Document:

Unassociated Document

    EXHIBIT
      10.1

     

    SAMDREW
      IV, INC.

    

    

    June
      20,
      2006

    

    Youssef
      M
      Habib, CEO

    Illuminex
      Corporation

    1064
      New
      Holland Ave.

    Lancaster,
      PA 17601

    

    
      	
            	Re:	
              Letter
                of Intent for Reverse
                Merger

            

    

    

    Dear
      Mr.
      Habib:

    

    Further
      to our recent discussions, this letter of intent summarizes the terms upon
      which
      Samdrew IV, Inc. (“Samdrew”), a Delaware corporation, intends to combine with
      Illuminex Corporation (“Illuminex”), a Delaware corporation, either through a
      merger between Illuminex and a wholly-owned subsidiary of Samdrew, or an
      exchange of shares of stock of Illuminex for shares of common stock, par value
      $.0001 per share (“Common Stock”) of Samdrew (the “Merger”). Upon completion of
      the Merger, the surviving corporation shall be called “Illuminex Corporation”
(the “Surviving Corporation”). The parties intend to begin preparation of
      agreements necessary for the Merger (“Definitive Agreements”) in accordance with
      the following terms:

    

    
      	 	
              1.

            	
              Pre-Merger
                Capitalization. At
                the closing of the Merger (“Closing”), an aggregate of 3,400,000 shares of
                Common Stock of the Surviving Corporation (“Common Stock”) will be issued
                to the current shareholders of Illuminex, and 600,000 shares (the
“Samdrew
                Founders Shares”) of Common Stock shall continue to be held by the current
                shareholders of Samdrew (the “Founders”), prior to the issuance of
                additional shares or other securities to be issued in connection
                with the
                Financing (as defined below). As a result, a total of 4,000,000 shares
                of
                Common Stock will be outstanding upon Closing of the Merger, and
                prior to
                the Financing. 

            

    

    

    
      	 	
              2.

            	
              Private
                Placement. A
                condition to Closing will be the completion of a private placement
                and
                sale of Common Stock or other securities pursuant to which the Surviving
                Corporation or Samdrew as the parent thereof upon Closing of the
                Merger
                receives gross proceeds of at least $7 million on terms reasonably
                acceptable to each of Samdrew and Illuminex (the
                “Financing”).

            

    

    

    
      	 	
              3.

            	
              Registration.
                After
                the Closing, the Surviving Corporation, at its cost and expense,
                will
                cause Samdrew, as its parent holding company following the Closing
                of the
                Merger, to seek to register for resale all of the Samdrew Founder
                Shares.
                The Surviving Corporation shall use its commercially reasonable efforts
                to
                work with and cooperate with the Founders to file a registration
                statement
                within 60 days after Closing (the “Filing Deadline”). If the Surviving
                Corporation fails to file a registration statement on or before the
                Filing
                Deadline, then the Founders shall be entitled to receive from the
                Samdrew,
                as the parent of the Surviving Corporation, additional shares of
                Common
                Stock in an amount equal to 1.5% of the value of the Samdrew Founders
                Shares on the date of the Closing (“Closing Date Value”) for each full
                month that the Surviving Corporation fails to meet the Filing Deadline
                (“Penalty Shares”). The Surviving Corporation and the Founders shall use
                their commercially efforts to have the
                registration

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    statement
      become effective within 150 days after Closing. If the Surviving Corporation
      does not cause Samdrew to bring the Registration Statement to effectiveness
      within such 150 day period, the holders of Samdrew Founder Shares will have
      the
      option either to (i) continue to receive Penalty Shares in the manner set forth
      above or (ii) receive a penalty equal to 1.5% per month of the Closing Date
      Value in the form of cash.

    

    
      	 	
              4.

            	
              Additional
                Conditions. All
                necessary consents of third parties will be obtained prior to Closing.
                Definitive Agreements will contain customary representations, warranties
                and covenants. The board of directors and, if required by Delaware
                law,
                shareholders of Samdrew, the board of directors and shareholders
                of any
                entity merging with Illuminex (such as a subsidiary of Samdrew established
                for that purpose) and the board of directors and shareholders of
                Illuminex
                shall have approved the Definitive Agreements. Closing will occur
                as soon
                as practicable, but the parties desire Closing be completed no later
                than
                October 31, 2006.

            

    

    

    
      	 	
              5.

            	
              No-Shop.
                In consideration of the expense and effort that will be expended
                by
                Samdrew in due diligence and the negotiation of the Definitive Agreements,
                neither Illuminex nor its affiliates will, directly or indirectly,
                solicit
                or entertain offers from, negotiate with or in any manner encourage,
                discuss, accept or consider any proposal of any other person or entity
                relating to (a) a transaction involving a merger into public “shell”
                corporation, or (b) any other potential merger, acquisition or sale
                of all
                or substantially all of the assets or capital stock of Illuminex
                until the
                earlier to occur of (a) the Closing, (b) the date on which Samdrew
                and
                Illuminex mutually agree in writing to discontinue negotiations regarding
                such a transaction on the terms set forth herein, or (c) October
                31, 2006.
                For clarification purposes, the foregoing provisions shall not prohibit
                or
                restrict Illuminex from seeking alternative forms of private financing,
                including without limitation, traditional venture capital
                financing.

            

    

    

    
      	 	
              6.

            	
              Definitive
                Agreements;
                Consents.
                Samdrew and Illuminex shall negotiate in good faith to arrive at
                mutually
                acceptable Definitive Agreements for approval, execution and delivery
                on
                the earliest practicable date. The parties shall cooperate with each
                other
                and proceed, as promptly as is reasonably practicable, to seek to
                obtain
                all necessary consents and approvals, if any, from third parties
                or
                governmental entities, and to endeavor to comply with all other legal
                or
                contractual requirements for, or preconditions to, the execution
                and
                consummation of the Definitive
                Agreements.

            

    

    

    
      	 	
              7.

            	
              Confidentiality.
                The parties each covenant and agree that, except as consented to
                by the
                parties, neither they nor any of their respective officers, directors,
                employees, agents or representatives will disclose any confidential
                information of the other to any third party, except (i) as required
                by law
                or regulation (including applicable securities regulations), or (ii)
                to a
                party’s accountants, lawyers, employees, advisors and representatives in
                connection with evaluating whether to proceed with negotiating and
                closing
                the transactions contemplated herein or (iii) in connection with
                obtaining
                consents required by the Definitive
                Agreements.

            

    

    

    
      	 	
              8.

            	
              Costs.
                Each party shall be responsible for and bear all of their own costs
                and
                expenses incurred in connection with the proposed transaction, except
                that
                Illuminex shall reimburse Samdrew for its counsel fees, up to $75,000,
                but
                only upon a Closing.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
            	9.	
              No
                Material Changes in Business.
                From and after the date of this letter of intent until the earliest
                to
                occur of the termination of this letter of intent, October 31, 2006
                or the
                date of execution of the Definitive Agreements, Illuminex will use
                commercially reasonable efforts to maintain the business in accordance
                with its customary practices and otherwise to conduct its business
                in the
                ordinary course in the manner in which it has heretofore been conducted
                and to preserve its business relationships with customers, suppliers
                and
                content providers. During such time, Illuminex shall notify Samdrew
                of any
                action outside the ordinary course of business or any commitment
                involving
                more than $50,000.

