Document:

AGREEMENT
      AND PLAN OF MERGER

    

    by
      and among

    

    SECURITY
      HOLDING CORP.,

    a
      Delaware corporation,

    

    SECURITY
      HOLDING ENTERPRISES, INC.,

    a
      Wisconsin corporation,

    

    AND

    

    Persons
      Listed on the Signature Pages Herein

     

    Dated:
      August 21, 2006

     

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Table
      of Contents

    

      
        	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 Page

              
	
                1.

              	
                 

              	
                TERMS
                  OF ACQUISITION

              	
                 

              	
                1

              
	
                 

              	
                 

              	
                1.1

              	
                 

              	
                Merger

              	
                 

              	
                1

              
	
                 

              	
                 

              	
                1.2

              	
                 

              	
                Effective
                  Time

              	
                 

              	
                1

              
	
                 

              	
                 

              	
                1.3

              	
                 

              	
                Effect
                  of the Merger

              	
                 

              	
                2

              
	
                 

              	
                 

              	
                1.4

              	
                 

              	
                Certificate
                  of Incorporation; Bylaws

              	
                 

              	
                2

              
	
                 

              	
                 

              	
                1.5

              	
                 

              	
                Directors
                  and Officers

              	
                 

              	
                2

              
	
                 

              	
                 

              	
                1.6

              	
                 

              	
                Merger
                  Consideration

              	
                 

              	
                2

              
	
                 

              	
                 

              	
                1.7

              	
                 

              	
                Closing.

              	
                 

              	
                2

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (a)

              	
                 

              	
                Closing
                  Date

              	
                 

              	
                3

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (b)

              	
                 

              	
                Purchaser’s
                  Deliveries At Closing

              	
                 

              	
                3

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (c)

              	
                 

              	
                The
                  Company’s and Sellers’ Deliveries At Closing

              	
                 

              	
                4

              
	
                 

              	
                 

              	
                 1.8

              	
                 

              	
                Earn
                  Out Shares

              	
                 

              	
                4

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                2.

              	
                 

              	
                ADDITIONAL
                  AGREEMENTS

              	
                 

              	
                4

              
	
                 

              	
                 

              	
                2.1

              	
                 

              	
                Audits

              	
                 

              	
                4

              
	
                 

              	
                 

              	
                2.2

              	
                 

              	
                Securities
                  Law Compliance

              	
                 

              	
                4

              
	
                 

              	
                 

              	
                2.3

              	
                 

              	
                Best
                  Efforts

              	
                 

              	
                5

              
	
                 

              	
                 

              	
                2.4

              	
                 

              	
                Further
                  Assurances

              	
                 

              	
                5

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                3.

              	
                 

              	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                 

              	
                5

              
	
                 

              	
                 

              	
                3.1

              	
                 

              	
                Representations
                  and Warranties as to the Company

              	
                 

              	
                5

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (a)

              	
                 

              	
                Capitalization

              	
                 

              	
                6

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (b)

              	
                 

              	
                Organization;
                  Good Standing; Power

              	
                 

              	
                6

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (c)

              	
                 

              	
                Authority;
                  Validity; No Conflicts

              	
                 

              	
                6

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (d)

              	
                 

              	
                Governmental
                  Authorizations; Third-Party Consents

              	
                 

              	
                6

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (e)

              	
                 

              	
                Financial
                  Statements

              	
                 

              	
                6

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (f)

              	
                 

              	
                Interests
                  in Other Entities

              	
                 

              	
                7

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (g)

              	
                 

              	
                Title
                  to Properties; Leases

              	
                 

              	
                7

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (h)

              	
                 

              	
                Accounts
                  Receivable; Inventory

              	
                 

              	
                7

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (i)

              	
                 

              	
                Intellectual
                  Property

              	
                 

              	
                8

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (j)

              	
                 

              	
                Bank
                  Accounts; Credit Cards; Corporate Accounts; and Powers of
                  Attorney

              	
                 

              	
                8

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (k)

              	
                 

              	
                Absence
                  of Undisclosed Liabilities

              	
                 

              	
                9

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (l)

              	
                 

              	
                Litigation

              	
                 

              	
                9

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (m)

              	
                 

              	
                Material
                  Contracts

              	
                 

              	
                9

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (n)

              	
                 

              	
                Insurance

              	
                 

              	
                9

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (o)

              	
                 

              	
                Employees

              	
                 

              	
                10

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (p)

              	
                 

              	
                Employee
                  Arrangements; ERISA

              	
                 

              	
                10

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (q)

              	
                 

              	
                Tax
                  Matters

              	
                 

              	
                11

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (r)

              	
                 

              	
                Compliance
                  with Applicable Laws

              	
                 

              	
                13

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (s)

              	
                 

              	
                Regulatory
                  Permits

              	
                 

              	
                13

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (t)

              	
                 

              	
                Domain
                  Names

              	
                 

              	
                13

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (u)

              	
                 

              	
                Absence
                  of Certain Changes

              	
                 

              	
                13

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (v)

              	
                 

              	
                Brokers

              	
                 

              	
                15

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        Table
          of Contents

        (continued)

      

       

      
        	
                 

              	
                 

              	
                 

              	
                 

              	
                (w)

              	
                 

              	
                Disclosure

              	
                 

              	
                15

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (x)

              	
                 

              	
                Affiliated
                  Transactions

              	
                 

              	
                15

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (y)

              	
                 

              	
                Disclosure
                  Schedules

              	
                 

              	
                15

              
	
                 

              	
                 

              	
                 3.2

              	
                 

              	
                Representations
                  and Warranties of the Sellers

              	
                 

              	
                16

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (a)

              	
                 

              	
                Capacity;
                  Validity; No Conflicts

              	
                 

              	
                16

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (b)

              	
                 

              	
                Stock
                  Ownership

              	
                 

              	
                16

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (c)

              	
                 

              	
                Investment
                  Intent

              	
                 

              	
                16

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (d)

              	
                 

              	
                Experience
                  of Such Seller

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (e)

              	
                 

              	
                General
                  Solicitation

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (f)

              	
                 

              	
                Disclosure
                  Schedules

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 3.3

              	
                 

              	
                Representations
                  and Warranties of the Purchaser

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (a)

              	
                 

              	
                Organization
                  and Power

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (b)

              	
                 

              	
                Authority;
                  Validity; No Conflicts

              	
                 

              	
                17

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (c)

              	
                 

              	
                Compliance
                  with Law

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (d)

              	
                 

              	
                Capitalization

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                (e)

              	
                 

              	
                No
                  Other Operations

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 (f)

              	
                 

              	
                Common
                  Stock

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                4.

              	
                 

              	
                COVENANTS

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                4.1

              	
                 

              	
                Public
                  Announcements

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                4.2

              	
                 

              	
                Satisfaction
                  of Certain Permitted Liens

              	
                 

              	
                18

              
	
                 

              	
                 

              	
                4.3

              	
                 

              	
                Tax
                  Treatment

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                4.4

              	
                 

              	
                Valuation
                  Rights

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                4.5

              	
                 

              	
                Forecast

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                4.6

              	
                 

              	
                Option
                  to Purchase Accutek Shares

              	
                 

              	
                19

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                5.

              	
                 

              	
                CONDITIONS
                  TO CLOSING

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                6.

              	
                 

              	
                CERTAIN
                  TAX MATTERS

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                6.1

              	
                 

              	
                Tax
                  Returns

              	
                 

              	
                20

              
	
                 

              	
                 

              	
                6.2

              	
                 

              	
                Amended
                  Returns

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                6.3

              	
                 

              	
                Closing
                  Date Transactions

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                6.4

              	
                 

              	
                No
                  Section 338 Election

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                6.5

              	
                 

              	
                Cooperation
                  on Tax Matters

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                6.6

              	
                 

              	
                Certain
                  Taxes

              	
                 

              	
                21

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                7.

              	
                 

              	
                SURVIVAL;
                  INDEMNIFICATION

              	
                 

              	
                22

              
	
                 

              	
                 

              	
                7.1

              	
                 

              	
                Survival
                  of Representations, Warranties, Covenants

              	
                 

              	
                22

              
	
                 

              	
                 

              	
                7.2

              	
                 

              	
                Indemnities
                  of the Company and the Sellers

              	
                22

              
	 	 	
                7.3

              	 	Procedures
                for Indemnification; Defense	 	
                23

              
	 	 	
                 

              	 	
                (a)

              	
                 

              	
                Direct
                  Losses

              	 	
                23

              
	 	 	
                 

              	 	
                (b)

              	
                 

              	
                Defense
                  of Third Party Claims

              	 	
                23

              
	 	 	
                7.4

              	 	
                Limitations
                  on Indemnification

              	 	
                24

              
	 	 	
                7.5

              	 	
                Relationship
                  with Purchase Price Adjustment

              	 	
                24

              
	 	 	
                7.6

              	 	
                Indemnification
                  Waiver

              	
                24

              
	 	 	
                7.7

              	 	
                Method
                  of Indemnification

              	 	
                24

              
	 	 	
                7.8

              	 	
                Limitation;
                  Security for Indemnification Obligations

              	 	
                24

              
	 	 	 	 	
                 

              
	
                8.

              	 	
                NON-COMPETITION;
                  CONFIDENTIALITY

              	 	
                25

              
	 	 	
                8.1

              	 	
                Non-Competition

              	 	
                25

              
	 	 	
                8.2

              	 	
                No
                  Competing Interests

              	 	
                26

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

        Table
          of Contents

        (continued)

      

       

      
        	 	 	
                8.3

              	 	
                Confidentiality

              	 	
                26

              
	 	 	
                8.4

              	 	
                Remedies
                  upon Breach

              	 	
                26

              
	 	 	
                8.5

              	 	
                Judicial
                  Modifications

              	 	
                26

              
	 	 	
                8.6

              	 	
                Tolling
                  of Time Periods

              	 	
                26

              
	 	 	
                8.7

              	 	
                Confirmation
                  as to Scope

              	 	
                27

              
	 	 	 	 	
                 

              
	
                9.

              	 	
                MISCELLANEOUS
                  PROVISIONS

              	 	
                27

              
	 	 	
                9.1

              	 	
                Counterparts;
                  Interpretation

              	 	
                27

              
	 	 	
                9.2

              	 	
                Governing
                  Laws

              	 	
                27

              
	 	 	
                9.3

              	 	
                Partial
                  Invalidity and Severability

              	 	
                27

              
	 	 	
                9.4

              	 	
                Waiver

              	 	
                28

              
	 	 	
                9.5

              	 	
                Acceptance
                  by Fax

              	 	
                28

              
	 	 	
                9.6

              	 	
                Fees
                  and Disbursements

              	 	
                28

              
	 	 	
                9.7

              	 	
                Attorneys’
                  Fees

              	 	
                28

              
	 	 	
                9.8

              	 	
                Further
                  Assurances

              	 	
                28

              
	 	 	
                9.9

              	 	
                Notice

              	 	
                28

              
	 	 	
                9.10

              	 	
                Assignment

              	 	
                29

              
	 	 	
                9.11

              	 	
                Binding
                  Effect; Benefits

              	 	
                29

              
	 	 	
                9.12

              	 	
                Rules
                  of Construction

              	 	
                30

              
	 	 	
                9.13

              	 	
                Waiver
                  of Jury Trial

              	 	
                30

              
	 	 	
                9.14

              	 	
                Methods
                  of Termination

              	 	
                30

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

    

     

    
      Table
        of Contents

      (continued)

       

    

    Annexes

    Annex
      A -
      Definitions 

    

    Exhibits

    Exhibit
      A
      - Form of Stockholders’ Agreement

    Exhibit
      B
      - Forms of Services Agreement

    Exhibit
      C-1 - Form of Konicek Employment Agreement

    Exhibit
      C-2- Form of Employment Agreement

    Exhibit
      D
      - Form of Series A Purchase Agreement

    Exhibit
      E
      - Form of Certificate of Designation

    Exhibit
      F
      - Form of Restricted Stock Agreement

    Exhibit
      G-Form of Escrow Agreement

    Exhibit
      H
      - Forecast

    Exhibit
      I
      - Terms of Earn Out Shares

    

      
        	
                Schedules

              	 
	
                Schedule 1.6

              	
                Merger
                  Consideration Allocation

              
	
                Schedule
                  1.8 

              	
                Earn
                  Out Shares

              
	
                Schedule 3.1(a)

              	
                Capitalization

              
	
                Schedule 3.1(b)

              	
                States
                  Where the Company is Qualified

              
	
                Schedule 3.1(d)

              	
                Governmental
                  Authorizations; Third-Party Consents

              
	
                Schedule 3.1(e)

              	
                Financial
                  Statements

              
	
                Schedule 3.1(e)(A)

              	
                Special
                  Purpose Entities

              
	
                Schedule 3.1(g)

              	
                Real
                  Property Leases; Personal Property Leases

              
	
                Schedule 3.1(h)(i)

              	
                Accounts
                  Receivable

              
	
                Schedule 3.1(h)(ii)

              	
                Inventory

              
	
                Schedule 3.1(i)

              	
                Intellectual
                  Property

              
	
                Schedule 3.1(j)

              	
                Bank
                  Accounts and Powers of Attorney

              
	
                Schedule 3.1(k)

              	
                Undisclosed
                  Liabilities

              
	
                Schedule 3.1(l)

              	
                Litigation

              
	
                Schedule 3.1(m)

              	
                Contracts

              
	
                Schedule 3.1(n)

              	
                Insurance

              
	
                Schedule 3.1(o)

              	
                Employee
                  Information

              
	
                Schedule 3.1(p)

              	
                Employee
                  Arrangements

              
	
                Schedule 3.1(q)

              	
                Tax
                  Matters

              
	
                Schedule 3.1(s)

              	
                Permits

              
	
                Schedule 3.1(t)

              	
                Domain
                  Names

              
	
                Schedule 3.1(u)

              	
                Absence
                  of Certain Changes

              
	
                Schedule 3.1(u)(iii)

              	
                Existing
                  Liens

              
	
                Schedule 3.1(v)

              	
                Brokers

              
	
                Schedule 3.1(x)

              	
                Affiliated
                  Transactions

              
	
                Schedule
                  8.1

              	
                Exceptions
                  to Non-Competition

              
	
                Schedule
                  8.2

              	
                Exception
                  to Competing Interests

              

      

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    

    AGREEMENT
      AND PLAN OF MERGER

     

    This
      AGREEMENT
      AND PLAN OF MERGER
      (this
“Agreement”)
      is
      made this ___ day of August, 2006, by and among Security
      Holding Corp.,
      a
      Delaware corporation (the “Purchaser”),
      Security Holding Enterprises, Inc., a
      Wisconsin corporation (the “Company”),
      and
      the stockholders
      of the Company listed on the signature pages hereto (the
      “Sellers”).

     

    RECITALS

     

    WHEREAS,
      the
      Company and its Company Subsidiaries are principally engaged in the business
      of
      (i) the distribution and manufacture of RFID products and (ii) providing
      security services to individuals and corporations (clauses (i) and (ii) are
      collectively referred to herein as the “Business”);
      and

     

    WHEREAS,
      the
      Sellers are the record and beneficial owners of 831 shares of common stock,
      $1.00 par value per share, of the Company (the “Company
      Stock”),
      which
      shares represent 100% of the issued and outstanding capital stock of the
      Company; 

     

    WHEREAS,
      the
      respective Boards of Directors of the Purchaser and the Company have determined
      that it is advisable and in the best interests of their respective stockholders
      to effect the acquisition of the Company pursuant to the terms and subject
      to
      the conditions set forth herein;
      and

     

    WHEREAS,
      it is
      the intention of the parties to this Agreement that the transactions
      contemplated by this Agreement for federal income tax purposes shall qualify
      as
      a “reorganization” within the meaning of Section 368(a) of the
      Code.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual representations, warranties,
      covenants and agreements herein contained, the parties hereby agree as
      follows:

     

    
      1.   Terms
        of Acquisition.

    

     

    
      1.1  Merger.
        Upon
        the
        terms and subject to the conditions set forth herein, and in accordance with
        the
        Delaware General Corporation Law (the “DGCL”),
        at
        the Effective Time (as defined below), the Company shall be merged with and
        into
        the Purchaser (the “Merger”).
        At
        the Effective Time, the separate corporate existence of Company shall cease
        and
        the Purchaser shall continue as the surviving corporation of the Merger (the
        “Surviving
        Corporation”).

    

     

    
      1.2  Effective
        Time.
        Upon
        the
        terms and subject to the conditions set forth in this Agreement, the parties
        hereto shall (i) file a certificate of merger (the “Certificate
        of Merger”)
        in
        such form as is required by, and executed and acknowledged in accordance
        with,
        the relevant provisions of the DGCL and file articles of merger (the
“Articles
        of Merger”)
        in
        such form as is required by, and executed and acknowledged in accordance
        with,
        the relevant provisions of the WBCL and (ii) make all other filings or
        recordings required under the DGCL and WBCL to effect the Merger. The Merger
        shall become effective at such date and time as the Certificate of Merger
        and
        Articles of Merger are duly filed with the Department of State of the State
        of
        Delaware and the Department of State of the State of Wisconsin, respectively,
        or
        at such subsequent date and time as Parties shall agree and specify in the
        Certificate of Merger and Articles of Merger. The date and time at which
        the
        Merger becomes effective is referred to in this Agreement as the “Effective
        Time”.

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      1.3  Effect
        of the Merger.
        At the Effective Time, the effect of the Merger shall be as provided
        in
        Section 259 of the DGCL and Section 180.1106 of the
        WBCL.

    

     

    
      1.4  Certificate
        of Incorporation;
        Bylaws. At
        the Effective Time, the Certificate of Incorporation of the Purchaser as
        in
        effect immediately prior to the Effective Time, shall remain in effect.
        At the
        Effective Time, the Bylaws of the Purchaser, as in effect immediately prior
        to
        the Effective Time, shall remain in effect. 

    

     

    
      1.5  Directors
        and
        Officers. The
        directors of the Purchaser immediately prior to the Effective Time shall
        be the
        initial directors of the Surviving Corporation, each to hold office in
        accordance with the Certificate of Incorporation and Bylaws of the Surviving
        Corporation, and the officers of the Purchaser immediately prior to the
        Effective Time shall be the initial officers of the Surviving Corporation,
        in
        each case until their respective successors are duly elected or appointed
        (including pursuant to the Stockholders’ Agreement) and qualified or until the
        earlier of their death, resignation or removal.

    

     

    
      1.6  Merger
        Consideration.
        

    

     

      (a) At
      the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      the Purchaser, the Company or the holders of any of the Company Stock, each
      share of Company Stock issued and outstanding immediately prior to the Effective
      Time shall be converted into common stock, par value $0.01 per share of the
      Purchaser (the “Purchaser
      Common Stock”)
      in
      accordance with Schedule
      1.6
      (the
“Closing
      Shares”).
      Upon
      surrender of a Company Stock certificate representing shares of Company Stock
      to
      the Purchaser, the holder of such Company Stock shall be entitled to receive
      in
      exchange therefor shares of the Purchaser Common Stock in accordance with
Schedule
      1.6
      (but
      subject to Section 1.6(b) below) and the Company Stock certificate so
      surrendered shall be cancelled. Until surrendered as contemplated by this
      Section 1.6, from and after the Effective Time, each Company Stock certificate
      shall be deemed to represent only the right to receive the above described
      consideration for each share of Company Stock formerly represented by such
      Company Stock certificate, and shall not evidence any interest in the Purchaser.
      Certain Purchaser Common Stock issued as Merger Consideration shall be issued
      pursuant to Section 1.8. The
      Purchaser Common Stock received pursuant to Section 1.6 and Section 1.8 shall
      collectively be referred to as the “Merger
      Consideration.”

     

    (b) At
      the
      Effective Time, 600,000 of the Closing Shares (the “Closing
      Escrow Shares”)
      shall
      be placed in escrow pursuant to the Escrow Agreement and will be released from
      the escrow if the Surviving Corporation’s Valuation (valued as of December 31,
      2007) as determined on the initial Earn Out Valuation Date is $9,000,000 or
      greater (the “Valuation
      Target”).
      If
      the
      Company fails to achieve the Valuation Target, all of the Closing Escrow Shares
      will be forfeited and cancelled. 

