its Affiliates or associates
      has
      any agreement, arrangement or understanding for the purpose of acquiring,
      holding, voting or disposing of any such shares, or (iv) pursuant to Section
      13(d) of the Exchange Act and any rules or regulations promulgated
      thereunder.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    “Benefit
      Plan”
means
      any “employee benefit plan” as defined in 3(3) of ERISA, including any
      (a) nonqualified deferred compensation or retirement plan or arrangement
      which is an Employee Pension Benefit Plan (as defined in ERISA
      Section 3(2)), (b) qualified defined contribution retirement plan or
      arrangement which is an Employee Pension Benefit Plan, (c) qualified
      defined benefit retirement plan or arrangement which is an Employee Pension
      Benefit Plan (including any Multiemployer Plan (as defined in ERISA
      Section 3(37)), (d) Employee Welfare Benefit Plan (as defined in ERISA
      Section 3(1)) or material fringe benefit plan or program, or (e) stock
      purchase, stock option, severance pay, employment, change-in-control, vacation
      pay, company awards, salary continuation, sick leave, excess benefit, bonus
      or
      other incentive compensation, life insurance, or other employee benefit plan,
      contract, program, policy or other arrangement, whether or not subject to
      ERISA.

    

    “Business
      Day”
means
      any day on which the principal offices of the SEC in Washington, D.C. are open
      to accept filings, or, in the case of determining a date when any payment is
      due, any day other than Saturday, Sunday or other day on which banks located
      in
      New York City are required or authorized by Law to close.

    

    “CERCLA”
means
      the Comprehensive Environmental Response, Compensation, and Liability Act,
      42
      U.S.C. Section 9601 et
      seq.

    

    “Company
      ERISA Affiliate”
means
      any entity which is a member of a “controlled group of corporations” with, under
“common control” with or a member of an “affiliated services group” with, the
      Company or any of its Subsidiaries, as defined in Section 414(b), (c),
      (m) or (o) of the Code.

    

    “Contaminant”
means,
      in relation to any Software, any virus or other intentionally created,
      undocumented contaminant.

    

    “Contract”
means
      any agreement, contract, license, lease, commitment, arrangement or
      understanding, written or oral, including any sales order and purchase
      order.

    

    “Control”
      (including the terms “Controlled
      By”
and
      “Under
      Common Control With”)
      means
      the possession, directly or indirectly or as trustee or executor, of the power
      to direct or cause the direction of the management and policies of a Person,
      whether through the ownership of voting securities, as trustee or executor,
      by
      Contract or credit arrangement or otherwise. 

    

    “Copyrights”
means
      registered and unregistered copyrights in both published and unpublished
      works.

    

    “Damages”
means
      all Proceedings, demands, claims, assessments, losses, damages, costs, expenses,
      Liabilities, obligations, injunctions, judgments, Orders, decrees, rulings,
      awards, fines, sanctions, penalties, charges, Taxes and amounts paid in
      settlement, including, without limitation, (i) interest on cash disbursements
      in
      respect of any of the foregoing at the Applicable Rate, compounded quarterly,
      from the date each such cash disbursement is made until the Person incurring
      the
      same shall have been indemnified in respect thereof, and (ii) reasonable costs,
      fees and expenses of attorneys, accountants and other agents of the relevant
      Person.

    

    “Disabling
      Codes”
means,
      with respect to any Software, any disabling codes or related
      instructions.

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    “Environment”
means
      all air, surface water, groundwater, land, including land surface or subsurface,
      including all fish, wildlife, biota and all other natural
      resources.

    

    “Environmental
      Action”
means
      any Proceeding brought or threatened under any Environmental Law or otherwise
      asserting the incurrence of Environmental Liabilities.

    

    “Environmental
      Clean-Up Site”
means
      any location which is listed on the National Priorities List, the Comprehensive
      Environmental Response, Compensation and Liability Information System, or on
      any
      similar state or foreign list of sites requiring investigation or cleanup,
      or
      which is the subject of any pending or threatened Proceeding related to or
      arising from any alleged violation of any Environmental Law, or at which there
      has been a threatened or actual Release of a Hazardous Substance.

    

    “Environmental
      Laws”
means
      any and all applicable Laws and Authorizations issued, promulgated or entered
      into by any Governmental Authority relating to the Environment, worker health
      and safety, preservation or reclamation of natural resources, or to the
      management, handling, use, generation, treatment, storage, transportation,
      disposal, manufacture, distribution, formulation, packaging, labeling, Release
      or threatened Release of or exposure to Hazardous Substances, whether now
      existing or subsequently amended or enacted, including but not limited to:
      CERCLA; the Federal Water Pollution Control Act, 33 U.S.C.
      Section 1251
      et
      seq.;
      the
      Clean Air Act, 42 U.S.C. Section 7401 et
      seq.;
      the
      Toxic Substances Control Act, 15 U.S.C. Section 2601 et
      seq.;
      the
      Occupational Safety and Health Act, 29 U.S.C. Section 651 et
      seq.;
      the
      Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
      Section 11001 et
      seq.;
      the
      Safe Drinking Water Act, 42 U.S.C. Section 300(f) et
      seq.;
      the
      Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
      seq.;
      the
      Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section 136
et
      seq.;
      RCRA;
      the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
      seq.;
      the Oil
      Pollution Act of 1990, 33 U.S.C. Section 2701 et
      seq.;
      and any
      similar or implementing state or local Law, and any non-U.S. Laws and
      regulations of similar import, and all amendments or regulations promulgated
      thereunder; and any common law doctrine, including but not limited to,
      negligence, nuisance, trespass, personal injury, or property damage related
      to
      or arising out of the presence, Release, or exposure to Hazardous
      Substances.

    

    “Environmental
      Liabilities”
means,
      with respect to any party, Liabilities arising out of (A) the ownership or
      operation of the business of such party or any of its Subsidiaries, or
      (B) the ownership, operation or condition of the Real Property or any other
      real property currently or formerly owned, operated or leased by such party
      or
      any of its Subsidiaries, in each case to the extent based upon or arising out
      of
      (i) Environmental Law, (ii) a failure to obtain, maintain or comply
      with any Environmental Permit, (iii) a Release of any Hazardous Substance,
      or (iv) the use, generation, storage, transportation, treatment, sale or
      other off-site disposal of Hazardous Substances.

    

    “Environmental
      Permit”
means
      any Authorization under Environmental Law, and includes any and all Orders
      issued or entered into by a Governmental Authority under Environmental
      Law.

    

    “ERISA”
means
      the U.S. Employee Retirement Income Security Act of 1974, as
      amended.

    

    “Exchange
      Act”
means
      the U.S. Securities Exchange Act of 1934, as amended.

    

    “FINRA”
mean
      the Financial Industry Regulatory Authority.

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    “Fully-Diluted
      Basis”
means,
      with respect to any calculation of common shares for a given corporation
      outstanding at a given time, that amount, exclusive of any and all shares held
      in treasury, which includes (i) any and all convertible securities then
      outstanding assuming the full conversion thereof as of such time, and (iii)
      any
      and all options and warrants then outstanding assuming the full exercise thereof
      as of such time.

    

    “GAAP”
means
      U.S. Generally Accepted Accounting Principles.

    

    “Governmental
      Authority”
means
      any entity or body exercising executive, legislative, judicial, regulatory
      or
      administrative functions of or pertaining to United States federal, state,
      local, or municipal government, foreign, international, multinational or other
      government, including any department, commission, board, agency, bureau,
      subdivision, instrumentality, official or other regulatory, administrative
      or
      judicial authority thereof, and any non-governmental regulatory body to the
      extent that the rules and regulations or orders of such body have the force
      of
      Law.

    

    “Hazardous
      Substances”
means
      all explosive or regulated radioactive materials or substances, hazardous or
      toxic materials, wastes or chemicals, petroleum and petroleum products
      (including crude oil or any fraction thereof), asbestos or asbestos containing
      materials, and all other materials, chemicals or substances which are regulated
      by, form the basis of liability or are defined as hazardous, extremely
      hazardous, toxic or words of similar import, under any Environmental Law,
      including materials listed in 49 C.F.R. Section 172.101 and materials
      defined as hazardous pursuant to Section 101(14) of CERCLA.

    

    “Indebtedness”
means
      any of the following: (a) any indebtedness for borrowed money, (b) any
      obligations evidenced by bonds, debentures, notes or other similar instruments,
      (c) any obligations to pay the deferred purchase price of property or
      services, except trade accounts payable and other current Liabilities arising
      in
      the Ordinary Course of Business, (d) any obligations as lessee under
      capitalized leases, (e) any indebtedness created or arising under any
      conditional sale or other title retention agreement with respect to acquired
      property, (f) any obligations, contingent or otherwise, under acceptance
      credit, letters of credit or similar facilities, and (g) any guaranty of
      any of the foregoing.

    

    “Intellectual
      Property”
means:
      (i) Proprietary Information; (ii) trademarks and service marks
      (whether or not registered), trade names, logos, trade dress and other
      proprietary indicia and all goodwill associated therewith;
      (iii) documentation, advertising copy, marketing materials, web-sites,
      specifications, mask works, drawings, graphics, databases, recordings and other
      works of authorship, whether or not protected by Copyright; (iv) Software;
      and (v) Intellectual Property Rights, including all Patents, Copyrights,
      Marks, trade secret rights, mask works, moral rights or other literary property
      or authors rights, and all applications, registrations, issuances, divisions,
      continuations, renewals, reissuances and extensions of the
      foregoing.

    

    “Intellectual
      Property Rights”
means
      all forms of legal rights and protections that may be obtained for, or may
      pertain to, any Intellectual Property in any country of the
      world.

    

    “Knowledge”
of
      a
      given party (or any similar phrase) means, with respect to any fact or matter,
      the actual knowledge of the directors and executive officers of such party
      and
      each of its Subsidiaries, together with such knowledge that such directors,
      executive officers and other employees could be expected to discover after
      due
      investigation concerning the existence of the fact or matter in
      question.

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    “Law”
means
      any statute, law (including common law), constitution, treaty, ordinance, code,
      order, decree, judgment, rule, regulation and any other binding requirement
      or
      determination of any Governmental Authority.

    

    “Liability”
or
      “Liabilities”
means
      any liability, Indebtedness or obligation of any kind, whether known or unknown,
      whether asserted or unasserted, whether absolute or contingent, whether accrued
      or unaccrued, whether liquidated or unliquidated, whether secured or unsecured,
      whether joint or several, whether due or to become due, whether vested or
      unvested, including any liability for Taxes.

    

    “Liens”
means
      any liens, claims, charges, security interests, mortgages, pledges, easements,
      conditional sale or other title retention agreements, defects in title,
      covenants or other restrictions of any kind, including, any restrictions on
      the
      use, voting, transfer or other attributes of ownership. 

    

    “Marks”
means
      trademarks, service marks and other proprietary indicia (whether or not
      registered).

    

    “Material
      Adverse Effect”
means,
      with respect to any Person, any state of facts, development, event,
      circumstance, condition, occurrence or effect that, individually or taken
      collectively with all other preceding facts, developments, events,
      circumstances, conditions, occurrences or effects (a) is materially adverse
      to the condition (financial or otherwise), business, operations or results
      of
      operations of such Person, (b) impairs the ability of such Person to perform
      its
      obligations under this Agreement, or (c) delays the consummation of the
      Merger.

    

    “Operative
      Agreements”
means,
      collectively, this Agreement, the Lock-Up & Voting Agreement and the
      Affiliate Agreements.

    

    “Order”
means
      any award, injunction, judgment, decree, stay, order, ruling, subpoena or
      verdict, or other decision entered, issued or rendered by any Governmental
      Authority.

    

    “Ordinary
      Course of Business”
means
      the ordinary course of business consistent with past custom and practice
      (including with respect to quantity and frequency).

    

    “OTCBB”
means
      the Over-The-Counter Bulletin Board, operated by NASDAQ.

    

    “Patents”
means
      letters patent, patent applications, provisional patents, design patents, PCT
      filings, invention disclosures and other rights to inventions or
      designs.

    

    “PCAOB”
means
      the Public Company Accounting Oversight Board.

    

    “PCBs”
means
      polychlorinated biphenyls.

    

    “Permitted
      Liens”
means,
      with respect to any party, (i) Liens for current real or personal property
      taxes not yet due and payable and with respect to which such party maintains
      adequate reserves, (ii) workers’, carriers’ and mechanics’ or other like
      Liens incurred in the Ordinary Course of Business with respect to which payment
      is not due and that do not impair the conduct of such party’s or any of its
      Subsidiaries’ business in any material respect or the present or proposed use of
      the affected property and (iii) Liens that are immaterial in character,
      amount, and extent and which do not detract from the value or interfere with
      the
      present or proposed use of the properties they affect.

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    “Person”
means
      an individual, a corporation, a partnership, a limited liability company, a
      trust, an unincorporated association, Governmental Authority, a person
      (including, without limitation, a “person” as defined in Section 13(d)(3) of the
      Exchange Act), or any political subdivision, agency or instrumentality of a
      Governmental Authority, or any other entity or body. 

    

    “Proceeding”
or
      “Proceedings”
means
      any actions, suits, claims, hearings, arbitrations, mediations, Proceedings
      (public or private) or governmental investigations that have been brought by
      any
      governmental authority or any other Person.

    

    “Proprietary
      Information”
means,
      collectively, inventions (whether or not patentable), trade secrets, technical
      data, databases, customer lists, designs, tools, methods, processes, technology,
      ideas, know-how, source code, product road maps and other proprietary
      information and materials.

    

    “Public
      Software”
means
      any Software that contains, or is derived in any manner (in whole or in part)
      from, any Software that is distributed as free Software, open source Software
      or
      similar licensing or distribution models, including Software licensed or
      distributed under any of the following licenses or distribution models, or
      licenses or distribution models similar to any of the following: (i) GNU’s
      General Public License or Lesser/Library GPL; (ii) Mozilla Public License;
      (iii) Netscape Public License; (iv) Sun Community Source/ Industry
      Standard License; (v) BSD License; and (vi) Apache
      License.

    

    “RCRA”
means
      the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
et
      seq.

    

    “Release”
means
      any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leaching, dumping, or disposing of Hazardous Substances
      into the Environment.

    

    “Registrable
      Securities”
means
      the shares of Parent Common Stock issued and outstanding immediately prior
      to
      the Effective Time; provided,
      however,
      that,
      as to any particular Registrable Securities, such securities will cease to
      be
      Registrable Securities when (a) they have been effectively registered under
      the
      Securities Act and disposed of in accordance with the registration statement
      covering them, (b) they are or may be freely traded without registration
      pursuant to Rule 144 under the Securities Act (or any similar provisions that
      are then in effect), or (c) they have been otherwise transferred and new
      certificates for them not bearing a restrictive legend have been issued by
      Parent and Parent shall not have “stop transfer” instructions imposed against
      them. 

    

    “Securities
      Act”
means
      the U.S. Securities Act of 1933, as amended. 

    

    “SEC”
means
      the U.S. Securities and Exchange Commission.

    

    “Software”
means,
      collectively, computer programs, including any and all software implementations
      of algorithms, models and methodologies, whether in source code or object code,
      design documents, flow-charts, user manuals and training materials relating
      thereto and any translations thereof. 

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

     

    “Subsidiary”
or
      “Subsidiaries”
means,
      with respect to any party, any Person, of which (a) such party or any
      subsidiary of such party is a general partner (excluding partnerships, the
      general partnership interests of which held by such party or any Subsidiary
      of
      such party do not have a majority of the voting interest in such partnership)
      or
      (b) at least a majority of the securities or other interests having by
      their terms ordinary voting power to elect a majority of the board of directors
      or others performing similar functions with respect to such Person is directly
      or indirectly owned or controlled by such party and/or by any one or more of
      its
      subsidiaries.

    

    “Systems”
means,
      in relation to any Person, any of the hardware, software, databases or embedded
      control systems thereof.

    

    “Tax”
or
      “Taxes”
means
      any means any and all federal, state, local, or foreign net or gross income,
      gross receipts, net proceeds, sales, use, ad
      valorem,
      value
      added, franchise, bank shares, withholding, payroll, employment, excise,
      property, deed, stamp, alternative or add-on minimum, environmental (including
      taxes under Code §59A), profits, windfall
      profits,
      transaction, license, lease, service, service use, occupation, severance,
      energy, unemployment, social security, workers’ compensation, capital, premium,
      and other taxes, assessments, customs, duties, fees, levies, or other
      governmental charges of any nature whatever, whether disputed or not, together
      with any interest, penalties, additions to tax, or additional amounts with
      respect
      thereto.

    

    “Tax
      Returns”
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 having jurisdiction with respect to any
      Tax.

    

    “Trading
      Day”
means
      any day on which the NASDAQ Stock Market is open for trading.

    

    “$”
means
      United States dollars.