            

    

    

    
      	 	
              10.

            	
              Binding
                Nature of Letter.
                Sections 1-4 of this letter of intent (the “Non-Binding Provisions”)
                reflect our mutual understanding of the matters described in them,
                but
                each party acknowledges that the Nonbinding Provisions are not intended
                to
                create or constitute any legally binding obligation between the parties.
                No party to this letter of intent shall have any liability to any
                other
                party based upon, arising from, or relating to the Nonbinding Provisions.
                Sections 5-11 of this letter of intent (the “Binding Provisions”) shall
                constitute the legally binding and enforceable agreement of the parties
                (in recognition of the significant costs to be borne by the parties
                in
                pursuing the transactions set forth herein). The Binding Provisions
                (along
                with the rest of this letter of intent) may be terminated (A) by
                mutual
                written consent of both parties; or (B) upon written notice by either
                party to the other if the Definitive Agreements have not been executed
                by
                October 31, 2006, provided,
                however,
                that the termination of the Binding Provisions shall not affect the
                liability for breach of any of the Binding Provisions prior to the
                termination.

            

    

    

    
      	 	
              11.

            	
              Counterparts,
                etc.
                This letter of intent may be executed in separate counterparts, none
                of
                which need contain all the signatures of all parties, each of which
                shall
                be deemed to be an original, and all of which taken together constitute
                one and the same instrument. The Binding Provisions may only be amended
                in
                writing signed by both parties. The Binding Provisions reflect the
                entire
                agreement among the parties with respect to the subject matter thereof.
                This letter of intent may not be assigned. Telecopied or email (via
                PDF)
                signatures shall be deemed to have the same effect as an
                original.

            

    

    

    If
      you
      are in agreement with the foregoing as a basis for negotiating Definitive
      Agreements between us with respect to the matters set forth herein, please
      execute the attached and return it to me.

    

    Sincerely,

     

    SAMDREW
      IV, INC.

     

     

    By: 
      /s/
      David
      N. Feldman 
      
        

      

    

    David
      N.
      Feldman, President

    

    ACCEPTED
      AND AGREED:

    

    ILLUMINEX
      CORPORATION

    

    

    

    By: 
      /s/
      Youssef M Habib 
      
        

      

      Youssef
        M
        Habib, CEOUnassociated Document

     

    PURCHASE
      AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT
      (the
“Agreement”) is
      made and entered into as of September 30, 2006, by and among Emerge
      Capital Corp.,
      a
      Delaware corporation (the “Purchaser”),
      Kipling
      Holdings, Inc.,
      a
      Delaware corporation (the “Company”)
      and
Timothy
      J. Connolly, an
      individual and the holder of one hundred percent (100%) of the capital stock
      of
      the Company (the “Selling
      Shareholder”).

     

    RECITALS:

     

    WHEREAS,
      the
      Selling Shareholder owns one hundred percent (100%) of the total issued and
      outstanding capital stock of the Company, which such issued and outstanding
      capital stock consists of One Million (1,000,000) shares of common stock
      (“Common
      Stock”),
      par
      value $0.001 per share (the Selling Shareholder’s Common Stock being sold
      pursuant to the terms and conditions herein are referred to as the “Shares”);
      and

     

     

    WHEREAS,
      as of
      the date of this Agreement, the Selling Shareholder beneficially owns 82,279
      shares of the Purchaser’s Series B preferred stock, par value $0.01 per share
      (the “Emerge
      Series B Preferred”),
      of
      which 69,935 shares are held directly by the Selling Shareholder, 12,344 shares
      are held by the Selling Shareholder’s spouse (together with the Selling
      Shareholder, the “Emerge
      Shareholders”)
      and
      One Hundred Thousand (100,000) shares of Emerge Series B Preferred are currently
      issued and outstanding; and

     

    WHEREAS,
      collectively, all of the shares of Emerge Series B Preferred are convertible,
      at
      the option of the holders of a majority of the shares of Emerge Series B
      Preferred at any time after the date of issuance of such shares into ninety-five
      percent (95%) of the outstanding capital stock of the Purchaser as of August
      31,
      2005, calculated on a fully diluted basis and after giving effect to such
      conversion (the “Existing
      Anti-Dilution Rights”);
      and

     

    WHEREAS,
      the
      Selling Shareholder desires to sell to the Purchaser, and the Purchaser desires
      to purchase from the Selling Shareholder, the Shares in exchange for (a) the
      Purchaser’s assumption of all of the liabilities of the Company, (b) the
      Purchaser expanding the Existing Anti-Dilution Rights in favor of the Selling
      Shareholder and (c) a nominal cash amount equal to the direct costs incurred
      by
      the Selling Shareholder in connection with this Agreement, on the terms and
      conditions set forth herein. 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements, covenants and premises set forth herein
      for certain other good and valuable consideration, the receipt and adequacy
      which are hereby acknowledged, the parties hereto, intending to be legally
      bound, hereby agree as follows:

    

    AGREEMENT:

    

    
      	
              1.

            	
              STOCK
                PURCHASE, PURCHASE PRICE AND RELATED TRANSACTIONS.

            

    

     

    1.1. Purchase
      Price and Sale.
      The Purchaser
      shall acquire from the Selling Shareholder, and the Selling Shareholder shall
      sell to the Purchaser, the Shares, which such Shares equal one hundred percent
      (100%) of the total issued and outstanding capital stock of the Company in
      exchange for the following consideration (collectively, the “Purchase
      Price”):
      (a)
      the Purchaser’s assumption of all of the liabilities of the Company, including,
      without limitation, those certain obligations of the Company under the
      Transaction Documents set forth in Item 3.2 of the Disclosure Schedule attached
      hereto (collectively, the “Liabilities”),
      (b)
      those certain Additional Anti-Dilution Rights set forth in Section 1.2 herein
      below and (c) all legal and other costs and expenses incurred by the Selling
      Shareholder in connection with this Agreement and the transactions contemplated
      hereby. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2. Additional
      Anti-Dilution Rights.
      As
      partial consideration for the acquisition by the Purchaser of all of the
      outstanding capital stock of the Company in accordance with Section 1.1(b)
      above, within five (5) business days following the Closing Date (as defined
      below), the Selling Shareholder shall relinquish all Existing Anti-Dilution
      Rights by delivering to the Purchaser those shares of Emerge Series B Preferred
      held by the Emerge Shareholders and, in exchange therefore, the Purchaser shall
      issue and deliver to the Emerge Shareholders, in the denominations set forth
      opposite each Emerge Shareholder’s name on Schedule
      A
      attached
      hereto, shares of its convertible Series D preferred stock, par value $0.01
      per
      share (the “Emerge
      Series D Preferred”).
      The
      Emerge Series D Preferred shares will have substantially the same powers,
      designations, preferences and relative, participating, optional and other
      special rights as the Emerge Series B Preferred except that holders of Emerge
      Series D Preferred will receive those additional anti-dilution rights (the
      “Additional
      Anti-Dilution Rights”)
      set
      forth in Section 4 of that certain Certificate of Designation of Emerge Series
      D
      Preferred Stock (the “Certificate
      of Designation”)
      in the
      form attached hereto as Exhibit
      A.
      Upon
      the satisfaction of those obligations set forth in Section 1.4.4 (a) and (b)
      herein the Emerge Series B Preferred shall be cancelled and be of no further
      force or effect. 

