Document:

STOCK
      PURCHASE AGREEMENT

     

    by
      and among

     

    SMLB
      LTD.,

     

    THE
      STOCKHOLDERS OF SMLB LTD.

     

    and

     

    FORTRESS
      INTERNATIONAL GROUP INC.

     

    Dated
      as of January 2, 2008

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	 	 	 	
              Page

            
	 	 	 	 
	
              ARTICLE
                I

            	
              DEFINITIONS

            	
              1

            
	 	
              1.1.

            	
              Definitions

            	
              1

            
	
              ARTICLE
                II

            	
              PURCHASE
                AND SALE OF THE SHARES; ADJUSTMENT

            	
              5

            
	 	
              2.1.

            	
              Purchase
                and Sale of the Shares.

            	
              5

            
	 	
              2.2.

            	
              Closing

            	
              6

            
	 	
              2.3.

            	
              Deliveries
                and Payments at the Closing.

            	
              6

            
	 	
              2.4.

            	
              Purchase
                Price Adjustment.

            	
              7

            
	 	
              2.5.

            	
              EBITDA
                Earn-Out

            	
              9

            
	 	
              2.6.

            	
              Project
                Earn-Out

            	
              10

            
	 	
              2.7.

            	
              Payment
                of Earn-Out

            	
              10

            
	 	
              2.8
                

            	
              Right
                of Set-Off.

            	
              10

            
	 	 	 	 
	
              ARTICLE
                III

            	
              REPRESENTATIONS
                AND WARRANTIES RELATING TO THE COMPANIES

            	
              10

            
	 	
              3.1.

            	
              Organization
                and Standing

            	
              10

            
	 	
              3.2.

            	
              Authorization

            	
              11

            
	 	
              3.3.

            	
              Noncontravention

            	
              
                11

              

            
	 	
              3.4.

            	
              Consents
                and Filings

            	
              
                11

              

            
	 	
              3.5.

            	
              Capital
                Stock

            	
              
                11

              

            
	 	
              3.6.

            	
              Financial
                Statements

            	
              12

            
	 	
              3.7.

            	
              Absence
                of Undisclosed Liabilities

            	
              
                12

              

            
	 	
              3.8.

            	
              Absence
                of Certain Changes

            	
              
                12

              

            
	 	
              3.9.

            	
              Litigation

            	
              13

            
	 	
              3.10.

            	
              Compliance
                with Laws.

            	
              
                13

              

            
	 	
              3.11.

            	
              Material
                Contracts.

            	
              
                13

              

            
	 	
              3.12.

            	
              Intellectual
                Property.

            	
              14

            
	 	
              3.13.

            	
              Benefit
                Plans.

            	
              15

            
	 	
              3.14.

            	
              Labor;
                Employees.

            	
              15

            
	 	
              3.15.

            	
              Taxes

            	
              16

            
	 	
              3.16.

            	
              Environmental
                Matters

            	
              16

            
	 	
              3.17.

            	
              Real
                Property

            	
              16

            
	 	
              3.18.

            	
              Personal
                Property

            	
              17

            
	 	
              3.19.

            	
              Sufficiency
                of Assets

            	
              
                17

              

            
	 	
              3.20.

            	
              Insurance

            	
              
                17

              

            
	 	
              3.21.

            	
              Suppliers
                and Customers

            	
              
                17

              

            
	 	
              3.22.

            	
              Bank
                Accounts; Authorized Signatories

            	
              
                17

              

            
	 	
              3.23.

            	
              Brokers

            	
              
                17

              

            
	 	
              3.24.

            	
              Affiliate
                Transactions

            	
              
                17

              

            
	 	
              3.25.

            	
              Books
                and Records

            	
              
                17

              

            

    

     

    
      
        
        

      

      
        (i)

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.26.

            	
              Restrictions
                on Business Activities

            	
              18

            
	 	
              3.27.

            	
              Certain
                Business Practices

            	
              
                18

              

            
	 	
              3.28.

            	
              Takeover
                Statutes

            	
              
                18

              

            
	 	
              3.29.

            	
              Disclosure

            	
              
                18

              

            
	
              ARTICLE
                IV

            	
              REPRESENTATIONS
                AND WARRANTIES RELATING TO THE SELLERS

            	
              
                18

              

            
	 	
              4.1.

            	
              Authorization

            	
              
                18

              

            
	 	
              4.2.

            	
              The
                Shares

            	
              19

            
	 	
              4.3.

            	
              Consents
                and Filings

            	
              
                19

              

            
	 	
              4.4.

            	
              Noncontravention

            	
              
                19

              

            
	 	
              4.5.

            	
              No
                Legal Proceedings

            	
              
                19

              

            
	 	
              4.6.

            	
              Receipt
                of Buyer Common Stock for Seller’s Own Account

            	
              
                19

              

            
	 	
              4.7.

            	
              Accredited
                Investor

            	
              
                19

              

            
	 	
              4.8.

            	
              Disclosure
                of Information

            	
              
                19

              

            
	 	
              4.9.

            	
              Restricted
                Securities

            	
              20

            
	 	
              4.10.

            	
              Legends

            	
              
                20

              

            
	
              ARTICLE
                V

            	
              REPRESENTATIONS
                AND WARRANTIES OF BUYER

            	
              
                20

              

            
	 	
              5.1.

            	
              Organization
                and Existence

            	
              
                20

              

            
	 	
              5.2.

            	
              Authorization

            	
              
                20

              

            
	 	
              5.3.

            	
              Consents
                and Filings

            	
              
                20

              

            
	 	
              5.4.

            	
              Noncontravention

            	
              
                20

              

            
	 	
              5.5.

            	
              No
                Legal Proceedings

            	
              21

            
	 	
              5.6.

            	
              Valid
                Issuance of Buyer Common Stock

            	
              
                21

              

            
	 	
              5.7.

            	
              Brokers

            	
              
                21

              

            
	
              ARTICLE
                VI

            	
              COVENANTS

            	
              
                21

              

            
	 	
              6.1.

            	
              Conduct
                of the Business

            	
              
                21

              

            
	 	
              6.2.

            	
              Access

            	
              
                21

              

            
	 	
              6.3.

            	
              Government
                Filings

            	
              22

            
	 	
              6.4.

            	
              Further
                Actions

            	
              
                22

              

            
	 	
              6.5.

            	
              Tax
                Returns

            	
              
                22

              

            
	 	
              6.6.

            	
              No
                Solicitation of Other Proposals.

            	
              
                22

              

            
	
              ARTICLE
                VII

            	
              CONDITIONS
                TO CLOSING

            	
              23

            
	 	
              7.1.

            	
              Conditions
                Precedent to Buyer’s Obligations

            	
              23

            
	 	
              7.2.

            	
              Conditions
                Precedent to the Company’s and Seller’s Obligations

            	
              25

            
	
              ARTICLE
                VIII

            	
              INDEMNIFICATION
                OBLIGATIONS

            	
              25

            
	 	
              8.1.

            	
              Survival

            	
              25

            
	 	
              8.2.

            	
              Sellers’
                Indemnification Obligations

            	
              26

            
	 	
              8.3.

            	
              Notice
                of Claim

            	
              26

            
	 	
              8.4.

            	
              Direct
                Claims

            	
              26

            
	 	
              8.5.

            	
              Third
                Party Claims

            	
              26

            
	 	
              8.6.

            	
              Disputes

            	
              27

            

    

     

    
      
        
        

      

      
        (ii)

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                IX

            	
              TERMINATION,
                AMENDMENT AND WAIVER

            	
              27

            
	 	
              9.1.

            	
              Termination

            	
              27

            
	 	
              9.2.

            	
              Effect
                of Termination

            	
              28

            
	
              ARTICLE
                X

            	
              MISCELLANEOUS

            	
              
                28

              

            
	 	
              10.1.

            	
              Expenses;
                Transfer Taxes

            	
              
                28

              

            
	 	
              10.2.

            	
              Notices

            	
              
                28

              

            
	 	
              10.3.

            	
              Severability

            	
              29

            
	 	
              10.4.

            	
              Amendments
                and Waivers

            	
              30

            
	 	
              10.5.

            	
              Counterparts

            	
              
                30

              

            
	 	
              10.6.

            	
              Entire
                Agreement

            	
              
                30

              

            
	 	
              10.7.

            	
              No
                Third Party Beneficiaries

            	
              
                30

              

            
	 	
              10.8.

            	
              Governing
                Law

            	
              
                30

              

            
	 	
              10.9.

            	
              Consent
                to Jurisdiction; Waiver of Jury Trial

            	
              
                30

              

            
	 	
              10.10.

            	
              Publicity

            	
              31

            
	 	
              10.11.

            	
              Assignment

            	
              31

            
	 	
              10.12.

            	
              Construction

            	
              32

            

    

    

    
      
        
        

      

      
        (iii)

        
          

        

      

      
        
        

      

    

    STOCK
      PURCHASE AGREEMENT

     

    This
      STOCK PURCHASE AGREEMENT (this “Agreement”)
      is
      made and entered into as of January 2, 2008 by and among FORTRESS INTERNATIONAL
      GROUP, INC., a Delaware corporation (“Buyer”),
      SMLB
      LTD., an Illinois corporation (the “Company”),
      and
      the undersigned holders of the outstanding shares of capital stock of the
      Company (each, a “Seller”
and,
      collectively, the “Sellers”).
      

     

    RECITALS

     

    A. The
      Sellers own all of the issued and outstanding shares of capital stock of the
      Company (the “Shares”),
      with
      each Seller owning the number of Shares set forth on such Seller’s signature
      page hereto. 

     

    B. Buyer
      desires to purchase the Shares from the Sellers, and the Sellers desire to
      sell
      the Shares to Buyer, in each case on the terms and subject to the conditions
      contained in this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises, covenants and agreements
      herein contained, and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties agree as
      follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1. Definitions.
      As used
      in this Agreement, the following terms have the following
      meanings:

     

    “AAA”
has
      the
      meaning the set forth in Section 8.6.

    

    “Accounting
      Firm”
has
      the
      meaning set forth in Section 2.4(b)(iii).

    

    “Affiliate”
of
      any
      Person means any other Person that directly or indirectly, through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      such first Person. 

    

    “Agreement”
has
      the
      meaning set forth in the preamble to this Agreement.

    

    “Acquisition
      Proposal”
has
      the
      meaning set forth in Section 6.6(a).

    

    “Business
      Day”
means
      any day other than a Saturday or Sunday or any day banks in the State of New
      York are authorized or required to be closed. 

     

    “Buyer”
has
      the
      meaning set forth in the preamble to this Agreement. 

     

    “Buyer
      Common Stock”
has
      the
      meaning set forth in Section 2.1(b)(iii).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Buyer
      Indemnified Parties”
has
      the
      meaning set forth in Section 8.2.

     

    “Cash
      Consideration”
has
      the
      meaning set forth in Section 2.1(b)(i).

     

    “Closing”
has
      the
      meaning set forth in Section 2.2. 

     

    “Closing
      Date”
has
      the
      meaning set forth in Section 2.2. 

     

    “Closing
      Funnel Report”
has
      the
      meaning set forth in Section 2.6.

     

    “Closing
      Working Capital”
has
      the
      meaning set forth in Section 2.4(a).

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the rules
      and regulations promulgated thereunder. 

     

    “Company”
has
      the
      meaning set forth in the preamble to this Agreement.

     

    “Company
      Plan”
has
      the
      meaning set forth in Section 3.13(a). 

     

    “Company
      Representatives”
has
      the
      meaning set forth in Section 6.6(a).

     

    “Consent”
has
      the
      meaning set forth in Section 3.4. 

     

    “Current
      Assets”
has
      the
      meaning set forth in Section 2.4(d).

     

    “Current
      Liabilities”
has
      the
      meaning set forth in Section 2.4(d).

     

    “Damages”
means
      any and all claims, lawsuits, liabilities, losses, damages, costs and expenses,
      including the reasonable fees and disbursements of counsel (including fees
      of
      attorneys and paralegals, whether at the pre-trial, trial, or appellate level,
      or in arbitration) and all amounts reasonably paid in investigation, defense,
      or
      settlement of any of the foregoing.

     

    “Direct
      Claim”
has
      the
      meaning set forth in Section 8.3.

     

    “Direct
      Claim Counter Notice”
has
      the
      meaning set forth in Section 8.4. 

     

    “Earn-Out
      Payments”
has
      the
      meaning set forth in Section 2.6.

     

    “EBITDA”
has
      the
      meaning set forth in Section 2.5(a).

     

    “EBITDA
      Earn-Out Payment”
has
      the
      meaning set forth in Section 2.1(b)(iv)).

     

    “EBITDA
      Earn-Out Period”
has
      the
      meaning set forth in Section 2.5(c).

     

    “EBITDA
      Earn-Out Worksheet”
has
      the
      meaning set forth in Section 2.5(a).

     

    “Employment
      Agreement”
has
      the
      meaning set forth in Section 2.3(b)(ii).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Encumbrance”
means
      any charge, claim, lien, pledge, security interest, voting agreement, option,
      right of first refusal, easement, servitude, right of way, or other encumbrance
      or similar restriction. 

     

    “ERISA”
has
      the
      meaning set forth in Section 3.13(a). 

     

    “Escrow
      Agent”
has
      the
      meaning ascribed thereto in the Escrow Agreement.

     

    “Escrow
      Agreement”
has
      the
      meaning set forth in Section 2.3(a)(iii).

     

    “Filing”
has
      the
      meaning set forth in Section 3.4. 

     

    “Financial
      Statements”
has
      the
      meaning set forth in Section 3.66. 

     

    “GAAP”
has
      the
      meaning set forth in Section 2.4(a).

     

    “Governmental
      Entity”
means
      any U.S. or foreign federal, state, provincial or local governmental authority,
      court, government or self-regulatory organization, commission, tribunal or
      organization or any regulatory, administrative or other agency, or any political
      or other subdivision, department or branch of any of the foregoing.

     

    “Inbound
      Licenses”
has
      the
      meaning set forth in Section 3.12(c). 

     

    “Indemnifying
      Party”
has
      the
      meaning set forth in Section 8.3. 