     

    
      1.7  Closing. 

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a)  Closing
      Date. The
      closing of the transactions contemplated by this Agreement (the
“Closing”)
      shall
      take place at the offices of Purchaser’s counsel, Kirkpatrick & Lockhart
      Nicholson Graham, LLP, located at Miami Center, 20th Floor, 201 S. Biscayne
      Blvd., Miami, FL 33131, on a mutually agreeable date on or prior to September
      30, 2006 (the “Closing
      Date”).
      At
      the
      Closing, the Sellers shall deliver the Company Stock to the Purchaser pursuant
      to Section 1.6 hereof and the Purchaser shall deliver the Merger
      Consideration to the Sellers pursuant to Section 1.6 hereof.

     

    (b)  Purchaser’s
      Deliveries At Closing.
      Subject
      to the terms and conditions of this Agreement, at Closing, the Purchaser shall
      deliver the following duly executed documents: 

     

    (i)  Stock
      certificates evidencing the Merger Consideration in accordance with the amounts
      as set forth in Schedule 1.6;
      provided that possession of the stock certificates evidencing the Closing Escrow
      Shares, Earn Out Shares and Restricted Shares shall remain with the Purchaser
      or
      an escrow agent (as applicable) to be held in escrow as set forth in the
      Restricted Stock Agreements, the Escrow Agreement and Section 7.8
      herein;

     

    (ii)  Stockholders’
      Agreement in the form attached as Exhibit
      A
      hereto
      (the “Stockholders’
      Agreement”);

     

    (iii)  Services
      Agreement in the form attached as Exhibit
      B
      hereto
      (the “Services
      Agreement”);

     

    (iv)  The
      Employment Agreement between the Purchaser and Joel Konicek, in the form
      attached as Exhibit
      C-1
      hereto,
      and the Employment Agreements between each of Charles Martin and Jim Peroutka
      in
      the forms attached as Exhibit
      C-2
      hereto
      (the “Employment
      Agreements”);

     

    (v)  Series
      A
      Convertible Preferred Stock Purchase Agreement in the form attached as
Exhibit D
      hereto (the “Series A
      Purchase Agreement”);

     

    (vi)  The
      Restricted Stock Agreements between the Purchaser and each of Sellers in the
      form attached as Exhibit F
      hereto (the “Restricted
      Stock Agreements”);
      

     

    (vii)  The
      Certificate of Merger and Articles of Merger; and

     

    (viii)  The
      Escrow Agreement in the form attached as Exhibit
      G
      hereto
      (the “Escrow
      Agreement”).

     

    The
      documents referred to in clauses (iii), (iv), (v), (vi), (vii) and (viii) above
      are hereinafter collectively referred to as the “Ancillary
      Agreements”
and
      together with this Agreement are referred to herein as the “Transaction
      Documents.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Company’s and Sellers’ Deliveries At Closing.  Subject
      to the terms and conditions of this Agreement, at Closing, the Company and
      the
      Sellers shall deliver the following duly executed documents:

     

    (i)  Original
      stock certificates evidencing all of the shares of outstanding Company
      Stock;

     

    (ii)  Stockholders’
      Agreement;

     

    (iii)  Employment
      Agreements;

     

    (iv)  evidence
      satisfactory to the Purchaser that the Liens identified on Schedule 3.1(u)(iii)
      have
      been satisfied or shall be satisfied at Closing;

     

    (v)  the
      Certificate of Merger and Articles of Merger;

     

    (vi)  the
      Secretary’s Certificate,
      dated
      the Closing Date and executed by the Secretary of the Company, certifying the
      incumbency and signatures of the officers of the Company authorized to act
      on
      behalf of the Company in connection with the transactions contemplated hereby
      and attaching and certifying as true and complete copies of (i) the resolutions
      duly adopted by the Board of Directors and stockholders of the Company
      authorizing and approving the execution and delivery of this Agreement and
      the
      consummation of the transactions contemplated hereby and (ii) the Charter and
      By-Laws of the Company, each as may have been amended up through the Closing
      Date;
      and

     

    (vii)  certificates
      of status of the Company and the Company Subsidiaries or other evidence
      verifying such entities’ good standing in Wisconsin;

     

    (viii)  the
      Restricted Stock Agreements; and

     

    (ix)  the
      Escrow Agreement.

     

    
      1.8  Earn
        Out Shares. The
        Earn
        Out Shares shall be issued (i) in such amounts as set forth on Schedule
        1.8
        and (ii)
        pursuant to the terms and conditions set forth on Exhibit
        I
        attached
        hereto. 

    

     

    
      2.  Additional
        Agreements.

    

     

    
      2.1  Audits.
        The Company hereby agrees that its financial statements shall be
        subject to an independent audit (the “Audit”)
        for
        the 2004 calendar year and 2005 calendar year (each an “Audited
        Period”).
        The
        Audit shall be delivered to the Company two (2) days prior to Closing. The
        Purchaser shall utilize an independent certified public accountant qualified
        to
        practice before the Securities and Exchange Commission to complete the Audit,
        and shall bear the costs for such Audit. 

    

     

    
      2.2  Securities
        Law Compliance.
        The issuance of the Merger Consideration shall not be registered
        under
        the Securities Act of 1933, as amended, by reason of the exemption provided
        by
        Section 4(2) thereof, and such shares may not be further transferred unless
        such transfer is registered under applicable securities laws or, in the opinion
        of counsel, such transfer complies with an exemption from such registration.
        In
        addition, the Purchaser Common Stock may be subject to additional restrictions
        pursuant to the Stockholders Agreement. All certificates evidencing the Merger
        Consideration to be issued to the Sellers shall be legended to reflect the
        foregoing restrictions.

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      2.3  Best
        Efforts.Subject
        to the terms and conditions provided in this Agreement, each of the parties
        shall use its best efforts in good faith to take or cause to be taken as
        promptly as practicable all reasonable actions that are within its power
        to
        cause to be fulfilled those conditions precedent to its obligations or the
        obligations of the other parties to consummate the transactions contemplated
        by
        this Agreement that are dependent upon its actions.
         

      

    

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

    

     

    
      3.  Representations
        and Warranties.

    

     

    
      3.1  Representations
        and Warranties as to the Company.
        The
        Company and the Sellers hereby, jointly and severally, represent and warrant
        to
        the Purchaser as follows:

    

     

    (a)  Capitalization.
      The
      authorized capital stock of the Company consists solely of 10,000 shares of
      common stock, $0.01 par value per share, of which 831 shares will be issued
      and
      outstanding at the Closing. All issued and outstanding shares of the Company
      Stock are owned, of record and beneficially, solely by the Sellers. All shares
      of Company Stock have been duly authorized and validly issued and are fully
      paid
      and non-assessable, except as specified in the Wisconsin General Corporation
      Law. All prior offerings and issuances of Company Stock have been made in
      accordance with applicable federal and state securities Laws. Except as
      disclosed in Schedule 3.1(a), (i) no shares of the Company’s capital stock
      are subject to rights of first refusal, preemptive rights or any other similar
      rights or any liens or encumbrances suffered or permitted by the Company, (ii)
      there are no outstanding debt securities, (iii) there are no outstanding
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      any
      shares of capital stock of the Company, or contracts, commitments,
      understandings or arrangements by which the Company is or may become bound
      to
      issue additional shares of capital stock of the Company or options, warrants,
      scrip, rights to subscribe to, calls or commitments of any character whatsoever
      relating to, or securities or rights convertible into, any shares of capital
      stock of the Company, (iv) there are no outstanding securities or instruments
      of
      the Company which contain any redemption or similar provisions, and there are
      no
      contracts, commitments, understandings or arrangements by which the Company
      is
      or may become bound to redeem a security of the Company, (v) there are no
      securities or instruments containing anti-dilution or similar provisions that
      will be triggered by the sale of the common shares of Company Stock as described
      in this Agreement and (vi) the Company does not have any stock appreciation
      rights or “phantom stock” plans or agreements or any similar plan or agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b)  Organization;
      Good Standing; Power.
      The
      Company is a corporation duly
      organized, validly existing and in active status under the laws of Wisconsin,
      and has full corporate power and authority to own, lease and operate its assets
      and properties and to carry on its Business as presently conducted by it.
Schedule 3.1(b)
      hereto
      sets forth a true and complete list of all states and other jurisdictions in
      which the Company is duly qualified and in good standing to transact business
      as
      a foreign corporation. Except for those states and jurisdictions set forth
      on
      Schedule 3.1(b), there are no other states or jurisdictions in which the
      character and location of the properties owned or leased by the Company and
      the
      conduct of its Business make any such qualification necessary, except any where
      the failure to be so qualified would not have a Material Adverse Effect. The
      Company’s minute books contain true and complete records of all meetings and
      other material actions, including, without limitation, actions by vote or
      written consent of the stockholders and the board of directors of the
      Company.

     

    (c)  Authority;
      Validity; No Conflicts.
      The
      execution and delivery by the Company of this Agreement, the performance by
      the
      Company of its obligations hereunder, and the consummation of the transactions
      contemplated hereby, have been duly authorized by all necessary corporate action
      on the part of the Company, and the Company has all necessary corporate power
      with respect thereto. This Agreement is the valid and binding obligation of
      the
      Company, enforceable against it in accordance with its terms, except to the
      extent that enforceability thereof may be limited by general equitable
      principles or the operation of bankruptcy, insolvency, reorganization,
      moratorium or similar Laws. Except as set forth in Schedule 3.1(c),
      neither
      the execution and delivery by the Company of this Agreement, nor the
      consummation of the transactions contemplated hereby, nor the performance by
      the
      Company of its obligations hereunder, shall (or, with the giving of notice
      or
      the lapse of time or both, would) (i) conflict with or violate any provision
      of
      the Articles of Incorporation or Bylaws of the Company, as amended; (ii) give
      rise to a conflict, breach or default, or any right of termination, cancellation
      or acceleration of remedies or rights, or otherwise result in a loss of benefits
      to the Company, under the provisions of any note, bond, mortgage, indenture,
      license, agreement or other instrument or obligation to which the Company is
      a
      party or by which it or any of its properties or assets is otherwise bound;
      (iii) violate any Law applicable to the Company or any of its properties or
      assets; (iv) result in the creation or imposition of any Lien upon any of the
      properties or assets of the Company; (v) interfere with or otherwise adversely
      affect the ability of the Purchaser to carry on the business of the Company
      as
      presently conducted; or (vi) contravene, conflict with, or result in a violation
      of any of the terms or requirements of, or give rise to any right to revoke,
      suspend, terminate or modify any Permit.

     

    (d)  Governmental
      Authorizations; Third-Party Consents.
      Except
      as
      set forth on Schedule 3.1(d)
      hereto,
      no approval, consent, waiver, exemption, order, authorization or other action
      by, or notice to or filing with, any governmental authority or any Person,
      and
      no lapse of a waiting period, is required to be obtained by the Company or
      any
      Seller in connection with (or in order to permit) the execution, delivery or
      performance by any of them of this Agreement or any of the Ancillary Agreements
      or the consummation of the transactions contemplated hereby or thereby
      (collectively, “Consents”).

     

    (e)  Financial
      Statements.
      The
      Company has delivered to the Purchaser true and complete copies of its
      Subsidiaries’(i) audited balance sheet as of December 31, 2003 and the related
      unaudited statements of income (loss), retained earnings and cash flow for
      the
      fiscal year then ended (the “2003
      Financial Statements”),
      (ii)
      audited balance sheet as of December 31, 2004 and the related audited statements
      of income (loss), retained earnings and cash flow for the fiscal year then
      ended
      (the “2004
      Financial Statements”)
      and
      (iii) audited balance sheet as of December 31, 2005 and the related audited
      statements of income (loss), retained earnings and cash flow for the fiscal
      year
      then ended (the “2005
      Financial Statements).
      The
      Financial Statements are attached hereto as Schedule 3.1(e).
      Except
      as set forth on Schedule 3.1(e),
      the
      Financial Statements, including any notes thereto, were prepared in accordance
      with GAAP applied on a consistent basis throughout the periods involved (except,
      in the case of the 2003 Financial Statements, the absence of footnotes) and
      fairly present the financial position of the Company as of the dates indicated
      and the results of its operations for the periods covered thereby. The books
      and
      records of the Company are, in all material respects, true and complete, have
      been maintained in accordance with good business practices, and accurately
      reflect the basis for the financial condition and results of operations of
      the
      Company as set forth in its financial statements. Except as set forth on
Schedule 3.1(e),
      the
      Company has employed the accrual method of accounting for at least the past
      two
      (2) years and the Financial Statements reflect such method of
      accounting.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (f)  Interests
      in Other Entities.  Except
      as set forth in Schedule
      3.1(f),
      the
      Company does not, directly or indirectly, (i) own, of record or beneficially,
      any shares of voting stock or any other equity securities of any Person; (ii)
      have any other ownership or equity or debt interest, of record or beneficially,
      in any Person; or (iii) have any obligation or right, fixed or contingent,
      to
      purchase or subscribe for any interest in, advance or loan monies to, or in
      any
      way make an investment in, any Person or to share any profits or capital
      investments in any other Person. 

     

    (g)  Title
      to Properties; Leases.
      Except
      as
      set forth on Schedule 3.1(g),
      the
      Company has good and marketable title to all of its properties and assets,
      real
      and personal, including, but not limited to, those reflected in the audited
      balance sheet contained in the 2005 Financial Statements (the “2005
      Balance Sheet”)
      (except as sold or otherwise disposed of in the ordinary course of business
      since December 31, 2005, or as expressly provided for in this Agreement), free
      and clear of all encumbrances, liens or charges of any kind or character except:
      (a) those securing liabilities of the Company incurred in the ordinary
      course (with respect to which no default exists); (b) property leased pursuant
      to leases disclosed on any Schedule hereto; (c) liens of real estate
      and personal property Taxes; and (d) imperfections of title and
      encumbrances, if any, which, in the aggregate do not have a Material Adverse
      Effect on the business, properties or assets of the Company. 

     

    (h)  Accounts
      Receivable; Inventory

     

    (i)  Schedule 3.1(h)(i)
      hereto
      sets forth a true and complete list of the Accounts Receivable as of December
      31, 2005 and as of May 31, 2006 and the individual aging with respect thereto.
      All of the Accounts Receivable reflected on Schedule 3.1(h)(i)
      are good
      and collectible in the ordinary course of business at the recorded amounts
      thereof, less the amount of the reserves for bad accounts reflected thereon
      (which reserves have been established in accordance with GAAP on a basis
      consistent with past practice), and, to the best of the Company’s and Sellers’
knowledge are not subject to any counterclaims or offsets. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (ii)  Schedule 3.1(h)(ii)
      hereto
      sets forth a true and complete list of the Inventory. The Inventory is of such
      quality and quantity as to be usable and saleable by the Company in the ordinary
      course of business, has been priced at the lower of cost or market value using
      the “first-in, first-out” method, and is free of any defect or deficiency,
      subject only to the reserve for Inventory writedown set forth on the face of
      the
      Final 2005 Balance Sheet as adjusted for operations and transactions through
      the
      Closing Date. The level of Inventory reflected on Schedule 3.1(h)(ii)
      and the
      Final 2005 Balance Sheet are not excessive in light of the Company’s normal
      operations of the Business and are adequate to conduct the Company’s operations
      in the ordinary course of business. 

     

    (i)  Intellectual
      Property.  Schedule 3.1(i)
      hereto
      sets forth a true and complete list of all licenses, patents, patents pending,
      registered copyrights, trade names, trademarks and service marks comprising
      Intellectual Property. None of the Sellers nor any officer, director or employee
      of the Company, or any of their respective Affiliates or Associates, has any
      ownership, royalty or other interest in any of the Intellectual Property. The
      Company has either all right, title and interest in and to, or valid and
      enforceable rights under contract to use, all items of Intellectual Property
      material to, or necessary to conduct, the Business of the Company as it is
      presently conducted or contemplated to be conducted, free and clear of all
      Liens
      other than Permitted Liens. There are no material restrictions on the direct
      or
      indirect transfer of any contract or other agreement, or any interest therein,
      held by the Company in respect of any item of Intellectual Property. The Company
      is not in default (or, with the giving of notice or lapse of time or both,
      would
      be in default) under any contract or other agreement to use any item of
      Intellectual Property required to be set forth on Schedule 3.1(i).
      None of
      the Intellectual Property infringes or conflicts with, and neither the Company
      nor any of Sellers has received any notice of infringement of or conflict with,
      any license, patent, copyright, trademark, service mark or other intellectual
      property right of any other Person and, there is no material infringement or
      material unauthorized use by any Person of any of the Intellectual Property
      owned by the Company. Except as set forth on Schedule 3.1(i),
      the
      validity or enforceability of any of the Intellectual Property or the title
      of
      the Company thereto has not been questioned in any litigation, governmental
      inquiry or proceeding to which the Company is party and to the knowledge of
      the
      Company or any of the Sellers, no such litigation, governmental inquiry or
      proceeding is threatened. The Company has taken all actions necessary and
      appropriate to preserve the confidentiality of all trade secrets, proprietary
      and other confidential information material to the business and operations
      of
      the Company.

     

    (j)  Bank
      Accounts; Credit Cards; Corporate Accounts; and Powers of
      Attorney.  Schedule 3.1(j)
      hereto
      sets forth a true and complete list showing (i) the names of all banks in which
      the Company has an account or safe deposit box, the account numbers for each
      account at such banks and the names of all Persons authorized to draw thereon
      and who have access thereto; (ii) the names of all credit card issuers with
      whom
      the Company has an account and the names of all Persons authorized to use such
      accounts or who have access thereto; (iii) the names of all cellular telephone,
      phone card or other corporate accounts with whom the Company has an account
      and
      the names of all Persons authorized to use such accounts or who have access
      thereto; and (iv) the names of all Persons, if any, holding powers of attorney
      from the Company. There are no automatic, periodic or scheduled withdrawals
      or
      debits with respect to the bank or corporate accounts required to be set forth
      on Schedule 3.1(j)
      hereto.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (k)  Absence
      of Undisclosed Liabilities.
      The
      Company does not have any Liabilities, including guarantees and indemnities
      by
      the Company of Liabilities of any other Person, except (i) Liabilities as and
      to
      the extent reflected on the Final 2005 Balance Sheet; (ii) Liabilities incurred
      by it in the ordinary course of business and consistent with past practice
      since
      the date of the 2004 Balance Sheet (none of which is a material Liability for
      breach of contract, breach of warranty, tort, infringement, claim, lawsuit
      or
      other proceeding) and adequately reflected on the books and records of the
      Company; (iii) obligations not in default under contracts entered into by
      it in the ordinary course of business; and (iv) the Liabilities set forth
      on Schedule 3.1(k)
      hereto.

     

    (l)  Litigation.
      Except
      as
      set forth on Schedule 3.1(l)
      hereto,
      there are no claims, suits or actions, administrative, arbitration or other
      proceedings, or governmental investigations pending or, to the knowledge of
      the
      Company or any of the Sellers, threatened against or affecting, or reasonably
      likely to adversely affect, the Company or any of its properties, assets or
      business or the transactions contemplated hereby. There are no outstanding
      judgments, orders, stipulations, injunctions, decrees or awards against the
      Company that have not been fully satisfied.

     

    (m)  Material
      Contracts.  Schedule 3.1(m)
      hereto
      sets forth a true and complete list, and brief description, of each Material
      Contract. True and complete copies of all written Material Contracts required
      to
      be set forth on Schedule 3.1(m)
      have
      been furnished to the Purchaser and, except as set forth on Schedule 3.1(m),
      each of
      them is in full force and effect. Except as set forth on Schedule 3.1(m),
      neither
      the Company nor, to the knowledge of the Company or any of the Sellers, any
      other Person that is a party to a Material Contract or is otherwise bound
      thereby is in default thereunder, and no event, occurrence, condition or act
      exists that, with the giving of notice or the lapse of time or both, would
      give
      rise to any default or right of cancellation thereunder. To the knowledge of
      the
      Company or any of the Sellers, there have been no threatened cancellations
      of
      any of the Material Contracts and there are no outstanding disputes thereunder.
      There are no agreements, understandings or arrangements with any other Person
      in
      respect of the Material Contracts that, other than as provided therein:
      (i) give any Person the right to renegotiate or require a reduction in the
      price paid to the Company or the repayment of any amount previously paid,
      (ii) provide for the sharing of any revenues or profits by or with the
      Company or (iii) provide for discounts, allowances or extended payment
      terms.