     

    1.3. Termination
      of Additional Anti-Dilution Rights.
      The
      Additional Anti-Dilution Rights shall terminate in accordance with the terms
      and
      conditions set forth in the Certificate of Designation.

     

    1.4. Closing
      and Closing Date. 

     

    1.4.1. The
      closing shall occur simultaneously with the execution of this Agreement (the
      “Closing”).
      The
      date of Closing is referred to herein as the “Closing
      Date”.
      

     

    1.4.2. At
      the
      Closing: (a) the Selling Shareholder shall deliver to the Purchaser all original
      stock certificates representing the Shares, together with stock powers duly
      executed in blank and (b) the Company shall become a one hundred percent (100%)
      wholly-owned subsidiary of the Purchaser. 

     

    1.4.3. Within
      five (5) days following the execution of this Agreement: (a) the Purchaser
      shall
      file with the Secretary of State of the State of Delaware the Certificate of
      Designation and receive confirmation from the State of the effectiveness of
      such
      Certificate of Designation.

     

    1.4.4. Within
      two (2) business days following the date upon which the Purchaser receives
      confirmation from the State of Delaware of the effectiveness of the Certificate
      of Designation: (a) the Purchaser shall deliver to the Selling Shareholder
      original stock certificates representing the Emerge Series D Preferred in the
      denominations set forth opposite each Emerge Shareholder’s name on Schedule
      A
      attached
      hereto and (b) the Selling Shareholder shall deliver to the Purchaser all
      original stock certificates representing the Emerge Series B Preferred for
      cancellation in accordance with Section 1.2 above.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              2.

            	
              ADDITIONAL
                AGREEMENTS.

            

    

     

    2.1. Access
      and Inspection.
      The
      Selling Shareholder has allowed the Purchaser and its authorized representatives
      full access to all of the properties, books, contracts, commitments and records
      of the Company, including, without limitation, the Transaction Documents set
      forth in Item 3.2 of the Disclosure Schedule attached hereto, for the purpose
      of
      making such investigations as the Purchaser has reasonably requested in
      connection with the transactions contemplated hereby.

     

    2.2. Confidential
      Treatment of Information.
      From and
      after the date hereof, the parties hereto shall and shall cause their
      representatives to hold in confidence this Agreement (including the
      Schedules hereto), all matters relating hereto and all data and information
      obtained with respect to the other parties or their business, except such data
      or information as is published or is a matter of public record, or as compelled
      by legal process.

     

    2.3. Public
      Announcements.
      The
      parties will consult with each other before issuing any press releases or
      otherwise making any public statement with respect to this Agreement or any
      of
      the transactions contemplated hereby and no party will issue any such press
      release or make any such public statement without the prior written consent
      of
      the other parties, except as may be required by law or by the rules and
      regulations of any governmental authority or securities exchange.

     

    2.4. Additional
      Documents.
      The
      parties hereto shall deliver any and all other instruments or documents required
      to be delivered pursuant to, or necessary or proper in order to give effect
      to,
      the provisions of this Agreement, including, without limitation, all necessary
      stock powers and such other instruments of transfer as may be necessary or
      desirable to transfer ownership of the shares to the Purchaser and to consummate
      the transactions contemplated by this Agreement. 

     

    
      	
              3.

            	
              REPRESENTATIONS,
                COVENANTS AND WARRANTIES OF SELLING SHAREHOLDER AND
                THE
                COMPANY.

            

    

     

    To
      further induce the Purchaser to enter into this Agreement and to consummate
      the
      transactions contemplated hereby, the Selling Shareholder and the Company each
      hereby jointly and severally represent and warrant to and covenant with the
      Purchaser as follows: 

     

    3.1. Organization
      and Qualification; Absence of Subsidiaries.
      The Company
      is a corporation duly organized and validly existing and in good standing under
      the laws of the State of Delaware and has the requisite power and authority
      to
      own, lease and operate its properties and to carry on its business as it is
      currently being conducted. the Company is duly qualified or licensed 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 that would not, individually or in the aggregate, have
      a
      material adverse effect on the business, properties, assets, financial
      condition, prospects or future business of the Company. the Company does not
      have any subsidiaries nor an equity interest in any partnerships or joint
      venture arrangements or other business entity.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.2. Shares;
      Capitalization.
      The
      authorized capital stock of the Company consists of (a) Two Million (2,000,000)
      shares of Common Stock, par value $0.001 per share, of which One Million
      (1,000,000) shares are issued and outstanding and Five Hundred Thousand
      (500,000) shares are held in escrow pursuant to that certain Escrow Shares
      Escrow Agreement, date December 2, 2005 by and among the Company, Highgate
      House
      Funds, Ltd. and Gottbetter & Partners, LLP and (b) One Hundred Thousand
      (100,000) shares of Series A preferred stock, par value $0.001 per share, of
      which zero (0) shares are issued and outstanding. Zero (0) shares are held
      in
      the Company’s treasury. All Shares of Common Stock are owned of record, legally
      and beneficially by the Selling Shareholder. The Shares are free and clear
      of
      any and all security interests, encumbrances, and rights of any kind or nature
      whatsoever (collectively, “Encumbrances”),
      and
      upon delivery of the Shares hereunder, the Purchaser will acquire title thereto,
      free and clear of any and all Encumbrances. Other than voting rights, redemption
      rights and such other rights conferred by the Company’s charter documents, by
      applicable Delaware statutes and as disclosed in Item 3.2 of the Disclosure
      Schedule attached hereto, there exist no Securities Rights (as defined
      herein) with respect to the Company’s Common Stock. All rights and powers
      to vote the Shares are held exclusively by the Selling Shareholder. All of
      the
      Shares are validly issued, fully paid and nonassessable, were not issued in
      violation of the terms of any agreement or other understanding, and were issued
      in compliance with all applicable federal and state securities or “blue
      sky”
laws
      and regulations. The certificates representing the Shares to be delivered to
      the
      Purchaser at the Closing are, and the signatures and endorsements thereof or
      stock powers relating thereto will be, valid and genuine. For the purposes
      of
      this section, “Securities
      Rights”
means,
      with respect to the Company’s Common Stock (whether issued or unissued), any
      other securities convertible into or exchangeable for shares of Common Stock,
      and includes all written or unwritten contractual rights relating to the
      issuance, sale, assignment, transfer, purchase, redemption, conversion,
      exchange, registration or voting of the Common Stock and all rights conferred
      by
      the Company’s governing documents and by any applicable agreement. 