    

    10.3 Index
      of Other Defined Terms.
      In
      addition to those terms defined above, the following terms, in their capitalized
      forms, shall have the respective meanings given thereto in the sections
      indicated below:

     

    
      	
              Defined
                Term

            	 	
              Section

            
	 	 	 
	
              “Affiliate
                Agreement”

            	 	
              2.2(j)

            
	
              “Agreement”

            	 	
              Preamble

            
	
              “Bixby
                Option Plan”

            	 	
              2.1(a)(x)

            
	
              “Cancelable
                Common Share”

            	 	
              2.1(a)(i)

            
	
              “Cancelable
                Non-Convertible Preferred Share”

            	 	
              2.1(a)(iv)

            
	
              “Cancelable
                Pre-Definitive Agreement Convertible Debenture”

            	 	
              2.1(a)(v)

            
	
              “Cancelable
                Pre-Definitive Agreement Convertible Preferred Share”

            	 	
              2.1(a)(ii)

            
	
              “Cancelable
                Post-Definitive Agreement Convertible Debenture”

            	 	
              2.1(a)(vi)

            
	
              “Cancelable
                Post-Definitive Agreement Convertible Preferred Share”

            	 	
              2.1(a)(iii)

            
	
              “Cancelable
                Securities”

            	 	
              2.2(a)

            
	
              “Certificate
                of Merger”

            	 	
              1.1

            
	
              “Closing
                Date”

            	 	
              1.2

            
	
              “Closing”

            	 	
              1.2

            

    

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

     

    
      	
              “Code”

            	 	
              Recitals

            
	
              “Company”

            	 	
              Preamble

            
	
              “Company
                Benefit Plan”

            	 	
              4.21(a)

            
	
              “Company
                Common Stock”

            	 	
              2.1(a)(i)

            
	
              “Company
                Common Stock Purchase Warrant”

            	 	
              2.1(a)(viii)

            
	
              “Company
                Convertible Debentures”

            	 	
              2.1(a)v)

            
	
              “Company
                Convertible Preferred Purchase Warrant”

            	 	
              2.1(a)(ix)

            
	
              “Company
                Convertible Preferred Stock”

            	 	
              2.1(a)(ii)

            
	
              “Company
                Disclosure Schedule”

            	 	
              Art.
                IV Intro

            
	
              “Company
                Foreign Plans”

            	 	
              4.21(r)

            
	
              “Company
                In-Bound Licenses”

            	 	
              4.18(b)

            
	
              “Company
                Intellectual Property”

            	 	
              4.18(e)

            
	
              “Company
                Lease”

            	 	
              4.17(c)

            
	
              “Company-Leased
                Real Property”

            	 	
              4.17(a)

            
	
              “Company
                Material Contracts”

            	 	
              4.19(b)

            
	
              “Company
                Minor Contracts”

            	 	
              4.19(e)

            
	
              “Company
                Non-Convertible Debt Security”

            	 	
              2.1(a)(vii)

            
	
              “Company
                Non-Convertible Preferred Stock”

            	 	
              2.1(a)(iv)

            
	
              “Company
                Out-Bound Licenses”

            	 	
              4.18(c)

            
	
              “Company-Owned
                Intellectual Property”

            	 	
              4.18(a)

            
	
              “Company-Owned
                Real Property”

            	 	
              4.17(a)

            
	
              “Company-Owned
                Software”

            	 	
              4.18(m)(i)

            
	
              “Company
                Pension Plan”

            	 	
              4.21(b)

            
	
              “Company
                Permits”

            	 	
              4.7

            
	
              “Company
                Principal Stockholder”

            	 	
              Preamble

            
	
              “Company
                Receivables”

            	 	
              4.9

            
	
              “Company
                Registered Intellectual Property”

            	 	
              4.18(f)

            
	
              “Company
                Series A Convertible Preferred Stock”

            	 	
              4.4(a)

            
	
              “Company
                Stockholder”

            	 	
              2.1

            
	
              “Company
                Stock Option”

            	 	
              2.1(a)(x)

            
	
              “Constituent
                Corporations”

            	 	
              1.1

            
	
              “Delaware
                Secretary of State”

            	 	
              1.2

            
	
              “DGCL”

            	 	
              Recitals

            
	
              “Dissentable
                Shares”

            	 	
              2.3(a)

            
	
              “Dissenting
                Holder”

            	 	
              2.3(a)

            
	
              “Dissenting
                Shares”

            	 	
              2.3(a)

            
	
              “Effective
                Time”

            	 	
              1.2

            
	
              “Exchange
                Agent”

            	 	
              2.2(a)

            
	
              “Exchange
                Fund”

            	 	
              2.2(a)

            
	
              “Exchange
                Ratio”

            	 	
              2.1(a)(i)

            
	
              “Form
                S-4 Registration Statement”

            	 	
              5.6(b)

            
	
              “Indemnified
                Parties”

            	 	
              7.14(b)

            
	
              “Merger”

            	 	
              1.1

            
	
              “Merger
                Securities”

            	 	
              2.2(a)

            
	
              “Merger
                Sub”

            	 	
              Preamble

            
	
              “Merger
                Sub Common Stock”

            	 	
              2.1(a)(xi)

            
	
              “Merger
                Sub Preferred Stock”

            	 	
              5.4(b)

            

    

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

     

    
      	
              “Most
                Recent Company Balance Sheet”

            	 	
              4.8(a)

            
	
              “Most
                Recent Company Cash Flow Statement”

            	 	
              4.8(a)

            
	
              “Most
                Recent Company Financial Statements”

            	 	
              4.8(a)

            
	
              “Most
                Recent Company Income Statement”

            	 	
              4.8(a)

            
	
              “Most
                Recent Company Statement of Stockholders’ Equity”

            	 	
              4.8(a)

            
	
              “Parent”

            	 	
              Preamble

            
	
              “Parent
                Common Stock”

            	 	
              Recitals

            
	
              “Parent
                Convertible Debenture”

            	 	
              2.1(a)(vi)

            
	
              “Parent
                Convertible Preferred Stock”

            	 	
              2.1(a)(iii)

            
	
              “Parent
                Disclosure Schedule”

            	 	
              Art.
                V Intro

            
	
              “Parent
                Non-Convertible Preferred Stock”

            	 	
              2.1(a)(iv)

            
	
              “Parent
                Preferred Stock”

            	 	
              5.4(a)

            
	
              “Parent
                Representatives

            	 	
              7.2(d)

            
	
              “Parent
                Stock-Split”

            	 	
              7.2(f)(i)(B)

            
	
              “Parent
                SEC Reports”

            	 	
              5.7(a)

            
	
              “Parent
                Stock Option”

            	 	
              2.1(a)(xii)

            
	
              “Parent
                Warrant”

            	 	
              2.1(a)(xii)

            
	
              “Party”
                / “Parties”

            	 	
              Preamble

            
	
              “Pre-Closing
                Company Standstill Commitment”

            	 	
              7.2(f)

            
	
              “Registrable
                Securities Lock-Up Agreement”

            	 	
              7.13(c)

            
	
              “Required
                Company Consents” 

            	 	
              4.6(a)

            
	
              “Replacement
                Common Warrant”

            	 	
              2.1(a)(viii)

            
	
              “Replacement
                Option”

            	 	
              2.1(a)(x)

            
	
              “Replacement
                Preferred Warrant”

            	 	
              2.1(a)(ix)

            
	
              “Resale
                Registration Statement”

            	 	
              7.13(a)

            
	
              “Surviving
                Corporation”

            	 	
              1.1

            
	
              “Terminating
                Parent Breach”

            	 	
              9.1(c)(ii)

            
	
              “Terminating
                Company Breach”

            	 	
              9.1(b)(v)

            
	
              “Transactions”

            	 	
              Recitals

            
	
              “Voting
                Agreement”

            	 	
              Recitals

            
	
              “WARN
                Act”

            	 	
              4.22(d)

            

    

     

    10.4 Interpretation.

    

    (a) The
      meaning assigned to each term defined herein shall be equally applicable to
      both
      the singular and the plural forms of such term and vice versa, and words
      denoting either gender shall include both genders as the context requires.
      Where
      a word or phrase is defined herein, each of its other grammatical forms shall
      have a corresponding meaning.

     

    (b) The
      terms
“hereof”, “herein” and “herewith” and words of similar import shall, unless
      otherwise stated, be construed to refer to this Agreement as a whole and not
      to
      any particular provision of this Agreement.

    

    (c) When
      a
      reference is made in this Agreement to an Article, Section, paragraph, Exhibit
      or Schedule, such reference is to an Article, Section, paragraph, Exhibit or
      Schedule to this Agreement unless otherwise specified.

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

     

    (d) The
      word
“include”, “includes”, and “including” when used in this Agreement shall be
      deemed to be followed by the words “without limitation”, unless otherwise
      specified.

    

    (e) A
      reference to any Party to this Agreement or any other agreement or document
      shall include such Party’s predecessors, successors and permitted
      assigns.

    

    (f) Reference
      to any Law means such Law as amended, modified, codified, replaced or reenacted,
      and all rules and regulations promulgated thereunder.

    

    (g) The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. Any rule of construction or interpretation otherwise requiring this
      Agreement to be construed or interpreted against any Party by virtue of the
      authorship of this Agreement shall not apply to the construction and
      interpretation hereof.

    

    (h) All
      accounting terms used and not defined herein shall have the respective meanings
      given to them under GAAP.

    

    10.5 Survival.
       The
      representations and warranties and covenants and agreements in this Agreement
      and in any certificate delivered pursuant hereto shall terminate at the
      Effective Time, except that the covenants and agreements set forth in Articles
      I, II, VII and this Article X, in each case as they relate to any
      post-Closing matters, and including without limitation any provisions for the
      benefit of third parties, shall survive the Effective Time.

    

    10.6 Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of Law, or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the Transactions is not affected
      in any manner materially adverse to any Party. Upon a determination that any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced, 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 a mutually acceptable manner in order that the Transactions be
      consummated as originally contemplated to the fullest extent possible.

    

    10.7 Assignment;
      Binding Effect; Benefit.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by any of the Parties hereto (whether by operation of Law or
      otherwise) without the prior written consent of the other Parties; provided,
      however,
      that
      Parent or Merger Sub may assign any of their respective rights and obligations
      to any direct or indirect Subsidiary of Parent. Subject to the preceding
      sentence, this Agreement shall be binding upon and shall inure to the benefit
      of
      the Parties hereto and their respective executors, heirs, personal
      representatives successors and assigns. Notwithstanding anything contained
      in
      this Agreement to the contrary, except for the provisions of Article II, and
      Sections 7.13 and 7.14, which are intended to benefit and be enforceable by
      third parties as specifically set forth therein, nothing in this Agreement,
      expressed or implied, is intended to confer on any Person other than the Parties
      or their respective successors and assigns any rights, remedies, obligations
      or
      Liabilities under or by reason of this Agreement. 

    

    10.8 Fees
      and Expenses.
      All
      fees and expenses incurred in connection with the Merger, the other
      Transactions, and this Agreement shall be paid by the Party incurring such
      fees
      or expenses, whether or not the Merger is consummated; provided,
      however,
      that:

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

     

    (a) As
      and
      when requested by Parent, the Company shall pay the reasonable legal,
      accounting, independent auditing, and EDGARization service fees and expenses
      of
      Parent in connection with the preparation and filing of any and all required
      reports to be filed under the Exchange Act from and after the date of this
      Agreement through the earlier of (i) the Effective Time, or (ii) the time at
      which this Agreement shall have been terminated, if at all, in accordance with
      Article IX hereof; 

    

    (b) As
      and
      when requested by Parent, the Company shall pay the reasonable legal,
      accounting, independent auditing, and EDGARization/printing service fees and
      expenses of Parent in connection with the preparation, filing and dissemination
      of the Form S-4 Registration Statementand all related federal and state
      securities Law compliance associated with the Merger; and

    

    (c) Parent
      shall be free at all times to select the professional service firms that it
      utilizes in respect of 10.8 (a) and (b) above in its exclusive discretion,
      and,
      without limiting the foregoing, it is acknowledged that Parent may utilize
      the
      services of M.M. Membrado, PLLC as legal counsel for certain aspects of the
      legal work involved in this process (at a rate of $400/hr.) and may use other
      law firms for other aspects (at rates that may be comparable or higher).

    

    10.9 Incorporation
      of Schedules.
      The
      Company Disclosure Schedule and the Parent Disclosure Schedule referred to
      herein and signed for identification by the Parties hereto are hereby
      incorporated herein and made a part hereof for all purposes as if fully set
      forth herein.

    

    10.10 Specific
      Performance.
      The
      Parties hereto agree that irreparable damage would occur in the event any
      provision of this Agreement was not performed in accordance with the terms
      hereof and that the Parties shall be entitled to specific performance of the
      terms hereof, in addition to any other remedy at Law or equity.

    

    10.11 Governing
      Law.
      This
      Agreement and the Exhibits and Schedules hereto shall be governed by and
      interpreted and enforced in accordance with the Laws of the State of New York,
      without giving effect to any choice of Law or conflict of Laws rules or
      provisions (whether of the State of New York or any other jurisdiction) that
      would cause the application of the Laws of any jurisdiction other than the
      State
      of New York. 

    

    10.12 Consent
      to Jurisdiction; Waiver of Jury Trial.
      Each
      Party irrevocably submits to the exclusive jurisdiction of (a) New York
      County, New York, and (b) the United States District Court for the Southern
      District of New York, for the purposes of any Proceeding arising out of this
      Agreement or any of the Transactions. Each Party agrees to commence any such
      Proceeding either in the United States District Court for the Southern District
      of New York or if such Proceeding may not be brought in such court for
      jurisdictional reasons, in the Supreme Court sitting in New York County
      (including its Appellate Division). Each Party further agrees that service
      of
      any process, summons, notice or document by U.S. registered mail to such Party’s
      respective address set forth above shall be effective service of process for
      any
      Proceeding in New York with respect to any matters to which it has submitted
      to
      jurisdiction in this Section 10.12. Each Party irrevocably and
      unconditionally waives any objection to the laying of venue of any Proceeding
      arising out of this Agreement or any of the Transactions in (i) the United
      States District Court for the Southern District of New York, or (ii) the
      Supreme Court sitting in New York County (including its Appellate Division),
      and
      hereby further irrevocably and unconditionally waives and agrees not to plead
      or
      claim in any such court that any such Proceeding brought in any such court
      has
      been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES
      ALL
      RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR
      OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH
      PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
      HEREOF.

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

     

    10.13 Headings.
      The
      descriptive headings contained in this Agreement are included for convenience
      of
      reference only and shall not affect in any way the meaning or interpretation
      of
      this Agreement.

    

    10.14 Counterparts.
      This
      Agreement may be executed and delivered (including by facsimile transmission)
      in
      one or more counterparts, and by the different Parties hereto in separate
      counterparts, each of which when executed and delivered shall be deemed to
      be an
      original but all of which taken together shall constitute one and the same
      agreement.

    

    10.15 Entire
      Agreement.
      This
      Agreement, the Company Disclosure Schedule, the Parent Disclosure Schedule
      and
      any documents delivered by the Parties in connection herewith constitute the
      entire agreement among the Parties with respect to the subject matter hereof
      and
      supersede all prior agreements and understandings among the Parties with respect
      thereto. Except as otherwise provided herein, no addition to or modification
      of
      any provision of this Agreement shall be binding upon any Party hereto unless
      made in writing and signed by all Parties hereto.

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement or caused this
      Agreement to be executed by the respective officers thereunto duly authorized,
      in each case as of the date first written above.

    

    
      	 	
              “PARENT”

            	 
	 	
              GCA
                I ACQUISITION CORP.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 	 	 
	 	
              Name:
                

            	
              Michael
                M. Membrado

            	 
	 	
              Title:

            	
              President
                & Chief Executive Officer

            	 
	 	 	 	 
	 	 	 	 
	 	
              “MERGER
                SUB”

            	 
	 	
              BIXBY
                ENERGY ACQUISITION CORP.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 	 	 
	 	
              Name:
                

            	
              Michael
                M. Membrado

            	 
	 	
              Title:

            	
              President
                & Chief Executive Officer

            	 
	 	 	 	 
	 	 	 	 
	 	
              “COMPANY”

            	 
	 	
              BIXBY
                ENERGY SYSTEMS, INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 	 	 
	 	
              Name:
                

            	
              Robert
                A. Walker

            	 
	 	
              Title:

            	
              President
                & Chief Executive Officer

            	 
	 	 	 	 
	 	 	 	 
	 	 	 
	 	
              Robert
                A. Walker, personally

            	 

    

     

    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

    

    EXHIBITS

    

    
      	
              Exhibit
                A 

            	
              Form
                of Voting Agreement

            
	
              Exhibit
                B 

            	
              Form
                of Certificate of Merger

            
	
              Exhibit
                C 

            	
              Articles
                of Incorporation – Merger Sub

            
	
              Exhibit
                D 

            	
              Bylaws
                – Merger Sub

            
	
              Exhibit
                E 

            	
              Form
                of Affiliate Agreement

            
	
              Exhibit
                F 

            	
              Form
                of Registrable Securities Lock-Up
                Agreement

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        EXHIBIT
          A

         

      

      VOTING
        AGREEMENT

       

      This
        Voting Agreement (this “Agreement”) is made as of May 7, 2008, by and among GCA
        I Acquisition Corp., a Delaware corporation (“Parent”) and Robert A. Walker, a
        principal stockholder of Bixby Energy Systems, Inc., a Delaware corporation
        (the
“Company”)(the “Company Principal Stockholder”).

       

      WHEREAS,
        concurrently with the execution and delivery of this Agreement, Parent, Bixby
        Energy Acquisition Corp., a Delaware corporation and wholly-owned subsidiary
        of
        Parent (“Merger Sub”) and the Company are entering into an Agreement and Plan of
        Merger of even date herewith (the “Merger Agreement”), pursuant to which Merger
        Sub will be merged with and into the Company, and the Company shall be the
        surviving corporation following the merger (the “Merger”);

       

      WHEREAS,
        as of the date hereof, the Company Principal Stockholder is a Beneficial
        Owner
        (as defined below) of the Subject Shares (as defined
        below); and

       

      WHEREAS,
        in order to induce Parent to enter into the Merger Agreement, the Company
        Principal Stockholder has agreed to enter into this Agreement.

       

      NOW,
        THEREFORE, in consideration of the foregoing premises and of the covenants
        and
        agreements set forth herein and in the Merger Agreement, and intending to
        be
        legally bound hereby, the parties agree as follows:

       

      1. Definitions.

       

      (a) “Beneficially
        Own” or “Beneficial Owner”
        with
        respect to any securities means having “beneficial ownership” as determined
        pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
        amended (the “Exchange Act”).

       

      (b) “Company
        Capital Stock”
        means
        shares of common stock, par value $0.001 per share, of the
        Company.

       

      (c) “Company
        Options and Other Rights”
        means
        options, warrants and other rights to acquire, directly or indirectly, shares
        of
        Company Capital Stock.

       

      (d) “Expiration
        Date”
        means
        the earlier to occur of (i) the Effective Time (as defined in the Merger
        Agreement) or (ii) the date on which the Merger Agreement is terminated
        pursuant to its terms.

       

      (e) “Subject
        Shares”
        means
        (i) all shares of Company Capital Stock Beneficially Owned by the Company
        Principal Stockholder as of the date of this Agreement and (ii) all
        additional shares of Company Capital Stock of which the Company Principal
        Stockholder acquires Beneficial Ownership during the period from the date
        of
        this Agreement through the Expiration Date.