     

    “Intellectual
      Property”
means
      all U.S. and foreign intellectual property rights, including patents,
      inventions, technology, discoveries, processes, know-how, trademarks, service
      marks, trade names, brand names, domain names, corporate names, logos,
      copyrights, and copyrightable works (including software and related items),
      and
      trade secrets, and all registrations, applications, continuations,
      continuations-in-part, divisions, provisionals, reissues, re-examinations and
      similar protections relating thereto. 

     

    “Knowledge”
means
      the actual knowledge, after reasonable inquiry, of the Sellers, after reasonable
      investigation by such persons. 

     

    “Law”
means
      any domestic or foreign, federal, state, provincial or local statute, law,
      ordinance, rule, administrative interpretation, regulation, order, writ,
      injunction, directive, judgment, decree or other requirement of any Governmental
      Entity. 

     

    “Lease”
has
      the
      meaning set forth in Section 3.17.

     

    “Legal
      Proceeding”
means
      any action, claim, lawsuit, arbitration, proceeding or
      investigation.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on the business, assets, financial condition, results
      of
      operations or prospects of the Company, taken as a whole, other than events
      or
      changes generally occurring in the businesses in which the Company operates
      or
      in the economy in general. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Material
      Contract”
means
      any contract or agreement required to be set forth on Schedule
      3.11(a).
      

     

    “NASDAQ
      CM”
has
      the
      meaning set forth in Section 2.1(b)(iii). 

     

    “Note”
has
      the
      meaning set forth in Section 2.1(b)(ii).

     

    “Notice
      of Claim”
has
      the
      meaning set forth in Section 8.3.

     

    “Notice
      of Disagreement”
has
      the
      meaning set forth Section 2.4(b).

     

    “Outbound
      Licenses”
has
      the
      meaning set forth in Section 3.12(c). 

     

    “Parties”
means
      the parties to this Agreement, and “Party”
means
      any of the Parties. 

     

    “Permit”
means
      any permit, licenses, registrations or other authorization.

     

    “Permitted
      Encumbrances”
means
      (a) liens for taxes, assessments and other governmental charges not yet due
      and
      payable or, if due, (i) not delinquent or (ii) being contested in good faith
      by
      appropriate proceedings; (b) mechanics’, workmen’s, repairmen’s, warehousemen’s,
      carriers’ or other liens arising or incurred in the ordinary course of business;
      (c) liens or title retention arrangements arising under original purchase price
      conditional sales contracts and equipment leases with third parties entered
      into
      in the ordinary course of business; (d) with respect to real property, (i)
      easements, licenses, covenants, rights-of-way and other similar restrictions,
      including, without limitation, any other agreements or restrictions which would
      be shown by an investigation of title to the extent and nature which a prudent
      buyer of property in the relevant jurisdiction would carry out, (ii) any
      conditions that may be shown by survey, title report or physical inspection
      (whether or not made) and (iii) zoning, building and other similar restrictions,
      so long as none of (i) or (ii) or (iii) prevent the use of such real property
      substantially as currently used by the Company or materially affect the value
      of
      any such property. 

     

    “Person”
means
      any individual, corporation, limited liability company, limited partnership,
      general partnership, joint venture, trust, association, Governmental Entity
      or
      other organization or entity. 

     

    “Project
      Earn-Out Payment”
has
      the
      meaning set forth in Section 2.6.

     

    “Purchase
      Price”
has
      the
      meaning set forth in Section 2.1(b).

     

    “Section
      2.5(b) Accountants”
has
      the
      meaning set forth in Section 2.5(b).

     

    “Section
      2.5(b) Notice”
has
      the
      meaning set forth in Section 2.5(b).

     

    “Securities
      Act”
has
      the
      meaning set forth in Section 4.7.

     

    “Seller”
and
      “Sellers”
have
      the meanings set forth in the preamble to this Agreement. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Seller’s
      Cash Consideration”
with
      respect to any Seller means the dollar amount of Cash Consideration equal to
      the
      product of (x) the aggregate Cash Consideration payable pursuant to Section
      2.1(b)(i) multiplied by (y) such Seller’s Proportionate Interest.

     

    “Seller’s
      Proportionate Interest”
with
      respect to any Seller means the percentage set forth on Schedule A attached
      hereto.

     

    “Sellers’
      Representative”
has
      the
      meaning set forth in Section 2.5(a).

     

    “Seller’s
      Stock Consideration”
with
      respect to any Seller means the number of shares of Buyer Common Stock equal
      to
      the product of (x) the aggregate number of shares of Buyer Common Stock issuable
      pursuant to Section 2.1(b)(iii) multiplied by (y) such Seller’s Proportionate
      Interest.

     

    “Shares”
has
      the
      meaning set forth in the Recital A to this Agreement. 

     

    “SMLB
      Common Stock”
means
      the common stock of the Company.

     

    “Statement”
has
      the
      meaning set forth in Section 2.4(a).

     

    “Tax”
or
      “Taxes”
means
      all United States federal, state, local and foreign income, profits, franchise,
      gross receipts, payroll, sales, employment, use, property, real estate, excise,
      value added, estimated, stamp, alternative or add-on minimum, environmental,
      withholding and any other taxes, duties or assessments, together with all
      interest, penalties and additions imposed with respect to such amounts.

     

    “Tax
      Authority”
means
      any domestic, foreign, federal, national, state, county or municipal or other
      local government, any subdivision, agency, commission or authority thereof,
      or
      any quasi-governmental body exercising any taxing authority or any other
      authority exercising Tax regulatory authority. 

     

    “Tax
      Return”
means
      any return, report, information return or other document (including any related
      or supporting information) required to be filed with any taxing authority with
      respect to Taxes, including information returns, claims for refunds of Taxes
      and
      any amendments or supplements to any of the foregoing.

     

    “Third
      Party Claim”
has
      the
      meaning set forth in Section 8.3. 

     

    “Working
      Capital”
has
      the
      meaning set forth in Section 2.4(d).

     

    ARTICLE
      II

    PURCHASE
      AND SALE OF THE SHARES; ADJUSTMENT

     

    2.1. Purchase
      and Sale of the Shares. 

     

    (a) Subject
      to the terms and conditions hereof, at the Closing, each Seller shall sell,
      transfer, assign and deliver to Buyer, and Buyer shall purchase from each
      Seller, legal and beneficial ownership of the Shares held by such Seller, free
      and clear of Encumbrances of any kind. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) Subject
      to Section 2.4 hereof, the aggregate purchase price for the Shares (the
“Purchase
      Price”)
      shall
      consist of the following:

     

    (i) $2,000,000
      in cash in immediately available funds, subject to adjustment as provided herein
      (the “Cash
      Consideration”);

     

    (ii) unsecured
      promissory note in the aggregate original principal amount of $500,000,
      substantially in the form attached hereto as Exhibit
      A
      (the
“Note”);
      

     

    (iii) that
      number of fully paid, nonassessble shares of common stock of Buyer, par value
      $0.0001 per share (the “Buyer
      Common Stock”)
      as
      shall be equal to $500,000, calculated based on the average of the last reported
      sale prices per share of Buyer Common Stock on the NASD Capital Market (the
      “NASDAQ
      CM”)
      over
      the 20 consecutive
      trading days ending on the trading day that is two trading days prior to the
      Closing Date; and

     

    (iv) subject
      to the limitation set forth in Section 2.7 the earn-out amounts, if any,
      determined in accordance with the provisions of Sections 2.5 and
      2.6.

     

    2.2. Closing.
      The
      closing of the purchase and sale of the Shares (the “Closing”)
      will
      take place on the second Business Day following the satisfaction or waiver
      of
      the conditions set forth in Article
      VII,
      or at
      such other date as may be agreed to by the Parties (the date on which the
      Closing actually occurs being referred to as the “Closing
      Date”). 

     

    2.3. Deliveries
      and Payments at the Closing. 

     

    (a) At
      the
      Closing, Buyer shall deliver or cause to be delivered:

     

    (i) to
      the
      applicable Seller, such Seller’s Cash Consideration by wire transfer of
      immediately available funds to such account or accounts as may be designated
      by
      such Seller in writing no later than two Business Days prior to the Closing,
      in
      each case against delivery by such Seller of the certificates evidencing the
      Shares being sold by such Seller, duly endorsed or accompanied by duly executed
      stock powers;

     

    (ii) the
      Note
      referred to in Section 2.1(b)(ii); 

     

    (iii) to
      DeSio,
      Franzen & Associates Ltd. as escrow agent (the “Escrow
      Agent”),
      under
      an escrow agreement to be entered into at Closing, substantially in the form
      of
Exhibit
      B attached
      hereto (the “Escrow
      Agreement”),
      duly
      executed stock certificates for the shares of Buyer Common Stock representing
      each Seller’s Stock Consideration in the amounts set forth on Schedule A, to be
      held by the Escrow Agent in accordance with the terms and conditions of the
      Escrow Agreement; 

     

    (iv) to
      the
      Company, the officer’s certificate referred to in Section 7.2(c) hereof;
      and

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (v) such
      other documents as Sellers may reasonably request to demonstrate satisfaction
      of
      the conditions and compliance with the covenants set forth in this
      Agreement.

     

    (b) At
      Closing, Sellers shall deliver or cause to be delivered to Buyer:

     

    (i) a
      receipt
      for the payment of the Sellers’ Cash Consideration;

     

    (ii) Employment
      Agreements, dated as of the Closing Date, executed by each of Larry Bergfalk
      and
      Erick Detloff, each substantially in the form of Exhibit
      C
      attached
      hereto (each, an “Employment
      Agreement”);

     

    (iii) any
      closing certificates referred to in Section 7.1(c) hereof; and 

     

    (iv) such
      other documents as Buyer may reasonably request to demonstrate satisfaction
      of
      the conditions and compliance with the covenants set forth in this
      Agreement.

     

    2.4. Purchase
      Price Adjustment.

     

    (a) Within
      60
      days after the Closing Date, Buyer shall prepare and deliver to the Sellers
      a
      balance sheet of the Company prepared in accordance with United States generally
      accepted accounting principles (“GAAP”),
      and a
      statement attached thereto (the “Statement”),
      certified by an officer of Buyer, setting forth Working Capital (as defined
      in
      Section 2.4(d)) as of the close of business on the Closing Date (the
“Closing
      Working Capital”).

     

    (b) During
      the 30-day period following each Seller’s receipt of the Statement, the Sellers
      and their accountants shall be permitted to review the working papers of Buyer
      relating to the Statement. The Statement shall become final and binding upon
      the
      parties on the 30th day following delivery thereof, unless the Sellers’
Representative gives written notice of the Sellers’ disagreement with the
      Statement (a “Notice
      of Disagreement”)
      to
      Buyer prior to such date. Any Notice of Disagreement shall:

     

    (i) specify
      in reasonable detail the nature of any disagreement so asserted;

     

    (ii) only
      include disagreements based on mathematical errors or based on Closing Working
      Capital not being calculated in accordance with this Section 2.4; and

     

    (iii) be
      accompanied by a certificate of the Seller’s accountants stating that they
      concur with each of the positions taken by Sellers in the Notice of
      Disagreement.

     

    If
      a
      Notice of Disagreement is received by Buyer in a timely manner, then the
      Statement (as revised in accordance with Clause A or B below) shall
      become final and binding upon the Sellers and Buyer on the earlier of
      (A) the date the Sellers’ Representative (as defined below) and Buyer
      resolve in writing any differences they have with respect to the matters
      specified in the Notice of Disagreement or (B) the date any disputed
      matters are finally resolved in writing by the Accounting Firm (as defined
      below). During the 30-day period following the delivery of a Notice of
      Disagreement, the Sellers’ Representative and Buyer shall seek in good faith to
      resolve in writing any differences that they may have with respect to the
      matters specified in the Notice of Disagreement. During such period Buyer and
      its accountants shall have access to the working papers of the Seller’s
      accountants prepared in connection with their certification of the Notice of
      Disagreement. At the end of such 30-day period, the Sellers and Buyer shall
      submit to an independent accounting firm that has not had a previous
      relationship with the Sellers or Buyer (the “Accounting
      Firm”)
      for
      arbitration any and all matters that remain in dispute and that were properly
      included in the Notice of Disagreement, in the form of a written brief. The
      Accounting Firm shall be Deloitte or, if such firm is unable or unwilling to
      act, such other nationally recognized independent public accounting firm as
      shall be agreed upon by the parties hereto in writing. The Sellers and Buyer
      agree that judgment may be entered upon the determination of the Accounting
      Firm
      in any court having jurisdiction over the Party against which such determination
      is to be enforced. The parties shall instruct the Accounting Firm to render
      its
      decision as promptly as practicable but in no event later than 60 days after
      its
      selection. The cost of any arbitration (including the fees and expenses of
      the
      Accounting Firm and reasonable attorney fees and expenses of the parties)
      pursuant to this Section
      2.4
      shall be
      borne by Buyer and the Sellers in equal proportion as they may prevail on
      matters resolved by the Accounting Firm, which proportionate allocations shall
      also be determined by the Accounting Firm at the time the determination of
      the
      Accounting Firm is rendered on the merits of the matters submitted. The fees
      and
      disbursements of the Sellers’ accountants incurred in connection with their
      review of the Statement and certification of any Notice of Disagreement shall
      be
      borne by the Sellers, and the fees and disbursements of the accountants of
      Buyer
      incurred in connection with their certification of the Statement and review
      of
      any Notice of Disagreement shall be borne by Buyer.