     

    3.3. Liabilities
      and Obligations.
      Except
      as set forth in Item 3.3 of the Disclosure Schedule attached hereto, the Company
      has no debt, obligation or liability, absolute, fixed, contingent or otherwise,
      of any nature whatsoever, whether due or to become due, including any unasserted
      claim, whether incurred directly or by any predecessor thereto, and whether
      arising out of any act, omission, transaction, circumstance, sale of goods
      or
      services, state of facts or other condition.

     

    3.4. Certificate
      of Incorporation and ByLaws.
      The
      Company has heretofore made available to the Purchaser a complete and correct
      copy of the Certificate of Incorporation and the Bylaws of the Company Such
      Certificate of Incorporation and Bylaws are in full force and
      effect.

     

    3.5. Financial
      Statements.
      The
      Company has delivered to the Purchaser prior to Closing (a) the audited balance
      sheet and supporting documents of the Company dated as of December 31, 2005
      and
      (b) the unaudited balance sheet and supporting documents of the Company dated
      as
      of June 30, 2006 (together, the “Company
      Financial Statements”).
      To
      the Selling Shareholder’s knowledge, all of the Company Financial Statements are
      accurate and complete in all material respects, and the dollar amount of each
      line item in the Company Financial Statements is accurate in all material
      respects.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.6. Absence
      of Changes.
      Since
      June 30, 2006: (a) there has not been any material adverse change in the
      Company’s business, condition, Assets, Liabilities, operations, financial
      performance, net income or prospects (or in any aspect or portion thereof),
      and
      no event has occurred that might have a material adverse effect on the Company’s
      business, condition, Assets, Liabilities, operations, financial performance,
      net
      income or prospects (or in any aspect or portion thereof, (b) the Company has
      not changed any of its methods of accounting or accounting practices in any
      respect and (c) the Company has not entered into any transaction or taken any
      other action outside of the ordinary course of business of the Company.

     

    3.7. Title
      to Assets.
      The
      Company owns, leases or has the right to use all the properties and assets
      used
      in the conduct of its business or otherwise owned, leased, or used by the
      Company and, with respect to contract rights, is a party to and enjoys the
      right
      to the benefits of all contracts, agreements and other arrangements used or
      intended to be used by the Company or in or relating to the conduct of its
      business (all such properties, assets and contract rights being the
“Assets”).
      The
      Company has good and marketable title to, or, in the case of any leased or
      subleased Assets, valid and subsisting leasehold interests in, all the Assets,
      free and clear of all Encumbrances.

     

    3.8. Absence
      of Litigation.
      There is
      no legal or administrative action or proceeding pending or, to the knowledge
      of
      the Selling Shareholder or the Company after reasonable investigation,
      threatened against the Company or any property or Asset of the
      Company.

     

    3.9. Permits
      and Licenses; Compliance.
      To the
      best knowledge of the Selling Shareholder and the Company, the Company is in
      possession of all permits and licenses necessary for the conduct of its business
      and, as of the date hereof, no suspension or cancellation of any such permits
      or
      licenses is pending or, to the knowledge of the Selling Shareholder and the
      Company after reasonable investigation, threatened.

     

    3.10. Authority
      Relative to This Agreement.
      The
      Selling Shareholder and the Company have all necessary power and authority
      to
      execute and deliver this Agreement, to perform its obligations hereunder and
      to
      consummate the transactions contemplated by this Agreement. The Selling
      Shareholder and the Company have full right and capacity to enter into this
      Agreement and to carry out his/its obligations hereunder. The execution and
      delivery of this Agreement by the Selling Shareholder and the Company, the
      performance by the Selling Shareholder and the Company of their obligations
      hereunder and the consummation by the Company of the transactions contemplated
      by this Agreement have been duly authorized by all necessary action on the
      part
      of the Selling Shareholder and the Company as are necessary to authorize this
      Agreement or to consummate the transactions contemplated by this Agreement.
      This
      Agreement has been duly and validly executed and delivered by the Selling
      Shareholder and the Company and constitutes the legal, valid and binding
      obligations of the Selling Shareholder and the Company, enforceable against
      the
      Selling Shareholder and the Company in accordance with its terms, except as
      the
      enforceability thereof may be limited by bankruptcy, insolvency, reorganization
      or other similar laws of general application affecting the enforcement of
      creditors’ rights generally.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    3.11. Execution;
      No Inconsistent Agreements; Etc.
      Except
      as set forth in Item 3.11 of the Disclosure Schedule attached hereto, the
      execution and delivery of this Agreement by the Selling Shareholder and the
      Company does not, and the consummation of the transactions contemplated hereby
      will not, constitute a breach or violation of the Certificate of Incorporation
      or Bylaws of the Company, or a default under any of the terms, conditions or
      provisions of (or an act or omission that would give rise to any right of
      termination, cancellation or acceleration under) any material note, bond,
      mortgage, lease, indenture, agreement or obligation to which the Company is
      a
      party, pursuant to which the Company otherwise receives benefits, or to which
      any of the properties of the Company is subject.

     

    3.12. Corporate
      Records.
      The
      statutory records, including the stock register and minute books of the Company,
      fully reflect all issuances, transfers and redemptions of its capital stock,
      correctly show and will correctly show the total number of shares of its capital
      stock issued and outstanding on the date hereof and on the Closing Date, the
      charter or other organizational documents and all amendments thereto, and its
      Bylaws as amended and currently in force.

     

    3.13. Compliance
      With Law.
      The
      business and activities of the Company have at all times been conducted in
      accordance with its Certificate of Incorporation and Bylaws and, to the best
      knowledge of the Selling Shareholder and the Company, any applicable law,
      regulation, ordinance, order, license, permit, rule, injunction or other
      restriction or ruling of any court or administrative or governmental agency,
      ministry or body.

     

    3.14. Contingencies.
      There
      are no actions, suits, claims or proceedings pending, or, to the knowledge
      of
      the Selling Shareholder and the Company after reasonable investigation,
      threatened against, by or affecting the Company in any court or before any
      arbitrator or governmental agency. To the knowledge of the Selling Shareholder
      and the Company after reasonable investigation, there is no valid basis upon
      which any such action, suit, claim, or proceeding may be commenced or asserted
      against the Company. There are no unsatisfied judgments against the Company
      and
      no consent decrees or similar agreements to which the Company is
      subject.