       

      2. Voting.

       

      (a) The
        Company Principal Stockholder hereby reresents that it is an “accredited
        investor” as such term is defined within Rule 501 of Regulation D promulgated
        under the Securities Act of 1933, as amended (the “Securities
        Act”);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) The
        Company Principal Stockholder hereby agrees that, prior to the Expiration
        Date,
        at any meeting of the stockholders of the Company, however called, and in
        any
        written action by consent of stockholders of the Company, unless otherwise
        directed in writing by Parent, the Company Principal Stockholder shall cause
        to
        be counted as present thereat for purposes of establishing a quorum and,
        subject
        only to Parent’s compliance with applicable securities laws, shall vote, or
        cause to be voted, any and all Subject Shares Beneficially Owned by the
        Company Principal Stockholder as of the record date of such meeting or written
        consent:

       

      (i) for
        the
        execution and delivery by the Company of the Merger Agreement and the adoption
        and approval of the Merger Agreement and the terms thereof, in favor of each
        of
        the other actions contemplated by the Merger Agreement and in favor of any
        action in furtherance of any of the foregoing;

       

      (ii) against
        any action or agreement that would result in a breach of any representation,
        warranty, covenant or obligation of the Company in the Merger
        Agreement; and

       

      (iii) against
        the following actions (other than the Merger and the transactions contemplated
        by the Merger Agreement): (A) any extraordinary corporate transaction, such
        as a merger, consolidation or other business combination involving the Company
        or any subsidiary of the Company; (B) any sale, lease, sublease, license,
        sublicense or transfer of a material portion of the rights or other assets
        of
        the Company or any subsidiary of the Company; (C) any reorganization,
        recapitalization, dissolution or liquidation of the Company or any subsidiary
        of
        the Company; (D) any change in the individuals who serve as members of the
        board of directors of the Company; (E) any amendment to the Company’s
        certificate of incorporation or bylaws; (F) any material change in the
        capitalization of the Company or the Company’s corporate structure; and
        (G) any other action which is intended, or could reasonably be expected, to
        impede, interfere with, delay, postpone, discourage or adversely affect the
        Merger or any of the other transactions contemplated by the Merger Agreement
        or
        this Agreement.

       

      (c) No
        provision contained in this Agreement shall prohibit the Company Principal
        Stockholder from voting in his capacity as a director of the Company in any
        manner whatsoever.

       

      (d) Prior
        to
        the Expiration Date, the Company Principal Stockholder shall not enter into
        any
        other agreement or understanding with any Person requiring him to vote in
        his
        capacity as a stockholder or give instructions in any manner inconsistent
        with
        clause “(i),” clause “(ii)” or clause “(iii)” of this
        Section 2(a).

       

      (e) The
        Company Principal Stockholder hereby waives and agrees not to exercise any
        applicable “appraisal rights” under the Delaware General Corporation Law with
        respect to the Subject Shares in connection with the Merger and the Merger
        Agreement.

       

      3. Written
        Consent of Stockholders.  Upon
        the U.S. Securities and Exchange Commission’s declaration of the
        effectiveness of the Registration Statement on Form S-4 filed by Parent in
        connection with the Merger, if at all, the Company Principal Stockholder
        shall
        deliver to Parent a written consent in favor of the adoption of the Merger
        Agreement and the Merger.

       

      4. Representations
        and Warranties of Stockholder.  The
        Company Principal Stockholder represents and warrants to Parent as
        follows:

       

      (a) As
        of the
        date of this Agreement and at all times through the Expiration
        Date:

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (i) He
        is the
        Beneficial Owner (free and clear of any encumbrances or restrictions) of
        the
        outstanding shares of Company Capital Stock set forth under the heading “Shares
        of Company Capital Stock Beneficially Owned”, on the signature page
        hereof;

       

      (ii) He
        is the
        Beneficial Owner (free and clear of any encumbrances or restrictions) of
        the
        outstanding Company Options and Other Rights set forth under the heading
        “Company Options and Other Rights Beneficially Owned” on the signature page
        hereof; and

       

      (iii) He
        does
        not directly or indirectly Beneficially Own any shares of Company Capital
        Stock
        or Company Options or Other Rights or other securities of the Company, other
        than the shares of Company Capital Stock and Company Options and Other Rights
        set forth on the signature page hereof.

       

      (b) The
        Company Principal Stockholder has the legal capacity, power and authority
        to
        enter into and perform all of its obligations under this Agreement. This
        Agreement has been duly executed and delivered by the Company Principal
        Stockholder, and upon its execution and delivery by Parent, will constitute
        a
        legal, valid and binding obligation of the Company Principal Stockholder,
        enforceable against him in accordance with its terms, except as enforceability
        may be limited by bankruptcy, insolvency, reorganization, moratorium or other
        similar laws affecting or relating to creditors rights generally, and the
        availability of injunctive relief and other equitable remedies.

       

      (c) The
        execution, delivery and performance by the Company Principal Stockholder
        of this
        Agreement will not (i) conflict with, require a consent, waiver or approval
        under, or result in a breach of or default under, any of the terms of any
        contract, commitment or other obligation (written or oral) to which such
        Company
        Principal Stockholder is a party or by which any of his assets may be
        bound.

       

      (d) No
        filing
        with, and no permit, authorization, consent or approval of, any state or
        federal
        public body or authority is necessary for the execution of this Agreement
        by the
        Company Principal Stockholder and the consummation by Company Principal
        Stockholder of the transactions contemplated hereby.

      

      5. Covenants
        of Stockholder.  The
        Company Principal Stockholder covenants and agrees for the benefit of Parent
        that, until the Expiration Date, he shall not:

       

      (a) sell,
        transfer, pledge, hypothecate, encumber, assign, tender or otherwise dispose
        of,
        or enter into any contract, option or other arrangement or understanding
        with
        respect to the sale, transfer, pledge, hypothecation, encumbrance, assignment,
        tender or other disposition of, (i) any Subject Shares or any interest
        therein, or (ii) any Company Options and Other Rights or any interest
        therein; provided,
        however,
        that
        Stockholder may convert, exercise or exchange Company Options and Other Rights
        into or for shares of Company Capital Stock in which event such shares of
        Capital Stock shall become and be deemed Subject Shares subject to all the
        terms
        and conditions of this Agreement;

       

      (b) acquire
        any shares of the stock of Parent except pursuant to existing Company Options
        and Other Rights or unless such shares shall become subject to the terms
        of this
        Agreement;

       

      (c) grant
        any
        powers of attorney or proxies or consents in respect of any of the Subject
        Shares, deposit any of such Subject Shares into a voting trust, or enter
        into a
        voting agreement with respect to any of such Subject Shares; or

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (d) take
        any
        other action with respect to the Subject Shares that would in any way restrict,
        limit or interfere with the performance of Stockholder’s obligations hereunder
        or the transactions contemplated hereby and the Merger Agreement.

       

      6. Adjustments;
        Additional Shares.  In
        the event (a) of any stock dividend, stock split, merger, recapitalization,
        reclassification, combination, exchange of shares or the like of the capital
        stock of the Company on, of or affecting the Subject Shares, or (b) that
        Stockholder shall become the Beneficial Owner of any additional shares of
        Company Capital Stock or other securities entitling the holder thereof to
        vote
        or give consent with respect to the matters set forth in Section 2(a), then
        the terms of this Agreement shall apply to the shares of Company Capital
        Stock
        or other instruments or documents held by Stockholder immediately following
        the
        effectiveness of the events described in clause (a) or Stockholder becoming
        the Beneficial Owner thereof as described in clause (b), as though, in
        either case, they were Subject Shares hereunder. The foregoing shall apply
        (mutatis
        mutandis)
        to the
        Parent Shares and Section 3 of this Agreement.

       

      7. Amendments
        and Waivers.  Any
        provision of this Agreement may be amended or waived if, and 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. No failure or delay by any party in
        exercising any right 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.
        To the
        maximum extent permitted by law, (a) no waiver that may be given by a party
        shall be applicable except in the specific instance for which it was given
        and
        (b) no notice to or demand on one party shall be deemed to be a waiver of
        any obligation of such party or the right of the party giving such notice
        or
        demand to take further action without notice or demand.

       

      8. Assignment.  This
        Agreement may not be assigned by any party hereto without the prior written
        consent of the other parties. Subject to the foregoing, all of the terms
        and
        provisions of this Agreement shall inure to the benefit of and be binding
        upon
        the parties hereto and their respective executors, heirs, personal
        representatives, successors and assigns.

       

      9. Entire
        Agreement.  This
        Agreement and the documents, instruments and other agreements specifically
        referred to herein or delivered pursuant hereto, set forth the entire
        understanding of the parties with respect to the subject matter hereof. Any
        and
        all previous agreements and understandings between or among the parties
        regarding the subject matter hereof, whether written or oral, are superseded
        by
        this Agreement.

       

      10. Notices.  Any
        notice, request, demand, waiver, consent, approval or other communication
        which
        is required or permitted hereunder shall be in writing and shall be deemed
        given
        (a) on the date established by the sender as having been delivered
        personally; (b) on the date delivered by a private courier as established
        by the sender by evidence obtained from the courier; (c) on the date sent
        by facsimile, with confirmation of transmission, if sent during normal business
        hours of the recipient, if not, then on the next business day; or (d) on
        the fifth day after the date mailed, by certified or registered mail, return
        receipt requested, postage prepaid. Such communications, to be valid, must
        be
        addressed as follows:

       

      If
        to
        Parent, to:

       

      GCA
        I Acquisition Corp. 

      115
        East
        57th
        Street,
        Suite 1006

      New
        York,
        New York 10022

      Attn:
        Michael M. Membrado

       

      Facsimile:
        646-486-9771

      
        

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

       

      With
        a
        required copy to:

       

      M.M.
        Membrado, PLLC

      115
        East
        57th
        Street,
        Suite 1006

      New
        York,
        New York 10022

      Attn:
        Michael M. Membrado

      

      Facsimile:
        646-486-9771

       

      If
        to any
        of the Company Principal Stockholder:

       

      Robert
        A.
        Walker

      c/o Bixby
        Energy Systems, Inc.

      6893
        139th
        Lane NW

      Ramsey,
        MN 55303

      

      Facsimile:
        763-428-7903

       

      With
        a
        required copy to:

       

      Davisson
        & Associates, PA

      3649
        Brunswick Avenue North

      Minneapolis,
        MN 55422

      Attn:
        Peder Davisson, Esq.

      

      Facsimile:
        763-535-4090

       

      or
        to
        such other address or to the attention of such person or persons as the
        recipient party has specified by prior written notice to the sending party
        (or
        in the case of counsel, to such other readily ascertainable business address
        as
        such counsel may hereafter maintain). If more than one method for sending
        notice
        as set forth above is used, the earliest notice date established as set forth
        above shall control.

       

      11. 
        Captions.  
        All captions contained in this Agreement are for convenience of reference
        only,
        do not form a part of this Agreement and shall not affect in any way the
        meaning
        or interpretation of this Agreement.

       

      12. 
        Severability;
        Enforcement.  Any
        provision of this Agreement which is invalid or unenforceable in any
        jurisdiction shall be ineffective to the extent of such invalidity or
        unenforceability without invalidating or rendering unenforceable the remaining
        provisions hereof, and any such invalidity or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

       

      13. 
        Specific
        Performance.  The
        Company Principal Stockholder acknowledges that the agreements contained
        in this
        Agreement are an integral part of the transactions contemplated by the Merger
        Agreement, and that, without these agreements, Parent would not enter into
        the
        Merger Agreement, and acknowledges that damages would be an inadequate remedy
        for any breach by the Company Principal Stockholder of the provisions of
        this
        Agreement. Accordingly, the Company Principal Stockholder agrees that his
        obligations hereunder shall be specifically enforceable and he shall not
        take
        any action to impede the other from seeking to enforce such right of specific
        performance.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      14. 
        Consent
        to Jurisdiction.  Each
        party irrevocably submits to the exclusive jurisdiction of (a) New York
        County, New York, and (b) the United States District Court for the Southern
        District of New York, for the purposes of any action, suit or proceeding
        arising
        out of this Agreement or any transaction contemplated hereby. Each party
        agrees
        to commence any such action, suit or proceeding either in the United States
        District Court for the Southern District of New York or if such action, suit
        or
        proceeding may not be brought in such court for jurisdictional reasons, in
        the
        Supreme Court sitting in New York County (including its Appellate Division).
        Each party further agrees that service of any process, summons, notice or
        document by U.S. registered mail to such party’s respective address set
        forth above shall be effective service of process for any action, suit or
        proceeding in New York with respect to any matters to which it has submitted
        to
        jurisdiction in this Section 14. Each party irrevocably and unconditionally
        waives any objection to the laying of venue of any action, suit or proceeding
        arising out of this Agreement or the transactions contemplated hereby in
        (i) the United States District Court for the Southern District of New York,
        or (ii) the Supreme Court sitting in New York County (including its
        Appellate Division), and hereby further irrevocably and unconditionally waives
        and agrees not to plead or claim in any such court that any such action,
        suit or
        proceeding brought in any such court has been brought in an inconvenient
        forum.
        EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION
        (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
        TO
        THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
        PERFORMANCE AND ENFORCEMENT HEREOF.

       

      15. 
        Governing
        Law.  This
        Agreement shall be governed by and interpreted and enforced in accordance
        with
        the laws of the State of New York, without giving effect to any choice of
        law or
        conflict of laws rules or provisions (whether of the State of New York or
        any
        other jurisdiction) that would cause the application of the laws of any
        jurisdiction other than the State of New York, except to the extent that
        the
        voting of the Subject Shares is subject to the corporate law of the State
        of
        Delaware.

       

      IN
        WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
        all
        as of the day and year first above written.

      

      GCA
        I
        ACQUISITION CORP.

      

      
        	
                By:

              	 
	
                Name:  Michael
                  M. Membrado

              
	
                Title:   
                  President
                  and Chief Executive Officer

              

      

      

      COMPANY
        PRINCIPAL STOCKHOLDER: 

      

      
        	
                 

              
	
                ROBERT
                  A. WALKER

              

      

      

      Number
        of
        shares of Company Common Stock: ________________

       

      Number
        of
        shares of Company Series _ Preferred Stock: ________________

      

      Number
        of
        Company Stock Options and/or Warrants: __________________

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
      
        EXHIBIT B

      

      CERTIFICATE
        OF MERGER

      OF

      BIXBY
        ENERGY SYSTEMS, INC.

      AND

      BIXBY
        ENERGY ACQUISITION CORP.

       

      Pursuant
        to Section 251 of the General Corporation Law of the State of Delaware (the
“DGCL”), Bixby Energy Acquisition Corp., a Delaware corporation, DOES HEREBY
        CERTIFY that:

       

      1. The
        name
        and jurisdiction of incorporation of each of the constituent corporations
        to the
        merger (collectively, the “Constituent Corporations”) are as
        follows:

      

      
        	
                Name

              	 	
                Jurisdiction
                  of Incorporation

              
	
                Bixby
                  Energy Systems, Inc.

              	 	
                Delaware

              
	
                Bixby
                  Energy Acquisition Corp.

              	 	
                Delaware

              

      

       

      2. An
        Agreement and Plan of Merger, dated as of May 7, 2008 (the “Agreement and
        Plan of Merger”), by and among GCA I Acquisition Corp., a Delaware corporation,
        and each of the Constituent Corporations, providing for the merger of Bixby
        Energy Acquisition Corp, with and into Bixby Energy Systems, Inc. has been
        approved, adopted, certified, executed and acknowledged by each of the
        Constituent Corporations in accordance with the requirements of
        Sections 228 and 251 of the DGCL.

       

      3. The
        name
        of the corporation surviving the merger is Bixby Energy Systems, Inc., a
        Delaware corporation (the “Surviving Corporation”).

       

      4. The
        Certificate of Incorporation of Bixby Energy Systems, Inc., as now in force
        and
        effect, shall continue to be the Certificate of Incorporation of the Surviving
        Corporation until amended and changed pursuant to the provisions of the
        DGCL.

       

      5. The
        Bylaws of Bixby Energy Systems, Inc., as now in full force and effect, shall
        continue to be the Bylaws of the Surviving Corporation until amended and
        changed
        pursuant to the provisions of the DGCL.

       

      6. The
        officers and directors of Bixby Energy Systems, Inc. immediately prior to
        the
        filing of this Certificate of Merger with the Secretary of State of the State
        of
        Delaware shall remain the officers and directors of the Surviving Corporation,
        each to hold office until their respective death, permanent disability,
        resignation or removal or until their respective successors are duly elected
        and
        qualified, all in accordance with the Certificate of Incorporation and Bylaws
        of
        the Surviving Corporation and the DGCL.

       

      7. The
        executed Agreement and Plan of Merger is on file at an office of the Surviving
        Corporation, the address of which is as follows:

      

      Bixby
        Energy Systems, Inc. 

      6893
        139th
        Lane
        N.W.

      Ramsey,
        MN 55303

       

      8. A
        copy of
        the Agreement and Plan of Merger will be furnished by the Surviving Corporation,
        on request and without cost, to any stockholder of either Constituent
        Corporation.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      9. This
        Certificate of Merger, and the merger provided for herein, shall be effective
        immediately upon its filing with the Secretary of State of the State of
        Delaware.

       

      IN
        WITNESS WHEREOF, this Certificate of Merger has been duly executed on ________
        __, 200_.

       

      
        	
                BIXBY
                  ENERGY SYSTEMS, INC.

              
	 	 
	
                By

              	 
	
                Name:         
                  Robert
                  Walker

              
	
                Title:  
                  President
                  & ChiefExecutive Officer

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      EXHIBIT
        C

       

      CERTIFICATE
        OF INCORPORATION

      OF

      BIXBY
        ENERGY ACQUISITION CORP.

       

      (Pursuant
        to Section 102 of the Delaware General Corporation Law)  

      

      1.
        The
        name of the corporation is Bixby Energy Acquisition Corp. (the
“Corporation”).

      

      2.
        The
        address of its registered office in the State of Delaware is 160 Greentree
        Drive, Suite 101, Dover, Delaware 19904, County of Kent. The name of its
        registered agent at such address is the National Registered Agents,
        Inc..

      

      3.
        The
        nature of the business or purposes to be conducted or promoted is to engage
        in
        any lawful act or activity for which corporations may be organized under
        the
        General Corporation Law of Delaware (the “DGCL”).