     

    (n)  Insurance.  Schedule 3.1(n)
      hereto
      sets forth a true and complete list of all policies of insurance under which
      the
      Company or any of its officers or directors (in such capacity) is an insured
      party, beneficiary or loss payable payee, and the expiration date of each such
      policy. The Company is current in all of its premiums for its insurance
      policies. True and complete copies of all such policies have been provided
      to
      the Purchaser. Such policies are in full force and effect and they will remain
      in full force and effect and will not terminate or lapse or otherwise be
      affected in any way by reason of the transactions contemplated hereby. The
      Company is not in default with respect to any provision contained in any such
      policy, the Company has not received or given a notice of cancellation or
      non-renewal with respect to any such policy and the Company has not received
      a
      reservation of rights letter with respect to any such policy. Except as set
      forth on Schedule 3.1(n),
      no
      claims have been made by the Company under any such policy, and no event has
      occurred and no state of facts exists in respect of which the Company is
      entitled to make a claim under any such policy.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (o)  Employees.

     

    (i)  Schedule 3.1(o)
      hereto
      sets forth a true and correct summary of the following information for each
      current employee of the Company, including each employee on leave of absence,
      disability or layoff status: name; job title; employment status; current
      compensation rate and any change(s) in compensation since December 31, 2004;
      vacation time accrued; and service years credited for purposes of vesting or
      eligibility to participate in any Benefit Plan. Except as set forth on
Schedule 3.1(o),
      the
      Company has no written or oral union, collective bargaining, employment,
      management, severance or consulting agreements or arrangements to which the
      Company is a party or by which it is otherwise bound. No union or other labor
      organization is seeking to organize, or to be recognized as, a collective
      bargaining unit of any group of employees that includes any employees of the
      Company. There is no pending or, to the knowledge of the Company or any of
      the
      Sellers, threatened representation proceeding or petition, strike, work
      stoppage, work slowdown, unfair labor practice charge or complaint or other
      material labor dispute affecting any employee of the Company.

     

    (ii)  Except
      as
      set forth in Schedule
      3.1(o),
      none of
      the Sellers, nor any officer nor employee of the Company are, parties to or
      are
      otherwise bound by any oral or written agreement or arrangement, including
      any
      confidentiality, non-competition or proprietary rights agreement, with any
      Person (other than the Company) that in any way limits or adversely affects
      or
      will limit or affect (A) the performance of his/her duties as an employee,
      officer or director of the Company after the Closing or (B) the ability of
      the
      Company to conduct its business as it currently exists or as currently
      contemplated. 

     

    (p)  Employee
      Arrangements; ERISA.

     

    (i)  Schedule 3.1(p)
      hereto
      sets forth a true and complete list of all Benefit Plans. The Company has
      delivered to the Purchaser true and complete copies of each Benefit Plan
      (including any related trust agreement), the most recent summary plan
      descriptions and all other material employee communications embodying or
      relating to any Benefit Plan, the most recent Internal Revenue Service
      determination letter (if the plan is intended to be qualified under
      Section 401(a) of the Code, and the annual reports filed on Form 5500
      (including all schedules and accountants’ opinions) for the two most recent
      completed plan years, if such reports were required to be filed. Except as
      set
      forth on Schedule 3.1(p),
      the
      Company has not announced or otherwise made a commitment to create any bonus,
      option, deferred compensation, pension, profit sharing or retirement plan or
      arrangement, severance arrangement or other fringe benefit plan.

     

    (ii)  Each
      of
      the Benefit Plans required to be set forth on Schedule 3.1(p) is
      and
      has at all times been in compliance with all applicable provisions of ERISA,
      the
      Code and other applicable Laws.

     

    (iii)  Except
      as
      set forth on Schedule 3.1(p),
      the
      execution and delivery of, and the performance of the transactions contemplated
      by, this Agreement will not (either alone or upon the occurrence of any
      additional or subsequent event) constitute an event under any Benefit Plan
      or
      individual agreement that will or may result in any payment (whether of
      severance pay or otherwise), acceleration, vesting or increase in benefits
      with
      respect to any employee, former employee, consultant, agent or director of
      the
      Company.

     

    
      
        
        

      

      
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    (iv)  Each
      Benefit Plan that is a “group health plan” (within the meaning of Code
      Section 4980B) has been administered in compliance with the coverage
      continuation requirements of COBRA, and as provided under Code Section 4980
      and any regulations promulgated or proposed under the Code. The Company and
      each
      Benefit Plan are in compliance with the requirements of the Health Insurance
      Portability and Accountability Act to the extent such requirements are
      applicable.

     

    (v)  At
      no
      time has the Company contributed to, been required to contribute to or incurred
      any Liability to any Benefit Plan that: is a multi-employer plan, as defined
      in
      Section 3(37) of ERISA; is a multiple employer welfare arrangement, as
      defined in Section 3(40) of ERISA; is a multiple employer plan, as
      described in Section 210 of ERISA, subject to Title IV of ERISA; or
      provides health (other than as required under COBRA), life or other welfare
      benefits to former employees, directors or consultants.

     

    (vi)  No
      event
      has occurred or is threatened that would constitute a reportable event (for
      which any applicable notice requirement has not been waived) within the meaning
      of Section  4043(b) of ERISA with respect to any Pension Plan.

     

    (vii)  Each
      Pension Plan that is intended to meet the requirements of Code
      Section 401(a) meets, and since its inception has met, the requirements for
      qualification under Code Section 401(a) and nothing has occurred that would
      adversely affect the qualified status of any such Pension Plan. The IRS has
      issued a favorable determination letter with respect to the qualification under
      the Code of each Pension Plan and the IRS has not taken any action to revoke
      or
      suspend any such letter.

     

    (viii)  Those
      sections of all annual reports heretofore filed with the IRS or the Department
      of Labor by or on behalf of every Benefit Plan that were required to be so
      certified were certified without qualification by the accountants or actuaries
      of such Benefit Plan.

     

    (ix)  The
      Company has made all contributions required to be made by it to each Benefit
      Plan under the terms of the Benefit Plan and applicable Law. No prohibited
      transaction (as defined in Code Section 4975 or Section 406 of ERISA)
      has occurred with respect to any Benefit Plan that could subject any Benefit
      Plan or any related trust, the Company, any Affiliate, the Purchaser or any
      director, officer or employee of any of them to any Tax or penalty imposed
      under
      Code Section 4975 or Sections 502(i) or 502(1) of ERISA, directly or
      indirectly, and whether by way of indemnity or otherwise.

     

    (q)  Tax
      Matters.
      Except
      as
      set forth on Schedule 3.1(q)
      hereto:

     

    (i)  the
      Company has filed (on a timely basis, including applicable extensions) with
      the
      appropriate governmental agencies any federal, state, local and foreign Tax
      Returns required to be filed by it and has paid in full all Taxes due. All
      such
      Tax Returns were true and complete in all material respects as shown
      thereon.

     

    
      
        
        

      

      
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    (ii)  the
      Company is not currently the beneficiary of any extension of time within which
      to file any Tax Return;

     

    (iii)  the
      Company has provided the Purchaser with true and complete copies of all income
      Tax Returns filed by it since the inception of the Business and filed by each
      of
      its Subsidiaries since the earlier of the applicable Subsidiary’s inception or
      the applicable Subsidiary’s 2002 fiscal year;

     

    (iv)  there
      are
      no Tax Liens upon any properties or assets of the Company other than any
      statutory Liens for Taxes not yet due and payable or which are being contested
      in good faith;

     

    (v)  the
      Company has not waived any statute of limitations in respect of Taxes or
      executed or filed with any governmental authority any agreement extending the
      period for the assessment or collection of any Taxes, and it is not a party
      to
      any pending or, to the knowledge of the Company or any of the Sellers,
      threatened suit, action or proceeding by any governmental authority for the
      assessment or collection of Taxes;

     

    (vi)  there
      is
      no unresolved written claim by a governmental authority in any jurisdiction
      where the Company does not file Tax Returns that the Company is subject to
      taxation by such jurisdiction;

     

    (vii)  except
      as
      set forth in Schedule 3.1(q), there has been no examination or audit or court
      proceeding with respect to Taxes with respect to any year since the Company’s
      inception;

     

    (viii)  the
      Company has timely withheld and paid all material Taxes required to have been
      withheld and paid in connection with amounts paid or owing to any employee,
      independent contractor, creditor, Sellers or other Person;

     

    (ix)  the
      unpaid Taxes of the Company (A) did not, as of the date of the Final 2005
      Balance Sheet, exceed the reserve for Tax Liabilities (other than any reserve
      for deferred Taxes established to reflect timing differences between book and
      Tax income) set forth on the face of the Final 2005 Balance Sheet and (B) will
      not exceed that reserve, as adjusted for the passage of time through the Closing
      Date in accordance with the past custom and practice of the
      Company;

     

    (x)  the
      Company has not filed a consent under Code Section 341(f) concerning
      collapsible corporations; 

     

    (xi)  the
      Company has not been a United States real property holding corporation (within
      the meaning of Code Section 897(c)(2)) during the applicable period
      specified in Code Section 897(c)(1)(A)(ii). The Company is not a party to
      or otherwise bound by any Tax indemnification, allocation or sharing
      agreement;

     

    (xii)  the
      Company will not be required to include any item of income in, or exclude any
      item of deduction from, its taxable income for any taxable period (or portion
      thereof) ending after the Closing Date as a result of any: (A) change in
      method of accounting for a taxable period ending on or prior to the Closing
      Date, (B) ”closing agreement,” as described in Code Section 7121 (or
      any corresponding provision of state, local or foreign Tax Law), (C) installment
      sale or open transaction disposition made on or prior to the Closing Date or
      (D) prepaid amount received on or prior to the Closing Date; 

     

    
      
        
        

      

      
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    (xiii)  no
      power
      of attorney has been granted by the Company with respect to any matters relating
      to Taxes that is currently in effect; and

     

    (xiv)  since
      the
      date of its incorporation, the Company has always been an S Corporation within
      the meaning of Code Section 1361(a)(1).

     

    (r)  Compliance
      with Applicable Laws.
      The
      Company is and has been in compliance with all Laws applicable to the Company
      or
      to the conduct of its business or operations or to the use of its properties
      or
      assets, including, without limitation, all privacy, employment and human rights
      Laws. The Company has not received written notice of any violation or alleged
      violation of any Law by the Company. To the knowledge of the Company or any
      of
      the Sellers, there is no pending or proposed legislation applicable to the
      Company or to the conduct of its business or operations that, if enacted, could
      reasonably be expected to have a Material Adverse Effect. No event has occurred
      and no circumstance exists that could reasonably be expected to constitute
      or
      result in (with or without notice or lapse of time or both) a violation of
      or
      failure to comply with (i) a material requirement of any Law by the Company
      or
      (ii) an order of any court with respect to which the Company or any of its
      assets or properties is subject. For purposes of clarity, this
      Section 3.1(r) does not apply, and Section 3.1(q) contains the sole
      representations of the Company and the Sellers related to, Tax
      matters.

     

    (s)  Regulatory
      Permits.
      The
      Company possesses all material certificates, authorizations and permits issued
      by the appropriate federal, state or foreign regulatory authorities necessary
      to
      conduct their respective businesses, and Company has not received any notice
      of
      proceedings relating to the revocation or modification of any such certificate,
      authorization or permit.

     

    (t)  Domain
      Names.  Schedule 3.1(t)
      hereto
      sets forth a true and complete list of all domain names owned or used by the
      Company in the conduct of its business. None of the Sellers and no officer,
      director or employee of the Company or any of their respective Affiliates or
      Associates has any ownership or other interest in the domain names. None of
      the
      domain names infringes or conflicts with any trademarks, trademark rights,
      trade
      names, trade name rights, service marks or other rights of any Person. The
      Company has not obtained rights to any domain name in violation of any Law,
      including, without limitation, the Anticybersquatting Consumer Protection
      Act.

     

    (u)  Absence
      of Certain Changes.
      Except
      as
      and to the extent set forth on Schedule 3.1(u)
      hereto,
      since December 31, 2005, the Company has not:

     

    (i)  incurred
      any indebtedness for borrowed money or any other material Liabilities or
      obligations, except those which are less than $10,000 individually and $25,000
      in the aggregate and incurred in the ordinary course of business and consistent
      with past practice, or experienced any increase in, or change in any underlying
      assumption or method used in calculating, any bad debt, contingency or other
      reserve;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (ii)  except
      for regularly scheduled payments of principal and interest on indebtedness
      for
      borrowed money that were required in accordance with the express terms thereof,
      paid, discharged or satisfied any claim, Liability or obligation (absolute,
      accrued, contingent or otherwise), other than the payment, discharge or
      satisfaction in the ordinary course of business of Liabilities and obligations
      (x) reflected or reserved against on the Final 2005 Balance Sheet or (y)
      incurred since the date thereof in the ordinary course of business and
      consistent with past practice;

     

    (iii)  caused,
      permitted or allowed any of its property or assets (real, personal or mixed,
      tangible or intangible) to be subjected to any Lien other than (A) Liens for
      Taxes not yet due and payable or being contested in good faith, (B) Liens of
      materialmen, mechanics, carriers, landlords and like Persons that are not yet
      due and payable and (C) those Liens set forth on Schedule 3.1(u)(iii)
      hereto,
      all of which Liens shall be released on or prior to the Closing (collectively,
      “Permitted
      Liens”).

     

    (iv)  written
      off as uncollectible any notes or Accounts Receivable, except for write-offs
      in
      the ordinary course of business and consistent with past practice, none of
      which
      is material and all of which together do not exceed $10,000 in the
      aggregate;

     

    (v)  canceled
      any debts or waived or suffered to lapse any claims or rights of material value,
      or sold, transferred or otherwise disposed of any of its tangible properties
      or
      assets, except in the ordinary course of business and consistent with past
      practice;

     

    (vi)  made
      any
      single capital expenditure or commitment in excess of Ten Thousand
      Dollars ($10,000)
      for additions to property, equipment or intangible assets or made aggregate
      capital expenditures or commitments in excess of Twenty-Five Thousand Dollars
      ($25,000) for additions to property, equipment or intangible
      assets;

     

    (vii)  issued,
      granted, redeemed or repurchased any shares of its capital stock or any options,
      warrants or other rights to acquire its capital stock, or declared, paid or
      set
      aside for payment any dividend or other distribution in respect of any of its
      capital stock;

     

    (viii)  made
      any
      change in any of its methods of accounting or accounting practices or
      principles;

     

    (ix)  paid,
      loaned or advanced any amount, or sold, transferred or leased any properties
      or
      assets (real, personal or mixed, tangible or intangible) to, or entered into
      any
      agreement or arrangement with, any Affiliate or Associate; 

     

    (x)  disposed
      of or suffered to lapse any right to use any domain name, web address or item
      of
      Intellectual Property, or disposed of or disclosed to any Person any trade
      secret, formula, process or know-how or any other confidential information
      relating to the Company;

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (xi)  acquired
      any assets or properties other than in the ordinary course of its
      business;

     

    (xii)  suffered
      any material adverse change in its Business, operations, assets or condition
      (financial or otherwise);

     

    (xiii)  granted
      any increase in the compensation (including any increase pursuant to any bonus,
      pension, profit-sharing or other plan) payable or to become payable to any
      officer or employee, and no such increase is customary or required by any
      agreement or understanding; or

     

    (xiv)  agreed,
      in writing or otherwise, to take any action described in this
      Section 3.1(u).

     

    (v)  Brokers.
      Except
      as
      set forth on Schedule 3.1(v)
      hereto,
      no agent, broker, firm or other Person acting on behalf of the Company or the
      Sellers, or under the authority of any of the foregoing, is or shall be entitled
      to a brokerage commission, finder’s fee or similar payment in connection with
      any of the transactions contemplated hereby from the Company, any Seller or
      the
      Purchaser. The Sellers shall have the sole obligation and responsibility to
      pay
      any Person identified on Schedule 3.1(v).
      

     

    (w)  Disclosure.
      No
      representation or warranty made by the Company or the Sellers herein or in
      any
      of the Ancillary Agreements contains any untrue statement of a material fact
      or
      omits a material fact necessary in order to make the statements herein or
      therein not misleading.

     

    (x)  Affiliated
      Transactions.
      Except
      as
      set forth on Schedule 3.1(x)
      hereto,
      none of the Sellers nor any director or officer of the Company (or any of their
      respective Affiliates or Associates) (i) is a party to or otherwise a
      beneficiary of any agreement, transaction or arrangement (oral or written)
      with
      or involving the Company or (ii) has any claim, monetary or otherwise, against
      the Company. 

     

    (y)  Disclosure
      Schedules.
      The
      Schedules are integral parts of this Agreement. Nothing in a Schedule shall
      be deemed adequate to disclose an exception to a representation or warranty
      made
      herein, unless the Schedule identifies the exception with reasonable
      particularity, including by explicit cross-reference to another Schedule to
      this Agreement. Without limiting the generality of the foregoing, the mere
      listing, or inclusion of a copy, of a document or other item shall not be deemed
      adequate to disclose an exception to a representation or warranty made herein,
      unless the representation or warranty is being made as to the existence of
      the
      document or other item itself. The Company and the Sellers are responsible
      for
      preparing and arranging the Schedules corresponding to the lettered and numbered
      sections contained herein. Disclosure made in a specific Schedule shall be
      deemed not to have been disclosed with respect to any other Schedule unless
      an explicit cross-reference is appropriately made.

     

    (z) The
      Company Subsidiaries are duly organized, validly existing and in good standing
      under the laws of Wisconsin, and have full corporate power and authority to
      own,
      lease and operate their assets and properties and to carry on their business
      as
      presently conducted by them.

     

    
      
        
        

      

      
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      3.2  Representations
        and Warranties of the Sellers.
        Each
        Seller hereby, for him or herself and for no other Seller, represents and
        warrants as follows:

    

     

    (a)  Capacity;
      Validity; No Conflicts.
      Such
      Seller has the legal capacity to execute and deliver this Agreement and the
      Ancillary Agreements to which he or she is a party and to consummate the
      transactions contemplated hereby and thereby. This Agreement and the Ancillary
      Agreements to which such Seller is a party have been duly and validly executed
      by such Seller and constitute the valid and binding obligations of such Seller,
      enforceable against him or her in accordance with his or her respective terms,
      except to the extent that enforceability thereof may be limited by general
      equitable principles or the operation of bankruptcy, insolvency, reorganization,
      fraudulent transfer, moratorium or similar Laws. Neither the execution and
      delivery by such Seller of this Agreement and the Ancillary Agreements (to
      the
      extent that he or she is a party thereto), nor the consummation of the
      transactions contemplated hereby or thereby, nor the performance by such Seller
      (to the extent that he or she is a party thereto) of his or her obligations
      hereunder or thereunder, shall (or, with the giving of notice or the lapse
      of
      time or both, would) (i) give rise to a conflict or default, or any right of
      termination or cancellation, under the provisions of any note, bond, mortgage,
      indenture, license, agreement or other instrument or obligation to which such
      Seller is a party or by which such Seller is otherwise bound; (ii) violate
      any
      order, writ, injunction, decree, law, statute, rule or regulation applicable
      to
      such Seller; or (iii) result in the creation or imposition of any Lien upon
      any of the properties or assets of such Seller.