     

    3.15. Taxes.
      The
      Company has (a) filed all Tax (as defined herein) returns required to
      be filed by it prior to the date of this Agreement, (b) paid or accrued all
      Taxes shown to be due on such returns and paid all applicable ad
      valorem
      and
      value added Taxes as are due, and (c) paid or accrued all Taxes for which a
      notice of assessment or collection has been received. The Company has not
      received from any governmental authority any written notice of proposed
      adjustment, deficiency or underpayment of any Taxes, which notice has not been
      satisfied by payment or been withdrawn, and there are no material claims that
      have been asserted or threatened relating to such Taxes against the Company.
      The
      Company has withheld or collected and paid over to the appropriate governmental
      authorities (or is properly holding for such payment) all Taxes required by
      law to be withheld or collected, except for amounts which would not,
      individually or in the aggregate, have a material adverse effect on the Company.
      For purposes of this Agreement, “Tax”
or
      “Taxes”
means
      any and all taxes, fees, levies, duties, tariffs, imposts and other charges
      of
      any kind (together with any and all interest, penalties, additions to tax and
      additional amounts imposed with respect thereto) imposed by any government
      or taxing authority, including, without limitation: taxes or other charges
      on or
      with respect to income, franchises, windfall or other profits, gross receipts,
      property, sales, use, capital stock, payroll, employment, social security,
      workers’ compensation, unemployment compensation, or net worth; taxes or other
      charges in the nature or excise, withholding, ad
      valorem,
      stamp,
      transfer, value added or gains taxes, license, registration and documentation
      fees, and custom duties, tariffs and similar charges.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    3.16. Full
      Disclosure.
      No
      representation or warranty of the Selling Shareholder or the Company contained
      in this Agreement, and none of the statements or information concerning the
      Company contained in this Agreement and the Exhibits and Schedules hereto,
      contains or will contain any untrue statement of a material fact nor will such
      representations, warranties, covenants or statements taken as a whole 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.

     

    
      	
              4.

            	
              REPRESENTATIONS
                AND WARRANTIES OF PURCHASER.

            

    

     

    To
      induce
      the Selling Shareholder and the Company to enter into this Agreement and to
      consummate the transactions contemplated hereby, the Purchaser represents and
      warrants to and covenants with the Selling Shareholder and the Company as
      follows:

     

    4.1. Organization.
      The
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. The Purchaser is entitled to own or
      lease its properties and to carry on its business as and in the places where
      such business is now conducted, and the Purchaser is duly licensed and qualified
      in all jurisdictions where the character of the property owned by it or the
      nature of the business transacted by it makes such license or qualification
      necessary, except where such failure would not result in a material adverse
      effect on the Purchaser.

     

    4.2. Execution;
      No Inconsistent Agreements; Etc.

     

    4.2.1. The
      execution and delivery of this Agreement and the performance of the transactions
      contemplated hereby have been prior to the Closing Date duly and validly
      authorized and approved by the Purchaser and this Agreement is a valid and
      binding agreement of the Purchaser, enforceable against the Purchaser in
      accordance with its terms, except as such enforcement may be limited by
      bankruptcy or similar laws affecting the enforcement of creditors' rights
      generally, and the availability of equitable remedies.

     

    4.2.2. The
      execution and delivery of this Agreement by the Purchaser does not, and the
      consummation of the transactions contemplated hereby will not, constitute a
      breach or violation of the Certificate of Incorporation (as amended) or Bylaws
      of the Purchaser, or a default under any of the terms, conditions or provisions
      of (or an act or omission that would give rise to any right of termination,
      cancellation or acceleration under) any material note, bond, mortgage,
      lease, indenture, agreement or obligation to which Purchaser is a party,
      pursuant to which it otherwise receives benefits, or by which any of its
      properties may be bound.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    4.3. Full
      Disclosure.
      No
      representation or warranty of the Purchaser contained in this Agreement, and
      none of the statements or information concerning the Purchaser contained in
      this
      Agreement and the Schedules, contains or will contain any untrue statement
      of a
      material fact nor will such representations, warranties, covenants or statements
      taken as a whole 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.

     

    
      	
              5.

            	
              CONDITIONS
                TO CLOSING.

            

    

     

    5.1. Conditions
      to Obligations of the Selling Shareholder and the
      Company.
      The
      obligation of the Selling Shareholder and the Company to consummate the
      transactions contemplated by this Agreement are subject to the satisfaction,
      on
      or before the Closing Date, of each of the following conditions, any or all
      of
      which may be waived in whole or in part by the joint agreement of the Selling
      Shareholder and the Company:

     

    5.1.1. No
      action
      or proceeding shall have been brought or threatened before any court or
      administrative agency to prevent the consummation or to seek damages in a
      material amount by reason of the transactions contemplated hereby, and no
      governmental authority shall have asserted that the within transactions shall
      constitute a violation of law or give rise to material liability on the part
      of
      the Purchaser; and

     

    5.1.2. The
      representations and warranties contained in Section 4 of this Agreement and
      in any certificate, instrument, schedule, agreement or other writing delivered
      by or on behalf of Purchaser in connection with the transactions contemplated
      by
      this Agreement shall be true and correct in all material respects (except for
      representations and warranties which are by their terms qualified by
      materiality, which shall be true, correct and complete in all
      respects) when made and shall be deemed to be made again at and as of the
      Closing Date and shall be true at and as of such time in all material respects
      (except for representations and warranties which are by their terms qualified
      by
      materiality, which shall be true, correct and complete in all respects);
      and

     

    5.1.3. Purchaser
      shall have performed and complied with all material agreements and conditions
      required by this Agreement to be performed or complied with by Purchaser prior
      to or on the Closing Date; and 

     

    5.1.4. The
      Purchaser shall have executed this Agreement and delivered the same to the
      Selling Shareholder and the Company.

     

    5.2. Conditions
      to Obligations of the Purchaser.
      The
      obligation of the Purchaser to consummate the transactions contemplated by
      this
      Agreement are subject to the satisfaction, on or before the Closing Date, of
      each of the following conditions, any or all of which may be waived in whole
      or
      in part by the Purchaser:

     

    5.2.1. No
      action
      or proceeding shall have been brought or threatened before any court or
      administrative agency to prevent the consummation or to seek damages in a
      material amount by reason of the transactions contemplated hereby, and no
      governmental authority shall have asserted that the within transactions shall
      constitute a violation of law or give rise to material liability on the part
      of
      the Selling Shareholder or the Company; and

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    5.2.2. The
      representations and warranties contained in Section 3 of this Agreement and
      in any certificate, instrument, schedule, agreement or other writing delivered
      by or on behalf of the Selling Shareholder and the Company in connection with
      the transactions contemplated by this Agreement shall be true and correct in
      all
      material respects (except for representations and warranties which are by their
      terms qualified by materiality, which shall be true, correct and complete in
      all
      respects) when made and shall be deemed to be made again at and as of the
      Closing Date and shall be true at and as of such time in all material respects
      (except for representations and warranties which are by their terms qualified
      by
      materiality, which shall be true, correct and complete in all respects); and
      

     

    5.2.3. The
      Selling Shareholder and the Company shall have performed and complied with
      all
      material agreements and conditions required by this Agreement to be performed
      or
      complied with by the Selling Shareholder and the Company prior to or on the
      Closing Date; and 

     

    5.2.4. The
      Selling Shareholder and the Company shall have executed this Agreement and
      delivered the same to Purchaser; and

     

    5.2.5. The
      Company shall have provided to the Purchaser a certificate of good standing
      from
      the secretary of state from the state in which the Company
      is
      incorporated.