      

      4.
        The
        Corporation is to have perpetual existence.

      

      5.
        The
        total number of shares of capital stock which the Corporation shall have
        authority to issue is: two million (2,000,000). These shares shall be divided
        into two classes with 1,000,000 shares designated as common stock at $.0001
        par
        value (the “Common Stock”) and 1,000,000 shares designated as preferred stock at
        $.0001 par value (the “Preferred Stock”).

      

      The
        Preferred Stock of the Corporation shall be issued by the Board of Directors
        of
        the Corporation in one or more classes or one or more series within any class
        and such classes or series shall have such voting powers, full or limited,
        or no
        voting powers, and such designations, preferences, limitations or restrictions
        as the Board of Directors of the Corporation may determine, from time to
        time.

      

      Holders
        of shares of Common Stock shall be entitled to cast one vote for each share
        held
        at all stockholders’ meetings for all purposes, including the election of
        directors. The Common Stock does not have cumulative voting rights.

      

      No
        holder
        of shares of stock of any class shall be entitled as a matter of right to
        subscribe for or purchase or receive any part of any new or additional issue
        of
        shares of stock of any class, or of securities convertible into shares of
        stock
        of any class, whether now hereafter authorized or whether issued for money,
        for
        consideration other than money, or by way of dividend.

      

      6.
 
        The Board of Directors shall have the power to adopt, amend or repeal the
        by-laws of the Corporation.  

       

      7.
 
        No director shall be personally liable to the Corporation or its stockholders
        for monetary damages for any breach of fiduciary duty by such director as
        a
        director. Notwithstanding the foregoing sentence, a director shall be liable
        to
        the extent provided by applicable law, (i) for breach of the director’s duty of
        loyalty to the Corporation or its stockholders, (ii) for acts or omissions
        not
        in good faith or which involve intentional misconduct or a knowing violation
        of
        law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction
        from
        which the director derived an improper personal benefit. If the DGCL hereafter
        is amended to authorize the further elimination or limitation of the liability
        of directors, then the liability of a director of the Corporation, in addition
        to the limitation on personal liability provided herein, shall be limited
        to the
        fullest extent permitted by the amended DGCL. No amendment to or repeal of
        this
        Article 7 shall apply to or have any effect on the liability or alleged
        liability of any director of the Corporation for or with respect to any acts
        or
        omissions of such director occurring prior to such amendment.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      8.
 
        The Corporation shall indemnify, to the fullest extent permitted by Section
        145
        of the DGCL, as amended from time to time, each person that such section
        grants
        the Corporation the power to indemnify.

      

      9.
        The
        name and mailing address of the incorporator is Michael M. Membrado, c/o
        M.M.
        Membrado, PLLC, 115 East 57th
        Street,
        Tenth Floor, New York, New York 10022.

      

      IN
        WITNESS WHEREOF, the undersigned, being the incorporator hereinbefore named,
        has
        executed, signed and acknowledged this certificate of incorporation this
        23rd
        day of
        April, 2008.

      

      
        	 
	
                Michael
                  M. Membrado, Incorporator

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      EXHIBIT
        D

      BY-LAWS

      

      OF

      

      BIXBY
        ENERGY ACQUISITION CORP. 

      ~
        A
        Delaware corporation
        ~

      

      ARTICLE
        I

      

      STOCKHOLDERS

       

      Section
        1. 
        Certificates
        Representing Stock.
        (a)
        Certificates representing stock in the corporation shall be signed by, or
        in the
        name of, the corporation by the Chairman or Vice-Chairman of the Board of
        Directors, if any, or by the President or a Vice-President and by the Treasurer
        or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
        corporation. Any or all the signatures on any such certificate may be a
        facsimile. In case any officer, transfer agent, or registrar who has signed
        or
        whose facsimile signature has been placed upon a certificate shall have ceased
        to be such officer, transfer agent, or registrar before such certificate
        is
        issued, it may be issued by the corporation with the same effect as if he
        were
        such officer, transfer agent, or registrar at the date of issue.

      

      (b)
          Whenever the corporation shall be authorized to issue more than one class
        of stock or more than one series of any class of stock, and whenever the
        corporation shall issue any shares of its stock as partly paid stock, the
        certificates representing shares of any such class or series or of any such
        partly paid stock shall set forth thereon the statements prescribed by the
        General Corporation Law. Any restrictions on the transfer or registration
        of
        transfer of any shares of stock of any class or series shall be noted
        conspicuously on the certificate representing such shares.

      

      (c)
          The corporation may issue a new certificate of stock or uncertificated
        shares in place of any certificate theretofore issued by it, alleged to have
        been lost, stolen or destroyed, and the Board of Directors may require the
        owner
        of the lost, stolen or destroyed certificate, or his legal representative,
        to
        give the Corporation a bond sufficient to indemnify the corporation against
        any
        claim that may be made against it on account of the alleged loss, theft or
        destruction of any such certificate or the issuance of any such new certificate
        or uncertificated shares.

       

      Section
        2. 
        Uncertificated
        Shares.
        Subject
        to any conditions imposed by the General Corporation Law, the Board of Directors
        of the corporation may provide by resolution or resolutions that some or
        all of
        any or all classes or series of the stock of the corporation shall be
        uncertificated shares. Within a reasonable time after the issuance or transfer
        of any uncertificated shares, the corporation shall send to the registered
        owner
        thereof any written notice prescribed by the General Corporation
        Law.

       

      Section
        3. 
        Fractional
        Share Interests.
        The
        corporation may, but shall not be required to, issue fractions of a share.
        If
        the Corporation does not issue fractions of a share, it shall (1) arrange
        for
        the disposition of fractional interests by those entitled thereto, (2) pay
        in
        cash the fair value of fractions of a share as of the time when those entitled
        to receive such fractions are determined, or (3) issue scrip or warrants
        in
        registered form (either represented by a certificate or uncertificated) or
        bearer form (represented by a certificate) which shall entitle the holder
        to
        receive a full share upon the surrender of such scrip or warrants aggregating
        a
        full share. A certificate for a fractional share or an uncertificated fractional
        share shall, but scrip or warrants shall not unless otherwise provided therein,
        entitle the holder to exercise voting rights, to receive dividends thereon,
        and
        to participate in any of the assets of the Corporation in the event of
        liquidation. The Board of Directors may cause scrip or warrants to be issued
        subject to the conditions that they shall become void if not exchanged for
        certificates representing the full shares
        or
        uncertificated full shares before a specified date, or subject to the conditions
        that the shares for which scrip or warrants are exchangeable may be sold
        by the
        corporation and the proceeds thereof distributed to the holders of scrip
        or
        warrants, or subject to any other conditions which the Board of Directors
        may
        impose.

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      Section
        4. 
        Stock
        Transfers.
        Upon
        compliance with provisions restricting the transfer or registration of transfer
        of shares of stock, if any, transfers or registration of transfers of shares
        of
        stock of the corporation shall be made only on the stock ledger of the
        corporation by the registered holder thereof, or by his attorney thereunto
        authorized by power of attorney duly executed and filed with the Secretary
        of
        the corporation or with a transfer agent or a registrar, if any, and, in
        the
        case of shares represented by certificates, on surrender of the certificate
        or
        certificates for such shares of stock properly endorsed and the payment of
        all
        taxes due thereon.

       

      Section
        5. 
        Record
        Date For Stockholders.
        In
        order that the corporation may determine the stockholders entitled to notice
        of
        or to vote at any meeting of stockholders or any adjournment thereof, the
        Board
        of Directors may fix a record date, which record date shall not precede the
        date
        upon which the resolution fixing the record date is adopted by the Board
        of
        Directors, and which record date shall not be more than sixty nor less than
        ten
        days before the date of such meeting. If no record date is fixed by the Board
        of
        Directors, the record date for determining stockholders entitled to notice
        of or
        to vote at a meeting of stockholders shall be at the close of business on
        the
        day next preceding the day on which notice is given, or, if notice is waived,
        at
        the close of business on the day next preceding the day on which the meeting
        is
        held. A determination of stockholders of record entitled to notice of or
        to vote
        at a meeting of stockholders shall apply to any adjournment of the meeting;
        provided,
        however,
        that
        the Board of Directors may fix a new record date for the adjourned meeting.
        In
        order that the corporation may determine the stockholders entitled to consent
        to
        corporate action in writing without a meeting, the Board of Directors may
        fix a
        record date, which record date shall not precede the date upon which the
        resolution fixing the record date is adopted by the Board of Directors, and
        which date shall not be more than ten days after the date upon which the
        resolution fixing the record date is adopted by the Board of Directors. If
        no
        record date has been fixed by the Board of Directors, the record date for
        determining the stockholders entitled to consent to corporate action in writing
        without a meeting, when no prior action by the Board of Directors is required
        by
        the General Corporation Law, shall be the first date on which a signed written
        consent setting forth the action taken or proposed to be taken is delivered
        to
        the corporation by delivery to its registered office in the State of Delaware,
        its principal place of business, or an officer or agent of the corporation
        having custody of the book in which proceedings of meeting of stockholders
        are
        recorded. Delivery made to the corporation’s registered office shall be by hand
        or by certified or registered mail, return receipt requested. If no record
        date
        has been fixed by the Board of Directors and prior action by the Board of
        Directors is required by the General Corporation Law, the record date for
        determining stockholders entitled to consent to corporate action in writing
        without a meeting shall be at the close of business on the day on which the
        Board of Directors adopts the resolution taking such prior action. In order
        that
        the corporation may determine the stockholders entitled to receive payment
        of
        any dividend or other distribution or allotment of any rights or the
        stockholders entitled to exercise any rights in respect of any change,
        conversion, or exchange of stock, or for the purpose of any other lawful
        action,
        the Board of Directors may fix a record date, which record date shall not
        precede the date upon which the resolution fixing the record date is adopted,
        and which record date shall be not more than sixty days prior to such action.
        If
        no record date is fixed, the record date for determining stockholders for
        any
        such purpose shall be at the close of business on the day on which the Board
        of
        Directors adopts the resolution relating thereto.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Section
        6. 
        Meaning
        of Certain Terms.
        As used
        herein in respect of the right to notice of a meeting of stockholders or
        a
        waiver thereof or to participate or vote thereat or to consent or dissent
        in
        writing in lieu of meeting, as the case may be, the term “share” or “shares” or
“share of stock” or “shares of stock” or “stockholder” or “stockholders” refers
        to an outstanding share or shares of stock and to a holder or holders of
        record
        of outstanding shares of stock when the corporation is authorized to issue
        only
        one class of shares of stock, and said reference is also intended to include
        any
        outstanding share or shares of stock and any holder or holders of record
        of
        outstanding shares of stock of any class upon which or upon whom the certificate
        of incorporation confers such rights where there are two or more classes
        or
        series of shares of stock or upon which or upon whom the General Corporation
        Law
        confers such rights notwithstanding that the certificate of incorporation
        may
        provide for more than one class or series of shares of stock, one or more
        of
        which are limited or denied such rights thereunder; provided,
        however, that
        no
        such right shall vest in the event of an increase or a decrease in the
        authorized number of shares of stock of any class or series which is otherwise
        denied voting rights under the provisions of the certificate of incorporation,
        except as any provision of law may otherwise require.

      

      Section
        7. 
        Stockholder
        Meetings
        .

      

      Time.
        The
        annual meeting shall be held on the date and at the time fixed, from time
        to
        time, by the directors, provided that the first annual meeting shall be held
        on
        a date within thirteen months after the organization of the corporation,
        and
        each successive annual meeting shall be held on a date within thirteen months
        after the date of the preceding annual meeting. A special meeting shall be
        held
        on the date and at the time fixed by the directors.

      

      Place.
        Annual
        meetings and special meetings shall be held at such place, within or without
        the
        State of Delaware, as the directors may, from time to time, fix. Whenever
        the
        directors shall fail to fix such place, the meeting shall be held at the
        registered office of the corporation in the State of Delaware.

      

      Call.
        Annual
        meetings and special meetings may be called by the directors or by any officer
        instructed by the directors to call the meeting.

      

      Notice
        or Waiver of Notice.
        Written
        notice of all meetings shall be given, stating the place, date, hour of the
        meeting and stating the place within the city or other municipality or community
        at which the list of stockholders of the corporation may be examined. The
        notice
        of an annual meeting shall state that the meeting is called for the election
        of
        directors and for the transaction of other business which may properly come
        before the meeting, and shall (if any other action which could be taken at
        a
        special meeting is to be taken at such annual meeting) state the purpose
        or
        purposes. The notice of a special meeting shall in all instances state the
        purpose or purposes for which the meeting is called. The notice of any meeting
        shall also include, or be accompanied by, any additional statements,
        information, or documents prescribed by the General Corporation Law. Except
        as
        otherwise provided by the General Corporation Law, a copy of the notice of
        any
        meeting shall be given, personally or by mail, not less than ten days nor
        more
        than sixty days before the date of the meeting, unless the lapse of the
        prescribed period of time shall have been waived, and directed to each
        stockholder at his record address or at such other address which he may have
        furnished by request in writing to the Secretary of the corporation. Notice
        by
        mail shall be deemed to be given when deposited, with postage thereon prepaid,
        in the United States Mail. If a meeting is adjourned to another time, not
        more
        than thirty days hence, and/or place is made at the meeting, it shall not
        be
        necessary to give notice of the adjourned meeting unless the directors, after
        adjournment, fix a new record date for the adjourned meeting. Notice need
        not be
        given to any stockholder who submits a written waiver of notice signed by
        him
        before or after the time stated therein. Attendance of a stockholder at a
        meeting of stockholders shall constitute a waiver of notice of such meeting,
        except when the stockholder attends the meeting for the express purpose of
        objecting, at the beginning of the meeting, to the transaction of any business
        because the meeting is not lawfully called or convened. Neither the business
        to
        be transacted at, not the purpose of, any regular or special meeting of the
        stockholders need be specified in any written waiver of notice.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Stockholder
        List.
        The
        officer who has charge of the stock ledger of the corporation shall prepare
        and
        make, at least ten days before every meeting of stockholders, a complete
        list of
        the stockholders, arranged in alphabetical order, and showing the address
        of
        each stockholder and the number of shares registered in the name of each
        stockholder. Such list shall be open to the examination of any stockholder,
        for
        any purpose germane to the meeting, during ordinary business hours, for a
        period
        of at least ten days prior to the meeting, either at a place within the city
        or
        other municipality or community where the meeting is to be held, which place
        shall be specified in the notice of the meeting, or if not so specified,
        at the
        place where the meeting is to be held. The list shall also be produced and
        kept
        at the time and place of the meeting during the whole time thereof, and may
        be
        inspected by any stockholder who is present. The stock ledger shall be the
        only
        evidence as to who are the stockholders entitled to examine the stock ledger,
        the list required by this section or the books of the corporation, or to
        vote at
        any meeting of stockholders.

      

      Conduct
        of Meeting.
        Meetings of the stockholders shall be presided over by one of the following
        officers in the order of seniority and if present and acting-the Chairman
        of the
        Board, if any, the Vice-Chairman of the Board, if any, the President, a
        Vice-President, or, if none of the foregoing is in office and present and
        acting, by a chairman to be chosen by the stockholders. The Secretary of
        the
        corporation, or in his absence, an Assistant Secretary, shall act as secretary
        of every meeting, but if neither the Secretary nor an Assistant Secretary
        is
        present the Chairman of the meeting shall appoint a secretary of the
        meeting.

      

      Proxy
        Representation.
        Every
        stockholder may authorize another person or persons to act for him by proxy
        in
        all matters in which a stockholder is entitled to participate, whether by
        waiving notice of any meeting, voting or participating at a meeting, or
        expressing consent or dissent without a meeting. Every proxy must be signed
        by
        the stockholder or by his attorney-in-fact. No proxy shall be voted or acted
        upon after three years from its date unless such proxy provides for a longer
        period. A duly executed proxy shall be irrevocable if it states that is
        irrevocable and, if, and only as long as it is coupled with an interest
        sufficient in law to support an irrevocable power. A proxy may be made
        irrevocable regardless of whether the interest with which it is coupled is
        an
        interest in the stock itself or an interest in the corporation
        generally.

      

      Inspectors.
        The
        directors, in advance of any meeting, may, but need not, appoint one or more
        inspectors of election to act at the meeting or any adjournment thereof.
        If any
        inspector or inspectors are not appointed, the person presiding at the meeting
        may, but need not appoint one or more inspectors. In case any person who
        may be
        appointed as an inspector fails to appear or act, the vacancy may be filled
        by
        appointment made by the directors in advance of the meeting or at the meeting
        by
        the person presiding thereat. Each inspector, if any, before entering upon
        the
        discharge of his duties, shall take and sign an oath faithfully to execute
        the
        duties of inspectors at such meeting with strict impartiality and according
        to
        the best of his ability. The inspectors, if any, shall determine the number
        of
        shares of stock outstanding and the voting power of each, the shares of stock
        represented at the meeting, the existence of a quorum, the validity and effect
        of proxies, and shall receive votes, ballots, or consents, hear and determine
        all challenges and questions arising in connection with the right to vote,
        count
        and tabulate all votes, ballots, or consents, determine the result, and do
        such
        acts as are proper to conduct the election or vote with fairness to all
        stockholders. Upon request of the person presiding at the meeting, the inspector
        or inspectors, if any, shall make a report in writing of any challenge,
        question, or matter determined by him or them and execute a certificate of
        any
        fact found by him or them. Except as otherwise required by subsection (e)
        of
        Section 231 of the General Corporation Law, the provisions of that Section
        shall
        not apply to the corporation.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Quorum.
        The
        holders of a majority of the outstanding shares of stock shall constitute
        a
        quorum at a meeting of stockholders for the transaction of any business.
        The
        stockholders presents may adjourn the meeting despite the absence of a
        quorum.

      

      Voting.
        Each
        share of stock shall entitle the holder thereof to one vote. Directors shall
        be
        elected by a plurality of the votes of the shares present in person or
        represented by proxy at the meeting and entitled to vote on the election
        of
        directors. Any other action shall be authorized by a majority of the votes
        cast
        except where the General Corporation Law prescribes a different percentage
        of
        votes and/or a different exercise of voting power, and except as may be
        otherwise prescribed by the provisions of the certificate of incorporation
        and
        these Bylaws. In the election of directors, and for any other action, voting
        need not be by ballot.