     

    
      
        
        

      

      
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    (c) The
      Purchase Price shall be decreased by the amount by which Closing Working Capital
      is less than $300,000, which amount shall be payable by Sellers by reduction
      of
      such amount from the Note or, by Buyer
      having
      the right to set-off payment to Sellers with respect to any Earn-Out Payment
      that remains payable, at Buyer’s election upon notice to Sellers. For the
      avoidance of doubt, provided that Sellers deliver the certificate required
      to be
      delivered by Sellers to Buyer as provided in Section 7.1(p) and subject to
      the
      provisions of this Section 2.4, prior to Closing, Sellers may transfer to
      accounts designated by Sellers any cash of the Company in excess of the $300,000
      Working Capital requirement. In
      the
      event that Sellers choose not to exercise their right to the distribution of
      the
      Closing Working Capital in excess of $300,000 prior to the Closing Date
      and defer distribution of said funds until after the delivery and
      acceptance by both parties of a balance sheet and the Statement referred to
      in
      Section 2.4(a) of this Agreement, Buyer agrees to disburse said funds within
      then (10) days of the final acceptance of the Sellers or their designated agent.
      This working capital disbursement to the Sellers shall have no effect on
      the EBITDA Earn-Out Payments stipulated in Section 2.5(c), (i), (ii), and (iii),
      or the Project Earn-Out Payments referred to in Section 2.7 of the
      Agreement.  

    

    (d) The
      term
“Working
      Capital”
means
      Current Assets (as defined below) minus Current Liabilities (as defined below).
      The terms “Current
      Assets”
and
      “Current
      Liabilities”
mean
      the consolidated current assets and consolidated current liabilities,
      respectively, of the Company calculated in accordance with GAAP applied
      consistently throughout the periods involved. Without limiting the generality
      of
      the foregoing, Current Liabilities will include all accrued tax liabilities
      through the Closing Date.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    2.5. EBITDA
      Earn-Out.

     

    (a) Delivery
      of Financial Information.
      Within
      90 days after the last Business Day of each EBITDA Earn-Out Period (as defined
      below), Buyer shall deliver to each Seller a work sheet (the “EBITDA
      Earn-Out Worksheet”)
      prepared by Buyer’s independent public accountants or Buyer’s Chief Financial
      Officer (or his designee), setting forth Buyer’s determination of earnings with
      respect to the business of the Company (but not including any projects or other
      items set forth in the Closing Funnel Report (as defined below)) before
      interest, taxes, depreciation and amortization (“EBITDA”)
      equal
      to Buyer’s determination of such Seller’s Proportionate Interest of the EBITDA
      Earn-Out Payments for said Earn-Out Period. Subject to execution of a
      Non-Disclosure Agreement in customary form, Sellers shall have the right, at
      Sellers’ expense, once during each EBITDA Earn-Out Period, at reasonable times
      and upon reasonable notice, to examine, and to have one representative, who
      shall initially be Larry Bergfalk or Sellers’ authorized agent, (the
“Sellers’
      Representative”)
      examine, the books and records relating to the Company to determine whether
      the
      calculation and payment of the EBITDA Earn-Out Payment are being conducted
      in
      accordance with the provisions of this Agreement.

     

    (b) Disputes
      Regarding EBITDA Earn-Out Worksheet.
      In the
      event that Sellers dispute any amounts reflected on any EBITDA Earn-Out
      Worksheet, Sellers’ Representative shall notify Buyer in writing (such notice, a
“Section
      2.5(b) Notice”),
      within 30 days after the delivery of the EBITDA Earn-Out Worksheet, setting
      forth the amount, nature and basis of the dispute. Within the following 10
      days,
      the parties shall use their reasonable best efforts to resolve in good faith
      such dispute. Upon their failure to do so, Sellers’ Representative and Buyer
      shall, within 10 days from the end of such 10 day period, jointly engage an
      Independent Accountant (the “Section
      2.5(b) Accountants”).
      The
      Section 2.5(b) Accountants shall be engaged jointly by Buyer and Sellers’
Representative to decide the dispute with respect to the EBITDA Earn-Out
      Worksheet within 30 days from its appointment; such decision to be communicated
      to both parties in writing. The decision of the Section 2.5(b) Accountants
      shall
      be final and binding upon the parties and accordingly a declaratory judgment
      by
      a court of competent jurisdiction may be entered in accordance therewith. The
      fees and expenses of such Section 2.5(b) Accountants shall be borne by one-half
      by Buyer and one-half by Sellers’ Representative.

     

    (c) Calculation
      of EBITDA Earn-Out Payment.
      Subject
      to the $600,000 limitation on payment set forth herein, the EBITDA Earn-Out
      Payment (the “EBITDA
      Earn-Out Payment”)
      for
      each of the two twelve 12 month periods beginning on January 1, 2008 and ending
      on December 31, 2008 and beginning on January 1, 2009 and ending on December
      31,
      2009 (each such twelve-month period individually, an “EBITDA
      Earn-Out Period,”)
      shall
      be determined as follows with respect to any EBITDA Earn-Out
      Period:

     

    (i) to
      the
      extent EBITDA during any EBITDA Earn-Out Period is less than or equal to
      $600,000, the Earn-Out Payment shall equal $0.00; 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (ii) to
      the
      extent EBITDA during any EBITDA Earn-Out Period is greater than $600,000, the
      EBITDA Earn-Out Payment shall equal $150,000 plus the sum of (x) $1 for every
      dollar of EBITDA between $600,000 and $750,000; and

     

    (iii) in
      addition to subsection 2.5(c)(ii), to the extent EBITDA during any EBITDA
      Earn-Out Period is greater than $750,000, the EBITDA Earn-Out Payment shall
      equal 20% of such excess amount.

     

    2.6. Project
      Earn-Out.
      A
      Closing Funnel Report (the “Closing
      Funnel Report”)
      outlining all Company projects under contract as of the Closing Date, and as
      shall be amended from time to time to include any project or proposal that
      comes
      under contract through December 31, 2008, shall be delivered by Sellers to
      the
      Buyer at Closing. In addition to any EBITDA Earn-Out Payment, Sellers shall
      be
      entitled to a one-time contingent payment equal to 50% of the after tax profit
      earned on the projects set forth in the Closing Funnel Report (the “Project
      Earn-Out Payment”,
      and
      together with the EBITDA Earn-Out Payment, the “Earn-Out
      Payments”),
      which
      Project Earn-Out Payment, if any, will be paid to the Sellers on March 31,
      2009.

     

    2.7. Payment
      of Earn-Outs.
      Subject
      to the provisions of Section 2.8, Buyer shall deliver any Earn-Out Payment
      to
      Sellers, or an authorized agent designated by Sellers, based on each Seller’s
      Proportionate Interest; provided, that notwithstanding anything to the contrary
      set forth herein, in no event shall Sellers be entitled to receive any Earn-Out
      Payments in excess of $600,000 in the aggregate. 

     

    2.8. Right
      of Set-Off.
      Buyer’s
      obligation to make the Earn-Out Payments is subject to reduction or non-payment
      due to (a) any claim for Damages that a Buyer Indemnified Party may have against
      Sellers in accordance with Article VIII and (b) any decrease in the Purchase
      Price pursuant to Section 2.4(c).  

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES RELATING TO THE COMPANY

     

    The
      Sellers and the Company jointly and severally represent and warrant to Buyer
      as
      follows:

     

    3.1. Organization
      and Standing.
      The
      Company is a corporation, duly organized, validly existing and in good standing
      under the Laws of the State of Illinois and has all requisite power and
      authority to own, lease and operate its properties and assets and to carry
      on
      its business as now being conducted. The Company does not have any direct or
      indirect subsidiaries, and does not own, directly or indirectly, any shares
      of
      or other ownership interest in any Person. The Company is duly licensed or
      qualified to do business and is in good standing in each jurisdiction in which
      such qualification or licensing is necessary because of the property and assets
      owned, leased or operated by it or because of the nature of its business as
      now
      being conducted, except for any failure to so qualify or be licensed or in
      good
      standing that, individually or in the aggregate, would not reasonably be
      expected to have a Material Adverse Effect. Schedule
      3.1
      lists
      the jurisdictions in which the Company is qualified to conduct business as
      a
      foreign corporation. The Company has made available to Buyer true, complete
      and
      correct copies of the constitutive documents of the Company, as amended to
      the
      date of this Agreement, and has made available to Buyer each such entity’s its
      minute books and stock records. The Company is not in violation of any provision
      of its respective certificate or articles of incorporation, by-laws or similar
      constitutive document. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    3.2. Authorization.
      The
      execution, delivery and performance by the Company of this Agreement and the
      consummation by each of the transactions contemplated hereby and thereby are
      within the Company’s power and have been duly authorized by all necessary action
      on the part of the Company. This Agreement constitutes (assuming the due
      execution and delivery by each of the other parties hereto) the legal, valid
      and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar Laws relating to or
      affecting creditors’ rights generally and general equitable principles (whether
      considered in a proceeding in equity or at Law).

     

    3.3. Noncontravention.
      Except
      as set forth in Schedule
      3.3,
      the
      execution, delivery and performance of this Agreement and the transactions
      contemplated hereby by the Company does not, and the consummation by the Company
      of the transactions contemplated hereby will not, (a) contravene or violate
      any
      material provision of the organizational documents of the Company or (b)
      contravene or violate any material provision of, or result in the termination
      or
      acceleration of, or entitle any party to accelerate any obligation or
      indebtedness under, or result in the imposition of any Encumbrance (other than
      a
      Permitted Encumbrance) on the Company pursuant to any mortgage, lease,
      franchise, license, permit, agreement, instrument, Law, order, arbitration
      award, judgment or decree to which the Company is a party or by which the
      Company is bound.

     

    3.4. Consents
      and Filings.
      No
      consent, approval, license, permit, order or authorization (each, a
“Consent”)
      of, or
      registration, declaration or filing (each, a “Filing”)
      with,
      any Governmental Entity is required for or in connection with the execution
      and
      delivery of this Agreement by the Company or the consummation by the Company
      of
      the transactions contemplated hereby.

     

    3.5. Capital
      Stock.
      The
      authorized capital stock of the Company consists of 1,000,000 shares of SMLB
      Common Stock, of which 1,000 shares of SMLB Common Stock are outstanding as
      of
      the date hereof. Sellers own 100% of the issued and outstanding shares of Common
      Stock. All of the issued and outstanding shares of SMLB Common Stock are duly
      authorized, validly issued, fully paid and nonassessable. None of the Shares
      were issued in violation of (a) any purchase option, right of first refusal,
      preemptive, subscription or similar rights under any provision of applicable
      Law, (b) the organizational documents of the Company, (c) any agreement to
      which
      the Company is subject or by which it is bound, or (d) the Securities Act of
      1933 (the “Securities Act”) or any state blue sky laws. There are no outstanding
      warrants, options, rights, agreements, convertible or exchangeable securities
      or
      other commitments pursuant to which the Company is or may become obligated
      to
      issue, sell, purchase, return or redeem any shares of capital stock of the
      Company. There are no voting trusts or other similar agreements with respect
      to
      the voting of the SMLB Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    3.6. Financial
      Statements.
      Attached hereto as Schedule
      3.6
      are true
      and correct copies of (a) the balance sheets as of December 31, 2006 and the
      related statements of operations, changes in stockholders’ equity and cash flows
      for the years then ended for the Company, and b) the unaudited balance sheets
      as
      of November 30, 2007 and the related statements of operations and cash flows
      of
      the Company for the 11 month period then ended (collectively “Financial
      Statements”).
      The
      Financial Statements have been prepared in accordance with GAAP consistently
      applied (except as may be indicated in the notes thereto) during the periods
      involved and fairly present in all material respects the financial position
      and
      the results of operations and cash flows of the Company as of the dates and
      for
      the periods presented therein.

     

    3.7. Absence
      of Undisclosed Liabilities.
      Except
      as set forth on Schedule
      3.7,
      the
      Company does not have any material liabilities except liabilities (a) reflected
      on, accrued or reserved against in the Financial Statements or the notes thereto
      or (b) incurred in the ordinary course of business since January
      1, 2007

     

    3.8. Absence
      of Certain Changes.
      Since
      January 1, 2007, the Company has operated its business in the ordinary course,
      consistent with past practice and there has not been any event or occurrence
      that has had or could reasonably be expected to have a Material Adverse Effect.
      Without limiting the scope of the foregoing, except as set forth on Schedule
      3.8:

     

    (a) The
      Company has not sold, transferred, disposed of, or agreed to sell, transfer
      or
      dispose of, any material assets other than in the ordinary course of
      business;

     

    (b) The
      Company has not acquired any material assets except in the ordinary course
      of
      business, nor acquired or merged with any other business; 

     

    (c) No
      material tangible asset or property owned, leased or licensed by the Company
      has
      been destroyed, damaged or otherwise lost (whether or not covered by
      insurance);

     

    (d) The
      Company has not increased the salary or other compensation payable or to become
      payable to any of its respective officers, directors, partners or employees
      or
      obligated itself to pay any bonus or other additional salary or compensation
      (including, without limitation, through any deferred compensation, severance,
      retirement, change of control, retention or similar agreement or arrangement)
      to
      any such person other than in the ordinary course of business and consistent
      with past practice; 

     

    (e) The
      Company has not made any material change in any pricing, marketing, purchasing,
      tax or accounting practice, or made any material tax election or settled or
      compromised any material income tax liability;

     

    (f) The
      Company has not made any declaration, setting aside or payment of any dividend
      or other distribution with respect to any shares of its capital stock, or any
      repurchase, redemption or other acquisition of any outstanding shares of its
      capital stock or other securities;

     

    (g) The
      Company has not made any loan, advance or capital contribution to or investment
      in any Person;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (h) The
      Company has not amended, rescinded or terminated (and not renewed) any existing
      Material Contract or arrangement and no such Material Contract or arrangement
      has expired or terminated (and not been renewed) by its terms;

     

    (i) The
      Company has not settled or compromised any material Legal Proceeding;
      and

     

    (j) The
      Company has not entered into any commitment (contingent or otherwise) to do
      any
      of the foregoing.

     

    3.9. Litigation.
      Except
      as set forth in Schedule
      3.9,
      (a)
      there are no Legal Proceedings by or before any Governmental Entity or
      arbitration tribunal pending, or to the Knowledge of the Company, threatened,
      against the Company, and (b) no injunction, writ, temporary restraining order,
      decree or any order of any nature has been issued by any court or other
      Governmental Entity relating to the Company or seeking or purporting to enjoin
      or restrain the execution, delivery and performance by the Company of this
      Agreement or the consummation of the transactions contemplated
      hereby.

     

    3.10. Compliance
      with Laws. 

     

    (a) The
      Company conducts its business in material compliance with all applicable Laws.
      