     

    
      	
              6.

            	
              INDEMNIFICATION.

            

    

     

    6.1. Indemnification
      by the Selling Shareholder and the Company.
      Subject
      to Section 6.5, the Selling Shareholder and the Company (hereinafter
      collectively called the “Indemnitor”) shall
      jointly and severally defend, indemnify and hold harmless the Purchaser, its
      direct and indirect parent corporations, subsidiaries (including the Company
      after Closing) and affiliates, their officers, directors, employees and
      agents (hereinafter collectively called “Indemnitees”) against
      and in respect of any and all loss, damage, liability, fine, penalty, cost
      and
      expense, including reasonable attorneys' fees and amounts paid in settlement
      (collectively, “Indemnified
      Losses”),
      suffered or incurred by any Indemnitee by reason of, or arising out
      of:

     

    (a) any
      misrepresentation, breach of warranty or breach or non-fulfillment of any
      agreement of the Selling Shareholder and the Company contained in this Agreement
      or in any certificate, schedule, instrument or document delivered to the
      Purchaser by or on behalf of the Selling Shareholder and the Company pursuant
      to
      the provisions of this Agreement (without regard to materiality thresholds
      contained therein); and

     

    (b) any
      liabilities of the Company of any nature whatsoever (including tax
      liability, penalties and interest), whether accrued, absolute, contingent or
      otherwise, except for the Liabilities defined in Section 1.1 herein
      above.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    6.2. Indemnification
      by Purchaser.
      Subject
      to Section 6.5, Purchaser (hereinafter called the “Indemnitor”) shall
      defend, indemnify and hold harmless the Selling Shareholder and the
      Company (hereinafter called “Indemnitee”) against
      and in respect of any and all loss, damage, liability, cost and expense,
      including reasonable attorneys' fees and amounts paid in
      settlement (collectively, “Indemnified
      Losses”),
      suffered or incurred by the Indemnitee by reason of or arising out of any
      misrepresentation, breach of warranty or breach or non-fulfillment of any
      material agreement of the Purchaser contained in this Agreement or in any other
      certificate, schedule, instrument or document delivered to the Selling
      Shareholder by or on behalf of the Purchaser pursuant to the provisions of
      this
      Agreement.

     

    6.3. Defense
      of Claims.

     

    6.3.1. Should
      any claim or action by a third party arise after the Closing Date for which
      an
      Indemnitor is liable under the terms of this Agreement, the Indemnitee shall
      notify the Indemnitor within ten (10) days after such claim or action
      arises and is known to Indemnitee, and shall give the Indemnitor a reasonable
      opportunity to participate in any proceedings and to settle or defend any such
      claim or action. The expenses of all proceedings, contests or lawsuits with
      respect to such claims or actions shall be borne by the Indemnitor. If the
      Indemnitor wishes to assume the defense of such claim or action, the Indemnitor
      shall give written notice to the Indemnitees within ten (10) days after
      notice from the Indemnitees of such claim or action, and the Indemnitor shall
      thereafter assume the defense of any such claim or liability, through counsel
      reasonably satisfactory to the Indemnitees, provided that Indemnitees may
      participate in such defense at their own expense, and the Indemnitor shall,
      in
      any event, have the right to control the defense of the claim or
      action.

     

    6.3.2. If
      the
      Indemnitor shall not assume the defense of, or if after so assuming it shall
      fail to defend, any such claim or action, the Indemnitees may defend against
      any
      such claim or action in such manner as they may deem appropriate and the
      Indemnitees may settle such claim or litigation on such terms as they may deem
      appropriate but subject to the Indemnitor's approval, such approval not to
      be
      unreasonably withheld; provided, however, that any such settlement shall be
      deemed approved by the Indemnitor if the Indemnitor fails to object thereto,
      by
      written notice to the Indemnitees, within fifteen (15) days after the
      Indemnitor's receipt of a written summary of such settlement. The Indemnitor
      shall promptly reimburse the Indemnitees for the amount of all expenses, legal
      and otherwise, incurred by the Indemnitees in connection with the defense and
      settlement of such claim or action.

     

    6.3.3. If
      a
      non-appealable judgment is rendered against any of the Indemnitees in any action
      covered by the indemnification hereunder, or any lien attaches to any of the
      assets of any of the Indemnitees, the Indemnitor shall immediately upon such
      entry or attachment pay such judgment in full or discharge such lien unless,
      at
      the expense and direction of the Indemnitor, an appeal is taken under which
      the
      execution of the judgment or satisfaction of the lien is stayed. If and when
      a
      final judgment is rendered in any such action, the Indemnitor shall forthwith
      pay such judgment or discharge such lien before any of the Indemnitees is
      compelled to do so.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    6.4. Waiver.
      The
      failure of any Indemnitee to give any notice or to take any action hereunder
      shall not be deemed a waiver of any of the rights of such Indemnitee hereunder,
      except to the extent that Indemnitor is actually prejudiced by such
      failure.

     

    6.5. Limitations
      on Indemnification.
      Notwithstanding anything to the contrary contained in this
      Agreement:

     

    6.5.1. Time
      Limitation.
      No party
      shall be responsible hereunder for any Indemnified Loss unless the Indemnitee
      shall have provided such party with written notice containing a reasonable
      description of the claim, action or circumstances giving rise to such
      Indemnified Loss within one (1) year after the Closing Date (the
“Indemnity
      Notice Period”);
      provided, however, that:

     

    (a) there
      shall be no limit on the Indemnity Notice Period for indemnity claims against
      any party based on fraud, intentional breach or misrepresentation.

     

    6.5.2. Indemnification
      Basket.
      No party
      shall have any liability hereunder for Indemnified Losses after Closing, with
      respect to a breach of the representations and warranties contained herein,
      until the aggregate of all Indemnified Losses for which the Selling Shareholder
      and the Company as a group or the Purchaser, as applicable, are responsible
      under this Agreement exceeds Ten Thousand Dollars ($10,000)(the “Basket”);
      provided that once this Basket amount is exceeded for the Selling Shareholder
      and the Company as a group or the Purchaser, as applicable, the responsible
      party or parties shall be responsible for all Indemnified Losses, from the
      first
      dollar as if such Basket never existed; and further provided that this the
       6.5.2 shall not limit in any respect indemnity claims: (i) based upon
      fraud, intentional breach or misrepresentation; (ii) arising from a breach
      by the Indemnitor of any covenant contained in Sections 2.2 and 2.3 hereof;
      or
      (iii) arising from a breach by Selling Shareholder of any representation or
      warranty contained in Section 3.2 hereto.