     

    (b)  Stock
      Ownership.
      Except
      as
      set forth in Schedule 3.2(b),
      such
      Seller is the sole record holder and beneficial owner of the Company Stock,
      and
      such Company Stock is free and clear of all restrictions on transfer (other
      than
      restrictions of general applicability under the Securities Act and state
      securities Laws) and Liens. Except as set forth on Schedule 3.2(b),
      such
      Seller is not a party to any option, warrant, right, contract, call, put, or
      other agreement or commitment providing for the disposition or acquisition
      of
      any Company Stock (other than this Agreement). Such Seller is not a party to
      any
      voting trust, proxy or other agreement or understanding with respect to the
      transfer or voting of the Company Stock. The transfer of the Company Stock
      by
      such Seller as provided herein shall, upon the Closing, vest the Purchaser
      with
      good and marketable title to such Shares, free and clear of all Liens. Joel
      Konicek and James Peroutka own a majority of the Owned Shares and in no instance
      can any person or person gain control of the voting power of Cyberlynk

     

    (c)  Investment
      Intent.
      Such
      Seller is acquiring the Purchaser Common Stock as principal for its own account
      for investment purposes only and not with a view to or for distributing or
      reselling such Purchaser Common Stock or any part thereof, without prejudice,
      however, to such Seller’s right at all times to sell or otherwise dispose of all
      or any part of such Purchaser Common Stock in compliance with applicable federal
      and state securities laws.  Subject to the immediately preceding sentence,
      nothing contained herein shall be deemed a representation or warranty by such
      Seller to hold the Purchaser Common Stock for any period of time.  Such
      Seller does not have any agreement or understanding, directly or indirectly,
      with any Person to distribute any of the Purchaser Common Stock.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (d)  Experience
      of Such Seller.
      Such
      Seller, either alone or together with its representatives, has such knowledge,
      sophistication and experience in business and financial matters so as to be
      capable of evaluating the merits and risks of the prospective investment in
      the
      Purchaser Common Stock, and has so evaluated the merits and risks of such
      investment. Such Seller is able to bear the economic risk of an investment
      in
      the Purchaser Common Stock and, at the present time, is able to afford a
      complete loss of such investment.

     

    (e)  General
      Solicitation.
      Such
      Seller is not purchasing the Purchaser Common Stock as a result of any
      advertisement, article, notice or other communication regarding the Purchaser
      Common Stock published in any newspaper, magazine or similar media or broadcast
      over television or radio or presented at any seminar or any other general
      solicitation or general advertisement.

     

    (f)  Disclosure
      Schedules.
      Each
      Seller further acknowledges that it has had full and adequate opportunity to
      request additional information from and to ask questions of the
      Purchaser.

     

    
      3.3  Representations
        and Warranties of the Purchaser.
        The
        Purchaser hereby represents and warrants to the Company and the Sellers as
        follows:

    

     

    (a)  Organization
      and Power.
      The
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the Laws of the State of Delaware, and has full corporate power and
      authority to own, lease and operate its assets and properties and to carry
      on
      its business as presently conducted by it. 

     

    (b)  Authority;
      Validity; No Conflicts.
      The
      execution and delivery by the Purchaser of this Agreement and of each of the
      Ancillary Agreements to which it shall be a party, the performance by the
      Purchaser of its obligations under this Agreement and such Ancillary Agreements,
      and the consummation of the transactions contemplated hereby and thereby, have
      been duly authorized by all necessary corporate action on the part of the
      Purchaser, and Purchaser has all necessary corporate power with respect thereto.
      This Agreement and the Ancillary Agreements to which it shall be a party are,
      or
      when executed and delivered by the Purchaser shall be, the valid and binding
      obligations of the Purchaser, enforceable against it in accordance with their
      respective terms, except to the extent that enforceability thereof may be
      limited by general equitable principles or the operation of bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium or similar Laws.
      Neither the execution and delivery by the Purchaser of this Agreement or the
      Ancillary Agreements to which it shall be a party, nor the consummation of
      the
      transactions contemplated hereby or thereby, nor the performance by the
      Purchaser of its obligations hereunder or thereunder, shall (or, with the giving
      of notice or the lapse of time or both, would) (i) conflict with or violate
      any
      provision of the Certificate of Incorporation or By-Laws of the Purchaser;
      (ii)
      violate any Law applicable to the Purchaser or any of its properties or assets;
      or (iii) conflict with, cause a default under, or require consent or approval
      of
      any party under any material contract or agreement to which the Purchaser is
      a
      party.

     

    (c)  Compliance
      with Law.
      The
      Purchaser is in compliance with all applicable Laws.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (d)  Capitalization.
      The
      authorized capital stock of the Purchaser consists of (i) 40,000,000 shares
      of common stock, $0.01 par value per share, of which 100 shares of common stock
      are issued and outstanding and (ii) 10,000,000 shares of preferred stock,
      $1.00 par value per share, of which no shares are issued and outstanding. All
      outstanding shares of the Purchaser capital stock have been duly authorized
      and
      validly issued and are fully paid and non-assessable and are subject to
      redemption by the Company for an aggregate of $1.00, which redemption will
      be
      effected immediately upon the Closing of this Agreement. All prior offerings
      and
      issuances of the Purchaser capital stock have been made in accordance with
      applicable federal and state securities Laws. There are no outstanding options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, any shares
      of
      capital stock of the Purchaser, or contracts, commitments, understandings or
      arrangements by which the Purchaser is or may become bound to issue additional
      shares of capital stock of the Purchaser or options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Purchaser. The Purchaser does not have any stock appreciation rights or “phantom
      stock” plans or agreements or any similar plan or agreement.

     

    (e)  No
      Other Operations.
      Since
      the date of inception, the Purchaser has conducted no business other than
      organizational matters and has no material assets or liabilities, executory
      contracts (except for this Agreement and the Ancillary Documents), pending
      claims or litigation. 

     

    (f)  Common
      Stock.
      When
      issued in accordance with this Agreement, the Common Stock issued as Merger
      Consideration, including Earn Out Shares, will be in the form of validly issued,
      fully paid and non-assessable shares of the Purchaser capital stock with no
      personal liability attaching to the ownership thereof and will be free and
      clear
      of any Liens other than as set forth in the Escrow Agreement.

     

    
      4.  Covenants.
        

       

      The
        Sellers, the Company and the Purchaser hereby covenant and agree
        as:

    

     

    
      4.1  Public
        Announcements.
        The
        Sellers, the Company and the Purchaser agree that they will consult with
        each
        other before issuing any press release or otherwise making any public statement
        with respect to this Agreement or the transactions contemplated hereby and
        any
        press release or any public statement shall be subject to the mutual agreement
        of the parties, except as may be required by the disclosure obligations of
        parties or parties under applicable securities laws.

    

     

    
      4.2  Satisfaction
        of Certain Permitted Liens.
        At
        or
        prior to Closing, the Company shall satisfy and obtain the release of all
        Liens
        required to be identified on Schedule 3.1(u)(iii).
        Such
        covenant may be satisfied by the Sellers and the Company by obtaining and
        delivering to the Purchaser on or prior to the Closing Date, lender final
        payoff
        letters in respect of such Liens, and documents releasing all such Liens
        (including UCC-3 termination statements), which letters and agreements shall
        be
        irrevocable effective subject only to the payment of the third-party
        debt.

    

     

    
      
        
        

      

      
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      4.3  Tax
        Treatment.
        The
        Purchaser shall not take, or agree to take, any action that would prevent
        the
        transactions contemplated by this Agreement from qualifying as a reorganization
        within the meaning of Code Section 368(a).

    

     

    
      4.4  Valuation
        Rights.

    

     

    (a)
      At
      any time upon thirty (30) days written notice to the Purchaser or, in the event
      the Parent elects to sell all of its capital stock of the Purchaser prior to
      the
      Final Earn Out Valuation Date, the Sellers shall have the right, at the Sellers’
expense, to seek a valuation of the Purchaser to determine the Equity Value
      on
      such date (the “Valuation
      Date”)
      and
      the Purchaser’s Restricted Shares or Earn Out Shares (or portion thereof) will
      vest (and as to Earn Out Shares, will be released from escrow), in accordance
      with the Escrow Agreement or the Restricted Stock Agreement, as applicable.
      The
      exercise of the Valuation right described herein shall not preclude any
      subsequent Valuation of the Restricted Shares or the Earn Out Shares pursuant
      to
      the Escrow Agreement or the Restricted Stock Agreement, as
      applicable.

     

    (b) Upon
      the
      death or Disability (as defined in the applicable Employment Agreement) of
      a
      Seller employed by the Purchaser, such Seller (or his/her successors or assigns)
      shall have a right, at such Seller’s expense and upon thirty (30) days written
      notice, to seek a Valuation to determine the Equity Value of the Purchaser.
      Based on such Equity Value, which shall be determined as of the date of the
      termination of such Seller’s employment with the Purchaser resulting from
      his/her death or Disability, the portion of the Restricted Shares and the Earn
      Out Shares earned as of such date shall vest or be released (as applicable).
      With respect to Restricted Shares or Earn Out Shares held by a Seller (or
      his/her successors or assigns) whose employment with the Purchaser terminates
      as
      a result of his/her death or Disability, any such Restricted Shares or Earn
      Out
      Shares not vested or released pursuant to this Section 4.4(b) shall be
      forfeited. 

     

    
      4.5  Forecast.  Sellers
        and Purchaser have agreed on forecasted revenue and EBITDA for the Purchaser
        for
        the 2006 fiscal year (the “Forecast”),
        a
        copy of which is attached hereto as Exhibit
        H.
        The
        Forecast shall not be revised without the unanimous written consent of the
        Purchaser’s Board of Directors (the “Board”).
        Prior
        to each subsequent fiscal year of the Purchaser, the Purchaser agrees to
        present
        a Forecast to the Board for such fiscal year, which forecast must be unanimously
        approved by the Board. 

    

     

    
      4.6  Option
        to Purchase Accutek Shares. Joel Konicek and James Peroutka
        represent and warrant that (i) they own 100% of the capital stock (and all
        securities convertible into the capital stock) of Accuteck LLC., a Wisconsin
        coporation, (ii) Accuteck LLC owns 67% of the capital stock (and all securities
        convertible into the capital stock) of Innovative Control Systems, Inc. a
        Wisconsin corporation (“Accutech”)
        and
        (iii) there are no restrictions on the sale or transfer of Accutek’s, or their
        capital stock, of Accutech (except any registration requirements under state
        and
        federal securities laws). For the period beginning on August 15, 2007 and
        ending on February 15, 2008 (the “Option
        Period”),
        Joel
        Konicek and James Peroutka hereby agree to grant to the Purchaser the option
        (the “Option”)
        to
        purchase all of their ownership interests in Accutek (as well as any capital
        stock they individually, or through any entity, own of Accutech) (the
“Option
        Shares”)
        based
        on the fair market value of Accutech as an on-going concern as determined
        by
        USBX Advisory Services, Inc. (“USBX”)
        or
        Focus Enterprises, Inc. (“Focus”)
        as of
        the date of the delivery of written notice of the exercise of the Option.
        Purchaser shall complete the purchase of all of the Option Shares within
        fifteen
        (15) days of the determination of the fair market value of Accutech. In
        addition, Joel Konicek and James Peroutka hereby agree to provide the Purchaser
        (i) written notice of any bona fide offer to purchase the Option Shares and
        (ii)
        the opportunity to exercise the Option for the thirty (30) day-period following
        the date of such notice until the expiration of the Option Period. The Option
        shall not be assignable. 

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    Covenants
      in this Section 4 and contained elsewhere in this Agreement which by their
      terms
      are intended to be performed by or available to any party to this Agreement
      after the Closing Date shall survive the Closing Date.

     

    
      5.  Conditions
        to Closing.

    

     

    The
      parties shall not be bound to close under this Agreement unless, on or before
      the Closing Date:

     

    (a) The
      Purchaser receives and approves the Company’s audited financials for the Fiscal
      Years ending December 31, 2004 and 2005.

     

    (b) SecurityInc,
      LLC, a Wisconsin limited liability company, Wisconsin Cyberlynk Network, Inc.,
      a
      Wisconsin corporation (“Cyberlynk”),
      and
      Autoaccess ID Security Solutions, Inc., a Delaware corporation, shall be wholly
      owned subsidiaries of the Company.

     

    (c) The
      Transaction Documents, in form and substance satisfactory to the parties and
      their counsel, have been duly executed and delivered.

     

    (d) The
      Purchaser has completed a satisfactory due diligence investigation of the
      Company and its subsidiaries.

     

    (e) The
      transactions contemplated by the Transaction Documents have been approved by
      (i)
      the Boards of Directors of the Parent, the Purchaser and the Company and (ii)
      the requisite vote of the stockholders of the Company.

     

    (f) The
      Certificate of Designation of the Purchaser, in the form attached hereto as
      Exhibit
      E,
      shall
      have been filed with the Department of State of the State of Delaware.

     

    (g) The
      Employment Agreements between the Purchaser and each of Joel Konicek, Charles
      Martin and James Peroutka shall have been duly executed and delivered;

     

    (h) The
      Company or its Subsidiaries shall not have shareholder loans in excess of
      $500,000; and

     

    (i) The
      Company and all of the Company Subsidiaries shall have terminated their S
      Corporation status.

     

    
      6.  Certain
        Tax Matters.

    

     

    
      6.1  Tax
        Returns.
        The Purchaser shall prepare or cause to be prepared and file or
        cause
        to be filed all Tax Returns of the Company for (x) all taxable periods ending
        on
        or prior to the  Closing Date and (y) all taxable periods beginning before
        and ending after the Closing Date. Each such Tax Return shall be prepared
        in a
        manner consistent with prior practice of the Company and shall be delivered
        to
        Sellers at least 15 days prior to filing. No such Tax Return shall be filed
        without the written consent of Sellers.

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      6.2  Amended
        Returns.
        Neither
        the Purchaser nor any Affiliate or Associate of the Purchaser may amend a
        Tax
        Return of the Company with respect to a taxable period (or portion thereof)
        ending on or before the Closing Date without the written consent of
        Sellers.

    

     

    6.3  Closing
      Date Transactions. 
      Neither
      the Purchaser nor any of its Affiliates or Associates shall make or cause to
      be
      made any extraordinary transaction or event on the Closing Date that would
      result in any increased Tax Liability for which Sellers would be required to
      provide indemnification pursuant to Article 7 or that would result in any
      increased personal income Tax Liability of Sellers.

     

    
      6.4  No
        Section 338 Election.
        Neither
        the Purchaser nor any of its Affiliates or Associates shall make any election
        under Code Section 338 with respect to the
        Company.

    

     

    
      6.5  Cooperation
        on Tax Matters.
        The
        Purchaser, the Company and the Sellers shall cooperate fully, as and to the
        extent reasonably requested by any other party, in connection with the filing
        of
        Tax Returns and any audit, litigation or other proceeding with respect to
        Taxes.
        Such cooperation shall include the retention and (upon the other party’s
        request) the provision of records and information that are reasonably relevant
        to any such audit, litigation or other proceeding and making employees or
        representatives available on a mutually convenient basis to provide additional
        information and explanation of any materials provided hereunder. The
        Company (after the Closing) shall (i) retain all books and records with
        respect to Tax matters pertinent to the Company relating to any taxable period
        beginning before the Closing Date until the expiration of the applicable
        statute
        of limitations for the respective taxable periods, and abide by all record
        retention agreements entered into with any taxing authority and (ii) give
        the
        Sellers reasonable written notice prior to transferring, destroying or
        discarding any such books and records and, if the Sellers so direct in writing,
        the Company shall allow the Sellers to take possession of such books and
        records.

    

     

    (a) Each
      of
      the Purchaser and the Sellers shall, upon request from the other party, use
      reasonable best efforts to obtain any certificate or other document from any
      governmental authority or other Person as may be necessary to mitigate, reduce,
      defer or eliminate any Tax that could be imposed with respect to a taxable
      period (or portion thereof) ending only on or before the Closing Date
      (including, but not limited to, with respect to the transactions contemplated
      hereby).

     

    
      6.6  Certain
        Taxes.
        All
        transfer (including real property), documentary, sales, stamp, registration
        and
        other similar Taxes and fees (including any penalties and interest) incurred
        in
        connection with this Agreement shall be paid by the Purchaser when due, and
        the
        Purchaser will, at their own expense, file all necessary Tax Returns and
        other
        documentation with respect to all such transfer, documentary, sales, stamp,
        registration and other similar Taxes and fees. If required by applicable
        Law,
        Sellers will, and will cause their Affiliates to, join in the execution of
        any
        such Tax Returns and other documentation.

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      7.  Survival;
        Indemnification.

    

     

    
      7.1  Survival
        of Representations, Warranties, Covenants.
        Notwithstanding
        any right of the Purchaser to investigate the business and condition of the
        Company, the Purchaser shall be entitled to rely upon the representations,
        warranties, covenants and agreements of the Company and the Sellers shall
        be
        entitled to rely upon the representations, warranties, covenants and agreements
        of the Purchaser. All representations, warranties, covenants and agreements
        contained in this Agreement (including the Schedules hereto) and in all
        certificates required hereby to be delivered with respect hereto shall be
        deemed
        to be representations, covenants, warranties and agreements hereunder and
        shall
        survive the Closing Date (or, if there is no Closing, the date hereof) for
        a
        period of eighteen (18) months; provided,
        however,
        that
        (i) any such representations, covenants, warranties and agreements shall
        survive
        the time(s) that they would otherwise terminate with respect to claims of
        which
        notice has been given as provided in this Agreement prior to such termination;
        and (ii) such time limitation shall not apply to the representations,
        warranties and agreements contained in (A) Sections 3.1(a), (p) and
        (q) hereof, which shall survive until thirty (30) days following the expiration
        of the applicable statute of limitations (including any extension(s) thereof),
        and (B) Section 3.1(v) hereof, which shall survive indefinitely. Any
        limitation or qualification set forth in any one representation and warranty
        contained in Section 3 hereof shall not limit or qualify any other
        representation and warranty contained in such Section. Each representation
        and
        warranty included in Section 3 is independent and shall be interpreted
        without regard to any other representation or warranty contained in
        Section 3 (including any more inclusive representation or warranty). The
        waiver by any party of any condition at the Closing or the breach or inaccuracy
        of any representation or warranty, or the breach of or non-compliance with
        any
        covenant or obligation, shall not affect the right of such party to the
        indemnification, payment or reimbursement of Losses or any other remedy based
        on
        such breach, inaccuracy or non-compliance. 

       

    

    
      7.2  Indemnities
        of the Company and the Sellers.
        The
        Sellers shall jointly and severally indemnify, defend and hold harmless the
        Purchaser, its Affiliates and Associates (including the Company) and their
        respective directors, officers, stockholders, agents, successors and permitted
        assigns (the “Purchaser
        Indemnitees”)
        from
        and against, and shall pay and reimburse the foregoing Persons for, any and
        all
        Losses relating to or arising out of the breach (or alleged breach if asserted
        by a third party) of any representation, warranty, covenant or agreement
        of the
        Sellers or the Company contained in this Agreement. Any amount paid by reason
        of
        indemnification contained in this Section 7 shall be treated as a reduction
        of
        the aggregate Merger Consideration. All indemnification amounts paid by the
        Sellers shall be net of any recoveries of the Purchaser Indemnitees under
        existing insurance policies or indemnity from third parties, or net of any
        reduction in Taxes actually realized by the Purchaser Indemnitees on account
        of
        the facts or circumstances giving rise to the indemnity, and increased by
        any
        Taxes incurred by the Purchaser Indemnitees on account of receipt of the
        indemnity payments. Notwithstanding the above, the Sellers shall be severally
        (and not jointly) liable for indemnification obligations arising in connection
        with a breach or violation of Sections 3.2(b), (c) and (d), 8.1, 8.2 and/or
        8.3.