     

    (b) The
      Company has all material Permits necessary for the conduct of its business
      as
      presently conducted, all of such Permits are valid and in full force and effect
      and the Company is in compliance with the terms of all of such Permits. Except
      as set forth in Schedule
      3.10(b),
      the
      consummation of the transactions contemplated by this Agreement will not result
      in the non-renewal, revocation or termination of any Permit. 

     

    3.11. Material
      Contracts. 

     

    (a) Set
      forth
      in Schedule
      3.11(a)
      is a
      list of the following agreements in effect on the date of this
      Agreement:
      each
      commitment or agreement (other than purchase orders and similar agreements
      entered into in the ordinary course of business) for the purchase of any
      materials, supplies, goods, products, services or equipment or licensing of
      rights that requires an annual expenditure by the Company of more than $50,000
      that cannot be terminated on not more than ninety calendar days’ notice without
      payment of any penalty;

     

    (i) each
      personal property under which the Company is a lessee that requires annual
      payments of more than $50,000 that cannot be terminated on not more than ninety
      calendar days’ notice without payment of any penalty;

     

    (ii) any
      partnership, joint venture or other similar agreement or arrangement to which
      the Company is a party;

     

    (iii) any
      agreement relating to the merger or consolidation with, or acquisition or
      disposition of the securities or all or substantially all of the business or
      assets of, any other Person;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (iv) any
      agreement relating to indebtedness for borrowed money (whether incurred,
      assumed, guaranteed or secured by any asset);

     

    (v) any
      agreement between any Seller or any controlled Affiliate of any Seller, on
      the
      one hand, and the Company, on the other hand; 

     

    (vi) any
      employment, consulting, severance, retention and deferred compensation
      agreements involving the Company;

     

    (vii) any
      agreement that limits in any material respect the freedom of the Company to
      compete in any line of business or with any Person or in any area;
      and

     

    (viii) any
      other
      agreement that is material to the business of the Company.

     

    (b) Except
      as
      set forth in Schedule
      3.11(b),
      (i)
      each Material Contract is a legal, valid and binding obligation of the Company,
      in full force and effect and enforceable against the Company in accordance
      with
      its terms, (ii) the Company has not received written notice, and has no reason
      to believe, that any Material Contract is not a legal, valid and binding
      obligation of the counterparty thereto, in full force and effect and enforceable
      against such counterparty in accordance with its terms, (iii) the Company has
      not received notice of any material default under any Material Contract, and
      (iv) the Company has not issued a notice to any counterparty to a Material
      Contract that such party is in default under any Material Contract. The Company
      has made available to Buyer accurate copies of the Material
      Contracts.

     

    3.12. Intellectual
      Property. 

     

    (a) Schedule
      3.12(a)
      sets
      forth a list of all U.S. and foreign patents, registrations and applications
      for
      Intellectual Property and all material unregistered Intellectual Property owned
      by the Company. The Company owns or has the right to use all of the Intellectual
      Property used in its business and all of the patents, registrations and
      applications listed on Schedule
      3.12(a)
      are
      unexpired and subsisting, and have not been abandoned or cancelled.

     

    (b) 
      The
      Company has taken all reasonable steps to maintain the confidentiality of all
      information that constitutes a material trade secret of the
      Company.

     

    (c) Schedule
      3.12(c)
      sets
      forth a complete and accurate list of (i) all material agreements granting
      to
      the Company any material right under or with respect to any Intellectual
      Property owned by a third party that is used in connection with the business
      of
      the Company (collectively, the “Inbound
      Licenses”),
      other
      than commercially available standard software applications and (ii) all material
      license agreements under which the Company has granted any rights under any
      Intellectual Property to any third party (collectively, the “Outbound
      Licenses”),
      other
      than non-exclusive licenses granted in the ordinary course of business in a
      standard form (which form has been provided to Buyer). No loss or expiration
      of
      any material Intellectual Property licensed to the Company under any Inbound
      License is pending or, to the Knowledge of the Company, reasonably foreseeable
      or threatened. There is no outstanding or, to the Knowledge of the Company,
      threatened dispute or disagreement with respect to any Inbound License or
      Outbound License. The consummation of the transactions contemplated by this
      Agreement will not result in the loss or impairment of, or give rise to any
      right of any third party to terminate or re-price or otherwise modify any of
      the
      Company’s rights or obligations under any Inbound License or any Outbound
      License.

     

    
      
        
        

      

      
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    (d) The
      Intellectual Property owned by the Company or licensed under any Inbound License
      constitutes all the material Intellectual Property rights necessary for the
      conduct of the businesses of the Company as each is currently
      conducted.

     

    (e) None
      of
      the products or services distributed, sold or offered by the Company, nor any
      technology, content, materials or other Intellectual Property used, displayed,
      published, sold, distributed or otherwise commercially exploited by or for
      the
      Company materially infringes upon, misappropriates, or violates any Intellectual
      Property of any third party. The Company has not received any written notice
      or
      claim asserting that any such infringement, misappropriation or violation is
      occurring or has occurred. To the Knowledge of the Company, no third party
      is
      misappropriating or infringing any material Intellectual Property owned by
      the
      Company.

     

    3.13. Benefit
      Plans. 

     

    (a) Schedule
      3.13(a)
      lists
      each material “employee
      benefit plan”
within
      the meaning of Section 3(3) of the Employee Retirement Income Security Act
      of
      1974, as amended (“ERISA”),
      and
      each material severance, change in control or employment plan, program or
      agreement, and vacation, incentive, bonus, stock option, stock purchase and
      restricted stock plan, program or policy sponsored or maintained by the Company
      for the benefit of current and former employees of the Company (each, a
“Company
      Plan”).
      Copies or descriptions of each Company Plan have been or will be furnished
      or
      made available to Buyer.

     

    (b) Except
      as
      set forth in Schedule
      3.13(b),
      each
      Company Plan is in compliance with ERISA, the Code and other applicable Laws
      and
      has been administered in all material respects in accordance with the terms
      of
      such plan and all applicable Laws. Each Company Plan that is intended to be
      qualified within the meaning of Section 401 of the Code has received a favorable
      determination letter as to its qualification, and to the Knowledge of the
      Company, nothing has occurred that could reasonably be expected to adversely
      affect such qualification.

     

    (c) Except
      as
      set forth in Schedule
      3.13(c),
      no
      Legal Proceedings involving any Company Plan has occurred or, to the Knowledge
      of the Company, is threatened (other than routine claims for benefits by
      participants).

     

    (d) The
      Company does not contribute to any “multiemployer
      plan”
(within
      the meaning of Section 3(37) of ERISA) or has incurred any withdrawal liability
      under any such multiemployer plan under Title IV of ERISA which remains
      unsatisfied.

     

    3.14. Labor;
      Employees. 

     

    (a) Except
      as
      set forth in Schedule
      3.14,
      the
      Company is neither a party to or bound by any collective bargaining or similar
      labor agreement, nor is one presently being negotiated, there are no existing
      or, to the Knowledge of the Company, threatened strikes, lockouts or other
      labor
      stoppages involving the employees of the Company, there is no union organization
      campaign being conducted with respect to employees of the Company, and there
      is
      no litigation relating to employment matters pending against the
      Company.

     

    
      
        
        

      

      
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    (b) Schedule
      3.14(b)
      sets
      forth a true and correct list of the name and current annual salary of each
      officer or employee of the Company whose annual base salary exceeds $50,000
      and
      any other form of compensation (other than salary, bonuses or customary
      benefits) paid or payable by the Company to each such officer or employee for
      the current fiscal year.

     

    3.15. Taxes.
      Except
      as set forth in Schedule
      3.15,
      (a) all
      Tax Returns required to be filed by the Company have been filed (except those
      under valid extension), (b) all Taxes which were shown to be due on such Tax
      Returns have been paid (unless such Taxes are being contested in good faith),
      (c) there is no Legal Proceeding or audit now pending against, or with respect
      to, the Company in respect of any Taxes or assessments, (d) the Company has
      never been a member of an affiliated group (other than a group the common parent
      of which is the Company filing a consolidated Return, (e) the Company does
      not
      have any liability for Taxes of any Person arising from the application of
      Treasury Regulation Section 1.1502-6 or any analogous provision of state, local
      or foreign Law, or as a transferee or successor, by contract, or otherwise,
      (f)
      the Company is not a party to any Tax sharing agreement or any agreement that
      obligates it to make any payment computed by reference to the Taxes, taxable
      income or taxable losses of any other Person, (g) all Taxes required to be
      withheld, collected or deposited by or with respect to the Company have been
      timely withheld, collected or deposited as the case may be, and to the extent
      required, have been paid to the relevant Tax Authority and (h) there are no
      liens with respect to Taxes upon the assets of the Company except for statutory
      liens for Taxes not yet due and payable or liens for Taxes that are being
      contested in good faith.

     

    3.16. Environmental
      Matters.
      Except
      as disclosed in Schedule
      3.16
      (a) the
      Company complies with all applicable Laws protecting the quality of the ambient
      air, soil, surface water or groundwater or otherwise relating to pollution,
      contamination or protection of the environment and possesses and complies with
      all applicable Permits required under any such Laws to operate as it currently
      operates; and (b) there are no Legal Proceedings pending or, to the Knowledge
      of
      the Company, threatened, that seek to enforce or impose liability under any
      such
      Law against the Company, or to revoke or modify any such Permit held by the
      Company. 

     

    3.17. Real
      Property.
      Schedule
      3.17
      hereto
      sets forth a complete and correct list of all real property owned or leased
      by
      the Company, identifying in each case whether such property is owned or leased.
      The Company has good title to, or a valid and binding leasehold interest in
      the
      real property owned by the Company, free and clear of all Encumbrances (other
      than Permitted Encumbrances). Each lease with respect to any real property
      leased by the Company (a “Lease”)
      is in
      full force and effect as of the date hereof and the Company is not in breach
      or
      default or has repudiated any provision of any Lease, and, to the Knowledge
      of
      the Company, neither has any counterparty to any Lease. No event has occurred
      which, with notice or lapse of time, would constitute a breach or default or
      permit termination, modification or acceleration under any Lease. There are
      no
      material disputes, oral agreements, or forbearance programs in effect as to
      any
      Lease. The Company has not assigned, transferred, conveyed, subleased,
      mortgaged, deeded in trust or encumbered any interest in the leasehold
      interest. 

     

    
      
        
        

      

      
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    3.18. Personal
      Property.
      The
      Company owns or has a valid leasehold interest in all personal property used
      in
      its business and all such personal property is in good working order, wear
      and
      tear excepted, and no material maintenance or replacement projects are required
      or scheduled for the next 12 months.

     

    3.19. Sufficiency
      of Assets.
      The
      assets of the Company constitute all of the assets (whether real or personal,
      tangible or intangible) that are reasonably necessary for the continued conduct
      of the business of the Company after the Closing in the same manner as presently
      conducted. All of such assets are either reflected on the Financial Statements
      or were acquired since December 31, 2006, except for inventories sold since
      such
      date in the ordinary course of business. 

     

    3.20. Insurance.
      Schedule
      3.20
      contains
      an accurate and complete description of all material policies of fire,
      liability, workers’ compensation, property, casualty and other forms of
      insurance owned or held by the Company. All such policies are in full force
      and
      effect, all premiums with respect thereto covering all periods up to and
      including the Closing Date will have been paid, and no notice of cancellation
      or
      termination has been received with respect to any such policy.

     

    3.21. Suppliers
      and Customers.
      Schedule
      3.21
      lists
      the top 20 suppliers (by amount paid to them) and the top 20 customers (by
      the
      amount paid by them) of the Company, taken as a whole, for the year ended
      December 31, 2006 and for the 11 months ended November 30, 2007. The Company
      has
      not (a) received any written notice of, or has any reason to believe that there
      are, any outstanding or threatened disputes with any material supplier or
      customer that have not been resolved, or (b) any reason to believe that there
      exist any reasonable grounds for any such dispute. No material supplier or
      customer has indicated in the last twelve months that it intends to stop,
      materially decrease the rate of, or materially change the terms on which it
      does
      business with the Company.

     

    3.22. Bank
      Accounts; Authorized Signatories.
      Schedule
      3.22
      contains
      a complete and correct list of the names and locations of all banks in which
      the
      Company has a bank account, lock box, safe deposit box and a list of all persons
      authorized to withdraw funds from or otherwise take actions with respect
      thereto.

     

    3.23. Brokers.
      Neither
      the Company nor any Seller has employed any investment banker, broker or finder
      or incurred any liability for any investment banking fees, brokerage fees,
      agent’s commissions or finders’ fees in connection with the transactions
      contemplated by this Agreement for which Buyer or the Company has, will have
      or
      may have any liability.

     

    3.24. Affiliate
      Transactions.
      Except
      for employment and consulting relationships and the payment of compensation
      and
      benefits in the ordinary course of business or as disclosed Schedules
      3.8 or 3.11,
      the
      Company is not a party to any material agreement or arrangement with any
      stockholder, officer, director or Affiliate of the Company.

    

    3.25. Books
      and Records.
      The
      minutes of the meetings of the Company’s stockholders, boards of directors and
      committees thereof and the written consents executed in lieu of the holding
      of a
      meeting contained in the minute books of the Company delivered to Buyer are
      true
      and correct. 

     

    
      
        
        

      

      
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    3.26. Restrictions
      on Business Activities.
      Except
      as set forth on Schedule
      3.26,
      there
      is no agreement, judgment, injunction, order or decree binding upon the Company
      which has the effect of prohibiting or impairing any current business practice
      of the Company, any acquisition of property by the Company or the conduct of
      business by the Company as currently conducted.

     

    3.27. Certain
      Business Practices.
      The
      Company has not: (a) used any funds for material unlawful contributions, gifts,
      entertainment or other unlawful payments relating to political activity; (b)
      made any material unlawful payment to any foreign or domestic government
      official or employee or to any foreign or domestic political party or campaign
      or violated any provision of the Foreign Corrupt Practices Act of 1977, as
      amended; (c) consummated any transaction, made any payment, entered into any
      agreement or arrangement or taken any other action in violation of Section
      1128B(b) of the Social Security Act, as amended; or (d) made any other material
      unlawful payment.