     

    
      	
              7.

            	
              MISCELLANEOUS.

            

    

     

    7.1. Notices.

     

    7.1.1. All
      notices, requests, demands, or other communications required or permitted
      hereunder shall be in writing and shall be deemed to have been duly given upon
      delivery if delivered in person or if sent by Federal Express (or similar
      recognized overnight courier service) to the parties at the following
      addresses:

     

    
      	 	
              If
                to the Selling Shareholder:

            	
              Timothy
                J. Connolly

              8602
                Pasture View Lane

              Houston,
                Texas 77024

            
	 	 
	 	 	 
	 	
              If
                to the Company:

            	
              Kipling
                Holdings, Inc.

              109
                North Post Oak Lane, Suite 422

              Houston,
                Texas 77024

              Attention:
                Timothy J. Connolly

            
	 	 
	 	 
	 	 

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	 	
              If
                to Purchaser:

            	
              Emerge
                Capital Corp.

              109
                North Post Oak Lane, Suite 422

              Houston,
                Texas 77024

              Attention:
                Timothy J. Connolly

            
	 	 
	 	 
	 	 
	 	 	 
	 	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Nicholson Graham LLP

              201
                South Biscayne Boulevard

              Suite
                2000, Miami Center

              Miami,
                Florida 33131

              Attention:
                Clayton E. Parker, Esq.

            
	 	 
	 	 
	 	 
	 	 
	 	 	 

    

    7.1.2. Notices
      may also be given in any other manner permitted by law, effective upon actual
      receipt. Any party may change the address to which notices, requests, demands
      or
      other communications to such party shall be delivered or mailed by giving notice
      thereof to the other parties hereto in the manner provided herein.

     

    7.2. Survival.
      The
      representations, warranties, agreements and indemnifications of the parties
      contained in this Agreement or in any writing delivered pursuant to the
      provisions of this Agreement shall survive any investigation heretofore or
      hereafter made by the parties and the consummation of the transactions
      contemplated herein and shall continue in full force and effect and survive
      after the Closing, subject to the limitations of Section 6.5.

     

    7.3. Counterparts;
      Interpretation.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which shall constitute one instrument. This
      Agreement supersedes all prior discussions and agreements between the parties
      with respect to the subject matter hereof, and this Agreement contains the
      sole
      and entire agreement among the parties with respect to the matters covered
      hereby. All Schedules and Exhibits hereto shall be deemed a part of this
      Agreement. This Agreement shall not be altered or amended except by a written
      instrument signed by or on behalf of all of the parties hereto. No ambiguity
      in
      any provision hereof shall be construed against a party by reason of the fact
      it
      was drafted by such party or its counsel. For purposes of this Agreement
“herein”,
      “hereby”,
      “hereof”,
      “hereunder”,
      “herewith”,
      “hereafter”
and
      “hereinafter”
and
      similar words refer to this Agreement in its entirety, and not to any particular
      subsection or paragraph. References to “including”
means
      including without limiting the generality of any description preceding such
      term. Nothing expressed or implied in this Agreement is intended, or shall
      be
      construed, to confer upon or give any person other than the parties hereto
      any
      rights or remedies under or by reason of this Agreement.

     

    7.4. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware. The parties hereto agree that any claim, suit, action or
      proceeding arising out of or relating to this Agreement or the transactions
      contemplated hereby shall be submitted for adjudication exclusively in any
      state
      or federal court sitting in Houston, Texas and each party hereto expressly
      agrees to be bound by such selection of jurisdiction and venue for purposes
      of
      such adjudication. Each party (a) waives any objection which it may have that
      such court is not a convenient forum for any such adjudication, (b) agrees
      and
      consents to the personal jurisdiction of such court with respect to any claim
      or
      dispute arising out of or relating to this Agreement or the transactions
      contemplated hereby and (c) agrees that process issued out of such court or
      in
      accordance with the rules of practice of such court shall be properly served
      if
      served personally or served by certified mail or other form of substituted
      service, as provided under the rules of practice of such court.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    7.5. Partial
      Invalidity and Severability.
      All
      rights and restrictions contained herein may be exercised and shall be
      applicable and binding only to the extent that they do not violate any
      applicable laws and are intended to be limited to the extent necessary to render
      this Agreement legal, valid and enforceable. If any terms of this Agreement
      not
      essential to the commercial purpose of this Agreement shall be held to be
      illegal, invalid or unenforceable by a court of competent jurisdiction, it
      is
      the intention of the parties that the remaining terms hereof shall constitute
      their agreement with respect to the subject matter hereof and all such remaining
      terms shall remain in full force and effect. To the extent legally permissible,
      any illegal, invalid or unenforceable provision of this Agreement shall be
      replaced by a valid provision which will implement the commercial purpose of
      the
      illegal, invalid or unenforceable provision.

     

    7.6. Waiver.
      Any term
      or condition of this Agreement may be waived at any time by the party which
      is
      entitled to the benefit thereof, but only if such waiver is evidenced by a
      writing signed by such party. No failure on the part of a party hereto to
      exercise, and no delay in exercising, any right, power or remedy created
      hereunder, shall operate as a waiver thereof, nor shall any single or partial
      exercise of any right, power or remedy by any such party preclude any other
      future exercise thereof or the exercise of any other right, power or remedy.
      No
      waiver by any party hereto to any breach of or default in any term or condition
      of this Agreement shall constitute a waiver of or assent to any succeeding
      breach of or default in the same or any other term or condition
      hereof.

     

    7.7. Headings.
      The
      headings as to contents of particular paragraphs of this Agreement are inserted
      for convenience only and shall not be construed as a part of this Agreement
      or
      as a limitation on the scope of any terms or provisions of this
      Agreement.

     

    7.8. Expenses.
      Except
      as otherwise expressly provided herein, all legal and other costs and expenses
      incurred in connection with this Agreement and the transactions contemplated
      hereby shall be paid by each party as each party incurs such
      expenses.

     

    7.9. Finder's
      Fees.
      Purchaser represents to the Selling Shareholder and the Company that no broker,
      agent, finder or other party has been retained by it in connection with the
      transactions contemplated hereby and that no other fee or commission has been
      agreed by the Purchaser to be paid for or on account of the transactions
      contemplated hereby. The Selling Shareholder and the Company represent to the
      Purchaser that no broker, agent, finder or other party has been retained by
      the
      Selling Shareholder or the Company in connection with the transactions
      contemplated hereby and that no other fee or commission has been agreed by
      the
      Selling Shareholder or the Company to be paid for or on account of the
      transactions contemplated hereby.

     

    7.10. Gender.
      Where
      the context requires, the use of the singular form herein shall include the
      plural, the use of the plural shall include the singular, and the use of any
      gender shall include any and all genders.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    7.11. Recitals.
      The
      Recitals to this Agreement, which the Parties acknowledge are true and correct,
      are hereby incorporated herein by this reference.