      

      Section
        8. 
        Stockholder
        Action Without Meetings.
        Any
        action required by the General Corporation Law to be taken at any annual
        or
        special meeting of stockholders, or any action which may be taken at any
        annual
        or special meeting of stockholders, may be taken without a meeting, without
        prior notice and without a vote, if a consent in writing, setting forth the
        action so taken, shall be signed by the holders of outstanding stock having
        not
        less than the minimum number of votes that would be necessary to authorize
        or
        take such action at a meeting at which all shares entitled to vote thereon
        were
        present and voted. Prompt notice of the taking of the corporate action without
        a
        meeting by less than unanimous written consent shall be given to those
        stockholders who have not consented in writing. Action taken pursuant to
        this
        paragraph shall be subject to the provisions of Section 228 of the General
        Corporation Law.

      

      ARTICLE
        II

      

      DIRECTORS

      

      Section
        1. 
        Functions
        and Definition.
        The
        business and affairs of the corporation shall be managed by or under the
        direction of the Board of Directors of the corporation. The Board of Directors
        shall have the authority to fix the compensation of the members thereof.
        The use
        of the phrase “whole board” herein refers to the total number of directors which
        the corporation would have if there were no vacancies.

      

      Section
        2. 
        Qualifications
        and Number.
        A
        director need not be a stockholder, a citizen of the United States, or a
        resident of the State of Delaware. The initial Board of Directors shall consist
        of one (1) person. Thereafter, the number of directors may be increased or
        decreased from time to time by action of the stockholders or of the directors,
        or, if the number is not fixed, the number shall be one (1).

       

      Section
        3. 
        Election
        and Term.
        The
        first Board of Directors, unless the members thereof shall have been named
        in
        the certificate of incorporation, shall be elected by the incorporator or
        incorporators and shall hold office until first annual meeting of stockholders
        and until their successors are elected and qualified or until their earlier
        resignation or removal. Any director may resign at any time upon written
        notice
        to the corporation. Thereafter, directors who are elected at an annual meeting
        of stockholders, and directors who are elected in the interim to fill vacancies
        and newly created directorships, shall hold office until the next annual
        meeting
        resignation or removal. Except as the General Corporation Law may otherwise
        require, in the interim between annual meetings of stockholders or of special
        meetings of stockholders called for the election of directors and/or for
        the
        removal of one or more directors and for the filling of any vacancy in that
        connection, newly created directorships and any vacancies in the Board of
        Directors, including unfilled vacancies resulting from the removal of directors
        for cause or without cause, may be filled by the vote of a majority of the
        remaining directors then in office, although less than a quorum, or by the
        sole
        remaining director.  

        

      
        
          
          

        

        
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      Section
        4. 
        MEETINGS.

      

      TIME.
        Meetings shall be held at such time as the Board shall fix, except that the
        first meeting of a newly elected Board shall be held as soon after its election
        as the directors may conveniently assemble.

      

      PLACE.
        Meetings shall be held at such place within or without the State of Delaware
        as
        shall be fixed by the Board.

      

      CALL.
        No call
        shall be required for regular meetings for which the time and place have
        been
        fixed. Special meetings may be called by or at the direction of the Chairman
        of
        the Board, if any, the Vice-Chairman of the Board, if any, of the President,
        or
        of a majority of the directors in office.

      

      NOTICE
        OR ACTUAL OR CONSTRUCTIVE WAIVER.
        No
        notice shall be required for regular meetings for which the time and place
        have
        been fixed. Written, oral, or any other mode of notice of the time and place
        shall be given for special meetings in sufficient time for the convenient
        assembly of the directors thereat. Notice need not be given to any director
        or
        to any member of a committee of directors who submits a written waiver of
        notice
        signed by him before or after the time stated therein. Attendance of any
        such
        person at a meeting shall constitute a waiver of notice of such meeting,
        except
        when he attends a meeting for the express purpose of objecting, at the beginning
        of the meeting, to the transaction of any business because the meeting is
        not
        lawfully called or convened. Neither the business to be transacted at, nor
        the
        purpose of, any regular or special meeting of the directors need be specified
        in
        any written waiver of notice.

      

      QUORUM
        AND ACTION.
        A
        majority of the whole Board shall constitute a quorum except when a vacancy
        or
        vacancies prevents such majority, whereupon a majority of the directors in
        office shall constitute a quorum, provided, that such majority shall constitute
        at least one-third of the whole Board. A majority of the directors present,
        whether or not a quorum is present, may adjourn a meeting to another time
        and
        place. Except as herein otherwise provided, and except as otherwise provided
        by
        the General Corporation Law, the vote of the majority of the directors present
        at a meeting at which a quorum is present shall be the act of the Board.
        The
        quorum and voting provisions herein stated shall not be construed as conflicting
        with any provisions of the General Corporation Law and these Bylaws which
        govern
        a meeting of the directors held to fill vacancies and newly created
        directorships in the Board or action of disinterested directors.

      

      Any
        member or members of the Board of Directors or of any committee designated
        by
        the Board, may participate in a meeting of the Board, or any such committee,
        as
        the case may be, by means of conference telephone or similar communications
        equipment by means of which all persons participating in the meeting can
        hear
        each other.

      

      CHAIRMAN
        OF THE MEETING.
        The
        Chairman of the Board, if any and if present and acting, shall preside at
        all
        meetings. Otherwise, the Vice-Chairman of the Board, if any and if present
        and
        acting, or the President, if present and acting, or any other director chosen
        by
        the Board, shall preside.

      

      Section
        5. 
        REMOVAL
        OF DIRECTORS.
        Except
        as may otherwise be provided by the General Corporation Law, any director
        or the
        entire Board of Directors may be removed, with or without cause, by the holders
        of a majority of the shares then entitled to vote at an election of
        directors.

      

      Section
        6. 
        COMMITTEES
        . The
        Board of Directors may, by resolution passed by a majority of the whole Board,
        designate one or more committees, each committee to consist of one or more
        of
        the directors of the corporation. The Board may designate one or more directors
        as alternate members of any committee, who may replace any absent or
        disqualified member at any meeting of the committee. In the absence or
        disqualification of any member of any such committee or committees, the member
        or members thereof present at any meeting and not disqualified from voting,
        whether or not he or they constitute a quorum, may unanimously appoint another
        member of the Board of Directors to act at the meeting in the place of any
        such
        absent or disqualified member. Any such committee, to the extent provided
        in the
        resolution of the Board, shall have and may exercise the powers and authority
        of
        the Board of Directors in the management of the business and affairs of the
        corporation with the exception of any authority the delegation of which is
        prohibited by Section 141 of the General Corporation Law, and may authorize
        the
        seal of the corporation to be affixed to all papers which may require
        it.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Section
        7. 
        WRITTEN
        ACTION.
        Any
        action required or permitted to be taken at any meeting of the Board of
        Directors or any committee thereof may be taken without a meeting if all
        members
        of the Board or committee, as the case may be, consent thereto in writing,
        and
        the writing or writings are filed with the minutes of proceedings of the
        Board
        or committee.

      

      Section
        8.   BOARD
        OF ADVISORS.  
        The
        Board of Directors, in its discretion, may establish a Board of Advisors,
        consisting of individuals who may or may not be stockholders or directors
        of the
        Corporation. The purpose of the Board of Advisors would be to advise the
        officers and directors of the Corporation with respect to such matters as
        such
        officers and directors shall choose, and any other matters which the members
        of
        such Board of Advisors deem appropriate in furtherance of the best interest
        of
        the Corporation. The Board of Advisors shall meet on such basis as the members
        thereof may determine. The Board of Directors may eliminate the Board of
        Advisors at any time. No member of the Board of Advisors, nor the Board of
        Advisors itself, shall have any authority of the Board of Directors or any
        decision-making power and shall be merely advisory in nature. Unless the
        Board
        of Directors determines another method of appointment, the President shall
        recommend possible members of the Board of Advisors to the Board of Directors,
        who shall approve such appointments or reject them.

       

      ARTICLE
        III

      

      OFFICERS

      

      The
        officers of the corporation shall consist of a President, a Secretary, a
        Treasurer, and, if deemed necessary, expedient, or desirable by the Board
        of
        Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive
        Vice-President, one or more other Vice-Presidents, one or more Assistant
        Secretaries, one or more Assistant Treasurers, and such other officers with
        such
        title as the resolution of the Board of Directors choosing them shall designate.
        Except as may otherwise be provided in the resolution of the Board of Directors
        choosing him, no officer other than the Chairman or Vice-Chairman of the
        Board,
        if any, need be a director. Any number of offices may be held by the same
        person, as the directors may determine.

      

      Unless
        otherwise provided in the resolution choosing him, each officer shall be
        chosen
        for a term which shall continue until the meeting of the Board of Directors
        following the next annual meeting of stockholders and until his successor
        shall
        have been chosen and qualified.

      

      All
        officers of the corporation shall have such authority and perform such duties
        in
        the management and operation of the corporation as shall be prescribed in
        the
        resolutions of the Board of Directors designating and choosing such officers
        and
        prescribing their authority and duties, and shall have such additional authority
        and duties as are incident to their office except to the extent that such
        resolutions may be inconsistent therewith. The Secretary or an Assistant
        Secretary of the corporation shall record all of the proceedings of all meetings
        and actions in writing of stockholders, directors, and committees of directors,
        and shall exercise such additional authority and perform such additional
        duties
        as the Board shall assign to him. Any officer may be removed, with or without
        cause, by the Board of Directors. Any vacancy in any office may be filled
        by the
        Board of Directors.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        IV

      

      CORPORATE
        SEAL

      

      The
        corporate seal shall be in such form as the Board of Directors shall
        prescribe.

      

      ARTICLE
        V

      

      FISCAL
        YEAR

        

      The
        fiscal year of the corporation shall be fixed, and shall be subject to change,
        by the Board of Directors.

      

      ARTICLE
        VI

      

      AMENDMENT

      

      These
        Bylaws may be adopted, amended or repealed at any time by the unanimous written
        consent of the Board of Directors.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          EXHIBIT
            E

           

        

        AFFILIATE
          AGREEMENT

        

        ____________   ,
          2008

         

         GCA
          I Acquisition Corp.

        115
          East
          57th
          Street,
          Tenth Floor

        New
          York,
          New York 10022

        

        Ladies
          and Gentlemen:

         

        The
          undersigned has been advised that as of the date of this letter it may
          be deemed
          to be an “affiliate” of Bixby Energy Systems, Inc., a Delaware corporation (the
“Company”), as the term “affiliate” is defined for purposes of
          paragraphs (c) and (d) of Rule 145 of the rules and
          regulations (the “Rules and Regulations”) of the U.S. Securities and Exchange
          Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”). Pursuant to the terms of the Agreement and Plan of Merger,
          dated as of May 7, 2008 (the “Merger Agreement”), by and among GCA I Acquisition
          Corp. (“Parent”), Bixby Energy Acquisition Corp., a wholly-owned subsidiary of
          Parent (“Merger Sub”) and the Company, Merger Sub will be merged with and into
          the Company (the “Merger”) and the Company, as the entity surviving the Merger,
          will become a wholly-owned subsidiary of Parent.

         

        As
          a
          result of the Merger, the undersigned will receive shares of common stock,
          par
          value $0.0001 per share, of Parent (the “Parent Common Stock”), in exchange
          for common stock, par value $0.001 per share [and other Merger Securities]
          of the Company owned by the undersigned immediately prior to the effective
          time
          of the Merger. 

         

        The
          undersigned hereby represents and warrants to, and covenants with, Parent
          that
          in relation to any Parent Common Stock it receives as a result of the
          Merger:

         

        A. The
          undersigned shall not make any sale, transfer or other disposition of the
          Parent
          Common Stock in violation of the Act or the Rules and Regulations.

         

        B. The
          undersigned has carefully read this letter and the Merger Agreement and
          discussed the requirements of these documents and other applicable limitations
          upon the undersigned’s ability to sell, transfer or otherwise dispose of the
          Parent Common Stock, to the extent the undersigned deemed necessary, with
          his or
          her counsel or counsel for the Company.

        

        C. The
          undersigned has been advised that any issuance of Parent Common Stock to
          him or
          her pursuant to the Merger has been, or will be, registered with the Commission
          under the Act on a registration statement on Form S-4. However, the
          undersigned has also been advised that, since at the time the Merger was
          submitted for a vote of the stockholders of the Company, the undersigned
          may be
          deemed to have been an affiliate of the Company, the undersigned may not
          sell,
          transfer or otherwise dispose of any Parent Common Stock issued to it in
          the
          Merger unless (a) such sale, transfer or other disposition has been
          registered under the Act, (b) such sale, transfer or other disposition is
          made in conformity with Rule 145 (as that rule may be hereinafter amended)
          promulgated by the Commission under the Act, or (c) Parent shall have
          received either an opinion of counsel acceptable to Parent or a “no action”
letter obtained by the undersigned from the staff of the Commission, to
          the
          effect that such sale, transfer or other disposition is otherwise exempt
          from
          registration under the Act.

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        D. The
          undersigned also understands that, except as set forth in the Merger Agreement,
          Parent is under no obligation to register the sale, transfer or other
          disposition of the Parent Common Stock by the undersigned or on his or
          her
          behalf under the Act or to take any other action necessary in order to
          comply
          with any available exemption from the registration requirements of the
          Act. The
          undersigned also understands that stop transfer instructions will be given
          to
          Parent’s transfer agents with respect to the Parent Common Stock and that there
          will be placed on the certificates for the Parent Common Stock issued to
          the
          undersigned, or any substitutions therefor, a legend stating in
          substance:

         

        “THE
          SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO
          WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
          (THE “ACT”), APPLIES, AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
          COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION
          STATEMENT UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
          OF THE ACT.”

         

        E. The
          undersigned also understands that unless the transfer by it of Parent Common
          Stock has been registered under the Act or is a sale made in conformity
          with the
          provisions of Rule 145, Parent reserves the right to place the following
          legend on the certificates issued to the undersigned’s transferee:

         

        “THE
          SALE OF THE SHARES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND SUCH
          SHARES WERE ACQUIRED FROM A PERSON WHO RECEIVED THESE SHARES IN A
          TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE ACT APPLIES. THE
          SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE
          IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
          ACT, AND
          MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A
          REGISTRATION STATEMENT UNDER THAT ACT OR IN ACCORDANCE WITH AN
          EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
          ACT.”

         

        F. Execution
          of this letter shall not be considered an admission on the part of the
          undersigned that he or she is an “affiliate” of the Company as described in the
          first paragraph of this letter, nor as a waiver of any rights the undersigned
          may have to object to any claim that he is such an affiliate after the
          date of
          this letter.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        It
          is
          understood and agreed that the legends set forth in paragraphs D and E
          above shall be removed by delivery of substitute certificates without any
          legend
          if either of these legends are not required for purposes of the Act or
          this
          letter. It is understood and agreed that these legends and the stop transfer
          orders referred to above will be removed if (i) evidence or representations
          satisfactory to Parent and its transfer agent that the Parent Common Stock
          represented by the certificates are being or have been sold in a transaction
          made in conformity with the provisions of Rule 145(d) (as that rule may be
          hereinafter amended), (ii) Parent has received either an opinion of counsel
          or a “no action” letter obtained by the undersigned from the staff of the
          Commission, to the effect that the restrictions imposed by Rule 145 under
          the Act no longer apply to the undersigned, or (iii) the shares represented
          by the certificates having such legend(s) are the subject of an effective
          registration statement under the Act.

        

        
          	 
	
                  [NAME]   
                     

                

        

        

        Accepted
          this  __th day of

        __________,
          200_ by

         

        
          	
                  GCA
                    I ACQUISITION CORP.

                
	
                	 
	
                  By

                	 
	
                  Name:         
                    Michael
                    M. Membrado

                
	
                  Title:  
                    President
                    & Chief Executive Officer

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      EXHIBIT
        F

       

      REGISTRABLE
        SECURITIES LOCK-UP AGREEMENT

       

      This
        Registrable Securities Lock-Up Agreement (this “Agreement”) is made as of
        _______ __, 200_, by and among [___________________ (formerly known as GCA
        I
        Acquisition Corp.)], a Delaware corporation (the “Company”) and _____________,
        an individual stockholder of Company (the “Stockholder”).

       

      WHEREAS,
        as of the date hereof, the Stockholder is the holder of record of
        _________________ (__________) shares of common stock, par value
        $0.0001 per share, of the Company (the “Registrable
        Securities”); and

       

      WHEREAS,
        in order to compel the Company to register the Registrable Securities in
        accordance with the terms of Section 7.13 of that certain Agreement & Plan
        of Merger dated May 7, 2008 by and among GCA I Acquisition Corp., Bixby Energy
        Acquisition Corp., and Bixby Energy Systems, Inc. (the “Merger Agreement”), the
        Stockholder has agreed to enter into this Agreement.

       

      NOW,
        THEREFORE, in consideration of the foregoing premises and of the covenants
        and
        agreements set forth herein and in the Merger Agreement, and intending to
        be
        legally bound hereby, the parties agree as follows:

         

      1. Lock-up.
        In
        consideration of the registration of the Registrable Securities by the Company
        pursuant to Section 7.13 of the Merger Agreement, the Stockholder hereby
        agrees
        that, whether or not registered, he or she shall only be permitted to sell
        shares in accordance with the schedule specifically set forth in Section
        2.2(i)
        of the Merger Agreement (the “Release Schedule”) as
        if
        the
        Stockholder were a recipient of shares of Parent Common Stock (as defined
        in the
        Merger Agreement) in connection with the Merger Agreement.

       

      2. Assignment.  This
        Agreement may not be assigned by any party hereto without the prior written
        consent of the other party. Subject to the foregoing, all of the terms and
        provisions of this Agreement shall inure to the benefit of and be binding
        upon
        the parties hereto and their respective executors, heirs, personal
        representatives, successors and assigns.

       

      3. Entire
        Agreement.  This
        Agreement and the documents, instruments and other agreements specifically
        referred to herein or delivered pursuant hereto, set forth the entire
        understanding of the parties with respect to the subject matter hereof. Any
        and
        all previous agreements and understandings between or among the parties
        regarding the subject matter hereof, whether written or oral, are superseded
        by
        this Agreement.