     

    3.28. Takeover
      Statutes.
      No
      applicable takeover statute or similar Law and no provision of the certificate
      of incorporation or bylaws, or other organizational document or governing
      instruments of the Company or any contract to which the Company is a party
      (a)
      would or would purport to impose restrictions which might adversely affect
      or
      delay the consummation of the transactions contemplated by this Agreement or
      (b)
      as a result of the consummation of the transactions contemplated by this
      Agreement or the acquisition of Acquired Interest by Buyer (i) would or would
      purport to restrict or impair the ability of Buyer to vote or otherwise exercise
      the rights of a stockholder with respect to securities of the Company or (ii)
      would or would purport to entitle any Person to acquire securities of the
      Company.

     

    3.29. Disclosure.
      Neither
      this Agreement (including the exhibits and schedules hereto) nor any certificate
      or statement provided or to be provided to Buyer by or on behalf of the Company
      pursuant hereto, taken together as a whole, contains or will contain any untrue
      statement of a material fact or omits or will omit to state a material fact
      necessary in order to make the statements contained herein or therein not
      misleading in light of the circumstances under which they were made or necessary
      to provide a prospective purchaser of the Company with all information material
      thereto.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES RELATING TO THE SELLERS

     

    Each
      Seller, severally and not jointly, hereby represents and warrants to Buyer
      as
      follows:

     

    4.1. Authorization.
      The
      execution, delivery and performance by such Seller of this Agreement and the
      consummation by such Seller of the transactions contemplated hereby and thereby
      are within such Seller’s powers and have been duly authorized by all necessary
      action on the part of such Seller. This Agreement constitutes (assuming the
      due
      execution and delivery by each of the other parties hereto) the legal, valid
      and
      binding obligation of such Seller, enforceable against such Seller in accordance
      with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other Laws relating to or affecting
      creditors’ rights generally and general equitable principles (whether considered
      in a proceeding in equity or at Law). 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    4.2. The
      Shares.
      Such
      Seller is the record and beneficial owner of the Shares to be sold by such
      Seller hereunder, free and clear of any Encumbrances and, upon transfer of
      the
      Shares to Buyer on the Closing Date in accordance with the terms of this
      Agreement, Buyer will receive good and valid title to the Shares, free and
      clear
      of any Encumbrances.

     

    4.3. Consents
      and Filings.
      No
      Consent or Filing with, any Governmental Entity is required for or in connection
      with the execution and delivery of this Agreement by such Seller, and the
      consummation by such Seller of the transactions contemplated hereby. 

     

    4.4. Noncontravention.
      The
      execution, delivery and performance of this Agreement by such Seller does not,
      and the consummation by such Seller of the transactions contemplated hereby
      will
      not, (a) contravene or violate any provision of the organizational documents
      of
      such Seller, or (b) contravene or violate any provision of, or result in the
      termination or acceleration of, or entitle any party to accelerate any
      obligation or indebtedness under, or result in an adverse claim to the Shares
      held by such Seller pursuant to any mortgage, lease, franchise, license, permit,
      agreement, instrument, law, order, arbitration award, judgment or decree to
      which such Seller is a party or by which such Seller is bound. 

     

    4.5. No
      Legal Proceedings.
      No
      Legal Proceedings are pending or threatened against such Seller relating to,
      or
      that could prevent or delay the consummation of, the transactions contemplated
      hereby.

     

    4.6. Receipt
      of Buyer Common Stock for Seller’s Own Account.
      The
      Buyer Common Stock is being acquired for investment for such Seller’s own
      account, not as a nominee or agent, and not with a view to the sale or
      distribution of all or any part thereof in violation of federal or state
      securities laws.

     

    4.7. Accredited
      Investor.
      Each
      Seller is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act. Each Seller agrees to furnish any additional information
      requested to assure compliance with applicable federal and state securities
      laws
      in connection with the purchase of the Buyer Common Stock and sale of the
      Shares.

     

    4.8. Disclosure
      of Information.
      Each
      Seller represents and warrants that (a) he or she has had an opportunity to
      discuss the Buyer’s business, management, financial affairs and is aware of the
      character, business acumen and general business and financial circumstances
      of
      Buyer, (b) has the requisite knowledge and experience to assess the relative
      merits and risks of a sale of the Shares and a purchase of the Buyer Common
      Stock, (c) has received and has carefully read and evaluated copies of all
      documents relevant to the sale and purchase contemplated by this Agreement,
      and
      (d) has had full opportunity to ask questions and receive answers concerning
      the
      historical business and operations of the Buyer, as well to evaluate the
      prospects, future financial condition and the likelihood of success of
      Buyer.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    4.9. Restricted
      Securities.
      Each
      Seller is
      aware
      that the Buyer Common Stock is subject to significant restrictions on transfer
      and may not be freely sold for one year from the date of initial transfer to
      Sellers or Escrow Agent. Such Seller represents that he or she (a) has liquid
      assets sufficient to assure that the purchase contemplated by this Agreement
      will cause no undue financial difficulties, (b) can afford the complete loss
      of
      his or her investment, and (c) can provide for current needs and possible
      contingencies without the need to sell or dispose of the Buyer Common
      Stock.

     

    4.10. Legends.
      In
      addition to any legend placed on the certificates pursuant to any other
      agreement or arrangement among the parties, each certificate evidencing Buyer
      Common Stock shall bear the following legends (unless Buyer receives an
      acceptable opinion of counsel that any such legend is not required): 

     

    THE
      SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR
      QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY STATE, AND MAY
      NOT
      BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SAID ACT AND APPLICABLE STATE LAWS, OR AN EXEMPTION FROM THE
      REGISTRATION AND QUALIFICATION REQUIREMENTS THEREOF.

     

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    Buyer
      hereby represents and warrants to the Company and to the Sellers as
      follows:

     

    5.1. Organization
      and Existence.
      Buyer
      is a corporation duly organized, validly existing and in good standing under
      the
      Laws of the State of Delaware and has all requisite power and authority to
      enter
      into this Agreement and to consummate the transactions contemplated
      hereby.

     

    5.2. Authorization.
      The
      execution, delivery and performance by Buyer of this Agreement and the
      consummation by Buyer of the transactions contemplated hereby are within Buyer’s
      powers and have been duly authorized by all necessary action on the part of
      Buyer. This Agreement constitutes (assuming the due execution and delivery
      by
      each of the other parties hereto) the legal, valid and binding obligation of
      Buyer, enforceable against Buyer in accordance with their terms, subject to
      the
      effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
      moratorium and other similar Laws relating to or affecting creditors’ rights
      generally and general equitable principles (whether considered in a proceeding
      in equity or at Law).

     

    5.3. Consents
      and Filings.
      No
      Consent of, or Filing with, any Governmental Entity by Buyer is required for
      or
      in connection with the execution and delivery of this Agreement and the
      consummation by Buyer of the transactions contemplated hereby.

     

    5.4. Noncontravention.
      The
      execution, delivery and performance by Buyer of this Agreement do not, and
      the
      consummation by Buyer of the transactions contemplated hereby and thereby will
      not, (a) contravene or violate any provision of the organizational documents
      of
      Buyer, or (b) contravene or violate any provision of, or result in the
      termination or acceleration of, or entitle any party to accelerate any
      obligation or indebtedness under, any mortgage, lease, franchise, license,
      permit, agreement, instrument, Law, order, arbitration award, judgment or decree
      to which Buyer is a party or by which Buyer is bound, except in the case of
      clause (b) to the extent that any such events would not materially impair or
      materially delay the ability of Buyer to effect the Closing.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    5.5. No
      Legal Proceedings.
      There
      are no Legal Proceedings pending against Buyer, and Buyer is not subject to
      any
      judgment, decree, injunction or order of any Governmental Entity which,
      individually or in the aggregate would, enjoin, rescind or materially delay
      the
      transactions contemplated by this Agreement or otherwise prevent Buyer from
      complying in all material respects with the terms and provisions hereof or
      thereof.

     

    5.6. Valid
      Issuance of Buyer Common Stock.
      The
      Buyer Common Stock, when issued and delivered in accordance with the terms
      and
      for the consideration set forth in this Agreement, will be validly issued,
      fully
      paid and nonassessable. Assuming the accuracy of each Seller’s representations
      above, the Buyer Common Stock will be issued in compliance with applicable
      federal and state securities laws.

     

    5.7. Brokers.
      Neither
      Buyer nor any of Buyer’s directors, officers, employees or agents has employed
      any investment banker, broker or finder or incurred any liability for any
      investment banking fees, brokerage fees, commissions or finders’ fees or any
      other fees or commissions to investment bankers, brokers or finders in
      connection with the transactions contemplated by this Agreement for which any
      Seller, or, in the event the Closing does not occur, the Company, has, will
      have
      or may have any liability.

     

    ARTICLE
      VI

    COVENANTS

     

    6.1. Conduct
      of the Business.
      From
      the date hereof until the Closing Date, Sellers shall cause the Company to
      (a)
      operate its business in the ordinary course in all material respects, (b)
      promptly advise Buyer of any material adverse change in the Company that has
      occurred or that would reasonably be expected to occur, (c) comply in all
      material respects with all Laws applicable to the Company in the conduct of
      its
      business, (d) use its reasonable efforts to maintain its assets and properties
      in good operating condition in all material respects (ordinary wear and tear
      excepted), (e) use reasonable efforts to keep available the services of its
      officers and employees, (f) perform all of its material obligations under the
      Material Contracts, and (g) make all Filings and pay any fees necessary to
      maintain in good standing all Permits. From the date hereof until the Closing
      Date, Sellers shall not permit the Company to, do or take any action that would
      have been required to be disclosed on Schedule
      3.8
      if it
      had been taken prior to the date hereof. 

     

    6.2. Access.
      From
      the date of this Agreement until the Closing, Sellers shall cause the Company
      to
      give Buyer and its lenders, financial sources and authorized representatives
      full access to the personnel, offices, properties, books and records of the
      Company and shall furnish Buyer and its lenders, financial sources and
      authorized representatives with such financial and operating data and other
      information concerning the Company as may reasonably be requested. Without
      limiting the generality of the foregoing, from the date of this Agreement to
      the
      Closing, to the extent permitted by applicable Law, Sellers shall inform Buyer
      of, and consult with Buyer concerning, all material transactions and decisions
      affecting the business of the Company, with the understanding that management
      of
      the Company will have final decision making authority through the Closing
      Date. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    6.3. Government
      Filings.
      Each of
      the Company, Buyer and Sellers, agree to use its respective commercially
      reasonable efforts to (a) obtain any and all licenses, permits, consents,
      approvals, authorizations, qualifications and orders of federal, state, local
      and foreign Governmental Entities as are required in connection with the
      consummation of the transactions contemplated hereby, (b) defend any lawsuits
      or
      other legal proceedings, whether judicial or administrative, whether brought
      derivatively or on behalf of third parties (including Governmental Entities
      or
      officials), challenging this Agreement or the consummation of the transactions
      contemplated hereby, and (c) furnish to each other such information and
      assistance and to consult with respect to the terms of any registration, filing,
      application or undertaking as reasonably may be requested in connection with
      the
      foregoing.

     

    6.4. Further
      Actions.
      Each
      Party shall use commercially reasonable efforts to take, or cause to be taken,
      all actions and to do, or cause to be done, all things necessary, proper or
      advisable under applicable Law to consummate and make effective the transactions
      contemplated by this Agreement. 

     

    6.5. Tax
      Returns.
      The
      Company shall prepare or cause to be prepared and file or cause to be filed
      all
      Returns (including any amendments thereto) for the Company for all Tax periods,
      whether ending on, prior to or after the Closing Date.

     

    6.6. No
      Solicitation of Other Proposals. 

     

    (a) From
      the
      date hereof until the earlier of the Closing or the termination of this
      Agreement in accordance with its terms, neither the Company nor any Seller
      shall, authorize or permit any of its respective officers, directors, employees,
      representatives or agents (collectively, the “Company
      Representatives”)
      directly or indirectly to, (i) solicit, facilitate, initiate, encourage or
      take
      any action to solicit, facilitate, initiate or encourage, any inquiries or
      communications or the making of any proposal or offer that constitutes or may
      constitute an Acquisition Proposal or (ii) participate or engage in any
      discussions or negotiations with, or provide any information to or take any
      other action with the intent to facilitate the efforts of, any Person concerning
      any possible Acquisition Proposal or any inquiry or communication which might
      reasonably be expected to result in an Acquisition Proposal. For purposes of
      this Agreement, the term “Acquisition
      Proposal”
shall
      mean any inquiry, proposal or offer from any Person (other than Buyer or any
      of
      its Affiliates) relating to any merger, consolidation, recapitalization,
      liquidation or other direct or indirect business combination or reorganization,
      involving the Company or the issuance or acquisition of shares of capital stock
      or other securities of the Company or any tender or exchange offer that if
      consummated would result in any Person, together with all Affiliates thereof,
      beneficially owning shares of capital stock or other securities of the Company,
      or the sale, lease, exchange, license (whether exclusive or not), or other
      disposition of any significant portion of the business or other assets of either
      Company, or any other transaction, the consummation of which could reasonably
      be
      expected to impede, interfere with, prevent or materially delay the consummation
      of the transactions contemplated hereby or which would reasonably be expected
      to
      diminish significantly the benefits to Buyer or its Affiliates of the
      transactions contemplated hereby. The Company shall immediately cease and cause
      to be terminated and shall cause all Company Representatives to immediately
      terminate and cause to be terminated all existing discussions or negotiations
      with any Persons conducted heretofore with respect to, or that could reasonably
      be expected to lead to, an Acquisition Proposal. The Company shall promptly
      notify the Company Representative of its obligations under this Section 6.6.
      Without limiting the foregoing, it is agreed that any violation of the
      restrictions set forth above by any Affiliate of the Company or any Company
      Representative, whether or not such Person is purporting to act on behalf of
      the
      Company, shall be deemed to be a breach of this Section 6.6 by the
      Company. 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (b) From
      the
      date hereof until the earlier of the Closing or the termination of this
      Agreement in accordance with its terms, neither the Board of Directors of the
      Company nor any committee thereof shall (i) approve or recommend, or propose
      to
      approve or recommend, any Acquisition Proposal other than the sale of the Shares
      to Buyer contemplated by this Agreement, (ii) subject to applicable Law,
      withdraw or modify or propose to withdraw or modify in a manner adverse to
      Buyer
      its approval or recommendation of the sale of the Shares to Buyer, this
      Agreement or the transactions contemplated hereby, (iii) upon a request by
      Buyer
      to reaffirm its approval or recommendation of this Agreement or the sale of
      the
      Shares to Buyer, fail to do so within two Business Days after such request
      is
      made, (iv) approve, enter or permit or cause either Company to enter, into
      any
      letter of intent, agreement in principle, acquisition agreement or other similar
      agreement related to any Acquisition Proposal or (v) resolve or announce its
      intention to do any of the foregoing.