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      7.3  Procedures
        for Indemnification; Defense.
        If
        any
        party (the “Indemnitee”)
        incurs
        Losses or receives notice of any claim or the commencement of any action
        or
        proceeding with respect to which the other party (or parties) is obligated
        to
        provide indemnification (the “Indemnifying
        Party”)
        pursuant to Sections 7.2 or 7.3 hereof, the Indemnitee shall adhere to the
        following procedures:

    

     

     (a)  Direct
      Losses.
      If
      Indemnitee incurs direct Losses, other than as a result of a third party claim,
      Indemnitee shall provide the Indemnifying Party written notice of such direct
      Losses within the time limits of the indemnity set forth in Section 7.1
      hereof. The notice shall describe the claim in reasonable detail, including
      the
      amount of such Losses (estimated if appropriate) that have been or may be
      sustained by the Indemnitee. The failure to provide such notice shall not affect
      the Indemnifying Party’s obligations hereunder, unless such party is materially
      prejudiced as a result thereof. Within ten (10) days of receipt of the
      notice, the Indemnifying Party shall pay the amount of such Losses to
      Indemnitee, otherwise Indemnitee may proceed to seek to collect these amounts
      either pursuant to Section 7.8 hereof or through legal action in accordance
      with Section 9 of this Agreement.

     

    (b)  Defense
      of Third Party Claims.
      Indemnitee
      shall give the Indemnifying Party written notice thereof within a reasonable
      period of time following the Indemnitee’s incurring receipt of notice of a third
      party claim. Such notice shall describe the claim in reasonable detail and
      shall
      indicate the amount (estimated if appropriate) of the Losses that have been
      or
      may be sustained by the Indemnitee. The failure to provide such notice shall
      not
      affect the Indemnifying Party’s obligations hereunder, unless such party is
      materially prejudiced as a result thereof. The Indemnifying Party may, subject
      to the other provisions of this Section 7.4, compromise or defend, at such
      Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel,
      any such matter involving the asserted Liability of the Indemnitee in respect
      of
      a third-party claim. If the Indemnifying Party shall elect to compromise or
      defend such asserted Liability, it shall, within thirty (30) days (or sooner,
      if
      the nature of the asserted Liability so requires), notify the Indemnitee of
      its
      intention to do so and the Indemnitee shall reasonably cooperate, at the request
      and reasonable expense of the Indemnifying Party, in the compromise of, or
      defense against, such asserted Liability. The Indemnifying Party shall not
      be
      released from any obligation to indemnify the Indemnitee hereunder with respect
      to a claim without the prior written consent of the Indemnitee, unless the
      Indemnifying Party shall deliver to the Indemnitee a duly executed agreement
      settling or compromising such claim with no monetary liability to or injunctive
      relief against the Indemnitee and a complete release of the Indemnitee with
      respect thereto, which agreement shall not limit or impair the Indemnitee’s
      ability to conduct its business. The Indemnifying Party shall have the right,
      except as provided below in Section 7.4, to conduct and control the defense
      of any third-party claim made for which it has been provided notice hereunder.
      All costs and fees incurred with respect to any such claim shall be borne by
      the
      Indemnifying Party. The Indemnitee shall have the right to participate, but
      not
      control, at its own expense, the defense or settlement of any such claim;
provided,
      that if
      the Indemnitee and the Indemnifying Party shall have conflicting or different
      claims or defenses, the Indemnifying Party shall not have control of such
      conflicting or different claims or defenses and the Indemnitee shall be entitled
      to appoint a separate counsel for such claims and defenses at the cost and
      expense of the Indemnifying Party; provided,
      further,
      that if
      the Indemnifying Party shall not assume and pursue in a timely and diligent
      manner the defense of any third-party claim, the Indemnifying Party shall cede
      control of such claim and the Indemnitee shall be entitled to appoint a counsel
      of its choice for such defense, at the cost and expense of the Indemnifying
      Party. If the Indemnifying Party shall choose to defend any claim, the
      Indemnitee shall make available to the Indemnifying Party any books, records
      or
      other documents within its control that are reasonably required for such
      defense.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      7.4  Limitations
        on Indemnification.
        Notwithstanding any provision contained in this Section 7 to the
        contrary, no Indemnitee shall be entitled to assert any claim for
        indemnification in respect of breach(es) of representations and warranties
        under
        Sections 6.1, 7.2 or 7.3 hereof until such time as all claims for
        indemnification by such Person (and all related Indemnitees) hereunder shall
        exceed $25,000 (the “Basket”),
        such
        Basket being deducted from any claim for indemnification; provided,
        however,
        that
        the aggregate dollar amount of Purchaser’s indemnification obligations hereunder
        may not exceed $3,000,000  (the “Claims
        Limitation”),
        except (i) if the Indemnifying party shall have provided information to the
        Purchaser in connection herewith or made any representation or warranty
        contained herein that, in either case, was made with fraudulent intent or
        (ii) for breaches of Section 8 hereof, in either of which event
        neither the Basket nor the Claims Limitation shall apply.
        In
        addition, the Basket shall not apply to Section 1.8, or any breach(es) of
        the representations, warranties and agreements contained in
        Sections 3.1(a), 3.1(c), 3.1(p), 3.1(q), 3.1(v) and 3.2(b) hereof. For
        purposes of this Section 7 only, the calculation of Losses arising out of a
        party’s breach of a representation or warranty in this Agreement shall be
        determined without giving effect to any exception or qualification of such
        representation or warranty as to the Material Adverse Effect of such breach
        or
        the Material Adverse Effect on any Person of such breach. Notwithstanding
        the
        foregoing, the parties acknowledge and agree that effect shall be given to
        any
        exception or qualification of any representation or warranty in this Agreement
        of either party that is based on use of the term “material” or the phrase “in
        all material respects” and similar undefined terms and
        phrases.

    

     

    
      7.5  [Intentionally
        Omitted].

    

     

    
      7.6  Indemnification
        Waiver.
        Each
        Seller hereby irrevocably waives, subject to the Closing, any and all rights
        to
        indemnification from the Company in his capacity as a director, employee
        or
        officer of the Company to which such Seller would otherwise have been entitled
        for all periods up through and including the Closing Date and including in
        respect of the transactions contemplated hereby.

    

     

    
      7.7  Method
        of Indemnification.
        The
        Sellers hereby agree and acknowledge that if any of them are required to
        provide
        any indemnification payments pursuant to Section 7.2 hereof, indemnifiable
        amounts shall be paid by such Seller to the Purchaser (and its related
        Indemnitees), at the discretion of the Purchaser, in either (i) immediately
        available funds or (ii) Held Back Shares pursuant to
        Section 7.8.

    

     

    
      7.8  Limitation;
        Security for Indemnification Obligations.
        As
        security for the indemnification obligations contained in this Section 7,
        at the Closing, each of the Sellers shall, and hereby do, pledge and grant
        to
        the Purchaser a security interest in ten percent (10%) of the Closing
        Shares received by each of the Sellers pursuant to this Agreement (collectively
        the “Held
        Back Shares”).
        The
        Purchaser shall set aside and hold certificates with respect to the Held
        Back
        Shares. The Purchaser may set off against the Held Back Shares for any loss,
        damage, cost or expense for which the Sellers may be responsible pursuant
        to
        this Agreement (including without limitation, any indemnifiable amounts)
        whether
        or not indemnified pursuant to this Section 7, subject, however, to the
        following terms and conditions:

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (a) The
      Purchaser shall give written notice to the Sellers of any claim for
      indemnifiable amounts or any other damages hereunder, which notice shall set
      forth (i) the amount of indemnifiable amounts or other loss, damage, cost or
      expense which the Purchaser claims to have sustained by reason thereof, and
      (ii)
      the basis of such claim;

     

    (b) The
      set
      off for any amounts claimed by the Purchaser hereunder shall be effected on
      the
      expiration of ten (10) days from the date of such notice.

     

    (c) Held
      Back
      Shares shall be valued at $1.00 per share.

     

    (d) All
      of
      the Held Back Shares shall be released to the Sellers on the date eighteen
      months after the date of this Agreement provided no claim for indemnification
      is
      pending pursuant to Section 7 and the security interest in the Held Back
      Shares shall be immediately terminated.

     

    
      8.  Non-Competition;
        Confidentiality.

    

     

    
      8.1  Non-Competition.
        Following
        the Closing Date and for a period of eighteen (18) months thereafter (the
        “Restricted
        Period”),
        other
        than as set forth on Schedule
        8.1,
        none of
        the Sellers or their respective Affiliates shall:

    

     

    (a) directly
      or indirectly, own, manage, operate, join, control or participate in the
      ownership, management, operation or control of, or be employed or retained
      by,
      render services to, provide financing (equity or debt) or advice to, or
      otherwise be connected in any manner with any business that at any time competes
      with any business of the Company, including the Business, anywhere in North
      America; provided, however, that nothing contained herein shall prevent the
      purchase or ownership by each of the Sellers of less than 5% of the outstanding
      equity securities of any class of securities of a company registered under
      Section 12 of the Exchange Act; or

     

    (b) for
      any
      reason, (i) induce any customer or supplier of the Company or any of its
      subsidiaries or affiliates to patronize or do business with any business
      directly or indirectly in competition with the businesses conducted by the
      Company or any of its subsidiaries or affiliates in any market in which the
      Company or any of its subsidiaries or affiliates does business; (ii) canvass,
      solicit or accept from any customer or supplier of the Company or any of its
      subsidiaries or affiliates any such competitive business; or (iii) request
      or
      advise any customer or vendor of the Company or any of its subsidiaries or
      affiliates to withdraw, curtail or cancel any such customer’s or vendor’s
      business with the Company or any of its subsidiaries or affiliates;
      or

     

    (c) for
      any
      reason, employ, or knowingly permit any company or business directly or
      indirectly controlled by any Seller, to employ, any person who was employed
      by
      the Company or any of its subsidiaries or affiliates at or within the
      prior one
      (1)
      year,
      or
      in any
      manner seek to induce any such person to leave his or her
      employment.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      8.2  No
        Competing Interests.
        Other than as set forth on Schedule
        8.2,
        each of
        the Sellers hereby represents and warrants to the Purchaser that
        neither he or she nor any of his or her Affiliates, has any material ownership
        or other material interest in any business or activity that competes or can
        reasonably be expected to compete, directly or indirectly, with any business
        of
        the Company, including the Business. Each of the Sellers hereby represent
        and
        warrant to the Purchaser that neither he or she nor any of his or her
        Affiliates, has or shares with the Company any ownership or similar interest
        in
        any asset or property (including any Intellectual Property) that is being
        (or
        has been in the past 12-month period) used in connection with the operation
        of
        the Business.

    

     

    
      8.3  Confidentiality.
        From and after the Closing Date, the Sellers and their respective
        Affiliates shall not at any time, directly or indirectly, use, exploit,
        communicate, disclose or disseminate any Confidential Information (as defined
        below) in any manner whatsoever (except disclosure to their personal financial
        or legal advisors and as may be required under legal process by subpoena
        or
        other court order; provided, that the Sellers will take reasonable steps
        to
        provide the Purchaser with sufficient prior written notice in order to contest
        such requirement or order). Notwithstanding the foregoing, the Sellers (and
        each
        representative or other agent of each Seller) may disclose to any and all
        Persons the tax treatment and tax structure of the transaction contemplated
        hereby; provided, however, that neither the Sellers nor any representative
        or
        agent thereof may disclose any information that is not necessary to
        understanding the tax treatment and tax structure of the transactions (including
        the identity of the parties and any information that could lead another to
        determine the identity of the parties) or any other information to the extent
        that such disclosure could result in a violation of any federal or state
        securities Law. 

    

     

    
      8.4  Remedies
        upon Breach.
        Each
        Seller acknowledges and agrees that: (i) the Purchaser (and the
        Company) would be irreparably injured in the event of a breach by any Seller
        of
        any of the obligations under this Section 8; (ii) monetary damages
        would not be an adequate remedy for such breach; (iii) the Purchaser (and
        the Company) shall be entitled to injunctive relief, without the necessity
        of
        the posting of a bond, in addition to any other remedy that they may have,
        in
        the event of any such breach; and (iv) the existence of any claims that the
        Seller may have against the Purchaser (and the Company), whether under this
        Agreement or otherwise, shall not be a defense to (or reason for the delay
        of)
        the enforcement by the Purchaser (and the Company) of any of their rights
        or remedies under this Agreement.

    

     

    
      8.5  Judicial
        Modifications.
        In
        the
        event that any court finally holds that the time or territory or any other
        provision stated in this Section 8 constitutes an unreasonable restriction,
        then the parties hereto hereby expressly agree that the provisions of this
        Agreement shall not be rendered void, but shall apply as to time and territory
        or to such other extent as such court may judicially determine or indicate
        constitutes a reasonable restriction under the circumstances
        involved.

    

     

    
      8.6  Tolling
        of Time Periods.
        In
        the
        event that the Sellers violate the provisions of Section 8.2, 8.3 or 8.4 of
        this Agreement, the Restricted Period shall toll during any period of
        non-compliance, and shall not continue to elapse until the Sellers are in
        full
        compliance with such Sections of this Agreement.

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      8.7  Confirmation
        as to Scope.
        The
        parties hereto acknowledge and confirm that: (i) the length of the term of
        the
        restrictions and the geographical restrictions contained in this Section 8
        are fair and reasonable and are not the result of overreaching, duress or
        coercion of any kind; (ii) the full, uninhibited and faithful observance
        of each
        of the covenants contained in this Section 8 shall not cause any undue
        hardship, financial or otherwise; and (iii) the Sellers special knowledge
        of the
        business of the Company, including the Business, is such as would cause the
        Purchaser serious injury and loss if the Sellers use such knowledge to benefit
        a
        competitor of the Purchaser or to compete with the Purchaser. The parties
        hereto
        acknowledge and agree that the provisions of this Section 8 are essential
        to protect the Purchaser’s legitimate business interest as contemplated under
        Delaware law and are in addition to any rights the Purchaser may have to
        enforce
        its rights with respect to the trade secrets of the Purchaser pursuant to
        Delaware law.

    

     

    
      9.  Miscellaneous
        Provisions.

    

     

    
      9.1  Counterparts;
        Interpretation.
        This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        deemed an original, and all of which shall constitute one and the same
        instrument. This Agreement supersedes all prior discussions and agreements
        between the parties with respect to the subject matter hereof, and this
        Agreement contains the sole and entire agreement among the parties with respect
        to the matters covered hereby. This Agreement shall not be altered or amended
        except by an instrument in writing signed by or on behalf of all of the parties
        hereto. No ambiguity in any provision hereof shall be construed against parties
        by reason of the fact it was drafted by such party or its counsel. References
        to
“including” means including without limiting the generality of any description
        preceding such term. Nothing expressed or implied in this Agreement is intended,
        or shall be construed, to confer upon or give any Person other than the parties
        any rights or remedies under or by reason of this
        Agreement.

    

     

    9.2  Governing
      Laws.
      The
      validity and effect of this Agreement shall be governed by and construed and
      enforced in accordance with the laws of the State of Delaware without regard
      to
      principles of conflicts of laws thereof. Any dispute, controversy or question
      of
      interpretation arising under, out of, in connection with or in relation to
      this
      Agreement or any amendments hereof, or any breach or default hereunder, shall
      be
      litigated exclusively in the state or federal courts of competent jurisdiction
      located in the State of Delaware. Each of the parties hereby irrevocably submits
      to the jurisdiction of any court of competent jurisdiction located in the State
      of Delaware. Each party hereby irrevocably waives, to the fullest extent it
      may
      effectively do so, the defense of an inconvenient forum to the maintenance
      of
      any such action in the State of Delaware. 

     

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

    

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

    

     

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

    

     

    
      9.6  Fees
        and Disbursements.
        The Purchaser and the Sellers (and not the Company) shall pay all
        costs
        and expenses, including the fees and disbursements of any counsel and
        accountants retained by them, incurred by them in connection with the
        preparation, execution, delivery and performance of this Agreement and the
        transactions contemplated hereby, whether or not the transactions contemplated
        hereby are consummated.

    

     

    
      9.7  Attorneys’
        Fees.
        In
        the
        event of any litigation arising under the terms of this Agreement, the
        prevailing party shall be entitled to recover its or their reasonable attorneys’
fees and court costs from the other party, including trial and appellate
        proceedings, as well as the costs of collecting any judgment; provided, however,
        such attorneys’ fees, together with other amounts paid hereunder, are not in
        excess of the limitation on indemnity in
        Section 7.4.

    

     

    
      9.8  Further
        Assurances.
        The
        parties shall from time to time do and perform such additional acts and execute
        and deliver such additional documents and instruments as may be required
        or
        reasonably requested by any party to establish, maintain or protect its rights
        and remedies or to effect the purposes of this Agreement.

    

     

    
      9.9  Notice.
        All
        notices and other communications hereunder shall be in writing and shall
        be
        deemed to have been given: (i) when delivered by hand or by confirmed facsimile
        transmission; (ii) one (1) day after delivery by internationally recognized
        express courier (i.e.,
        Federal
        Express, DHL); or (iii) three (3) days after delivery by certified mail,
        postage
        prepaid, to the parties at the following addresses (or at such other address
        for
        parties as shall be specified by like notice):

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              If
                to Sellers:

            	 	
              As
                set forth on Schedule 1.6, hereto

            
	
               

            	
               

            	 	
               

            
	
               

            	
               

            	 	
               

            
	
               

            	
              If
                to Company:

            	 	
              Security
                Holding Enterprises, Inc.

            
	
               

            	
               

            	 	
              10125
                S. 52nd
                Street

            
	
               

            	
               

            	 	
              Franklin,
                Wisconsin 53132

            
	
               

            	
               

            	 	
              Attn:
                Joel Konicek

            
	
               

            	
               

            	 	
              Telephone:
                (414) 858-9413

            
	
               

            	
               

            	 	
              Facsimile:
                (414) 858-9443 

            
	
               

            	
               

            	 	
               

            
	
               

            	
              With
                a copy to:

            	 	
              Quarles
                & Brady, LLP

            
	
               

            	
               

            	 	
              411
                E. Wisconsin

            
	
               

            	
               

            	 	
              Milwaukee,
                WI 53202

            
	
               

            	
               

            	 	
              Attn:
                Douglas Tucker, Esq.

            
	
               

            	
               

            	 	
              Telephone:
                (414) 277-5161 

            
	
               

            	
               

            	 	
              Facsimile:
                (414) 978-8744

            
	
               

            	
               

            	 	
               

            
	
               

            	
              If
                to the Purchaser:

            	 	
              C.
                Thomas McMillen

            
	
               

            	
               

            	 	
              4100
                Fairfax Drive, Suite 1150

            
	
               

            	
               

            	 	
              Arlington,
                VA 22203

            
	
               

            	
               

            	 	
              Attn:
                C. Thomas McMillen

            
	
               

            	
               

            	 	
              Telephone:
                (703) 528-7073

            
	
               

            	
               

            	 	
              Facsimile:
                (703) 528-0956

            
	
               

            	
               

            	 	
               

            
	
               

            	
              With
                a copy to:

            	 	
              Kirkpatrick
                & Lockhart Nicholson Graham LLP

            
	
               

            	
               

            	 	
              201
                South Biscayne Blvd.

            
	
               

            	
               

            	 	
              Suite
                2000

            
	
               

            	
               

            	 	
              Miami,
                FL 33131

            
	
               

            	
               

            	 	
              Attn:
                Clayton Parker, Esq.

            
	
               

            	
               

            	 	
              Telephone:
                (305) 539-3306

            
	
               

            	
               

            	 	
              Facsimile:
                (305) 358-7095

            
	
               

            	
               

            	 	
               

            

    

     

    
      9.10  Assignment.
        This
        Agreement may not be assigned by the Company or the Sellers without the prior
        written consent of the Purchaser; provided, however, that (i) the Purchaser
        may
        assign or delegate any or all rights or obligations hereunder, to an Affiliate
        prior to Closing if necessary in connection with its financing or Tax planning
        and (ii) the Purchaser may assign any and all of its rights hereunder to
        any
        lenders that provide financing to it in connection with the transactions
        contemplated hereby and in any related transactions; provided, further, that
        the
        Purchaser may assign or delegate any or all of its rights or obligations
        hereunder, including its rights under Sections 7 and 8 hereof, to any subsequent
        purchaser of the Business, the Company, Purchaser or all or substantially
        all of
        the Purchaser’s or the Company’s assets.