       

      4. Notices.  Any
        notice, request, demand, waiver, consent, approval or other communication
        made
        in connection with this Agreement shall be in writing and shall be deemed
        given
        (a) on the date established by the sender as having been delivered
        personally; (b) on the date delivered by a private courier as established
        by the sender by evidence obtained from the courier; (c) on the date sent
        by facsimile, with confirmation of transmission, if sent during normal business
        hours of the recipient, if not, then on the next business day; or (d) on
        the fifth day after the date mailed, by certified or registered mail, return
        receipt requested, postage prepaid. Such communications, to be valid, must
        be
        addressed as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
                If
                  to the Company, to:

              
	
                 

              	
              	 
	 	Bixby
                Energy Systems, Inc.
	 	6893
                139th Lane N.W.
	 	Ramsey,
                MN 55303
	 	Att:
                Robert Walker, CEO
	 	
              	 
	 	Fax:
                763-428-7903
	 	 	 
	
                with
                  a copy to:

              
	 	 	 
	 	Davisson
                & Associates, PA
	 	3649
                Brunswick Avenue North
	 	Minneapolis,
                MN 55422
	 	Att:
                Peder K. Davisson, Esq.
	 	
              
	 	Fax:
                763-535-0490
	
                 

              	 	 
	
                If
                  to the Stockholder:

              
	
                 

              	 
	 	 
                
	 	 
	 	 
	 	 
	 	 	 
	 	Facsimile:	
                 

              
	
                 

              	 	 
	
                With
                  a required copy to:

              
	 	 	 
	 	 
	 	 
	 	 
	 	Attn:	
                 

              
	 	 	 
	 	Facsimile:	
                 

              

      

       

      or
        to
        such other address or to the attention of such person or persons as the
        recipient party has specified by prior written notice to the sending party
        (or
        in the case of counsel, to such other readily ascertainable business address
        as
        such counsel may hereafter maintain). If more than one method for sending
        notice
        as set forth above is used, the earliest notice date established as set forth
        above shall control.

       

      5. 
        Severability;
        Enforcement.  Any
        provision of this Agreement which is invalid or unenforceable in any
        jurisdiction shall be ineffective to the extent of such invalidity or
        unenforceability without invalidating or rendering unenforceable the remaining
        provisions hereof, and any such invalidity or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      6. 
        Consent
        to Jurisdiction.  Each
        party irrevocably submits to the exclusive jurisdiction of (a) New York
        County, New York, and (b) the United States District Court for the Southern
        District of New York, for the purposes of any action, suit or proceeding
        arising
        out of this Agreement or any transaction contemplated hereby. Each party
        agrees
        to commence any such action, suit or proceeding either in the United States
        District Court for the Southern District of New York or if such action, suit
        or
        proceeding may not be brought in such court for jurisdictional reasons, in
        the
        Supreme Court sitting in New York County (including its Appellate Division).
        Each party further agrees that service of any process, summons, notice or
        document by U.S. registered mail to such party’s respective address set
        forth above shall be effective service of process for any action, suit or
        proceeding in New York with respect to any matters to which it has submitted
        to
        jurisdiction in this Section 15. Each party irrevocably and unconditionally
        waives any objection to the laying of venue of any action, suit or proceeding
        arising out of this Agreement or the transactions contemplated hereby in
        (i) the United States District Court for the Southern District of New York,
        or (ii) the Supreme Court sitting in New York County (including its
        Appellate Division), and hereby further irrevocably and unconditionally waives
        and agrees not to plead or claim in any such court that any such action,
        suit or
        proceeding brought in any such court has been brought in an inconvenient
        forum.
        EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION
        (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
        TO
        THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
        PERFORMANCE AND ENFORCEMENT HEREOF.

       

      7. 
        Governing
        Law.  This
        Agreement shall be governed by and interpreted and enforced in accordance
        with
        the laws of the State of New York, without giving effect to any choice of
        law or
        conflict of laws rules or provisions (whether of the State of New York or
        any
        other jurisdiction) that would cause the application of the laws of any
        jurisdiction other than the State of New York, except to the extent that
        the
        voting of the Subject Shares is subject to the corporate law of the State
        of
        Delaware.

       

      IN
        WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
        all
        as of the day and year first above written.

      

      
        	BIXBY
                ENERGY SYSTEMS, INC.
	 	 
	
                By:
                  

              	 
	
                Name:

              
	
                Title:   
                  President
                  and Chief Executive Officer

              

      

      

      STOCKHOLDER: 

      

      
        	
                 

              
	
                [NAME]

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULES

     

    
      	
              Schedule
                A 

            	
              Company
                Disclosure Schedule

            
	
              Organization
                and Qualification; Subsidiaries

            	
              Section
                4.1 

            
	
              Capitalization

            	
              Section
                4.4 

            
	
              No
                Conflict; Required Filings and Consents

            	
              Section
                4.6

            
	
              Permits;
                Compliance

            	
              Section
                4.7

            
	
              Financial
                Statements

            	
              Section
                4.8

            
	
              Taxes

            	
              Section
                4.11

            
	
              Inventory

            	
              Section
                4.14

            
	
              Product
                Warranty

            	
              Section
                4.15

            
	
              Real
                Property

            	
              Section
                4.17

            
	
              Intellectual
                Property

            	
              Section
                4.18

            
	
              Material
                Contracts

            	
              Section
                4.19

            
	
              Litigation

            	
              Section
                4.20

            
	
              Employee
                Benefit Plans

            	
              Section
                4.21

            
	
              Environmental

            	
              Section
                4.23

            
	
              Related
                Party Transactions

            	
              Section
                4.24

            
	
              Insurance

            	
              Section
                4.25

            
	
              Absence
                of Certain Changes or Events

            	
              Section
                4.26

            
	
              Change
                in Control

            	
              Section
                4.33

            
	
              Conduct
                of Business by the Company Pending the Merger

            	
              Section
                6.1

            
	
               

            	 
	
              Schedule
                B 

            	
              Parent
                Disclosure Schedule

            
	
              Capitalization

            	
              Section
                5.4 

            
	
              No
                Conflict; Required Filings and Consents

            	
              Section
                5.6

            
	
              Taxes

            	
              Section
                5.8

            
	
              Absence
                of Certain Changes or Events

            	
              Section
                5.12

            
	
              Conduct
                of Business by the Parent Pending the Merger 

            	
              Section
                6.2

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Company
        Disclosure Schedule: Section
        4.1

      

      Organization
        and Qualification; Subsidiaries

       

      The
        Company was originally organized under the laws of the State of Minnesota
        and
        subsequently changed its domicile to Delaware, filing a foreign qualification
        to
        do business in the State of Minnesota. The Company’s subsidiary, SS Acquisition
        Corp. is a corporation organized under the laws of the State of Minnesota.
        The
        Company and its subsidiary are qualified to do business in each jurisdiction
        in
        which they have determined they are required to do so.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.4

      

      Capitalization

      

      Section
        4.4(a)

       

      
        	 	 	
                Shares

                Issued

              	 	
                Common

                Stock

                Equivalents

              	 
	 	 	 	 	 	 	 	 
	
                Common
                  Stock

              	 	 	
                32,194,880
                  

              	 	 	
                32,194,880
                  

              	 
	 	 	 	 	 	 	 	 
	
                Convertible
                  Preferred

              	 	 	
                1,046,846
                  

              	 	 	
                2,093,692
                  

              	 
	 	 	 	 	 	 	 	 
	
                Warrants
                  for Convertible Preferred Stock

              	 	 	
                233,000
                  

              	 	 	
                466,000
                  

              	 
	 	 	 	 	 	 	 	 
	
                Common
                  Stock Warrants - Issued

              	 	 	
                40,054,338
                  

              	 	 	
                40,054,338
                  

              	 
	 	 	 	 	 	 	 	 
	
                Employee/Board
                  Options (5,000,000 Authorized)

              	 	
                3,157,000
                  

              	 
	 	 	 	 	 	 	 	 
	
                Loans
                  With Conversion Features:

              	 	 	 	 	 	
                3,778,500
                  

              	 
	 	 	 	 	 	 	
                
                

              	 
	
                Total
                  Common Stock Equivalents

              	 	 	 	 	 	
                81,744,410
                  

              	 

      

       

      Section
        4.4b

       

      [INTENTIONALLY
        BLANK]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.4 (cont’d).

       

      Section
        4.4c

       

      Debentures
        and Promissory Notes Outstanding:

      

        
          	
                  Type

                	 	
                  $
                    Amount

                	 	
                  Due
                    Date

                	 	
                  Conversion Price

                	 
	 	 	 	 	 	 	 	 
	
                  Debenture

                	 	 	
                  1,025,000

                	 	
                  Nov
                    2010

                	 	
                  $1.60/share

                	 
	 	 	 	 	 	 	 	 	 
	
                  Promissory
                    Notes

                	 	 	
                  500,000

                	 	
                  May
                    2008

                	 	
                  $1.60/share

                	 
	 	 	 	
                  150,000

                	 	
                  June
                    2008

                	 	
                  $1.60/share

                	 
	 	 	 	
                  300,000

                	 	
                  July
                    2008

                	 	N/A	 
	 	 	 	
                  200,000

                	 	
                  Nov
                    2008

                	 	
                  $1.60/share

                	 
	 	 	 	
                  324,880

                	 	
                  Oct
                    2009

                	 	
                  $1.60/share

                	 
	 	 	 	
                  186,000

                	 	
                  Nov
                    2009

                	 	
                  $1.60/share

                	 
	 	 	 	
                  37,200

                	 	
                  Dec
                    2009

                	 	
                  $1.60/share

                	 
	 	 	 	
                  100,000

                	 	
                  Jan
                    2010

                	 	
                  $1.60/share

                	 
	 	 	 	
                  125,000

                	 	
                  Feb
                    2010

                	 	
                  $1.60/share

                	 
	 	 	 	
                  1,750,000

                	 	
                  Mar
                    2010

                	 	
                  $1.60/share

                	 
	 	 	 	
                  150,000

                	 	
                  Apr
                    2010

                	 	
                  $2.50/share

                	 
	 	 	 	
                  50,000

                	 	
                  May
                    2010

                	 	
                  $2.50/share

                	 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.6

      

      No
        Conflict; Required Filings and Consents

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.7

      

      Permits;
        Compliance

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.8

      

      Financial
        Statements

       

      Section
        4.8(a)

       

      
        BIXBY
          ENERGY SYSTEMS, INC.

        Consolidated
          Balance Sheets

        Years
          ending May 26, 2007, May 27, 2006 and May 31, 2005

        

        
          	
                  Assets

                	 	
                  2007

                	 	
                  2006

                	 	
                  2005

                	 
	
                  Current
                    assets:

                	 	 	 	 	 	 	 	 	 	 
	
                  Cash
                    and cash equivalents

                	 	
                  $

                	
                  286,673
                    

                	 	 	
                  2,273,439
                    

                	 	 	
                  70,701
                    

                	 
	
                  Trade
                    Accounts Receivable, less allowance for doubtful accounts of
                    $204,687 and
                    $6,090 in 2007 and 2006, respectively

                	 	 	
                  231,758
                    

                	 	 	
                  338,844
                    

                	 	 	
                  135,735
                    

                	 
	
                  Inventories,
                    less writedown to market of $1,212,642 and $0 in 2007 and 2006,
                    respectively

                	 	 	
                  3,508,163
                    

                	 	 	
                  2,414,821
                    

                	 	 	
                  401,935
                    

                	 
	
                  Other
                    current assets

                	 	 	
                  393,955
                    

                	 	 	
                  842,387
                    

                	 	 	
                  130,586
                    

                	 
	
                  Total
                    current assets

                	 	 	
                  4,420,548
                    

                	 	 	
                  5,869,491
                    

                	 	 	
                  738,958
                    

                	 
	
                  Property
                    and equipment

                	 	 	
                  1,761,610
                    

                	 	 	
                  1,470,398
                    

                	 	 	
                  890,269
                    

                	 
	
                  Less
                    accumulated depreciation and amortization

                	 	 	
                  (752,046

                	
                  )

                	 	
                  (416,174

                	
                  )

                	 	
                  (213,079

                	
                  )

                
	
                  Net
                    property and equipment

                	 	 	
                  1,009,564
                    

                	 	 	
                  1,054,224
                    

                	 	 	
                  677,190
                    

                	 
	
                  Other
                    assets

                	 	 	
                  9,450,077
                    

                	 	 	
                  7,686,572
                    

                	 	 	
                  6,610,018
                    

                	 
	
                  Total
                    assets

                	 	
                  $

                	
                  14,880,189
                    

                	 	 	
                  14,610,287
                    

                	 	 	
                  8,026,165
                    

                	 
	
                  Liabilities
                    and Shareholders’ Deficit

                	 	 	 	 	 	 	 	 	 	 
	
                  Current
                    liabilities:

                	 	 	 	 	 	 	 	 	 	 
	
                  Current
                    portion of long-term debt

                	 	
                  $

                	
                  87,700
                    

                	 	 	
                  77,700
                    

                	 	 	
                  48,975
                    

                	 
	
                  Short
                    Term Debt

                	 	 	
                  929,350
                    

                	 	 	
                  150,000
                    

                	 	 	
                  533,623
                    

                	 
	
                  Trade
                    accounts payable

                	 	 	
                  3,460,697
                    

                	 	 	
                  1,880,472
                    

                	 	 	
                  1,048,996
                    

                	 
	
                  Unearned
                    Income

                	 	 	
                  —
                    

                	 	 	
                  —
                    

                	 	 	
                  202,986
                    

                	 
	
                  Accrued
                    expenses

                	 	 	
                  1,933,623
                    

                	 	 	
                  973,873
                    

                	 	 	
                  637,871
                    

                	 
	
                  Total
                    current liabilities

                	 	 	
                  6,411,370
                    

                	 	 	
                  3,082,045
                    

                	 	 	
                  2,472,451
                    

                	 
	
                  Long-term
                    debt, less current portion

                	 	 	
                  1,451,051
                    

                	 	 	
                  1,539,053
                    

                	 	 	
                  874,320
                    

                	 
	
                  Other
                    long-term liabilities

                	 	 	
                  290,700
                    

                	 	 	
                  290,700
                    

                	 	 	
                  290,700
                    

                	 
	
                  Total
                    liabilities

                	 	 	
                  8,153,121
                    

                	 	 	
                  4,911,798
                    

                	 	 	
                  3,637,472
                    

                	 
	
                  Commitments
                    and contingencies (note 4 and 8)

                	 	 	 	 	 	 	 	 	 	 
	
                  Shareholders’
                    deficit:

                	 	 	 	 	 	 	 	 	 	 
	
                  Undesignated
                    preferred stock, $.001 par value.

                	 	 	 	 	 	 	 	 	 	 
	
                  Authorized
                    3,900,000 shares; none issued and outstanding

                	 	 	 	 	 	 	 	 	 	 
	
                  in
                    2007 and 2006

                	 	 	 	 	 	 	 	 	 	 
	
                  Series
                    A convertible preferred stock, $0.001 par value.

                	 	 	
                  1,047
                    

                	 	 	
                  1,047
                    

                	 	 	
                  1,047
                    

                	 
	
                  Authorized
                    1,100,000 shares; issued and outstanding

                	 	 	 	 	 	 	 	 	 	 
	
                  1,046,846
                    shares in 2007 and 1,046,846 shares in 2006

                	 	 	 	 	 	 	 	 	 	 
	
                  ($1,046,846
                    liquidation preference)

                	 	 	 	 	 	 	 	 	 	 
	
                  Common
                    stock $0.001 par value. Authorized 50,000,000 shares;

                	 	 	
                  27,984
                    

                	 	 	
                  24,365
                    

                	 	 	
                  17,238
                    

                	 
	
                  issued
                    and outstanding 27,983,894 shares in 2007 and

                	 	 	 	 	 	 	 	 	 	 
	
                  24,364,721
                    shares in 2006

                	 	 	 	 	 	 	 	 	 	 
	
                  Additional
                    paid-in capital

                	 	 	
                  31,742,484
                    

                	 	 	
                  25,936,754
                    

                	 	 	
                  15,698,741
                    

                	 
	
                  Accumulated
                    deficit

                	 	 	
                  (25,044,447

                	
                  )

                	 	
                  (16,263,676

                	
                  )

                	 	
                  (11,328,333

                	
                  )

                
	
                  Total
                    shareholders’ equity

                	 	 	
                  6,727,068
                    

                	 	 	
                  9,698,490
                    

                	 	 	
                  4,388,693
                    

                	 
	
                  Total
                    liabilities and shareholders’ equity

                	 	
                  $

                	
                  14,880,189
                    

                	 	 	
                  14,610,287
                    

                	 	 	
                  8,026,165
                    

                	 

        

        

        
          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

         

        BIXBY
          ENERGY SYSTEMS, INC.

        Consolidated
          Statements of Operations

        For
          52
          weeks ending May 26, 2007 and May 27 2006

        

        
          	 	 	
                  2007

                	 	
                  2006

                	 
	
                  Net
                    Sales

                	 	
                  $

                	
                  7,252,559
                    

                	 	 	
                  6,746,635
                    

                	 
	
                  Cost
                    of goods

                	 	 	
                  8,828,537
                    

                	 	 	
                  6,605,590
                    

                	 
	
                  Gross
                    Profit

                	 	 	
                  (1,575,979

                	
                  )

                	 	
                  141,045
                    

                	 
	
                  Operating
                    expenses:

                	 	 	 	 	 	 	 
	
                  Selling,
                    general, and administrative

                	 	 	
                  7,132,828
                    

                	 	 	
                  4,180,420
                    

                	 
	
                  Research
                    and development

                	 	 	
                  1,415,997
                    

                	 	 	
                  862,963
                    

                	 
	
                  Total
                    operating expenses

                	 	 	
                  8,548,825
                    

                	 	 	
                  5,043,383
                    

                	 
	
                  Other
                    income (expense):

                	 	 	 	 	 	 	 
	
                  Miscellaneous
                    income

                	 	 	
                  —
                    

                	 	 	
                  5,292
                    

                	 
	
                  Interest
                    expense

                	 	 	
                  (248,151

                	
                  )

                	 	
                  (239,217

                	
                  )

                
	
                  Other,
                    net

                	 	 	
                  (1,598,646

                	
                  )

                	 	
                  (1,802,337

                	
                  )

                
	
                  Net
                    loss before taxes

                	 	
                  $

                	
                  (11,971,600

                	
                  )

                	 	
                  (6,938,600

                	
                  )

                
	 	 	 	 	 	 	 	 
	
                  Provision
                    for Income Tax Loss

                	 	 	
                  3,190,829
                    

                	 	 	
                  2,003,257
                    

                	 
	
                  Net
                    loss after taxes

                	 	
                  $

                	
                  (8,780,771

                	
                  )

                	 	
                  (4,935,343

                	
                  )

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        BIXBY
          ENERGY SYSTEMS, INC.