     

    (c) In
      addition to the other obligations of the Company set forth in this Section
      6.6,
      the Company shall immediately advise Buyer orally and in writing of any
      Acquisition Proposal, any request for information with respect to any
      Acquisition Proposal, or any inquiry with respect to or which could result
      in an
      Acquisition Proposal, the material terms and conditions of such request,
      Acquisition Proposal or inquiry, and the identity of the Person making the
      same.

     

    ARTICLE
      VII

    CONDITIONS
      TO CLOSING

     

    7.1. Conditions
      Precedent to Buyer’s Obligations.
      The
      obligation of Buyer to consummate the Closing and the other transactions
      contemplated by this Agreement is expressly subject to the fulfillment or
      express written waiver of the following conditions on or prior to the Closing
      Date:

     

    (a) Representations
      and Warranties True.
      Each of
      the representations and warranties contained in Article III and Article IV
      shall
      be true and correct in all material respects at and as of the Closing, except
      for those (x) representations and warranties that are qualified by materiality,
      which representations and warranties shall be true and correct in all respects,
      and (y) representations and warranties that expressly relates to an earlier
      date, in which case such representation and warranty shall be true and correct
      as of such earlier date.

     

    
      
        
        

      

      
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    (b) Covenants
      Performed.
      The
      Company and each Seller shall have performed, on or before the Closing Date,
      all
      material obligations contained in this Agreement which by the terms hereof
      are
      required to be performed by it on or before the Closing Date.

     

    (c) Compliance
      Certificate.
      Buyer
      shall have received the certificates signed by an officer of the Company
      certifying as to the matters set forth in Sections 7.1(a) and 7.1(b)
      above.

     

    (d) Required
      Consents and Approvals.
      All of
      the approvals, consents and licenses listed on Schedule
      7.1(d)
      shall
      have been obtained.

     

    (e) No
      Injunction, Etc.
      There
      shall not be any order of any court or governmental agency restraining or
      invalidating the material transactions which are the subject of this
      Agreement.

     

    (f) Deliverables.
      The
      Company and the Sellers shall have delivered the items set forth in Section
      2.3(b).

     

    (g) Employment
      Agreements.
      Each of
      Larry Bergfalk and Erick Detloff shall have (i) terminated all existing
      employment agreements with the Company entered into prior to the date hereof,
      and (ii) executed and delivered Employment Agreements, as of the date hereof,
      to
      Buyer.

     

    (h) Legal
      Opinion.
      The
      Sellers shall have delivered to Buyer an opinion, dated the Closing Date, of
      Sellers’ counsel, substantially in the form of Exhibit
      D
      attached
      hereto.

     

    (i) Good
      Standing Certificates.
      The
      Company shall have delivered to Buyer a certificate of good standing from the
      Secretary of State of its jurisdiction of incorporation and the Secretary of
      State or other appropriate authority of each jurisdiction in which it is
      qualified or licensed to do business. Each such certificate shall be dated
      no
      more than 10 Business Days prior to the Closing Date.

     

    (j) Resignations.
      Each of
      the officers and directors of the Company shall have delivered resignations
      to
      Buyer, in form and substance satisfactory to Buyer.

     

    (k) Due
      Diligence.
      Buyer
      and Buyer’s counsel shall have received from the Company and Sellers all
      documents and other materials requested in writing for the purpose of examining
      the Company’s technology, assets, financial condition, and the status of the
      Company’s rights in and to all such technology and assets, and all such
      documents and other materials shall be reasonably satisfactory to Buyer and
      such
      counsel. 

     

    (l) No
      Material Adverse Effect.
      From
      and including the date hereof, there shall not have occurred any event and
      no
      circumstance shall exist which, alone or together with any one or more other
      events or circumstances has had, is having or would reasonably be expected
      to
      have a Material Adverse Effect. 

     

    
      
        
        

      

      
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    (m) Board
      of Directors Approval.
      The
      approval of the Agreement and the transactions contemplated herein by the Board
      of Directors of the Buyer shall have been obtained.

     

    (n) Strategic
      Alliance.
      A
      strategic alliance agreement, in form and substance reasonably satisfactory
      to
      Buyer, between the Company and Aerico, Inc. shall have been entered into.

     

    (o) Escrow
      Agreement.
      Buyer
      shall have entered into the Escrow Agreement.

     

    (p) Working
      Capital.
      On the
      Closing Date, the Company and Sellers shall deliver to Buyer a certificate,
      signed by the Chief Financial Officer (or comparable person) of the Company,
      certifying that the Working Capital is at least $300,000. 

     

    (q) Shareholders
      Agreement.
      The
      Shareholders Agreement, dated September 14, 2007 shall have been
      terminated.

     

    7.2. Conditions
      Precedent to the Company’s and Seller’s Obligations.
      The
      obligation of the Company and each Seller to consummate this Agreement and
      the
      other transactions contemplated by this Agreement is expressly subject to the
      fulfillment or express written waiver of the following conditions on or prior
      to
      the Closing Date:

     

    (a) Representations
      and Warranties True.
      Each of
      the representations and warranties of Buyer contained in Article V shall be
      true
      and correct in all material respects at and as of the Closing.

     

    (b) Obligations
      Performed.
      Buyer
      shall have performed in all material respects, on or before the Closing Date,
      all obligations contained in this Agreement which by the terms hereof are
      required to be performed by Buyer on or before the Closing Date.

     

    (c) Compliance
      Certificate.
      The
      Company shall have received a certificate signed by an authorized officer of
      Buyer certifying as to the matters set forth in Sections 7.2(a) and
      7.2(b).

     

    (d) Deliverables.
      The
      Buyer shall have delivered the items set forth in Section 2.3(a).

     

    (e) No
      Injunction, Etc.
      There
      shall not be any order of any court or governmental agency restraining or
      invalidating the material transactions which are the subject of this
      Agreement.

     

    ARTICLE
      VIII

    INDEMNIFICATION
      OBLIGATIONS

     

    8.1. Survival.
      Each of
      the representations and warranties of the Company and the Sellers contained
      in
      Articles III and IV of this Agreement shall survive the Closing and not
      terminate until 12 months from the Closing Date, except that the representations
      and warranties set forth in Sections 3.1, 3.2, 3.5, 3.15, 3.17, 4.1, and 4.2
      shall not terminate and shall survive indefinitely. Notwithstanding the
      foregoing, any representation or warranty in respect of which indemnity may
      be
      sought under Article VIII of this Agreement shall survive the time at which
      it
      would otherwise terminate pursuant to this Section 8.1 if written notice of
      a
      good faith claim for indemnification in respect of such representation or
      warranty shall have been duly given prior to such time, in which event such
      representation or warranty shall survive solely with respect to such claim
      until
      the final resolution thereof. The obligations of the Sellers and the Company
      under Article VI shall survive the Closing and shall continue
      indefinitely. 

     

    
      
        
        

      

      
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    8.2. Sellers’
      Indemnification Obligations.
      From
      and after the Closing, the Sellers, jointly and severally, agree to indemnify
      and hold Buyer and its Affiliates, including the Company and its respective
      officers, directors and stockholders (the “Buyer
      Indemnified Parties”)
      harmless and shall reimburse Buyer Indemnified Parties for any Damages incurred
      or suffered by Buyer Indemnified Parties arising out of any misrepresentation
      or
      breach of representation or warranty, covenant or agreement made or to be
      performed by any Seller (or the Company) under this Agreement, it being
      understood and agreed that for purposes of this Article VIII, such
      representations and warranties shall be interpreted without giving effect to
      any
      limitations or qualifications as to “materiality” (including the word
“material”), “Company Material Adverse Effect” or any similar limitations or
      qualifications. 

     

    8.3. Notice
      of Claim.
      If a
      claim is asserted against a Buyer Indemnified Party by a third party (a
“Third
      Party Claim”)
      that
      could reasonably be expected to give such Buyer Indemnified Party the right
      to
      be indemnified under this Article VIII, or if a Buyer Indemnified Party believes
      that it is entitled to indemnification under this Article VIII on the basis
      of a
      direct claim against such Buyer Indemnified Party under this Agreement (a
“Direct
      Claim”),
      then
      the Buyer Indemnified Party seeking indemnification hereunder shall give written
      notice thereof (a “Notice
      of Claim”)
      to the
      Seller (the “Indemnifying
      Party”)
      as
      promptly as is practicable from the date on which the Buyer Indemnified Party
      obtains knowledge of such claim, provided that a delay in notifying the
      Indemnifying Party shall not relieve the Indemnifying Party of its obligations
      under this Agreement except to the extent that (and only to the extent that)
      the
      Indemnifying Party is materially prejudiced by such delay. The Notice of Claims
      shall specify whether the claim is a Third Party Claim or a Direct Claim, and
      shall set forth in reasonable detail the grounds and the amount or estimated
      amount of the claim. 

     

    8.4. Direct
      Claims.
      The
      Indemnifying Party shall have 20 Business Days from receipt of the Notice of
      Claim with respect to any Direct Claim to deliver to the Buyer Indemnified
      Party
      a written notice objecting to any item or amount set forth in the Notice of
      Claim (a “Direct
      Claim Counter Notice”).
      If no
      such objection if given in a timely manner, the Indemnifying Party shall be
      deemed to have consented and agreed to such item or amount. Should the Parties,
      within such 20 Business Days period (subject to any possible extensions agreed
      between them), agree, in whole or in part, upon the Indemnifying Party’s
      liability for Damages, the Indemnifying Party shall pay to the Buyer Indemnified
      Party the entire agreed upon amount of Damages.

     

    8.5. Third
      Party Claims.
      Upon
      receipt by the Indemnifying Party of a Notice of Claim with respect to a Third
      Party Claim, the Indemnifying Party shall have the right to assume the defense
      of such Third Party Claim with counsel reasonably satisfactory to the Buyer
      Indemnified Party and the Buyer Indemnified Party shall cooperate to the extent
      reasonably requested by the Indemnifying Party in defense or prosecution
      thereof, provided that the Buyer Indemnified Party is reimbursed by the
      Indemnifying Party for its costs in connection therewith. If the Indemnifying
      Party elects to assume the defense of such claim, the Buyer Indemnified Party
      shall have the right to employ its own counsel in any such case, but the fees
      and expenses of such counsel shall be at the expense of the Buyer Indemnified
      Party, unless there is, under applicable standards of conduct, a conflict on
      any
      significant issue between Indemnifying Party and the Buyer Indemnified Party,
      in
      which case the reasonable fees and expenses of one such counsel shall be at
      the
      expense of the Indemnifying Party. Unless and until the Indemnifying Party
      assumes the defense of a Third Party Claim, the Buyer Indemnified Party may
      defend against the Third Party Claim in any manner it may reasonably deem
      appropriate, the reasonable costs and expenses of which shall be borne by the
      Indemnifying Party. If the Indemnifying Party has assumed the defense of any
      claim against the Buyer Indemnified Party, the Indemnifying Party shall not
      settle such claim without the prior written consent of the Buyer Indemnified
      Party, which consent shall not be unreasonably withheld, delayed or conditioned.
      If the Indemnifying Party does not assume the defense of a Third Party Claim,
      but does not dispute the Buyer Indemnified Party’s right to indemnification by
      delivering to the Buyer Indemnified Party a written notice objecting to any
      item
      or amount set forth in the Notice of Claim (a “Third
      Party Claim Counter Notice”
and
      collectively with the Direct Claim Counter Notice, a “Counter Notice”),
      the
      Indemnifying Party shall have the right to participate in the defense of such
      claim through counsel of its choice, at the Indemnifying Party’s expense, and
      the Buyer Indemnified Party shall not settle such claim without the prior
      written consent of the Indemnifying Party, which consent shall not be
      unreasonably withheld, delayed or conditioned.

     

    
      
        
        

      

      
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    8.6. Disputes.
      In the
      event that Sellers shall dispute any claim for indemnification made hereunder,
      Buyer and the Sellers’ Representative will attempt to resolve such dispute
      through good faith negotiation. If Buyer and the Sellers’ Representative are
      unable to resolve such dispute through good faith negotiation within 30 days
      after the Sellers deliver the Counter Notice, the dispute will be settled by
      binding arbitration conducted before a single arbitrator. Either Buyer or the
      Sellers’ Representative may submit the dispute to arbitration. The arbitration
      will be conducted in accordance with the then applicable Commercial Arbitration
      Rules of the American Arbitration Association (“AAA”)
      and
      will be held in the State of Maryland. The arbitrator shall be mutually agreed
      upon by Buyer and the Sellers, but if they are unable to agree on an arbitrator,
      the arbitrator shall be appointed by AAA. All arbitration proceedings shall
      be
      closed to the public and confidential. All records relating thereto shall be
      permanently sealed, except as necessary to obtain court confirmation of the
      arbitrator’s decision. The arbitrator will be bound by the terms and conditions
      of this Agreement and shall have no power, in rendering his or her award, to
      alter or depart from any express provision of these agreements, and his or
      her
      failure to observe this limitation shall constitute grounds for vacating the
      award. The award of the arbitrator shall be final and binding upon the parties,
      and judgment upon the award may be entered in any court having jurisdiction
      thereof. 