    

     

    
      9.11  Binding
        Effect; Benefits.
        This
        Agreement shall inure to the benefit of, and be binding upon, the parties
        hereto
        and their respective heirs, legal representatives, successors and permitted
        assigns. Nothing in this Agreement, express or implied, is intended to or
        shall
        confer upon any Person other than the parties hereto, and their respective
        heirs, legal representatives, successors and permitted assigns, any rights,
        remedies, obligations or liabilities under, in connection with or by reason
        of
        this Agreement.

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      9.12  Rules
        of Construction.  Words
        used herein, regardless of the number and gender used, shall be deemed and
        construed to include any other number, singular or plural, and any other
        gender,
        masculine, feminine or neuter, as the context requires; as used herein, unless
        the context clearly requires otherwise, the words “hereof,” “herein,”
“hereinafter” and “hereunder” and words of similar import shall refer to this
        Agreement as a whole and not to any particular provision of this
        Agreement.

    

     

    A
      reference to any statute or statutory provision shall be construed as a
      reference to the same as it may have been, or as it may from time to time be,
      amended, modified or re-enacted.

     

    The
      terms
“dollars” and “$” mean United States dollars.

     

    All
      references to any Person shall mean and include the successors and permitted
      assigns of such Person, and all references to “including” and “include” shall be
      understood to mean “including, without limitation.”

     

    The
      table
      of contents, lists of annexes, schedules and exhibits and Section headings
      used in this Agreement are for convenience of reference only and shall not
      affect the interpretation of this Agreement.

     

    This
      Agreement is between financially sophisticated and knowledgeable parties and
      is
      entered into by such parties in reliance upon the economic and legal bargains
      contained herein, the language used in this Agreement has been negotiated by
      the
      parties hereto and shall be interpreted and construed in a fair and impartial
      manner without regard to such factors as the party who prepared, or caused
      the
      preparation of, this Agreement or the relative bargaining power of the
      parties.

     

    
      9.13  Waiver
        of Jury Trial.
        THE
        PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
        OF
        THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
        OR
        ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
        CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
        COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
        PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF
        THIS AGREEMENT.

    

     

    
      9.14  Methods
        of Termination.
        Subject to the other provisions of this Section 9.14, this Agreement may
        be
        terminated and the transactions contemplated herein may be abandoned at any
        time
        notwithstanding approval thereof by the Sellers, at any time prior to the
        Closing:

    

     

    
      	 	
              (a)

            	
              
                By
                  mutual written consent of the Purchaser and the Company;
                  or

              

            

    

     

    
      	 	
              (b)

            	
              By
                the Company on or after the Termination Date if any of the conditions
                provided for in Article 5 of this Agreement have not been reasonably
                satisfied or waived in writing by the Company prior to such date
                (unless
                the failure results primarily from a breach by the Company of any
                representation, warranty or covenant contained in this Agreement);
                or

            

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              By
                the Purchaser on or after the Termination Date if any of the conditions
                provided for in Article 5 of this Agreement have not been reasonably
                satisfied or waived in writing by the Purchaser prior to such date
                (unless
                the failure results primarily from a breach by the Purchaser of any
                representation, warranty or covenant contained in this Agreement);
                or

            

    

     

    
      	 	
              (d)

            	
              By
                the Company if there has been a material breach of any representation,
                warranty, covenant or agreement which remains uncured for 30 days
                after
                written notice thereof on the part of the Company set forth in this
                Agreement; or

            

    

     

    
      	 	
              (e)

            	
              By
                the Purchaser if there has been a material breach of any representation,
                warranty, covenant or agreement which remains uncured for 30 days
                after
                written notice thereof on the part of the Purchaser set forth in
                this
                Agreement; or

            

    

     

    
      	 	
              (f)

            	
              By
                either party if any court of competent jurisdiction or any other
                governmental authority has issued an order, decree or ruling or taken
                any
                other action permanently enjoining, restraining or otherwise prohibiting
                the transactions contemplated hereby and such order, decree, ruling
                or
                other action has become final and
                non-appealable.

            

    

     

    In
      the
      event of termination and abandonment pursuant to Section 9.14, written notice
      thereof will forthwith be given to the other party or parties, and the
      transactions contemplated herein will be abandoned, without further action
      by
      any party hereto.

     

    [SIGNATURES
      APPEAR ON THE FOLLOWING PAGE]

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan of
      Merger the day and year first above written.

     

    
      	 	
              COMPANY:

            
	 	 
	 	
              SECURITY
                HOLDING ENTERPRISES, INC.

            
	 	 
	 	
              By:
                /s/ Joel
                Konicek                                       

            
	 	
              Name:  _______________________       

            
	 	
              Title:   
                ___________________________       

            
	 	 
	 	 
	 	
              SELLERS:

            
	 	 
	 	/s/
              Joel Konicek
	 	
              Name: Joel
                Konicek

              10125
                South 52nd
                Street

              Franklin,
                WI 53132

              Shares
                of Company Stock: ____________

            
	 	 
	 	/s/
              Charles Martin and Elizabeth
              Martin
	 	
              Name: Charles
                Martin and Elizabeth Martin

              135
                Lakeside Drive

              Peachtree
                City, GA 30269

              Shares
                of Company Stock: ____________

            
	 	 
	 	/s/
              James Vinson
	 	
              Name: James
                Vinson

              7033
                W. Overlook Court

              Mequon,
                WI 53092

              Shares
                of Company Stock: ____________

            
	 	 
	 	/s/
              James Peroutka
	 	
              Name: James
                Peroutka

              3908
                S. Woodhill Ct.

              New
                Berlin, WI 53151

              Shares
                of Company Stock: ____________

            

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              PURCHASER:

               

              
                SECURITY
                  HOLDING CORP.

              

            
	 
 	 
 	 
 
	 	By:  	/s/
              C. Thomas McMillen
	 	
              C.
                Thomas McMillen, President

            
	 	 

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    ANNEX
      A

     

    To
      Merger Agreement

     

    Definitions

     

    “Accounts
      Receivable” means
      all
      of the Company’s accounts receivable due to the Company, including but not
      limited to obligations owing to the Company arising from the sale or lease
      of
      goods or the rendition of services by the Company.

     

    “Accutech”
      has
      the
      meaning given to such term in Section 4.6.

     

    “Affiliate”
      means,
      with respect to any Person, a Person that directly, or indirectly through one
      or
      more intermediaries, controls or is controlled by, or is under the common
      control with, the Person specified (as set forth in Rule 405 promulgated under
      the Securities Act of 1933).

     

    “Agreement”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Ancillary
      Agreements” has
      the
      meaning given to such term in Section 1.7(b).

     

    “Articles
      of Merger”
      has the
      meaning given to such term in Section 1.2.

     

    “Associate”
      means,
      when used to indicate a relationship with any Person, (1) a corporation or
      organization of which such Person is an officer or partner or is, directly
      or
      indirectly, the beneficial owner of 10 percent or more of any class of equity
      securities, (2) any trust or other estate in which such Person has a substantial
      beneficial interest or as to which such Person serves as trustee or in a similar
      capacity, and (3) any relative or spouse of such Person, or any relative of
      such
      spouse, who has the same home as such Person or who is a director or officer
      of
      the Person or any of its parents or subsidiaries (as set forth in Rule 405
      promulgated under the Securities Act of 1933).

     

    “Audit”
has
      the
      meaning given to such term in Section 2.1.

     

    “Audited
      Period”
has
      the
      meaning given to such term in Section 2.1.

     

    “Balance
      Sheet Adjustment”
has
      the
      meaning given to such term in Section 1.8.

     

    “Basket”
      has
      the
      meaning given to such term in Section 7.4.

     

    “Benefit
      Plan” means
      each plan, program, policy, payroll practice, agreement or other arrangement,
      whether or not written, providing for deferred or incentive compensation,
      severance or termination pay, stock or stock-related awards and each “employee
      benefit plan” within the meaning of Section 3(3) of ERISA that is
      maintained, sponsored or contributed to by the Company or with respect to which
      the Company may have any current or contingent obligation. For purposes of
      the
      definition of Benefit Plans, references to the term “Company”
      shall be
      deemed also to refer to any entity that is under common control or affiliated
      with the Company, within the meaning of Section 4001 of ERISA and the rules
      and regulations promulgated thereunder, or Sections 414(b), (c), (m) or (o)
      of
      the Code.

     

    
      
        
        

      

      
        ANNEX
          A-1

        
          

        

      

      
        
        

      

    

     

    “Business”
      has
      the
      meaning given to such term in the Recitals to this Agreement.

     

    “Certificate
      of Merger”
      has the
      meaning given to such term in Section 1.2.

     

    “Claims
      Limitation” has
      the
      meaning given to such term in Section 7.4.

     

    “Closing
      Date”
      has the
      meaning given to such term in Section 1.7(a).

     

    “Closing”
      has
      the
      meaning given to such term in Section 1.7(a).

     

    “Closing
      Escrow Shares” has
      the
      meaning given to such term in Section 1.6(b).

     

    “Closing
      Shares” has
      the
      meaning given to such term in Section 1.6(a).

     

    “COBRA”
      means
      the Consolidated Omnibus Budget Reconciliation Act of 1985.

     

    “Code”
      means
      the
      Internal Revenue Code of 1986, as amended (together with the rules and
      regulations thereunder).

     

    “Company”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Company
      Stock” has
      the
      meaning given to such term in the Recitals to this Agreement.

     

    “Company
      Subsidiaries”
      means
      those subsidiaries of the Company listed in Schedule 3.1(f).

     

    “Confidential
      Information”
      means
      any and all information (oral or written) relating to the Company and/or the
      Purchaser and its Affiliates or any of their operations or activities,
      including, but not limited to, the terms of this Agreement, information relating
      to trade secrets, plans, promotion and pricing techniques, procurement and
      sales
      activities and procedures, proprietary information, business methods and
      strategies (including acquisition strategies), software, software codes,
      advertising, sales, marketing and other materials, customers and supplier lists,
      data processing reports, customer sales analyses, invoice, price lists or
      information, and information pertaining to any lawsuits or governmental
      investigation, except such information that is in the public domain at the
      time
      (such information not being deemed to be in the public domain merely because
      it
      is embraced by more general information that is in the public domain), other
      than as a result of a breach of any of the provisions hereof.

     

    “Consents”
      has
      the
      meaning given to such term in Section 3.1(d).

     

    “Consulting
      Agreement”
      has the
      meaning given to such term in Section 1.7(b)(vi).

     

    “Cyberlynk”
      has the
      meaning given to such term in Section 4.7.

     

    “DGCL”
means
      Delaware General Corporation Law.

     

    
      
        
        

      

      
        ANNEX
          A-2

        
          

        

      

      
        
        

      

    

     

    “Earn
      Out Shares” means
      certain shares of the Purchaser Common Stock delivered to Sellers as Merger
      Consideration in accordance with Section 1.8.

     

    “Earn
      Out Valuation Date”
      shall
      mean the date of a Valuation which are scheduled to occur (i) initially between
      January 1, 2008 and March 31, 2008 and (ii) between January 1, 2010 and March
      31, 2010. 

     

    “EBITDA”
      shall
      mean, for any period, revenues of the Company (and, with respect to any period
      after Closing, consolidated with the Purchaser and its Subsidiaries) minus
      its
      expenses, but before interest, income taxes, depreciation and amortization,
      provided, however, (i) and costs incurred by the Company as a result of SEC
      compliance activities requested by the Parent that would not otherwise be
      required in the ordinary course of the Company’s business and (ii) any expense
      related to the Purchaser’s outstanding preferred stock, shall be
      excluded.

     

    “Effective
      Time”
      has the
      meaning given to such term in Section 1.2.

     

    “Employment
      Agreement” means
      the
      employment agreement in the form attached hereto as Exhibit
      C.

     

    “Equity
      Value”
      means
      the fair market value of the Purchaser as a going concern as determined by
      USBX.

     

    “ERISA”
      means
      the Employee Retirement Income Security Act of 1974, as amended, and all
      regulations promulgated thereunder.

     

    “Escrow
      Agreement”
      has the
      meaning given to such term in Section 1.7(b)(viii).

     

    “Final
      Earn Out Valuation Date”
      shall
      mean March 31, 2010, as the same may be extended pursuant to the terms of the
      Restricted Stock Agreement. 

     

    “Final
      2005 Balance Sheet” means
      the
      audited balance sheet of the Company as of December 31, 2005.

     

    “Final
      2005 Income Statement” means
      the
      audited income statement of the Company for the twelve months ended December
      31,
      2005.

     

    “Financial
      Statements” means
      the
      2003 Financial Statements, 2004 Financial Statements and the 2005 Financial
      Statements, collectively.

     

    “Fiscal
      Year” shall
      mean the fiscal year of the Company ending on December 31.

     

    “Focus”
      has the
      meaning given to such term in Section 4.6. 

     

    “GAAP”
      means
      United States generally accepted accounting principles.

     

    “Held
      Back Shares”
      has the
      meaning given to such term in Section 7.8.

     

    “Indemnifying
      Party” has
      the
      meaning given to such term in Section 7.3.

     

    
      
        
        

      

      
        ANNEX
          A-3

        
          

        

      

      
        
        

      

    

     

    “Indemnitee”
      has
      the
      meaning given to such term in Section 7.3.

     

    “Intellectual
      Property”
      means
      all patents and patent rights, trademarks and trademark rights, trade names
      and
      trade name rights, service marks and service mark rights, service names and
      service name rights, brand names, inventions, processes, formulae, copyrights
      and copyright rights, trade dress, business and product names, logos, slogans,
      designs, trade secrets, industrial models, proprietary data, methodologies,
      computer programs and software (including all source codes) and related
      documentation, technical information, manufacturing, engineering and technical
      drawings, know-how, inventions, works of authorship, management information
      systems, and all pending applications for and registrations of patents,
      trademarks, service marks and copyrights owned by the Company or used by the
      Company in the conduct of its Business, in each such case, including all forms
      (e.g.,
      electronic media, computer disks) in which such items are recorded.

     

    “Inventory”
      means
      each item of inventory of the Company (including raw materials, work in progress
      and finished goods).

     

    “IRS”
      means
      the
      Internal Revenue Service.

     

    “Laws”
      mean
      material federal, state, local and foreign laws, statutes, ordinances, rules
      or
      regulations, orders and administrative rulings promulgated by any governmental
      or regulatory authority.

     

    “Liabilities”
      mean
      debts, liabilities, commitments or obligations, whether absolute or contingent,
      asserted or unasserted, known or unknown, liquidated or unliquidated, due or
      to
      become due, or fixed or unfixed.

     

    “Liens”
      mean
      all
      liens, mortgages, pledges, charges, claims, security interests or encumbrances
      of any nature whatsoever.

     

    “Losses”
      shall
      mean all actions, causes of action, suits, claims, losses, costs, penalties,
      fees, liabilities and damages, and expenses in connection therewith, and
      including reasonable attorneys’ fees and disbursements.

     

    “Material
      Adverse Effect” means
      an
      effect
      that is
      more than a minor, de minimis or minimal effect on the Business, operations
      or
      condition (financial or other) of the Company or the value of its properties
      or
      assets. 

     

    “Material
      Contract” means
      any
      contract, purchase order, agreement, mortgage, note, commitment, obligation
      and
      undertaking to which the Company is a party or by which it is otherwise bound
      that involves in excess of Twenty Thousand
      Dollars ($20,000). 

     

    “Merger”
      has the
      meaning given to such term in Section 1.1.

     

    “Merger
      Consideration”
      has the
      meaning given to such term in Section 1.6(a).

     

    “Option”
      has the
      meaning given to such term in Section 4.6.

     

    
      
        
        

      

      
        ANNEX
          A-4

        
          

        

      

      
        
        

      

    

     

    “Option
      Period”
      has the
      meaning given to such term in Section 4.6.

     

    “Option
      Shares”
      has the
      meaning given to such term in Section 4.6.

     

    “Parent”
      shall
      mean Homeland Security Capital Corporation.

     

    “Parent’s
      Common Stock” shall
      mean the Purchaser Common Stock held by Parent as converted from the Series
      A
      Preferred Stock.

     

    “Pension
      Plan” means
      any
      Benefit Plan that is an “employee pension benefit plan,” as defined in
      Section 3(2) of ERISA.

     

    “Permits”
      means
      governmental permits, approvals, licenses, certificates, franchises,
      authorizations, consents and orders necessary for the operation of the Business
      in the manner that it is presently conducted.

     

    “Permitted
      Liens”
has
      the
      meaning given to such term in Section 3.1(u)(iii). 

     

    “Person”
      or “Persons” means
      any
      stockholder, officer, employee or director of the Company, or any other natural
      person, corporation, partnership, limited liability company or other
      entity.

     

    “Purchaser”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Purchaser
      Common Stock”
has
      the
      meaning given to such term in Section 1.6(a).

     

    “Purchaser
      Indemnitee”
      shall
      have the meaning given to such term in Section 7.2.

     

    “Records”
      means
      all
      original agreements, documents, books, stock ledgers, minutes, correspondence,
      and corporate and other records and files, including records and files stored
      on
      computer disks or tapes or any other storage medium.

     

    “Restricted
      Period” has
      the
      meaning given to such term in Section 8.1.

     

    “Restricted
      Shares”
means
      certain shares of the Purchaser Common Stock delivered to Sellers as Merger
      Consideration in accordance with Schedule
      1.6.
      

     

    “Schedule”
      means
      all
      schedules to this Agreement.

     

    “Sellers”
      has
      the
      meaning given to such term in the Preamble to this Agreement.

     

    “Series
      A Purchase Agreement”
      has the
      meaning given to such term in Section 1.7(b)(v).

     

    “Services
      Agreement”
      has the
      meaning given to such term in Section 1.7(b)(iii).

     

    “Stockholders’
      Agreement”
      has the
      meaning given to such term in Section 1.7(b)(ii).

     

    
      
        
        

      

      
        ANNEX
          A-5

        
          

        

      

      
        
        

      

    

     

    “Surviving
      Corporation”
      shall
      have the meaning given to such term in Section 1.1

     

    “Tax
      Return”
      means
      any return, declaration, report, claim for refund, or information return or
      statement relating to Taxes, including any Schedule or attachment thereto,
      and any amendment(s) thereof.

     

    “Tax”
      means
      any federal, state, local or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental (including taxes under Section 59A of the Code), customs,
      duties, capital stock, franchise, profits, withholding, social security (or
      similar), unemployment, disability, real property, personal property, sales,
      use, transfer, registration, value added, alternative or add-on minimum,
      estimated or other tax, of any kind, whatsoever, including any interest, penalty
      or addition thereto, whether disputed or not.

     

    “Termination
      Date”
      means
      September 30, 2006.

     

    “Transaction
      Documents”
      has the
      meaning given to such term in Section 1.7(b)(ix).

     

    “USBX”
      has the
      meaning given to such term in Section 4.6. 

     

    “Valuation”
      shall
      mean a determination of Equity Value by USBX.

     

    “Valuation
      Date”
      has the
      meaning given to such term in Section 4.4 or the date of a Valuation pursuant
      to
      Section 4.4(b). 

     

    “Valuation
      Target” has
      the
      meaning given to such term in Section 1.6(b).

     

    “WBCL”
      shall
      mean the Wisconsin Business Corporation Law.

     

    “2003
      Financial Statements”
      has the
      meaning given to such term in Section 3.1(e).

     

    “2004
      Financial Statements”
      has the
      meaning given to such term in Section 3.1(e).

     

    “2005
      Balance Sheet”
      has the
      meaning given to such term in Section 3.1(g).

     

    “2005
      Financial Statements” has
      the
      meaning given to such term in Section 3.1(e).

     

    
      
        
        

      

      
        ANNEX
          A-6SERIES
      A CONVERTIBLE PREFERRED STOCK

     

    PURCHASE
      AGREEMENT

     

    Dated
      as of August 21, 2006

     

    Between

     

    SECURITY
      HOLDING CORP.