        Consolidated
          Statements of Stockholders’ Equity

        Years
          Ended May 26, 2007 and May 27, 2006

        

          
            	 	 	 	 	 	 	
                    Series A convertible

                  	 	 	 	 	 	
                    Additional

                  	 	 	 	
                    Total

                  	 
	 	 	
                    Undesignated preferred stock

                  	 	
                    preferred stock

                  	 	
                    Common stock

                  	 	
                    paid-in

                  	 	
                    Accumulated

                  	 	
                    stockholders’

                  	 
	 	 	
                    Shares

                  	 	
                    Amount

                  	 	
                    Shares

                  	 	
                    Amount

                  	 	
                    Shares

                  	 	
                    Amount

                  	 	
                    capital

                  	 	
                    deficit

                  	 	
                    equity

                  	 
	
                    Balances
                      at May 31, 2005

                  	 	 	
                    —
                      

                  	 	
                    $

                  	
                    —

                  	 	 	
                    1,046,846
                      

                  	 	
                    $

                  	
                    1,047

                  	 	 	
                    17,237,990
                      

                  	 	
                    $

                  	
                    17,238

                  	 	 	
                    15,698,741
                      

                  	 	 	
                    (11,328,333

                  	
                    )

                  	 	
                    4,388,693
                      

                  	 
	
                    Shares
                      issued in connection with conversion of debt

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    411,250
                      

                  	 	 	
                    411
                      

                  	 	 	
                    657,589
                      

                  	 	 	 	 	 	
                    658,000
                      

                  	 
	
                    
                      Shares
                        issued in connection with private placement, less
                        issuance costs of $1,704,332

                    

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    6,715,481
                      

                  	 	 	
                    6,716
                      

                  	 	 	
                    9,033,096
                      

                  	 	 	 	 	 	
                    9,039,811
                      

                  	 
	
                    Warrants
                      issued for debt issuance costs

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    547,328
                      

                  	 	 	 	 	 	
                    547,328
                      

                  	 
	
                    Net
                      loss for the year

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                    (4,935,343

                  	
                    )

                  	 	
                    (4,935,343

                  	
                    )

                  
	
                    Balances
                      at May 27, 2006

                  	 	 	
                    —
                      

                  	 	 	
                    —
                      

                  	 	 	
                    1,046,846
                      

                  	 	 	
                    1,047
                      

                  	 	 	
                    24,364,721
                      

                  	 	 	
                    24,365
                      

                  	 	 	
                    25,936,754
                      

                  	 	 	
                    (16,263,676

                  	
                    )  
                      

                  	 	
                    9,698,490
                      

                  	 
	
                    Shares
                      issued in connection with warrants exercised

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    13,348
                      

                  	 	 	
                    13
                      

                  	 	 	
                    19,585
                      

                  	 	 	 	 	 	
                    19,598
                      

                  	 
	
                    
                      Shares
                        issued in connection with private placement, less
                        issuance costs of $599,981

                    

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    3,605,825
                      

                  	 	 	
                    3,606
                      

                  	 	 	
                    5,786,146
                      

                  	 	 	 	 	 	
                    5,789,752
                      

                  	 
	
                    Warrants
                      issued for debt issuance costs

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                    —
                      

                  	 	 	 	 	 	
                    —
                      

                  	 
	
                    Net
                      loss for the year

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                     

                  	 	 	
                    (8,780,771

                  	
                    )

                  	 	
                    (8,780,771

                  	
                    )

                  
	
                    Balances
                      at May 26, 2007

                  	 	 	
                    —
                      

                  	 	
                    $

                  	
                    —

                  	 	 	
                    1,046,846
                      

                  	 	
                    $

                  	
                    1,047

                  	 	 	
                    27,983,894
                      

                  	 	
                    $

                  	
                    27,984

                  	 	 	
                    31,742,484
                      

                  	 	 	
                    (25,044,447

                  	
                    )

                  	 	
                    6,727,068
                      

                  	 

          

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        BIXBY
          ENERGY SYSTEMS, INC.

        Consolidated
          Statements of Cash Flows

        Years
          Ended May 26, 2007 and May 27, 2006

        

        
          	 	 	
                  2007

                	 	
                  2006

                	 
	
                  Cash
                    flows from operating activities:

                	 	 	 	 	 	 	 
	
                  Net
                    loss before Provision from Income Tax Loss

                	 	
                  $

                	
                  (11,971,600

                	
                  )

                	 	
                  (6,938,600

                	
                  )

                
	
                  Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:

                	 	 	 	 	 	 	 
	
                  Depreciation
                    and amortization

                	 	 	
                  1,692,532
                    

                	 	 	
                  1,513,478
                    

                	 
	
                  Amortization
                    of deferred financing costs

                	 	 	
                  318,495
                    

                	 	 	
                  465,387
                    

                	 
	
                  Loss
                    on sale of property and equipment

                	 	 	 	 	 	 	 
	
                  (Benefit)
                    provision for doubtful accounts

                	 	 	 	 	 	 	 
	
                  Change
                    in current assets and current liabilities:

                	 	 	 	 	 	 	 
	
                  Accounts
                    receivable

                	 	 	
                  494,657
                    

                	 	 	
                  (632,259

                	
                  )

                
	
                  Inventories

                	 	 	
                  (1,093,342

                	
                  )

                	 	
                  (2,012,886

                	
                  )

                
	
                  Other
                    current assets

                	 	 	
                  60,862
                    

                	 	 	
                  (282,650

                	
                  )

                
	
                  Employee
                    note receivable

                	 	 	 	 	 	 	 
	
                  Trade
                    accounts payable

                	 	 	
                  1,580,226
                    

                	 	 	
                  831,476
                    

                	 
	
                  Accrued
                    expenses

                	 	 	
                  959,750
                    

                	 	 	
                  133,015
                    

                	 
	
                  Net
                    cash used in operating activities

                	 	 	
                  (7,958,420

                	
                  )

                	 	
                  (6,923,039

                	
                  )

                
	
                  Cash
                    flows from investing activities:

                	 	 	 	 	 	 	 
	
                  Additions
                    to property and equipment

                	 	 	
                  291,212
                    

                	 	 	
                  580,129
                    

                	 
	
                  Proceeds
                    from sale of property and equipment

                	 	 	 	 	 	 	 
	
                  Additions
                    to other assets

                	 	 	
                  (70,664

                	
                  )

                	 	
                  383,680
                    

                	 
	
                  Net
                    cash used in investing activities

                	 	 	
                  220,548
                    

                	 	 	
                  963,810
                    

                	 
	
                  Cash
                    flows from financing activities:

                	 	 	 	 	 	 	 
	
                  Proceeds
                    from capital leases

                	 	 	
                  —
                    

                	 	 	
                  119,166
                    

                	 
	
                  Principal
                    payments on capital leases

                	 	 	
                  (33,794

                	
                  )

                	 	
                  (8,597

                	
                  )

                
	
                  Proceeds
                    from issuance of debt 

                	 	 	
                  1,360,945
                    

                	 	 	
                  1,630,317
                    

                	 
	
                  Principal
                    payments on debt

                	 	 	
                  (323,885

                	
                  )

                	 	
                  (741,111

                	
                  )

                
	
                  Proceeds
                    from issuance of common stock

                	 	 	
                  5,188,937
                    

                	 	 	
                  9,089,812
                    

                	 
	
                  Net
                    cash provided by financing activities

                	 	 	
                  6,192,202
                    

                	 	 	
                  10,089,587
                    

                	 
	
                  Net
                    decrease in cash and cash equivalents

                	 	 	
                  (1,986,766

                	
                  )

                	 	
                  2,202,738
                    

                	 
	
                  Cash
                    and cash equivalents at beginning of year

                	 	 	
                  2,273,439
                    

                	 	 	
                  70,701
                    

                	 
	
                  Cash
                    and cash equivalents at end of year

                	 	
                  $

                	
                  286,673
                    

                	 	 	
                  2,273,439
                    

                	 

        

         

      

      Section
        4.8(b)

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.9

      

      Notes
        and Accounts Receivable

       

      
        	
                CUSTOMER

              	 	
                TOTAL

              	 
	 	 	 	 	 
	
                Empire
                  Distributors

              	 	
                $

              	
                16,646.87

              	 
	 	 	 	 	 
	
                Field
                  To Flue

              	 	
                $

              	
                20,882.51

              	 
	 	 	 	 	 
	
                Kowalkse's
                  Hot Spot

              	 	
                $

              	
                19,566.25

              	 
	 	 	 	 	 
	
                Summer
                  Winds Pool & Spas Inc.

              	 	
                $

              	
                78,320.35

              	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.11

      

      Taxes

       

      Section
        4.11(a)

      

      Income
        tax returns have only been filed through 5/31/04 (FY04). Returns for FY05,
        FY06
        and FY07 are in process. 

       

      Section
        4.11(b)

       

      [INTENTIONALLY
        BLANK]

       

      Section
        4.11(c)

       

      [INTENTIONALLY
        BLANK]

       

      Section
        4.11(d)

      

      No
        tax
        returns of the company have been audited. 

      

      Tax
        returns are open for all fiscal years ending from 2004 to current.

       

      Section
        4.11(e)

      

      
        	 	
                §

              	
                Federal

              

      

      
        	 	
                §

              	
                State
                  of Minnesota 

              

      

      
        	 	
                §

              	
                State
                  of South Dakota (sales tax only)

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.11 (cont’d)

       

      Section
        4.11(l)

       

      [INTENTIONALLY
        BLANK]

       

      Section
        4.11(n)

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.14

      

      Inventory

       

      The
        inventory for the stove operation consists mainly of slow moving items due
        to
        current market conditions.  As of February 23, 2008 (the end of the
        3rd Quarter, 2008), the stove operation had the following inventory values,
        all
        of which would be considered slow moving:

      

        
          	
                  Raw
                    Materials

                	 	
                  $

                	
                  1,160,601

                	 
	
                  Finished
                    Goods

                	 	
                  $

                	
                  1,469,168

                	 

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.15

      

      Product
        Warranty

       

      
        
          
            

          

        

        
          Bixby
            Energy Systems, Inc.

           

        

        7
          Year Limited Warranty 

         

        "Good
          Products come with Good Warranties"

         

        RULES
          OF WARRANTY

         

        This
          warranty is issued by Bixby Energy Systems, Inc., (the "Manufacturer")
          and
          extends only to the original purchaser of this product. For the warranty
          to be
          effective, you must complete and return the attached warranty card to the
          address indicated within 30 days of your purchase. Failure to do so will
          mean
          that you may not later make a claim under this warranty. The Manufacturer
          excludes and disclaims all implied warranties including but not limited
          to, the
          implied warranty of merchantability.

         

        For
          a
          period of seven (7) years from the date of original consumer purchase,
          the
          Manufacturer warrants the Room Heater to be free from defects in material
          or
          workmanship, in normal use and service and for a period of four (4) years
          from
          date of original consumer purchase, Manufacturer warrants its products
          for
          mechanical and electrical failures. There is no express warranty on the
          fiberglass rope gasketing, log sets, paint, nickel or gold plated surfaces
          or
          handles.

         

        For
          a
          period of one (1) year from the date of original consumer purchase, the
          Manufacturer warrants Bixby Direct Vent pipe to be free from defects in
          material
          or workmanship. Void if not installed according to the instructions detailed
          in
          the venting section of the User's Manual.

         

        Some
          states mandate a warranty from the installer of two (2) years on workmanship.
          Check your state requirements for your specific rights and coverage. This
          warranty covers defects in materials and workmanship in covered components,
          provided that the product has been installed and operated properly in strict
          accordance with the Manufacturers printed instructions. There is no
          warranty coverage when damage or breakage is due or caused by mishandling,
          freight damage or misuse or unauthorized modification of the structure
          or
          electrical system. This warranty is limited to the Max FireTM Room Heater
          and Bixby Direct Vent only, accessories are not covered. Some states do
          not
          allow the exclusion of limitation of consequential damages, or limitations
          of
          implied warranties. The limitations or exclusions set forth in this warranty
          may
          not apply to you. This warranty gives you specific legal rights and you
          may also
          have other rights, which can vary, from state to state.

         

        IF
          YOU NEED TO EXERCISE THIS WARRANTY

         

        Inspection
          Required
          - Before
          exercising this warranty, a local representative of the Manufacturer must
          inspect the unit to determine if it is defective. If the inspection reveals
          that
          the failure is due to defective material or workmanship and the part is
          covered
          by the condition of this warranty, the Manufacturer will, at its option,
          repair
          or replace the defective part.

         

        Responsibilities
          Of The Manufacturer
          - The
          sole duty of the Manufacturer and liability under this warranty is limited
          to
          the repair or replacement of the covered defective part. If it is determined
          that the defect was caused by the Manufacturer, the Manufacturer will cover
          the
          costs of the shipping and repaired unit or replacement parts to the original
          purchaser.

         

        Responsibility
          Of The Consumer
          - The
          purchaser assumes all costs related to shipping the replacement parts or
          return
          of the unit to the factory for replacement. Removal Or Reinstallation Costs
          Are
          Not Covered By This Warranty. All claims under this warranty must be made
          in
          writing to the Manufacturer. To insure prompt and proper handling of your
          claim,
          you must include the following: a) The name, address, and phone number
          of the
          dealer you purchased your unit from; b) The name, address, and phone number
          of
          the person who originally purchased this unit; c) The date of purchase
          along
          with the model and serial number of the unit; d) a copy of the sales receipt
          from your dealer; e) The nature of the problem and what procedures have
          been
          done to correct the problem.

         

        THIS
          WARRANTY IS NULL AND VOID IF THE ROOM HEATER 

        WAS
          OPERATED WITH IMPROPER FUEL

         

        Manufacturer
          

        Bixby
          Energy Systems, Inc.

        14295
          James Road 

        Rogers,
          Minnesota 55374 

        1-877-500-2800
          

        www.bixbyenergy.com

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        

        BIXBY
          MAXFIRETM
          STOVE 

        OWNER
          LIMITED WARRANTY POLICY

         

        RULES
          OF
          WARRANTY

         

        This
          limited warranty is issued by Bixby Energy, Inc., ("Manufacturer") and
          extends
          only to the original purchaser ("Consumer") of this product.
          This warranty covers defects in materials and workmanship in covered components,
          provided that the product has been installed,
          operated, and maintained properly in strict accordance with the Manufacturers
          printed instructions and excludes any incidental
          and consequential damages connected therewith. There is no warranty coverage
          when purchased through internet sales from
          a
          non-servicing dealer or when damage or breakage is due or caused by mishandling,
          freight damage, misuse, or unauthorized modification
          of the structure or electrical system. This warranty is limited to the
          MaxFireTM
Room Heater only, accessories are not covered. 

         

        For
          the
          warranty to be effective, the warranty card provided with the Room Heater
          must
          be completed and returned to the Manufacturer within 30 days of your purchase.
          Failure to do so will prevent any claims under this warranty.

         

        The
          Manufacturer limits all implied warranties, including but not limited to,
          the
          implied warranty of merchantability or the implied warranty for a particular
          purpose, in duration to:

         

        - For
          a
          period of one (1) year
          from
          the date of original Consumer purchase, the Manufacturer warrants the Room
          Heater steel frame and body panels to be free from defects in material
          or
          workmanship when operated in normal residential use and service.

         

        - For
          a
          period of one (1) year from the date of original Consumer purchase, the
          Manufacturer warrants the Room Heater heat exchanger and the
          electrical/mechanical components from failure when operated in normal
          residential use and service.

         

        There
          are
          no express or implied warranties on: adjustments, tightening, regular
          maintenance, filters, gaskets, glass, log set, paint, plated surfaces,
          handles,
          caulking, Consumer education, software upgrades, upgraded parts, or cleaning.
          Failure due, but not limited to, fire, lightning, acts of God, power failures
          and/or surges, rust, corrosion, improper installation, and improper or
          inadequate venting or ventilation are not covered. The Manufacturer shall
          be
          held free and harmless from liability from damage to property related to
          the
          operation, proper or improper, of the Room Heater.

         

        Some
          states do not allow limitations on how long an implied warranty lasts,
          so the
          above limitation may not apply to you. Some states do not allow the exclusion
          or
          limitation of consequential damages, or limitations of implied warranties.
          The
          limitations or exclusions set forth in this warranty may not apply to you.
          This
          warranty gives you specific legal rights and you may also have other rights,
          which can vary, from state to state.

         

        Some
          states mandate a warranty from the installer of two (2)
          years
          on
          workmanship. Check your state requirements for your specific rights and
          coverage.

         

        IF
          YOU
          NEED TO EXERCISE THIS WARRANTY

         

        Before
          exercising this warranty, the Consumer must cause the local Bixby Dealer
          from
          whom this appliance was purchased to inspect the Room Heater to determine
          if it
          or a part is defective. If the inspection reveals a defect as covered by
          this
          warranty, the Manufacturer will, at its option, repair or replace the Room
          Heater or defective part.

         

        The
          Consumer assumes all costs related to shipping the defective part or Room
          Heater
          to the factory for repair or replacement. Any defective parts not returned
          to
          the Manufacturer will be billed at current MSRP pricing.

         

        The
          sole
          duty and liability under this warranty of the Manufacturer is limited to
          the
          repair or replacement of the covered defective part or Room Heater. Removal
          or
          reinstallation costs are not covered by this warranty. If it is determined
          that
          the Manufacturer caused the defect, the Manufacturer will cover the cost
          of
          shipping the repaired Room Heater or replacement part to the original
          purchaser.

         

        THIS
          WARRANTY IS NULL AND VOID IF THE ROOM HEATER WAS OPERATED 

        WITH
          IMPROPER FUEL OR VENTING AS DEFINED IN THE USER'S MANUAL

        For
          warranty assistance or service, contact your Bixby Dealer.