     

    ARTICLE
      IX

    TERMINATION,
      AMENDMENT AND WAIVER

     

    9.1. Termination.
      This
      Agreement may be terminated:

     

    (a) at
      any
      time prior to the Closing Date by mutual written agreement of Buyer and the
      Company;

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (b) by
      Sellers, acting unanimously, by written notice to Buyer if any event or
      circumstance occurs that makes it impossible to satisfy any condition precedent
      under Section 7.2 (unless the failure results primarily from any action or
      inaction of the Company or any Seller in violation of the terms of this
      Agreement); 

     

    (c) by
      Sellers, acting unanimously, by written notice to Buyer, if any of Buyer’s
      representations and warranties made in Article V were materially inaccurate
      when
      made or if Buyer is unable to pay the consideration for the Shares at the time
      that the Closing is otherwise required to occur;

     

    (d) by
      Buyer
      by written notice to each of the Sellers if any event or circumstance occurs
      that makes it impossible to satisfy any condition precedent under Section 7.1
      (unless the failure results primarily from any action or inaction of Buyer
      in
      violation of the terms of this Agreement); or 

     

    (e) by
      Buyer
      if any of the representations and warranties made in Article III or Article
      IV
      were materially inaccurate when made or if Buyer will not be able to obtain
      good
      title, free of all Encumbrances, to all of the Shares at the
      Closing.

     

    9.2. Effect
      of Termination.
      If this
      Agreement is terminated as permitted by Section 9.1, such termination shall
      be
      without liability of any Party to the other Parties. This Section 9.2 and the
      provisions of Article X shall survive any termination hereof pursuant to Section
      9.1. 

     

    ARTICLE
      X

    MISCELLANEOUS

     

    10.1. Expenses;
      Transfer Taxes.
      Except
      as otherwise provided in this Agreement, whether or not the Closing takes place,
      all costs and expenses incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the Party incurring such
      costs
      and expenses. For the avoidance of doubt, the Sellers, and not the Company
      nor
      Buyer, shall be responsible for any and all fees or other costs to any third
      party advisors to either Company or the Sellers incurred prior to the Closing.
      Notwithstanding any provision of this Agreement to the contrary, (a) any
      transfer, documentary, sales, use, registration and other such Taxes incurred
      in
      connection with the consummation of the transactions contemplated by this
      Agreement shall be borne equally by the Sellers, on the one hand, and Buyer,
      on
      the other hand; and (b) Buyer will pay for the audit of the Company’s 2006
      financial statements.

     

    10.2. Notices.
      All
      notices, requests and other communications hereunder shall be in writing and
      shall be sent, delivered or mailed, addressed or sent by
      telecopier:

     

    (a) if
      to
      Buyer (or to the Company after the Closing), to:

     

    Fortress
      International Group, Inc.

    9841
      Broken Land Parkway, Suite 100

    Columbia,
      Maryland 21046

    Attention:
      Thomas P. Rosato

    Fax:
      (410) 312-9979

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    with
      a
      copy to:

    

    Mintz
      Levin Cohn Ferris Glovsky & Popeo, P.C.

    666
      Third
      Avenue

    New
      York,
      New York 10017

    Attention:
      Kenneth R. Koch, Esq.

    Fax:
      (212) 983-3115

    

    (b) if
      to the
      Company prior to the Closing, to:

     

    SMLB
      Ltd.

    716
      W.
      Algonquin Road

    Arlington
      Heights, Illinois

    Attention:
      Laurence Bergfalk

    Fax:
      (847) 545-9226

    

    with
      a
      copy to (which shall not constitute notice):

    

    Sanchez,
      Daniels and Hoffman

    333
      West
      Wacker Drive - Ste 500

    Chicago,
      Illinois 60606

    Attention:
      Neal McQueeney

    Fax:
      (312) 641-3004

    

    (c) if
      to a
      Seller, to the address set forth on such Seller’s signature page  hereto.

    

    Each
      such
      notice, request or other communication shall be given (i) by mail (postage
      prepaid, registered or certified mail, return receipt requested), (ii) by hand
      delivery, (iii) by nationally recognized courier service or (iv) by telecopier,
      receipt confirmed (with a confirmation copy to be sent by first class mail;
      provided that the failure to send such confirmation copy shall not prevent
      such
      telecopier notice from being effective). Each such notice, request or
      communication shall be effective (i) if mailed, three calendar days after
      mailing at the address specified in this Section 10.2 (or in accordance with
      the
      latest unrevoked written direction from such Party), (ii) if delivered by hand
      or by nationally recognized courier service, when delivered at the address
      specified in this Section 10.2 (or in accordance with the latest unrevoked
      written direction from the receiving Party) and (iii) if sent by telecopier,
      when such telecopy is transmitted to the fax number specified in this Section
      10.2 (or in accordance with the latest unrevoked written direction from the
      receiving Party), and the appropriate confirmation is received.

     

    10.3. Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof. If any provision of this
      Agreement, or the application thereof to any Person or any circumstance, is
      found to be invalid or unenforceable in any jurisdiction, (a) a suitable and
      equitable provision shall be substituted therefor in order to carry out, so
      far
      as may be valid or enforceable, such provision and (b) the remainder of this
      Agreement and the application of such provision to other Persons or
      circumstances shall not be affected by such invalidity or unenforceability,
      nor
      shall such invalidity or unenforceability affect the validity or enforceability
      of such provision, or the application thereof, in any other
      jurisdiction.

     

    
      
        
        

      

      
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    10.4. Amendments
      and Waivers.
      This
      Agreement may not be amended, supplemented, modified or terminated except by
      an
      instrument in writing signed on behalf of Buyer, the Company and Sellers holding
      over 50% of the Shares at the time of such termination. The Parties hereto
      may,
      by an instrument in writing signed on behalf of such Party, waive compliance
      by
      any other Party with any term or provision of this Agreement that such other
      Party was or is obligated to comply with or perform. No failure or delay by
      any
      Party in exercising any right, power or privilege hereunder shall operate as
      a
      waiver thereof nor shall any single or partial exercise thereof preclude any
      other or further exercise thereof or the exercise of any other right, power
      or
      privilege. No waiver of any of the provisions of this Agreement shall be deemed,
      or shall constitute, a waiver of any other provision of this Agreement, whether
      or not similar, nor shall such waiver constitute a continuing waiver unless
      otherwise expressly provided.

     

    10.5. Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which shall, taken together, be considered one
      and
      the same agreement. The execution of this Agreement by any of the Parties may
      be
      evidenced by way of a facsimile transmission of such Party’s signature, or a
      photocopy of such facsimile transmission, and such facsimile signature shall
      be
      deemed to constitute the original signature of such Party thereto.

     

    10.6. Entire
      Agreement.
      This
      Agreement (together with the agreements, Schedules and certificates referred
      to
      herein or delivered pursuant hereto) constitutes the entire agreement and
      supersedes all prior agreements and understandings, both written and oral,
      among
      the parties with respect to the subject matter hereof.

     

    10.7. No
      Third Party Beneficiaries.
      Except
      for the rights of the Buyer Indemnified Parties under Article VIII, this
      Agreement is intended solely for the benefit of the Parties hereto and is not
      intended to confer upon any other Person any rights or remedies.

     

    10.8. Governing
      Law.
      This
      Agreement and all claims arising out of or relating to it shall be governed
      by
      and construed in accordance with the Laws of the State of Maryland, without
      regard to the conflicts of Laws rules thereof. 

     

    10.9. Consent
      to Jurisdiction.
      Each of
      the parties hereto irrevocably submits to the exclusive jurisdiction of the
      United States District Court for the District of Maryland, or if such court
      does
      not have jurisdiction, the Howard County Circuit Court located in Ellicott
      City,
      Maryland, or if such court does not have jurisdiction, the Howard County
      District Court, located in Ellicott City, Maryland, for the purposes of any
      suit, action or other proceeding arising out of this Agreement or any
      transaction contemplated hereby. Each of the parties hereto further agrees
      that
      service of any process, summons, notice or document by U.S. certified mail
      to
      such Party’s respective address set forth in Section 10.2 shall be effective
      service of process for any Legal Proceeding in Maryland with respect to any
      matters to which it has submitted to jurisdiction as set forth above in the
      immediately preceding sentence. Each of the parties hereto irrevocably and
      unconditionally waives any objection to the laying of venue of any Legal
      Proceeding arising out of this Agreement or the transactions contemplated hereby
      in (a) the United States District Court for the District of Maryland or (b)
      the
      Howard County Circuit Court or Howard County District Court, and hereby further
      irrevocably and unconditionally waives and agrees not to plead or claim in
      any
      such court that any such Legal Proceeding brought in any such court has been
      brought in an inconvenient forum. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    10.10. Publicity.
      Subject
      to its legal obligations (including requirements of stock exchanges and other
      similar regulatory bodies), the Parties shall consult with each other with
      respect to the timing and content of all announcements regarding this Agreement
      or the transactions contemplated hereby and shall use reasonable efforts to
      agree upon the text of any such announcement prior to its release; provided,
      however, that, to the extent that any announcement regarding this Agreement
      or
      the transactions contemplated hereby is made at any time, each Party may issue
      further announcements (including press releases, tombstones and similar
      announcements) without the consent of the other Party so long as such further
      announcements are consistent with, and not broader in scope than, the previously
      issued announcement.

     

    10.11. Assignment.
      Neither
      this Agreement nor any of the rights or obligations hereunder shall be assigned
      by any of the Parties without the prior written consent of each of the other
      Parties, except that Buyer may (a) assign any of its rights under this Agreement
      to any one or more Affiliates, (b) make a collateral assignment of any rights
      or
      benefits hereunder to any lender, or (c) assign any or all of its rights,
      interests or obligations hereunder in connection with any sale of Buyer or
      the
      Company of all or substantially all of the assets of Buyer or the Company.
      Subject to the preceding sentence, this Agreement will be binding upon, inure
      to
      the benefit of and be enforceable by the Parties and their respective successors
      and permitted assigns. Any attempted assignment in violation of the terms of
      this 10.11 shall be null and void, ab initio.
      Assignment by any Party in accordance with the terms of this 10.11 shall not
      relieve the assignor of any liability.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    10.12. Construction.
      The
      parties have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as of drafted jointly by the parties
      and no presumption of burden of proof shall arise favoring or disfavoring any
      party by virtue of the authorship of any of the provisions of this Agreement.
      References in this Agreement to any gender include references to all genders,
      and references to the singular include references to the plural and vice versa.
      The words “include”, “includes” and “including” when used in this Agreement
      shall be deemed to be followed by the phrase “without limitation”. Unless the
      context otherwise requires, references in this Agreement to Articles, Sections,
      Exhibits and Schedules shall be deemed references to Articles and Sections
      of,
      and Exhibits and Schedules to this Agreement. Unless the context otherwise
      requires, the words “hereof”, “hereby”, “hereunder” and “herein” and words of
      similar meaning when used in this Agreement refer to this Agreement in its
      entirety and not to any particular Article, Section or provision of this
      Agreement. All references in this Agreement to “dollars” and “$” are to United
      States dollars. Any definition of or reference to any Law, agreement, instrument
      or other document herein will be construed as referring to such Law, agreement,
      instrument or other document as from time to time amended, supplemented or
      otherwise modified. Any definition of or reference to any statute will be
      construed as referring also to any rules and regulations promulgated
      thereunder.

     

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

     

     

    
      	FORTRESS
              INTERNATIONAL GROUP, INC.	 	 	SMLB
              LTD.
	 	 	 	 
	 	 	 	 
	
              By:
                /s/
                Thomas P. Rosato 

            	 	 	By: /s/
              Laurence E. Bergfalk
	
              
                

              

              Name:
                Thomas
                P. Rosato 

            	 	 	
              
                

              

              Name:
Laurence
                E. Bergfalk

            
	
              Title:
                Chief
                Executive Officer 

            	 	 	
              Title:
President

            

    

     

    [Counterpart
      Signature Pages of the Sellers follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [Counterpart
      Signature Page to Stock Purchase Agreement for the Sellers]

     

    IN
      WITNESS WHEREOF, the undersigned Seller has caused this Stock Purchase Agreement
      to be executed as of the date first written above.

     

    SELLER:

    John
      Mazur

    
      
        

      

    

    Print
      or
      Type Name of Seller (must match stock certificate)

    

    
      	 	 	 	 
	
              /s/
                John Mazur

            	 	 	
            
	
              

              Signature
                of Seller or Authorized Signatory

            	 	 	
            

    

    

    _____________________________________________

    Print
      or
      Type Name and Title of Authorized Signatory

    

    Number
      of
      Shares of Company Held: 250

    

    Notice
      Address:

    

    _____________________

    Street
      Address

    

    _____________________

    City     State     Zip
      Code

    

    Telecopy
      No.: (    
       )                            

    

    Taxpayer
      Identification Number: ________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [Counterpart
      Signature Page to Stock Purchase Agreement for the Sellers]

     

    IN
      WITNESS WHEREOF, the undersigned Seller has caused this Stock Purchase Agreement
      to be executed as of the date first written above.

     

    SELLER:

    Gregory
      N. Schwabe

    
      

    

    Print
      or
      Type Name of Seller (must match stock certificate)

    
      

      
        	 	 	 	 
	/s/ Gregory N. Schwabe	 	 	
              
	
                
Signature
                of Seller or Authorized Signatory	 	 	
              

      

       

      _____________________________________________

    

    Print
      or
      Type Name and Title of Authorized Signatory

    

    Number
      of
      Shares of Company Held: 250

    

    Notice
      Address:

    

    _____________________

    Street
      Address

    

    _____________________

    City     State     Zip
      Code

    

    Telecopy
      No.: (   
      )                            

    

    Taxpayer
      Identification Number: ________

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    [Counterpart
      Signature Page to Stock Purchase Agreement for the Sellers]

     

    IN
      WITNESS WHEREOF, the undersigned Seller has caused this Stock Purchase Agreement
      to be executed as of the date first written above.