     

    And

     

    HOMELAND
      SECURITY CAPITAL CORPORATION

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	 	
              PAGE

            
	
              ARTICLE
                I
                PURCHASE AND SALE OF PREFERRED STOCK

            	 	
              1

            
	 	 	 
	
              Section 
                1.1

            	 	
              Purchase
                and Sale of Preferred Stock

            	 	
              1

            
	
              Section
                1.2

            	 	
              The
                Conversion Shares

            	 	
              1

            
	
              Section
                1.3

            	 	
              Purchase
                Price and Closing

            	 	
              1

            
	 	 	 
	
              ARTICLE
                II
                REPRESENTATIONS AND WARRANTIES

            	 	
              2

            
	 	 	 
	
              Section
                2.1

            	 	
              Representations
                and Warranties as to the Company

            	 	
              2

            
	
              Section
                2.2

            	 	
              Representations
                and Warranties of the Purchaser

            	 	
              14

            
	 	 	 
	
              ARTICLE
                III
                COVENANTS

            	 	
              15

            
	 	 	 	 	 
	
              Section
                3.1

            	 	
              Company
                Covenants

            	 	
              15

            
	
              Section
                3.2

            	 	
              Purchaser
                Covenants

            	 	
              17

            
	
              Section
                3.3

            	 	
              Non-Competition;
                Non-Solicitation.

            	 	
              18

            
	 	 	 
	
              ARTICLE
                IV
                CONDITIONS

            	 	
              19

            
	 	 	 
	
              Section
                4.1

            	 	
              Conditions
                Precedent to the Obligation of the Company to Sell the Preferred
                Shares

            	 	
              19

            
	
              Section
                4.2

            	 	
              Conditions
                Precedent to the Obligation of the Purchaser to Purchase the Preferred
                Shares

            	 	
              20

            
	 	 	 
	
              ARTICLE
                V
                STOCK CERTIFICATE LEGEND

            	 	
              21

            
	 	 	 	 	 
	
              Section
                5.1

            	 	
              Legend

            	 	
              21

            
	 	 	 
	
              ARTICLE
                VI
                INDEMNIFICATION

            	 	
              21

            
	 	 	 	 	 
	
              Section
                6.1

            	 	
              General
                Indemnity

            	 	
              21

            
	
              Section
                6.2

            	 	
              Indemnification
                Procedure

            	 	
              22

            
	 	 	 
	
              ARTICLE
                VII
                REGISTRATION RIGHTS

            	 	
              23

            
	 	 	 	 	 
	
              Section
                7.1

            	 	
              Registration
                Rights

            	 	
              23

            
	
              Section
                7.2

            	 	
              Registration
                Procedures

            	 	
              24

            
	
              Section
                7.3

            	 	
              Provision
                of Documents

            	 	
              25

            
	
              Section
                7.4

            	 	
              Expenses

            	 	
              25

            
	
              Section
                7.5

            	 	
              Indemnification
                and Contribution

            	 	
              26

            
	
              Section
                7.6

            	 	
              Effect
                of Registration.

            	 	
              27

            
	 	 	 
	
              ARTICLE
                VIII
                MISCELLANEOUS

            	 	
              28

            
	 	 	 
	
              Section
                8.1

            	 	
              Fees
                and Expenses

            	 	
              28

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                8.2

            	 	
              Specific
                Enforcement, Consent to Jurisdiction

            	 	
              28

            
	
              Section
                8.3

            	 	
              Entire
                Agreement; Amendment

            	 	
              29

            
	
              Section
                8.4

            	 	
              Notices

            	 	
              29

            
	
              Section
                8.5

            	 	
              Waivers

            	 	
              30

            
	
              Section
                8.6

            	 	
              Headings

            	 	
              30

            
	
              Section
                8.7

            	 	
              Successors
                and Assigns

            	 	
              30

            
	
              Section
                8.8

            	 	
              No
                Third Party Beneficiaries

            	 	
              30

            
	
              Section
                8.9

            	 	
              Governing
                Law

            	 	
              30

            
	
               Section
                8.10

            	 	
              Waiver
                of Jury Trial

            	 	
              30

            
	
               Section
                8.11

            	 	
              Survival

            	 	
              30

            
	
               Section
                8.12

            	 	
              Counterparts

            	 	
              31

            
	
               Section
                8.13

            	 	
              Severability

            	 	
              31

            
	
               Section
                8.14

            	 	
              Further
                Assurances

            	 	
              31

            

    

     

    Exhibit
      A
      - Certificate of Designation

    Exhibit
      B
      - Form of Conversion Notice

    Exhibit
      C
      - Promissory Note

    

    Schedules

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    SERIES
      A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     

    This
      Series A Convertible Preferred Stock Purchase Agreement (the “Agreement”)
      is
      dated as of August 21, 2006 by and among Security Holding Corp., a Delaware
      corporation (the “Company”),
      and
      Homeland Security Capital Corporation (the “Purchaser”).

     

    The
      parties hereto agree as follows:

     

    ARTICLE
      I  

     

    PURCHASE
      AND SALE OF PREFERRED STOCK

     

    Section
      1.1  Purchase
      and Sale of Preferred Stock.
      Upon
      the following terms and conditions, the Company shall issue and sell to the
      Purchaser, and the Purchaser shall purchase from the Company, up to 5,000,000
      shares of the Company’s Series A Convertible Preferred Stock, $1.00 par value
      per share (the “Preferred
      Shares”),
      at a
      price of $1.00 per share. The Preferred Shares are convertible into shares
      of
      the Company’s common stock, $0.01 par value per share (the “Common
      Stock”).
      The
      Purchaser will initially purchase 3,000,000 Preferred Shares (the “First
      Tranche”)
      for an
      aggregate purchase price equal to $3,000,000 (“Purchase
      Price”).
      The
      Purchaser agrees to purchase on any date (or dates) prior to August 21, 2008
      up
      to an additional 2,000,000 Preferred Shares in the aggregate on such dates
      and
      in such amounts (the “Additional
      Tranches”)
      as the
      Company (following the unanimous approval of its board of directors (the
“Board”))
      requests upon sixty (60) days prior written notice. The designation, rights,
      preferences and other terms and provisions of the Preferred Shares are set
      forth
      in the Certificate of Designation of the Relative Rights and Preferences of
      the
      Series A Convertible Preferred Stock attached hereto as Exhibit
      A
      (the
“Certificate
      of Designation”).
      The
      Company and the Purchaser are executing and delivering this Agreement in
      accordance with and in reliance upon the exemption from securities registration
      afforded by Rule 506 of Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission (the
“Commission”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”)
      or
      Section 4(2) of the Securities Act.

     

    Section
      1.2  The
      Conversion Shares.
      The
      Company has authorized and reserved and covenants to continue to reserve, free
      of preemptive rights and other similar contractual rights of stockholders,
      such
      number of shares of Common Stock equal to one hundred twenty percent (120%)
      of
      the number of shares of Common Stock as shall from time to time be sufficient
      to
      effect the conversion of all of the issued and outstanding Preferred Shares.
      Any
      shares of Common Stock issuable upon conversion of the Preferred Shares are
      herein referred to as the “Conversion
      Shares.”
The
      Preferred Shares and the Conversion Shares are sometimes collectively referred
      to as the “Shares.”
The
      Preferred Shares may be converted into Common Stock in accordance with the
      Certificate of Designation and pursuant the delivery of a conversion notice
      in
      the form attached as Exhibit
      B
      hereto.

     

    Section
      1.3  Purchase
      Price and Closing.
      The
      Company agrees to issue and sell to the Purchaser and, in consideration of
      and
      in express reliance upon the representations, warranties, covenants, terms
      and
      conditions of this Agreement, the Purchaser, agrees to purchase the Preferred
      Shares. The closing of the purchase and sale of the Preferred Shares for the
      First Tranche (a “Closing” and together with any additional closings of the sale
      of Preferred Shares, the “Closings”)
      shall
      take place at the offices of Kirkpatrick & Lockhart Nicholson Graham LLP,
      Miami Center - 20th
      Floor,
      201 South Biscayne Blvd., Miami, Florida 33131 at 1:00 p.m. (eastern time)
      upon the satisfaction of each of the conditions set forth in Article IV
      hereof (the “Closing
      Date”).
      The
      Purchase Price for the First Tranche with respect to the Closing shall be
      payable as follows: (i) $2,500,000 shall be paid by wire transfer of immediately
      available funds on or prior to the Closing Date; and (ii) $500,000 shall be
      payable via a promissory note, in the form attached hereto as Exhibit
      C
      (the
“Note”).
      Additional Closings for the sale of the Additional Tranches shall occur at
      times
      and places as mutually agreed by the parties.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II  

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.1  Representations
      and Warranties as to the Company. The
      Company represents and warrants to the Purchaser that each of the following
      is,
      or will be at the Closing Date, true and correct:

     

    (a)  Capitalization.
      The
      authorized capital stock of the Company consists of (i) 40,000,000 shares of
      Common Stock, of which 15,000,000 shares are issued and outstanding
      and (ii) 10,000,000 shares of Preferred Stock, none of which are issued and
      outstanding. All shares of Common Stock have been duly authorized and validly
      issued and are fully paid and non-assessable. All prior offerings and issuances
      of Common Stock have been made in accordance with applicable federal and state
      securities Laws. Except as disclosed in Schedule 2.1(a) and in the
      Stockhoders’ Agreement of the Company dated the date hereof, (i) no shares
      of the Company’s capital stock are subject to rights of first refusal,
      preemptive rights or any other similar rights or any liens or encumbrances
      suffered or permitted by the Company, (ii) there are no outstanding debt
      securities, (iii) there are no outstanding options, warrants, scrip, rights
      to subscribe to, calls or commitments of any character whatsoever relating
      to,
      or securities or rights convertible into, any shares of capital stock of the
      Company, or contracts, commitments, understandings or arrangements by which
      the
      Company or any of its Subsidiaries is or may become bound to issue additional
      shares of capital stock of the Company or options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Company, (iv) there are no outstanding securities or instruments of the
      Company which contain any redemption or similar provisions, and there are no
      contracts, commitments, understandings or arrangements by which the Company
      is
      or may become bound to redeem a security of the Company, (v) there are no
      securities or instruments containing anti-dilution or similar provisions that
      will be triggered by the sale of the common shares of Common Stock as described
      in this Agreement and (vi) the Company does not have any stock appreciation
      rights or “phantom stock” plans or agreements or any similar plan or agreement.
“Laws” mean
      material federal, state, local and foreign laws, statutes, ordinances, rules
      or
      regulations, orders and administrative rulings promulgated by any governmental
      or regulatory authority.

     

    (b)  Organization;
      Good Standing; Power.
      The
      Company is a corporation duly
      organized, validly existing and in good standing under the Laws of the State
      of
      Delaware, and has full corporate power and authority to own, lease and operate
      its assets and properties and to carry on its business as presently conducted
      by
      it. Schedule 2.1(b) hereto sets forth a true and complete list of all
      states and other jurisdictions in which the Company is duly qualified and in
      good standing to transact business as a foreign corporation. Except for those
      states and jurisdictions set forth on Schedule 2.1(b), there are no other
      states or jurisdictions in which the character and location of the properties
      owned or leased by the Company and the conduct of its Business make any such
      qualification necessary, except any where the failure to be so qualified would
      not have a Material Adverse Effect. The Company’s minute books contain true and
      complete records of all meetings and other material actions, including, without
      limitation, actions by vote or written consent of the stockholders and the
      board
      of directors of the Company. “Material
      Adverse Effect” means
      an
      effect that is more than a minor, de minimis or minimal effect on the Business,
      operations or condition (financial or other) of the Company or the value of
      its
      properties or assets. All references to “Company” in Section 2.1 shall also
      refer to any Subsidiaries of the Company where applicable; except that (i)
      the
      reference to “Delaware” in the first sentence shall be replaced with “Wisconsin”
when referring to the Subsidiaries of the Company, and (ii) Schedule 2.1(b)
      shall not apply to the Subsidiaries of the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)  Authority;
      Validity; No Conflicts.
      The
      execution and delivery by the Company of this Agreement, the performance by
      the
      Company of its obligations hereunder, and the consummation of the transactions
      contemplated hereby, have been duly authorized by all necessary corporate action
      on the part of the Company, and the Company has all necessary corporate power
      with respect thereto. This Agreement is the valid and binding obligation of
      the
      Company, enforceable against it in accordance with its terms, except to the
      extent that enforceability thereof may be limited by general equitable
      principles or the operation of bankruptcy, insolvency, reorganization,
      moratorium or similar Laws. Except as set forth in Schedule
      2.1(c),
      neither the execution and delivery by the Company of this Agreement, nor the
      consummation of the transactions contemplated hereby, nor the performance by
      the
      Company of its obligations hereunder, shall (or, with the giving of notice
      or the lapse of time or both, would) (i) conflict with or violate any provision
      of the Company’s Certificate of Incorporation or Bylaws of the Company, as
      amended; (ii) give rise to a conflict, breach or default, or any right of
      termination, cancellation or acceleration of remedies or rights, or otherwise
      result in a loss of benefits to the Company, under the provisions of any note,
      bond, mortgage, indenture, license, agreement or other instrument or obligation
      to which the Company is a party or by which it or any of its properties or
      assets is otherwise bound; (iii) violate any Law applicable to the Company
      or any of its properties or assets; (iv) result in the creation or
      imposition of any Lien upon any of the properties or assets of the Company
      or
      cause the Company to be subject to any Tax; (v) interfere with or otherwise
      adversely affect the ability to carry on the business of the Company as
      presently conducted; or (vi) contravene, conflict with, or result in a
      violation of any of the terms or requirements of, or give rise to any right
      to
      revoke, suspend, terminate or modify any Permit. “Liens” mean
      all
      liens, mortgages, pledges, charges, claims, security interests or encumbrances
      of any nature whatsoever. “Permits” means
      governmental permits, approvals, licenses, certificates, franchises,
      authorizations, consents and orders necessary for the operation of the Business
      in the manner that it is presently conducted.

     

    (d)  Governmental
      Authorizations; Third-Party Consents.
      Except
      as
      set forth on Schedule 2.1(d)
      hereto,
      no approval, consent, waiver, exemption, order, authorization or other action
      by, or notice to or filing with, any governmental authority or any Person,
      and
      no lapse of a waiting period, is required to be obtained by the Company in
      connection with (or in order to permit) the execution, delivery or
      performance by any of them of this Agreement or the consummation of the
      transactions contemplated hereby or thereby (collectively, “Consents”).“Person”
or
      “Persons” means
      any
      stockholder, officer, employee or director of the Company, or any other natural
      person, corporation, partnership, limited liability company or other entity.
“Subsidiaries”
shall
      mean any corporation or other organization, whether incorporated or
      unincorporated, in which the Company owns, directly or indirectly, any equity
      or
      other ownership interest.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (e)  Financial
      Statements. The
      Company has delivered to the Purchaser true and complete copies of its
      Subsidiaries’ (i) unaudited balance sheet as of December 31, 2003 and the
      related unaudited statements of income (loss), retained earnings and cash
      flow for the fiscal year then ended (the “2003
      Financial Statements”), (ii)
      audited balance sheet as of December 31, 2004 and the related audited statements
      of income (loss), retained earnings and cash flow for the fiscal year then
      ended (the “2004
      Financial Statements”)
      and (iii) audited balance sheet as of December 31, 2005 and the related
      audited statements of income (loss), retained earnings and cash flow for
      the fiscal year then ended (the “2005
      Financial Statements”).
       “Financial
      Statements” means
      the
      2003 Financial Statements, 2004 Financial Statements and 2005 Financial
      Statements, collectively. The Financial Statements are attached hereto as
Schedule 2.1(e).
      Except
      as set forth on Schedule 2.1(e),
      the
      Financial Statements, including any notes thereto, were prepared in accordance
      with GAAP applied on a consistent basis throughout the periods involved (except,
      in the case of the 2003 Financial Statements, the absence of footnotes) and
      fairly present the financial position of the Company as of the dates indicated
      and the results of its operations for the periods covered thereby. The books
      and
      records of the Company are, in all material respects, true and complete, have
      been maintained in accordance with good business practices, and accurately
      reflect the basis for the financial condition and results of operations of
      the
      Company as set forth in its financial statements. 

     

    (f)  Interests
      in Other Entities. The
      Company owns all of the capital stock of each of its Subsidiaries. The Company
      does not, directly or indirectly, (i) own, of record or beneficially, any
      shares of voting stock or any other equity securities of any Person other than
      as set forth on Schedule
      2.1(f); (ii)
      have any other ownership or equity or debt interest, of record or beneficially,
      in any Person; or (iii) have any obligation or right, fixed or contingent,
      to purchase or subscribe for any interest in, advance or loan monies to, or
      in
      any way make an investment in, any Person or to share any profits or capital
      investments in any other Person (other than as set forth on Schedule
      2.1(f)).
      

     

    (g)  Title
      to Properties; Leases.
      Except
      as
      set forth on Schedule 2.1(g),
      the
      Company has good and marketable title to all of its properties and assets,
      real
      and personal, including, but not limited to, those reflected in the audited
      balance sheet contained in the 2005 Financial Statements (the “2005
      Balance Sheet”) (except
      as since sold or otherwise disposed of in the ordinary course of business since
      December 31, 2005, or as expressly provided for in this Agreement), free and
      clear of all encumbrances, liens or charges of any kind or character
      except: (a) those securing liabilities of the Company incurred in the
      ordinary course (with respect to which no default
      exists); (b) liens of real estate and personal property taxes; (c)
      property leased pursuant to leases disclosed on any Schedule hereto;
      and (d) imperfections of title and encumbrances, if any, which, in the
      aggregate do not have a Material Adverse Effect on the business, properties
      or
      assets of the Company. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (h)  Accounts
      Receivable; Fixed Assets; Inventory.
      

     

    (i)  Schedule 2.1(h)(i)
      hereto
      sets forth a true and complete list of the Accounts Receivable as of December
      31, 2005 and as of May 31, 2006 and the individual aging with respect thereto.
      All of the Accounts Receivable reflected on Schedule 2.1(h)(i)
      are good
      and collectible in the ordinary course of business at the recorded amounts
      thereof, less the amount of the reserves for bad accounts reflected
      thereon (which reserves have been established in accordance with United
      States generally accepted accounting principles (“GAAP”)
      on a
      basis consistent with past practice), and, to the best of the Company’s
      knowledge, are not subject to any counterclaims or offsets. “Accounts
      Receivable” means
      all
      of the Company’s accounts receivable due to the Company, including but not
      limited to obligations owing to the Company arising from the sale or lease
      of
      goods or the rendition of services by the Company.

     

    (ii)  Schedule 2.1(h)(ii)
      hereto
      sets forth a true and complete list of the Inventory. The Inventory is of such
      quality and quantity as to be usable and saleable by the Company in the ordinary
      course of business, has been priced at the lower of cost or market value using
      the “first-in, first-out” method, and is free of any defect or deficiency,
      subject only to the reserve for Inventory writedown set forth on the face of
      the
      Final 2006 Balance Sheet as adjusted for operations and transactions through
      the
      Closing Date. The level of Inventory reflected on Schedule 2.1(h)(ii)
      and the
      2005 Balance Sheet is not excessive in light of the Company’s normal operations
      of its business and are adequate to conduct the Company’s operations in the
      ordinary course of business. “Inventory”
means
      each item of inventory of the Company (including raw materials, work in progress
      and finished goods).