         

        Manufacturer:
          

        Bixby
          Energy, Inc 

        9300
          75th
          Avenue North, 

        Minneapolis,
          Minnesota 55428

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Company
        Disclosure Schedule: Section
        4.17

      

      Real
        Property

       

      [INTENTIONALLY
        BLANK]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.18

      

      Intellectual
        Property

      

      Section
        4.18(a)

      

      Registered
        patents pending or issued in the U.S. Patent and Trademark Office:

      

        
          	
                  US
                    Patent Number

                	 	
                  Patent
                    Description

                
	 	 	 
	
                  B304001PPA

                	 	
                  Closed
                    Loop Fluidized Bed Flash Gasification System

                
	
                  10/630371

                	 	
                  Apparatus
                    and Method for Delivery of Biomass Fuel

                
	
                  11/049,611
                    

                	 	
                  Biomass
                    Fuel Burning Stove and Method

                
	
                  29/179,835
                    

                	 	
                  Biomass
                    Stove (design)

                
	
                  10/802,463
                    

                	 	
                  Burn
                    Pot for Furnace

                

      

       

      Exclusive
        license for Patent Number 5,445,192 – Method for Delivery of Salt. 

      

      Phase
        One: Bixby’s Confined Gasification Liquefaction Technology (Confined Thermal
        DePolymerization Process)

      

      We
        engaged Industrial Process Solutions, Inc. under a research and development
        contract to design our closed loop fluidized bed gasification system. The
        inventor has applied for a provisional patent which will be converted into
        a
        full patent application once the unit is in production. Under the terms of
        our
        agreement with Industrial Process Solutions, Inc. and the inventor, all patent
        and other intellectual property rights related to Phase I of the Bixby CGL
        Process belong to Bixby both contractually an under the “work-for -hire”
doctrine. The inventor retained the right to repurchase the intellectual
        property rights in the event of our insolvency or bankruptcy. 

      

      Phase
        Two: Bixby’s Confined Liquefaction Technology (Carbon Thermal Refining
        Process)

      

      As
        a
        complement to Phase I of the Bixby CGL Process we entered into an exclusive
        license agreement with TekGar, LLC for the conversion of coal based carbon
        into
        liquid fuels within the United States and its territories. Under the terms
        of
        our agreement with TekGar, LLC the Company will have a right to pursue a
        patent
        or patents on the process, method and/or design of the Phase II Bixby CGL
        Process and own all right title and interest in that patent or patents in
        the
        United States. To date we have not applied for any patents and no assurances
        can
        be made that any will be applied for, or that if applied for, that they would
        be
        granted. Without adequate protection of this intellectual property our business
        position could be severely compromised, resulting in significant losses to
        investors.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.18 (cont’d).

       

      Trademarks

      

      We
        currently maintain trademark rights on MaxFireTM
        and
        MaxYieldTM,
        which
        we regard as a valuable future asset. 

      

      Whenever
        we deem it important for purposes of maintaining competitive advantages,
        we
        require parties with whom we share, or who otherwise are likely to become
        privy
        to, our trade secrets or other confidential information to execute and deliver
        to us confidentiality and/or non-disclosure agreements. Among others, this
        includes employees, consultants and other advisors, each of whom we require
        to
        execute such an agreement upon commencement of their employment, consulting
        or
        advisory relations. These agreements generally provide that all confidential
        information developed or made known to the individual by us during the course
        of
        the individual’s relationship with us is to be kept confidential and not to be
        disclosed to third parties except under specific circumstances, 

       

      Section
        4.18(b)

       

      [INTENTIONALLY
        BLANK]

       

      Section
        4.18(c)

      

      [INTENTIONALLY
        BLANK]

       

      Section
        4.18(d)

      

      [INTENTIONALLY
        BLANK]

       

      Section
        4.18(e)

      

      See
        Section 4.18(a) Phase
        One: Bixby’s Confined Gasification Liquefaction Technology (Confined Thermal
        DePolymerization Process) above.

       

      Section
        4.18(f)

      

      [INTENTIONALLY
        BLANK]

       

      Section
        4.18(g)

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.18 (cont’d).

       

      Section
        4.18(h)

       

      [INTENTIONALLY
        BLANK]

       

      Section
        4.18(j)

      

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.19

      

      Material
        Contracts

      

      
        	 	
                §

              	
                Tek-Gar,
                  LLC
                  (“TekGar”). The Company has entered into agreements with TekGar to provide
                  the Company with technology that will allow it to use coal based
                  activated
                  carbon as a feed stock for the production of diesel and jet fuel.
                  The
                  contracts provide for the issuance of 2,000,000 warrants to purchase
                  the
                  Company’s common stock at a purchase price of $ per share exercisable for
                  a period of 5 years, revenue sharing of 2% of sales of products
                  derived
                  from TekGar Products not to exceed $5,000,000 per year and fees
                  of
                  $1,500,000 payable in thee equal annual installments. In addition
                  the
                  Company agreed to pay an additional $1,000,000 payable out of revenue
                  from
                  the sale of products derived from the TekGar
                  technology.

              

      

       

      
        	 	
                §

              	
                Industrial
                  Process Solutions, Inc.
                  (“IPS”) and Alfred
                  Sherman Aaron
                  (“Aaron”). The Company entered into research and development agreement
                  with IPS and Aaron to develop the Company’s fluidized bed confined thermal
                  depolymerization process, and a supply agreement and compensation
                  agreement with IPS. The aforementioned contracts were entered into
                  effective as of April 21, 2008. The research and development agreement
                  is
                  scheduled to be completed by December 15, 2008 and the other agreements
                  have terms that extend for the life of any patnes granted on the
                  fluidized
                  bed confined thermal depolymerization process. This technology
                  is being
                  designed to allow the Company to convert coal and other feed stocks
                  into
                  activated carbon and gas. Under the research and development contract,
                  IPS
                  will receive a warrant to purchase 500,000 warrants of the Company’s
                  common stock at a purchase price of $2.00 per share exercisable
                  for a
                  period of 5 years. Under the compensation agreement IPS will receive
                  revenue sharing of 2% of sales of products derived from the technology
                  up
                  to a maximum annual payment of $5,000,000. Under the supply agreement
                  IPS
                  will build units on a basis of 125% of the cost of materials and
                  labor.

              

      

      

      
        	 	
                §

              	
                Deloitte
                  Financial Advisory Services, LLP
                  (“Deloitte”) and Green
                  Espel, PLLP
                  (“Green”). The Company was engaged in a dispute with Deloitte and Green
                  over fees that were approximately $1,000,000. This matter was settled
                  for
                  $570,000 on January 31, 2008 and involves a series of payments
                  $110,000 of
                  which have been paid, the balance of which are due in monthly payments
                  over a three-year period.

              

      

      

      
        	 	
                §

              	
                Salo,
                  LLC
                  (“Salo”). The Company entered into a settlement agreement with Salo, on
                  October 8, 2007, a vendor who had provided consulting services
                  to the
                  Company in the amount of approximately $360,000. Pursuant to the
                  Settlement Agreement the Company has agreed to make monthly payments
                  over
                  approximately 5 years.

              

      

      

      
        	 	
                §

              	
                Barnard
                  Dalsin Manufacturing Company
                  (“BDM”). The Company entered into a settlement agreement in March, 2008,
                  to pay $109,650.50 in the form of weekly payments until paid in
                  full.

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.19

       

      
        	 	
                §

              	
                Dadson’s
                  Machining Inc., v. Bixby Energy Systems, Inc.,
                  a
                  former vendor, commenced an action in Hennepin County District
                  Court in
                  the state of Minnesota against the company by service of process
                  in June
                  of 2007. This action was settled by the parties in April of 2008.
                  Under
                  the terms of that agreement, The Company will pay $60,000 to Dadson’s. The
                  Company will make weekly payments to Dadson’s in the amount of $10,000
                  post-marked by each
                  consecutive Friday beginning May 2, 2008 until the last payment
                  is made by
                  June 6, 2008. Dadson’s retains a right of first sale for the Company’s
                  product in Dadson’s inventory until payment is made in full. The
                  settlement provides for a confession of judgment in the amount
                  of
                  $80,000 in favor of Dadson’s less any amounts
                  paid.

              

      

      

      
        	 	
                §

              	
                Notes
                  Payable.
                  The Company has notes payable as part of its capital structure
                  in the form
                  of current and long term debt. See the Financial Statements included
                  as Company
                  Disclosure Schedule Section
                  4.8

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.20

      

      Litigation

      

      
        	 	
                §

              	
                Bixby
                  Energy Systems, Inc., Robert Walker and Dennis DeSender v. Alexander
                  Boylan.
                  The plaintiffs commenced an action in Hennepin County District
                  Court in
                  the state of Minnesota against Mr. Boylan by service of process
                  in June of
                  2007. This is a claim against a former employee for tort claims
                  based upon
                  statements and emails the former employee sent to the Company’s
                  shareholders. Although the parties have had settlement discussions,
                  to
                  date they have not been able to reach an agreement. The Company
                  is
                  planning to amend its complaint to add another related
                  individual.

              

      

      

      
        	 	
                §

              	
                Phoenix
                  America, Inc. v Bixby Energy Systems, Inc.,
                  a
                  former vendor brought suit against the Company, in the Superior
                  Court in
                  Allen County in the State of Indiana Cause No.
                  02D01-0704-CC-489
                  in
                  April of 2007 and proceeded with out notice after an extension
                  to answer
                  had been granted. The judgment, for which vacation has been sought,
                  was in
                  the amount of approximately
                  $173,000.

              

      

      

      
        	 	
                §

              	
                Country
                  Side Stove & Chimney, Inc. d/b/a Empire Distributing v Bixby Energy
                  Systems, Inc.,
                  Plaintiff, a former distributor of the Company’s products, brought suit
                  against the Company in the Supreme Court in Erie County in the
                  State of
                  New York Index
                  No. 2007 006597 in
                  July of 2007. Company distributor claims that the Company’s freestanding
                  stoves are defective and sued to rescind its purchase of approximately
                  100
                  stoves. Empire continues to sell
                  stoves.

              

      

      

      
        	 	
                §

              	
                Dadson’s
                  Machining Inc., v. Bixby Energy Systems, Inc.,
                  a
                  former vendor, commenced an action in Hennepin County District
                  Court in
                  the state of Minnesota against the company by service of process
                  in June
                  of 2007. This action was settled by the parties in April of 2008.
                  Under
                  the terms of that agreement. The Company will
                  pay $60,000 to Dadson’s. The Company will make weekly payments to Dadson’s
                  in the amount of $10,000 post-marked by each consecutive Friday
                  beginning
                  May 2, 2008 until the last payment is made by June 6, 2008. Dadson’s
                  retains a right of first sale for the Company’s product in Dadson’s
                  inventory until payment is made in full. The settlement provides
                  for a
                  confession of judgment in the amount of $80,000 in favor of Dadson’s less
                  any amounts paid.

              

      

      

      
        	 	
                §

              	
                NRI
                  Electronics, Inc. is a vendor of the Company who the Company owed
                  payment
                  for past deliveries. NRI brought suit against the Company for payment
                  on
                  product the Company had received and for what it claims are open
                  purchase
                  orders for approximately $100,000. The Company has been paying
                  approximately $6,000 per month.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.21

      

      Employee
        Benefit Plans

      

      Section
        4.21(a)

       

      Through
        a
        co-employment arrangement with Administaff, a Professional Employment
        Organization (PEO), the Company offers its employees the following
        benefits:

      

      
        	 	
                -

              	
                Health
                  Insurance (United Health Care)

              

      

      
        	 	
                -

              	
                Dental
                  Insurance (United Health Care)

              

      

      
        	 	
                -

              	
                Vision
                  Care (VSP)

              

      

      
        	 	
                -

              	
                Health
                  Care Flexible Spending Account

              

      

      

      Administaff
        is responsible for the maintenance of the benefit plans and all necessary
        reporting.

       

      Section
        4.21(r) 

       

      [INTENTIONALLY
        BLANK]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.23

      

      Environmental

       

      Section
        4.23(a)

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.24

      

      Related
        Party Transactions

       

      
        	 	
                §

              	
                Robert
                  Walker, the Company’s President and Chief Executive Officer, loaned the
                  Company approximately $65,000 in early 2007 in exchange for which
                  he was
                  granted a warrant to purchase 65,000 shares of the company’s common stock
                  at a purchase price of $2.00 per share, exercisable for a period
                  of 5
                  years from April 11, 2007.

              

      

       

      
        	 	
                §

              	
                Ronald
                  Kinner, the Company’s Treasurer and Chief Financial Officer, loaned the
                  Company approximately $50,000 in the fall of 2007 in exchange for
                  which he
                  was granted a warrant to purchase 100,000 shares of the company’s common
                  stock at a purchase price of $2.00 per share, exercisable for a
                  period of
                  5 years from the date of the loan along with simple interest of
                  12%.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.25

      

      Insurance

       

      
        Bixby
          Energy Systems

        Business
          Insurance Summary

        

        Agent
          Information: Hayes
          Companies, 80 South 8th Street, Suite 700, Minneapolis, MN 55402

        

        
          	
                   

                	 	
                  Property

                	
                   

                	
                  General Liability

                	
                   

                	
                  Auto Liability

                	
                   

                	
                  Umbrella

                	
                   

                	
                  Directors & Officers / Employment

                  Practice Liability

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Carrier

                	 	
                  United
                    Fire & Casualty Co.

                	 	
                  Chubb
                    Custom Insurance Company

                	 	
                  United
                    Fire & Casualty Company

                	 	
                  RSUI
                    Indemnity Company

                	 	
                  American
                    International Specialty Lines (AIG)

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Policy
                    Number

                	 	
                  60341231

                	 	
                  79544134

                	 	
                  60341231

                	 	
                  NHA041965

                	 	
                  053-06-91

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Effective
                    Dates

                	 	
                  11/1/07-11/1/08

                	 	
                  11/1/07-11/1/08

                	 	
                  11/1/07-11/1/08

                	 	
                  11/1/07-11/1/08

                	 	
                  10/12/07
                    - 10/12/08

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Named
                    Insured

                	 	
                  Bixby
                    Energy Systems, Inc. SS Acquisitions dba Bixby Delivery Services
                    

                	 	
                  Bixby
                    Energy Systems, Inc. SS Acquisitions dba Bixby Delivery Services
                    

                	 	
                  Bixby
                    Energy Systems, Inc. SS Acquisitions dba Bixby Delivery Services
                    

                	 	
                  Bixby
                    Energy Systems, Inc. SS Acquisitions dba Bixby Delivery Services
                    

                	 	
                  Bixby
                    Energy Systems, Inc.

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Scope

                	 	
                  Special
                    Form

                	 	
                  Occurrence
                    Form

                	 	 	 	
                  Occurrence
                    Form

                	 	
                  Claims
                    Made Coverage

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Amount

                	 	
                  Total
                    Insured Value -3,360,500

                	 	
                  General
                    Aggregate - 2,000,000

                  Products
                    or Completed Ops Agg.-2,000,000

                  Personal/Advertising
                    Injury Per Occ.-1,000,000

                  Per
                    Occurrence - 1,000,000

                  Fire
                    Damage Legal Liability - 100,000

                  Employee
                    Benefits E&O Liability - 1,000,000

                  Employee
                    Benefits E&O Liab. Agg.-1,000,000

                	 	
                  Liability
                    - 1,000,000

                  Uninsured/Underinsured-1,000,000

                  Hired
                    & Non-Owned - 1,000,000

                  Personal
                    Injury Protection - Basic

                	 	
                  General
                    Aggregate - 1,000,000

                  Each
                    Occurence.-1,000,000

                  Underlying
                    Limits

                  Each
                    Occurrence - 1,000,000

                  General
                    Aggregate - 2,000,000

                  Products/Completed
                    Ops Agg-2,000,000

                  Personal/Advertising
                    Injury - 1,000,000

                  Automobile
                    Per Occurrence - 1,000,000

                  Employers
                    Liab. Each Accident -1,000,000

                  Employers
                    Liab. Each Employee-1,000,000

                  Employers
                    Liability Policy Limit -1,000,000

                  Employee
                    Benefits Liab. Occ.-1,000,000

                  Employee
                    Benefits Liability Agg-1,000,000

                	 	
                  Shared
                    Directors & Officers and Employment Practices Liability: 2,000,000
                    Shared Limit

                
	 	 	 	 	 	 	 	 	 	 	 
	
                  Ded.

                	 	
                  $1,000
                    24 Hours BI/EE

                	 	
                  $5,000
                    Employee Benefits Retro Date - 11/1/07

                	 	
                  Comprehensive
                    & Collision $500

                	 	 	 	
                  $-0-
                    Non-Indemnifiable D&O Claims $-0- Non-Indemnifiable D&O Claims
                    $35,000 Company D&O Claims $5,000 Employment Practices
                    Claims

                

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company
        Disclosure Schedule: Section
        4.26

      

      Absence
        of Certain Changes or Events

       

      
        	 	
                §

              	
                Since
                  May 26, 2007, the company has granted general salary increases
                  in the
                  Ordinary Course of Business. 

              

      

      

      
        	 	
                §

              	
                In
                  June, 2007, the Board of Directors promoted Ronald Kinner to the
                  position
                  of Chief Financial Officer. A salary adjustment was made at that
                  time to
                  compensate for these additional duties.

              

      

      

      
        	 	
                §

              	
                In
                  April, 2008, the Board approved additional compensation for Robert
                  Walker,
                  CEO of the company. This included a bonus to correct an error in
                  the
                  compensation change made in April, 2007, and the approval of an
                  additional
                  grant of options subject to certain
                  attainments.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        4.33

      

      Change
        in Control

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Company
        Disclosure Schedule: Section
        6.1

      

      Conduct
        of Business by the Company Pending the Merger

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      Parent
        Disclosure Schedule: Section
        5.4

      

      Capitalization

       

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Parent
        Disclosure Schedule: Section
        5.6

      

      No
        Conflict; Required Filings and Consents

      

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Parent
        Disclosure Schedule: Section
        5.8

      

      Taxes

      

      1.
        Federal (Internal Revenue Service)

      

      2.
        New
        York State 

      

      3.
        New
        York City

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Parent
        Disclosure Schedule: Section
        5.12

      

      Absence
        of Certain Changes or Events

      

      [INTENTIONALLY
        BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Parent
        Disclosure Schedule: Section
        6.2

      

      Conduct
        of Business by the Parent and Merger Sub

      

      [INTENTIONALLY
        BLANK]

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