     

    7.12. Acceptance
      by Fax.
      This
      Agreement shall be accepted, effective and binding, for all purposes, when
      the
      parties shall have signed and transmitted to each other, by telecopier or
      otherwise, copies of the signature pages hereto.

     

    7.13. Opportunity
      to Hire Counsel; Role of Kirkpatrick & Lockhart Nicholson Graham
LLP.
      The
      Selling Shareholder and the Company expressly acknowledge that they have been
      advised and have been given an opportunity to hire counsel with respect to
      this
      Agreement and the transactions contemplated hereby, including but not limited
      to, tax counsel. The Selling Shareholder and the Company further acknowledge
      that the law firm of Kirkpatrick & Lockhart Nicholson Graham LLP
      did
      not
      provide them with any legal advice, including but not limited to, any tax advice
      with respect to the transactions contemplated by this Agreement. The Selling
      Shareholder and the Company further acknowledge that the law firm of Kirkpatrick
      & Lockhart Nicholson Graham LLP
      has
      solely represented the Purchaser in connection with this Agreement and the
      transactions contemplated hereby and no other person.

     

    7.14. Time
      is of the Essence.
      It is
      understood and agreed among the parties hereto that time is of the essence
      in
      this Agreement and this applies to all terms and conditions contained
      herein.

     

    7.15. Attorneys’
      Fees.
      In the
      event of any litigation or other proceeding arising out of or in connection
      with
      this Agreement, the prevailing party or parties shall be entitled to recover
      its
      or their reasonable attorneys’ fees and court costs from the other party or
      parties.

     

    7.16. NO
      JURY TRIAL.
      EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
      WAIVES THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
      LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
      AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
      OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
      WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
      FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.

    
 

    [Remainder
      of Page Intentionally Left Blank]

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	
              Purchaser:

            
	 	 
	 	
              Emerge
                Capital Corp.

            
	 	 
	 	
              By: /s/
                Pete Shukis   

            
	 	
              Name:
                Pete Shukis

            
	 	
              Title:
                Controller 

            
	 	 
	 	 
	 	
              Company:

            
	 	 
	 	
              Kipling
                Holdings, Inc.

            
	 	 
	 	
              By: /s/
                Timothy J. Connolly  

            
	 	
              Name:
                Timothy J. Connolly

            
	 	
              Title:
                Chief Executive Officer 

            
	 	 
	 	 
	 	
              Selling
                Shareholder:

            
	 	 
	 	
              Timothy
                J. Connolly, an Individual

            
	 	 
	 	
              By: /s/
                Timothy J. Connolly 

            
	 	
              Name:
                Timothy J. Connolly

            
	 	 

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    DISCLOSURE
      SCHEDULE

    

    Item
      3.2

    

    On
      December 2, 2005 the Company entered into that certain Securities Purchase
      Agreement (“SPA”)
      with
      Highgate House Funds, Ltd. (“Highgate”
and
      together with the Company, the “Parties”)
      pursuant to which the Company issued and sold to Highgate Six Million Two
      Hundred Twenty-Five Thousand Dollars ($6,225,000) of secured convertible
      debentures (the “Debentures”),
      due
      December 1, 2010. In connection with the SPA and of even date therewith, the
      Parties entered into (a) that certain Escrow Shares Escrow Agreement
      (“ESEA”)
      pursuant to which the Company issued and delivered 500,000 shares of Common
      Stock which the Escrow Agent (as defined therein) shall distribute to Highgate
      in the event Highgate exercises its right to conversion under the Debentures;
      (b) that certain investor registration rights agreement (the “IRRA”)
      pursuant to which the Company agreed to provide to Highgate certain registration
      rights under the Securities Act of 1933, as amended, the rules and regulations
      promulgated thereunder and other applicable state securities laws, (c) that
      certain Security Agreement (“SA”),
      pursuant to which the Company pledged certain Pledged Property (as such term
      is
      defined therein) to secure its Obligations (as such term is defined therein)
      under the Debentures, the SPA, those certain Irrevocable Transfer Agent
      Instructions (“ITAI”)
      and
      any other amounts owed to Highgate by the Company and (d) that certain warrant
      (“Warrant”),
      which
      entitles Highgate to purchase 3,735,000 shares of Common Stock at any time
      at an
      exercise price of $0.01 (subject to certain adjustments set forth therein)
      through December 1, 2010 and (e) that certain option (“Option”
and
      together with the SPA, the Debentures, the ESEA, the IRRA, the SA, the ITAI
      and
      the Warrant, the “Transaction
      Documents”)
      pursuant to which Highgate may purchase 33,334 Units (each Unit consisting
      of
      ten (10) shares of Common Stock and one (1) share of Preferred Stock) at any
      time at an exercise price of $1.10 per Unit through December 1, 2010.

    

    Item
      3.3

    

    On
      December 2, 2005 the Company entered into that certain Securities Purchase
      Agreement with Highgate House Funds, Ltd. (“Highgate”)
      pursuant to which the Company issued and sold to Highgate the principal amount
      of Six Million Two Hundred Twenty-Five Thousand Dollars ($6,225,000) of secured
      convertible debentures (the “Debentures”).
      As of
      September 30, 2006, the principal amount of the Debentures, plus accrued
      interest, remains outstanding as is most recently reflected in the line item
      entitled “Total Long Term Liabilities” on the Company’s unaudited Balance Sheet
      dated as of June 30, 2006 and attached hereto as Exhibit
      B.
      

    

    Item
      3.11

    

    The
      parties acknowledge that, in accordance with the Transaction Documents set
      forth
      in Item 3.2 in this Disclosure Schedule, the consent of Highgate is required
      in
      order to consummate this transaction, Therefore, the Company shall obtain the
      written consent of Highgate, effective as of the date hereof. 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Emerge
      Series D Preferred Denominations

    

    Name
      of Series D Preferred Stockholder: Number
      of Shares:

     

    

      
        	
                Name
                  of Series D Preferred Stockholder:

              	 	
                Number
                  of Shares:

              
	 	 	 
	
                Timothy
                  J. Connolly

              	 	
                The
                  number of Series D Preferred shall be determined at such time
                  the

              
	 	 	
                Purchaser
                  files that certain Certificate of
                  Designation in accordance with Section 1.4.3
                  herein.

              
	 	 	
                 

              
	 	 	 
	
                Jan
                  Carson Connolly

              	 	
                The
                  number of Series D Preferred shall be determined at such time the
                  Purchaser files that certain Certificate of Designation in accordance
                  with
                  Section 1.4.3 herein.

              

      

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    [FORM
      OF
      CERTIFICIATE OF DESIGNATION OF 

    THE
      SERIES D PREFERRED STOCK OF THE PURCHASER]

    
      
        
        

      

      
        A
          - 1 

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    

     

    
      
        
        

      

      
        B
          - 1 

        
          

        

      

      
        
        

      

    

    

     

     

    
      
        
        

      

        B
          - 2

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