     

    SELLER:

    Erick
      Detloff

    
      

    

    Print
      or
      Type Name of Seller (must match stock certificate)

    
      

      
        	 	 	 	 
	/s/ Erick Detloff	 	 	
              
	
                
Signature
                of Seller or Authorized Signatory	 	 	
              

      

       

    

    _____________________________________________

    Print
      or
      Type Name and Title of Authorized Signatory

    

    Number
      of
      Shares of Company Held: 250

    

    Notice
      Address:

    

    _____________________

    Street
      Address

    

    _____________________

    City     State     Zip
      Code

    

    Telecopy
      No.: (    
       )                            

    

    Taxpayer
      Identification Number: ________

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    [Counterpart
      Signature Page to Stock Purchase Agreement for the Sellers]

     

    IN
      WITNESS WHEREOF, the undersigned Seller has caused this Stock Purchase Agreement
      to be executed as of the date first written above.

     

    SELLER:

    Laurence
      Bergfalk

    
      

    

    Print
      or
      Type Name of Seller (must match stock certificate)

    
      
        

        
          	 	 	 	 
	/s/ Laurence Bergfalk	 	 	
                
	
                  

                  Signature
                    of Seller or Authorized Signatory

                	 	 	
                

        

         

      

    

    _____________________________________________

    Print
      or
      Type Name and Title of Authorized Signatory

    

    Number
      of
      Shares of Company Held: 250

    

    Notice
      Address:

    

    _____________________

    Street
      Address

    

    _____________________

    City     State     Zip
      Code

    

    Telecopy
      No.: (   
      )                            

    

    Taxpayer
      Identification Number: ________

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    SCHEDULE
      OF SELLERS

    

      
        	
                Name
                  and Address of Seller

              	 	
                Shares
                  of the Company Owned

              	 	
                Percentage
                  Interest

              	 	
                Cash
                  Consideration Paid to Seller at Closing

              	 	
                Stock
                  Consideration placed in Escrow

              	 	
                Proportion
                  of Note to be Paid to Seller 1 

              	 
	
                Larry
                  Bergfalk

              	 	 	
                250

              	 	 	
                
                

                25

              	
                
                

                %

              	
                
                

                $

              	
                
                

                500,000

              	 	 	
                
                

                24,224

              	 	
                
                

                $

              	
                
                

                125,000

              	 
	
                Erick
                  Detloff

              	 	 	
                250

              	 	 	
                
                

                25

              	
                
                

                %

              	
                
                

                $

              	
                
                

                500,000

              	 	 	
                
                

                24,224

              	 	
                
                

                $

              	
                
                

                125,000

              	 
	
                Gregory
                  N. Schwabe

              	 	 	
                250

              	 	 	
                
                

                25

              	
                
                

                %

              	
                
                

                $

              	
                
                

                500,000

              	 	 	
                
                

                24,224

              	 	
                
                

                $

              	
                
                

                125,000

              	 
	
                John
                  Mazur

              	 	 	
                250

              	 	 	
                
                

                25

              	
                
                

                %

              	
                
                

                $

              	
                
                

                500,000

              	 	 	
                
                

                24,224

              	 	
                
                

                $

              	
                
                

                125,000

              	 

      

       

      
        
          
1
          Assumes
          full payment of $500,000 Note.

      

    

    

    
      
        
        

      

      
        5AMENDMENT
      NO. 1

    TO

    SHUTT
      EMPLOYMENT AGREEMENT

     

    This
      Amendment No. 1 (“Amendment”) is effective as of December 28, 2007, and is by
      and between CAPITAL
      GROWTH SYSTEMS, INC.,
      a
      Florida corporation (“Company”), and PATRICK C.
      SHUTT (“Executive”).
      All capitalized terms used in this Amendment and not otherwise defined shall
      have the meanings assigned to them in the Employment Agreement (as defined
      below).

     

    WHEREAS,
      Company and Executive entered into an Employment Agreement, dated as of
      September 8, 2006 (the “Employment Agreement”), pursuant to which Company
      employs Executive; 

     

    WHEREAS,
      since becoming the President of Company, Executive has made significant and
      valuable contributions to Company; including becoming the CEO of Company and
      providing significant leadership with respect to Company’s business development,
      operational and financing initiatives. 

     

    WHEREAS,
      Company, believes that the existing financial incentives in Executive’s
      Employment Agreement do not properly reward Executive for his efforts and
      Company is also desirous of providing for additional economic incentives in
      order to retain Executive and to encourage continued efforts for the benefit
      of
      Company, and in return Executive agrees to enter into the restrictive covenant
      set forth herein in addition to the restrictive covenants presently in
      Executive’s employment agreement.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals, and other good and
      valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, Company and Executive, intending to be legally bound, hereby
      agree
      as follows:

     

    1. Grant
      of Additional Stock Options.

     

    (a) Vested
      Stock Options.
      Company
      through its compensation committee has granted effective December 10, 2007
      fully
      vested options to purchase up to 5,750,000 shares of Common Stock to Executive
      in accordance with the form of option agreement attached hereto as Exhibit
      A.

     

    (b) Performance
      Options.
      Company
      through its compensation committee has granted effective December 10, 2007
      unvested options to purchase up to 7,000,000 shares of Common Stock to Executive
      in accordance with the form of option agreement attached hereto as Exhibit
      B.
      

     

    2. Terms
      of Employment.
      

     

    (a) Section 4(a)
      of the
      Employment Agreement is amended and restated as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “(a) Executive
      shall serve as CEO of Company and shall have the normal duties, responsibilities
      and authority of the position of CEO, subject to the power of the Board to
      limit
      such duties, responsibilities and authority.”

     

    (b) The
      following paragraph is added to the end of Section 4(b)(i)
      entitled
“Base Salary:”

     

    “Effective
      January 1, 2008, Executive’s Base Salary shall be increased to $250,000 per
      annum.”

     

    (c) Section 4(b)(ii)
      entitled
“Additional Compensation” is amended and restated as follows:

     

    “(ii) Additional
      Compensation
      In
      addition to Base Salary, Executive shall be eligible to receive an annual bonus
      based upon the attainment of certain performance goals and objectives
      established by the Board and/or the Compensation Committee established by the
      Board, in accordance with annual objectives, with no less than 2/3 tied to
      objective results (such as monthly recurring revenue and EBITDA),and the
      remaining percentage tied to subjective results (which could include
      departmental management, establishment of a cooperative working environment,
      effort and other factors). The target annual bonus, assuming accomplishment
      of
      100% of the target objectives and the wherewithal of Company to pay the same
      is
      100% of Base Salary. With respect to 2007 Executive shall be entitled to a
      cash
      bonus of: (A)$25,000, payable prior to January 31, 2008; and (B) $50,000 payable
      thirty (30) days after the receipt by Company or one if its subsidiaries
      (hereinafter referred to as a “Subsidiary”) of the first payment for the
      570th
      installed circuit by Company of its current contract to install circuits with
      a
      carrier engaged in the sale of voice minutes.

     

    The
      incentive bonus for 2008 and thereafter will be determined annually by the
      Board
      or by the Compensation Committee if delegated such task by the Board. There
      will
      be no cap, with incentive bonus to increase with increased profit performance
      for over plan achievement. Plan metrics will be set annually and agreed to
      by
      the CEO. Executive shall be entitled at Executive’s option to take payment of
      incentive bonus either 100% in cash, or to take a lesser amount of cash (the
      amount of cash bonus to be paid in such event, if any, is the “Retained Sum”)
      and accept a grant of “European Options” to purchase Common Stock of Company
      pursuant to the “Formula Amount.” The “Formula Amount” will be based upon the
      amount of the bonus not taken in cash (the “Non-cash Sum”), whereby Company will
      determine the ten (10) day average closing price of Company’s Common Stock for
      the last ten (10) trading days immediately preceding the date of the
      announcement of the bonus (the “TDA”), and Executive will then be entitled to an
      option to purchase that number of shares of Common Stock equal to the Non-cash
      Sum divided by one half of the TDA, with the purchase price for such shares
      to
      be one half of the TDA. The European Option, if selected, will be fully vested,
      but will be exercisable only at any time during the calendar year following
      the
      year in which the European Option is selected, subject to a Change in Control
      provision which would change the exercise period in a manner substantially
      similar to that set forth in the form of option agreement attached hereto as
      Exhibit B with respect to a Change in Control. The form and remaining terms
      of
      the European Option(s) shall be substantially similar to the form and terms
      attached as Exhibit B, and shall be in such form as Company in good faith shall
      submit to Executive. The determination by Executive to accept the European
      Options with respect to a particular year must be made within one (1) business
      day of being informed of his incentive bonus amount, and absent delivery of
      notice of election of the European Option, the entire bonus shall be payable
      in
      cash. By way of example, if the TDA was $2.00 per share and the Non-cash Sum
      elected by Executive was $100,000, then the European Options would relate to
      100,000 shares of Common Stock, purchasable at $1.00 per share.” 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3. Addition
      of Noncompetition Covenant.
      The
      following Section 9(b)(iv)
      is added
      to the Agreement (and the period at the end of Section 9(b)(iii)
      of the
      Agreement is deleted and replaced by “; or”):

     

    “(iv) take
      any
      action that would violate the terms of this Section 9(b)(iv).
      Executive acknowledges that the covenants set forth in this Section 9(b)(iv)
      are
      reasonable in scope and essential to the preservation of the Business of Company
      (as defined herein). Executive also acknowledges that the enforcement of the
      covenants set forth in this Section 9(b)(iv)
      will not
      preclude Executive from being gainfully employed in such manner and to the
      extent as to provide a standard of living for himself, the members of his family
      and the others dependent upon him of at least the level to which he and they
      have become accustomed and may expect. In addition, Executive acknowledges
      that
      Company has obtained an advantage over its competitors as a result of its name,
      location and reputation that is characterized by near permanent relationships
      with vendors, customers, principals and other contacts which it has developed
      at
      great expense. Furthermore, Executive acknowledges that competition by him
      following the termination or expiration of his employment would impair the
      operation of Company beyond that which would arise from the competition of
      an
      unrelated third party with similar skills. Executive hereby agrees that he
      shall
      not, during his employment and for a period of one (1) year after the end of
      his
      employment, directly or indirectly, engage in or become directly or indirectly
      interested in any proprietorship, partnership, firm, trust, company, limited
      liability company or other entity, other than Company (whether as owner,
      partner, trustee, beneficiary, stockholder, member, officer, director, employee,
      independent contractor, agent, servant, consultant, manager, lessor, lessee
      or
      otherwise) that:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (a) competes
      with Company in the Business of Company; or 

     

    (b) competes
      at a material level with Company in the Restricted Territory (as defined
      herein), other than acquiring an ownership interest in a company listed on
      a
      recognized stock exchange in an amount which does not exceed five percent (5%)
      of the outstanding stock of such corporation. For purposes of this Agreement,
      the term “Business of Company” shall include all business activities and
      ventures related to the business of providing of any of the
      following:

     

    (i) provision
      of telecom network integration services, including the sale or lease of
      broadband circuits for the transmission of data or voice; 

     

    (ii) cost
      reduction solutions for companies aimed at taking cost out of their network
      usage or procurement, including network optimization and least cost
      routing;

     

    (iii) licensing
      or sale of software intended to effect the foregoing:

     

    (1) all
      other
      businesses in which Company or any of its subsidiaries is engaged in as of
      the
      date of termination of Executive’s employment; and

     

    (2) the
      term
“Restricted Territory” means any state in the United States of America.
      Executive specifically acknowledges that the Business of Company is not
      naturally restricted by any geographic boundaries.

     

    Notwithstanding
      anything to the contrary contained in this Agreement, in order to enforce the
      terms of the noncompetition covenant contained in this Section
      9(b)(iv),
      Company
      must make payment to Executive no later than 30 days following the termination
      of his employment with the Company or any of its subsidiaries of the full amount
      of severance payments that would otherwise be payable to him under this
      Agreement as if he had been terminated without “cause,” if it wishes to enforce
      the noncompetition provisions called for hereunder. For the avoidance of doubt,
      the payment called for in the preceding sentence will not be in addition to
      the
      severance otherwise payable hereunder, if any. Notwithstanding anything to
      the
      contrary contained in this paragraph, should Executive’s employment have been
      terminated for “cause” as defined in this Agreement, then the Company shall be
      entitled to enforce the noncompetition covenant contained in this Section
      9(b)(iv) by
      paying
      to Executive no later than 30 days following the termination of his employment
      with the Company or any of its subsidiaries of one half of the full amount
      of
      severance payments that would otherwise be payable to him under this Agreement
      as if he had been terminated without “cause,” if it wishes to enforce the
      noncompetition provisions called for hereunder.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.
      Notice
      Provision.
      The
      addresses for the delivery of notices and communications with respect to this
      Agreement in Section
      14(b)
      and with
      respect to Exhibit A are hereby amended and restated as follows:

     

    
      	
              “If
                to Executive:

            	
              At
                Executive’s home address as reflected on the books and records of Company,
                with a copy to Executive at the address of Company set forth
                below.

            
	 	 
	
              If
                to Company:

            	
              Capital
                Growth Systems, Inc.

              500
                West Madison - Suite 2060

              Chicago,
                IL 60661

            
	 	 
	 	
              with
                a copy to:

            
	 	 
	 	
              Mitchell
                D. Goldsmith, Esq.

              Shefsky
                & Froelich Ltd.

              111
                East Wacker Drive - Suite 2800

              Chicago,
                IL 60601”

            

    

    

    4. Miscellaneous.
      The
      following Section
      14(l)
      is added
      at the end of the Employment Agreement:

     

    “(l) To
      the
      extent of any inconsistency between the terms of the First Amendment to this
      Employment Agreement and the original form of Employment Agreement, the First
      Amendment will prevail and supersede the terms of the original Employment
      Agreement.”

     

    This
      Amendment may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same Amendment.

     

    [SIGNATURE
      PAGE TO FOLLOW]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this First Amendment to
      Employment Agreement effective as of the date first set forth
      above.

     

    
      	
              COMPANY:

            	 	
              EXECUTIVE:

            
	 	 	 
	
              CAPITAL
                GROWTH SYSTEMS, INC.,
                a
                

            	 	 
	
              Florida
                corporation

            	 	 
	 	 	
              PATRICK
                C. SHUTT

            
	 	 	 
	
              By:

            	 	 	 
	
              Its:

            	 	 	 

    

     

    
      
        
        

      

      
        6

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