     

    (i)  Intellectual
      Property.
      Schedule
      2.1(i)
      hereto
      sets forth a true and complete list of all licenses, patents, patents pending,
      registered copyrights, trade names, trademarks and service marks comprising
      Intellectual Property. The Company has either all right, title and interest
      in
      and to, or valid and enforceable rights under contract to use, all items of
      Intellectual Property material to, or necessary to conduct, the business of
      the
      Company as it is presently conducted or contemplated to be conducted, free
      and
      clear of all Liens other than Permitted Liens. There are no material
      restrictions on the direct or indirect transfer of any contract or other
      agreement, or any interest therein, held by the Company in respect of any item
      of Intellectual Property. The Company is not in default (or, with the
      giving of notice or lapse of time or both, would be in default) under any
      contract or other agreement to use any item of Intellectual Property required
      to
      be set forth on Schedule
      2.1(i).
      None of
      the Intellectual Property infringes or conflicts with, and the Company has
      not
      received any notice of infringement of or conflict with, any license, patent,
      copyright, trademark, service mark or other intellectual property right of
      any
      other Person and, to the knowledge of the Company, there is no material
      infringement or material unauthorized use by any Person of any of the
      Intellectual Property owned by the Company. Except as set forth on Schedule
      2.1(i),
      the
      validity or enforceability of any of the Intellectual Property or the title
      of
      the Company thereto has not been questioned in any litigation, governmental
      inquiry or proceeding to which the Company is party and, to the knowledge of
      the
      Company, no such litigation, governmental inquiry or proceeding is threatened.
      The Company has taken all actions necessary and appropriate to preserve the
      confidentiality of all trade secrets, proprietary and other confidential
      information material to the business and operations of the Company.
“Intellectual
      Property”
means
      all patents and patent rights, trademarks and trademark rights, trade names
      and
      trade name rights, service marks and service mark rights, service names and
      service name rights, brand names, inventions, processes, formulae, copyrights
      and copyright rights, trade dress, business and product names, logos, slogans,
      designs, trade secrets, industrial models, proprietary data, methodologies,
      computer programs and software (including all source codes) and related
      documentation, technical information, manufacturing, engineering and technical
      drawings, know-how, inventions, works of authorship, management information
      systems, and all pending applications for and registrations of patents,
      trademarks, service marks and copyrights owned by the Company or used by the
      Company in the conduct of its business, in each such case, including all forms
      (e.g.,
      electronic media, computer disks) in which such items are recorded.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (j)  Bank
      Accounts; Credit Cards; Corporate Accounts; and Powers of
      Attorney.
      Schedule 2.1(j)
      hereto
      sets forth a true and complete list showing (i) the names of all banks in
      which the Company has an account or safe deposit box, the account numbers for
      each account at such banks and the names of all Persons authorized to draw
      thereon and who have access thereto; (ii) the names of all credit card
      issuers with whom the Company has an account and the names of all Persons
      authorized to use such accounts or who have access thereto; (iii) the names
      of all cellular telephone, phone card or other corporate accounts with whom
      the
      Company has an account and the names of all Persons authorized to use such
      accounts or who have access thereto; and (iv) the names of all Persons, if
      any, holding powers of attorney from the Company. There are no automatic,
      periodic or scheduled withdrawals or debits with respect to the bank or
      corporate accounts required to be set forth on Schedule 2.1(j)
      hereto.

     

    (k)  Absence
      of Undisclosed Liabilities. The
      Company does not have any Liabilities, including guarantees and indemnities
      by
      the Company of Liabilities of any other Person, except (i) Liabilities as and
      to
      the extent reflected on the 2005 Balance Sheet; (ii) Liabilities
      incurred by it in the ordinary course of business and consistent with past
      practice since December 31, 2005 (none of which is a material Liability for
      breach of contract, breach of warranty, tort, infringement, claim, lawsuit
      or
      other proceeding) and adequately reflected on the books and records of the
      Company; (iii) obligations not in default under contracts entered into
      by it in the ordinary course of business; and (iv) the Liabilities set
      forth on Schedule 2.1(k)
      hereto.
“Liabilities” mean
      debts, liabilities, commitments or obligations, whether absolute or contingent,
      asserted or unasserted, known or unknown, liquidated or unliquidated, due or
      to
      become due, or fixed or unfixed.

     

    (l)  Litigation.
      Except
      as
      set forth on Schedule 2.1(l)
      hereto,
      there are no claims, suits or actions, administrative, arbitration or other
      proceedings, or governmental investigations pending or, to the knowledge of
      the
      Company, threatened against or affecting, or reasonably likely to adversely
      affect, the Company or any of its properties, assets or business or the
      transactions contemplated hereby. There are no outstanding judgments, orders,
      stipulations, injunctions, decrees or awards against the Company that have
      not
      been fully satisfied. For purposes of clarity, this Section 2.1(l) does not
      apply to, and Section 2.1(q) contains the sole representation of the Company
      related to, Tax matters.

     

    
      
        
        

      

      
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    (m)  Material
      Contracts.
      Schedule 2.1(m)
      hereto
      sets forth a true and complete list, and brief description, of each Material
      Contract. True and complete copies of all written Material Contracts required
      to
      be set forth on Schedule 2.1(m)
      have
      been furnished to the Purchaser and, except as set forth on Schedule 2.1(m),
      each of
      them is in full force and effect. Except as set forth on Schedule 2.1(m),
      neither
      the Company nor, to the knowledge of the Company, any other Person that is
      a
      party to a Material Contract or is otherwise bound thereby is in default
      thereunder, and no event, occurrence, condition or act exists that, with the
      giving of notice or the lapse of time or both, would give rise to any default
      or
      right of cancellation thereunder. To the knowledge of the Company, there have
      been no threatened cancellations of any of the Material Contracts and there
      are
      no outstanding disputes thereunder. There are no agreements, understandings
      or
      arrangements with any other Person in respect of the Material Contracts that,
      other than as provided therein: (i) give any Person the right to
      renegotiate or require a reduction in the price paid to the Company or the
      repayment of any amount previously paid, (ii) provide for the sharing
      of any revenues or profits by or with the Company or (iii) provide for
      discounts, allowances or extended payment terms. “Material
      Contract” means
      any
      contract, purchase order, agreement, mortgage, note, commitment, obligation
      and
      undertaking to which the Company is parties or by which it is otherwise bound
      that involves in excess of Twenty Thousand
      Dollars ($20,000).

     

    (n)  Insurance.
      Schedule 2.1(n)
      hereto
      sets forth a true and complete list of all policies of insurance under which
      the
      Company or any of its officers or directors (in such capacity) is an
      insured party, beneficiary or loss payable payee, and the expiration date of
      each such policy. The Company is current in all of its premiums for its
      insurance policies. True and complete copies of all such policies have been
      provided to the Purchaser. Such policies are in full force and effect and
they
      will
      remain in full force and effect and will not terminate or lapse or otherwise
      be
      affected in any way by reason of the transactions contemplated
      hereby.
      The
      Company is not in default with respect to any provision contained in any such
      policy, the Company has not received or given a notice of cancellation or
      non-renewal with respect to any such policy and the Company has not received
      a
      reservation of rights letter with respect to any such policy. Except as set
      forth on Schedule 2.1(n),
      no
      claims have been made by the Company under any such policy, and no event has
      occurred and no state of facts exists in respect of which the Company is
      entitled to make a claim under any such policy.

     

    (o)  Employees. Schedule 2.1(o)
      hereto
      sets forth a true and correct summary of the following information for each
      current employee of the Company, including each employee on leave of absence,
      disability or layoff status: name; job title; employment status; current
      compensation rate and any change(s) in compensation since December 31, 2005;
      vacation time accrued; and service years credited for purposes of vesting or
      eligibility to participate in any Benefit Plan. Except as set forth on
Schedule 2.1(o),
      the
      Company has no written or oral union, collective bargaining, employment,
      management, severance or consulting agreements or arrangements to which the
      Company is a party or by which it is otherwise bound. No union or other labor
      organization is seeking to organize, or to be recognized as, a collective
      bargaining unit of any group of employees that includes any employees of the
      Company. There is no pending or, to the knowledge of the Company, threatened
      representation proceeding or petition, strike, work stoppage, work slowdown,
      unfair labor practice charge or complaint or other material labor dispute
      affecting any employee of the Company. Except as set forth in Schedule
      2.1(o),
      neither
      the Company, nor any officer nor employee of the Company are parties to or
      are
      otherwise bound by any oral or written agreement or arrangement, including
      confidentiality, non-competition or proprietary rights agreement, with any
      Person (other than the Company) that in any way limits or adversely affects
      or
      will limit or affect (A) the performance of his/her duties as an employee,
      officer or director of the Company after the Closing Date, or (B) the ability
      of
      the Company to conduct its business as it currently exists or as currently
      contemplated. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (p)  Employee
      Arrangements; ERISA.
      

     

    (i)  Schedule 2.1(p)
      hereto
      sets forth a true and complete list of all Benefit Plans. The Company has
      delivered to the Purchaser true and complete copies of each Benefit
      Plan (including any related trust agreement), the most recent summary plan
      descriptions and all other material employee communications embodying or
      relating to any Benefit Plan , the most recent Internal Revenue Service
      determination letter (if the plan is intended to be qualified under Section
      401(a) of the Internal Revenue Code of 1986, as amended (together with all
      rules
      and regulations thereunder) (the “Code”),
      and
      the annual reports filed on Form 5500 (including all schedules and accountants’
opinions) for the two most recent completed plan years, if such reports were
      required to be filed. Except as set forth on Schedule 2.1(p),
      the
      Company has not announced or otherwise made a commitment to create any bonus,
      option, deferred compensation, pension, profit sharing or retirement plan or
      arrangement, severance arrangement or other fringe benefit plan.

     

    (ii)  Each
      of
      the Benefit Plans required to be set forth on Schedule 2.1(p) is
      and
      has at all times been in compliance with all applicable provisions of ERISA,
      the
      Code and other applicable Laws.

     

    (iii)  Except
      as
      set forth on Schedule 2.1(p),
      the
      execution and delivery of, and the performance of the transactions contemplated
      by, this Agreement will not (either alone or upon the occurrence of any
      additional or subsequent event) constitute an event under any Benefit Plan
      or
      individual agreement that will or may result in any payment (whether of
      severance pay or otherwise), acceleration, vesting or increase in benefits
      with
      respect to any employee, former employee, consultant, agent or director of
      the
      Company.

     

    (iv)  Each
      Benefit Plan that is a “group health plan” (within the meaning of Code
      Section 4980B) has been administered in compliance with the coverage
      continuation requirements of COBRA, and as provided under Code Section 4980
      and any regulations promulgated or proposed under the Code. The Company and
      each
      Benefit Plan are in compliance with the requirements of the Health Insurance
      Portability and Accountability Act to the extent such requirements are
      applicable.

     

    (v)  At
      no
      time has the Company contributed to, been required to contribute to or incurred
      any Liability to any Benefit Plan that: is a multi-employer plan, as defined
      in
      Section 3(37) of ERISA; is a multiple employer welfare arrangement, as
      defined in Section 3(40) of ERISA; is a multiple employer plan, as
      described in Section 210 of ERISA, subject to Title IV of ERISA; or
      provides health (other than as required under COBRA), life or other welfare
      benefits to former employees, directors or consultants.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (vi)  No
      event
      has occurred or is threatened that would constitute a reportable event (for
      which any applicable notice requirement has not been waived) within the meaning
      of Section 4043(b) of ERISA with respect to any Pension Plan. “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended, and all
      regulations promulgated thereunder. “Pension
      Plan” means
      any
      Benefit Plan that is an "employee pension benefit plan," as defined in Section
      3(2) of ERISA.

     

    (vii)  Each
      Pension Plan that is intended to meet the requirements of Code
      Section 401(a) meets, and since its inception has met, the requirements for
      qualification under Code Section 401(a) and nothing has occurred that would
      adversely affect the qualified status of any such Pension Plan. The United
      States Internal Revenue Service (“IRS”)
      has
      issued a favorable determination letter with respect to the qualification under
      the Code of each Pension Plan and the IRS has not taken any action to revoke
      or
      suspend any such letter.

     

    (viii)  Those
      sections of all annual reports heretofore filed with the IRS or the Department
      of Labor by or on behalf of every Benefit Plan that were required to be so
      certified were certified without qualification by the accountants or actuaries
      of such Benefit Plan.

     

    (ix)  The
      Company has made all contributions required to be made by it to each Benefit
      Plan under the terms of the Benefit Plan and applicable Law. No prohibited
      transaction (as defined in Code Section 4975 or Section 406 of
      ERISA) has occurred with respect to any Benefit Plan that could subject any
      Benefit Plan or any related trust, the Company, any Affiliate or any director,
      officer or employee of any of them to any Tax or penalty imposed under Code
      Section 4975 or Sections 502(i) or 502(1) of ERISA, directly or indirectly,
      and whether by way of indemnity or otherwise. “Affiliate” means,
      with respect to any Person, a Person that directly, or indirectly through one
      or
      more intermediaries, controls or is controlled by, or is under the common
      control with, the Person specified (as set forth in Rule 405 promulgated under
      the Securities Act).

     

    (q)  Tax
      Matters.
      Except
      as
      set forth on Schedule 2.1(q)
      hereto:

     

    (i)  the
      Company has filed (on a timely basis, including applicable extensions) with
      the appropriate governmental agencies any federal, state, local and foreign
      Tax
      Returns required to be filed by it and has timely paid in full all Taxes due.
      All such Tax Returns were true and complete in all material respects as shown
      thereon. “Tax”
means
      any federal, state, local or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental (including taxes under Section 59A of the Code), customs, duties,
      capital stock, franchise, profits, withholding, social security (or similar),
      unemployment, disability, real property, personal property, sales, use,
      transfer, registration, value added, alternative or add-on minimum, estimated
      or
      other tax, of any kind, whatsoever, including any interest, penalty or addition
      thereto, whether disputed or not and including any obligations to indemnify
      or
      otherwise assume or succeed to the Tax liability of any other Person.
“Tax
      Return”
means
      any return, declaration, report, claim for refund, or information return or
      statement relating to Taxes, including any schedule or attachment thereto,
      and
      any amendment(s) thereof.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (ii)  the
      Company is not currently the beneficiary of any extension of time within which
      to file any Tax Return;

     

    (iii)  the
      Company has provided the Purchaser with true and complete copies of all income
      Tax Returns filed by the Company since the inception of its business and filed
      by each of its Subsidiaries since the earlier of the applicable Subsidiary’s
      inception or the applicable Subsidiary’s 2002 fiscal year;

     

    (iv)  there
      are
      no Tax Liens upon any properties or assets of the Company other than any
      statutory Liens for Taxes not yet due and payable or which are being contested
      in good faith;

     

    (v)  the
      Company has not waived any statute of limitations in respect of Taxes or
      executed or filed with any governmental authority any agreement extending the
      period for the assessment or collection of any Taxes, and it is not a party
      to
      any pending or, to the knowledge of the Company, threatened suit, action or
      proceeding by any governmental authority for the assessment or collection of
      Taxes;

     

    (vi)  there
      is
      no unresolved written claim by a governmental authority in any jurisdiction
      where the Company does not file Tax Returns that the Company is or may be
      subject to taxation by such jurisdiction;

     

    (vii)  except
      as
      set forth in Schedule
      2.1(p)(vii),
      there
      has been no examination or audit or court proceeding with respect to Taxes
      with
      respect to any year since the Company’s inception;

     

    (viii)  the
      Company has timely withheld and paid all material Taxes required to have been
      withheld and paid in connection with amounts paid or owing to any employee,
      independent contractor, creditor or other Person;

     

    (ix)  the
      unpaid Taxes of the Company (A) did not, as of the date of the 2005 Balance
      Sheet exceed the reserve for Tax Liabilities (other than any reserve for
      deferred Taxes established to reflect timing differences between book and Tax
      income) set forth on the 2005 Balance Sheet and (B) will not exceed that
      reserve, as adjusted for the passage of time through the Closing Date in
      accordance with the past custom and practice of the Company;

     

    (x)  the
      Company has not filed a consent under Code Section 341(f) concerning
      collapsible corporations; 

     

    (xi)  the
      Company has not been a United States real property holding
      corporation (within the meaning of Code Section 897(c)(2)) during the
      applicable period specified in Code Section 897(c)(1)(A)(ii). The Company
      is not a party to or otherwise bound by any Tax indemnification, allocation
      or
      sharing agreement; and

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (xii)  the
      Company will not be required to include any item of income in, or exclude any
      item of deduction from, its taxable income for any taxable period (or
      portion thereof) ending after the Closing Date as a result of any:
 (A) change in method of accounting for a taxable period ending on or
      prior to the Closing Date, (B) “closing agreement,” as described in
      Code Section 7121 (or any corresponding provision of state, local or
      foreign Tax Law), (C) installment sale or open transaction disposition
      made on or prior to the Closing Date or (D) prepaid amount received on
      or prior to the Closing Date; 

     

    (xiii)  no
      power
      of attorney has been granted by the Company with respect to any matters relating
      to Taxes that is currently in effect.

     

    (r)  Compliance
      with Applicable Laws. The
      Company is and has been in compliance with all Laws applicable to the Company
      or
      to the conduct of its business or operations or to the use of its properties
      or
      assets, including, without limitation, all Tax, ERISA, privacy, employment
      and
      human rights Laws. The Company has not received written notice of any violation
      or alleged violation of any Law by the Company. To the knowledge of the Company,
      there is no pending or proposed legislation applicable to the Company or to
      the
      conduct of its business or operations that, if enacted, could reasonably be
      expected to have a Material Adverse Effect. To the best of the Company’s
      knowledge, no event has occurred and no circumstance exists that could
      reasonably be expected to constitute or result in (with or without notice
      or lapse of time or both) a violation of or failure to comply with (i) a
      material requirement of any Law by the Company or (ii) an order of any
      court with respect to which the Company or any of its assets or properties
      is
      subject. For purposes of clarity, this Section 2.1(r) does not apply, and
      Section 2.1(q) contains the sole representations of the Company related to,
      Tax
      matters. 

     

    (s)  Regulatory
      Permits.
      The
      Company possesses all material certificates, authorizations and permits issued
      by the appropriate federal, state or foreign regulatory authorities necessary
      to
      conduct their respective businesses, and Company has not received any notice
      of
      proceedings relating to the revocation or modification of any such certificate,
      authorization or permit.

     

    (t)  Domain
      Names.
      Schedule 2.1(t)
      hereto
      sets forth a true and complete list of all domain names owned or used by the
      Company in the conduct of its business. No officer, director or employee of
      the
      Company or any of their respective Affiliates or Associates has any ownership
      or
      other interest in the domain names. None of the domain names infringes or
      conflicts with any trademarks, trademark rights, trade names, trade name rights,
      service marks or other rights of any Person. The Company has not obtained rights
      to any domain name in violation of any Law, including, without limitation,
      the
      Anticybersquatting Consumer Protection Act.
      “Associate”
means,
      when used to indicate a relationship with any Person, (1) a corporation or
      organization of which such Person is an officer or partner or is, directly
      or
      indirectly, the beneficial owner of ten percent (10%) or more of any class
      of
      equity securities, (2) any trust or other estate in which such Person has a
      substantial beneficial interest or as to which such Person serves as trustee
      or
      in a similar capacity, and (3) any relative or spouse of such Person, or any
      relative of such spouse, who has the same home as such Person or who is a
      director or officer of the Person or any of its parents or subsidiaries (as
      set
      forth in Rule 405 promulgated under the Securities Act).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (u)  Absence
      of Certain Changes. Except
      as
      and to the extent set forth on Schedule 2.1(u)
      hereto,
      since December 31, 2005, the Company has not:

     

    (i)  incurred
      any indebtedness for borrowed money or any other material Liabilities or
      obligations, except those which are less than $10,000 individually and $25,000
      in the aggregate and incurred in the ordinary course
      of
      business and consistent with past practice, or experienced any increase in,
      or
      change in any underlying assumption or method used in calculating, any bad
      debt,
      contingency or other reserve;

     

    (ii)  except
      for regularly scheduled payments of principal and interest on indebtedness
      for
      borrowed money that were required in accordance with the express terms thereof,
      paid, discharged or satisfied any claim, Liability or obligation (absolute,
      accrued, contingent or otherwise), other than the payment, discharge or
      satisfaction in the ordinary course of business of Liabilities and
      obligations (x) reflected or reserved against on the Final 2006 Balance
      Sheet or (y) incurred since the date thereof in the ordinary course of
      business and consistent with past practice;

     

    (iii)  caused,
      permitted or allowed any of its property or assets (real, personal or
      mixed, tangible or intangible) to be subjected to any Lien other than (A)
      Liens for Taxes not yet due and payable or being contested in good
      faith, (B) Liens of materialmen, mechanics, carriers, landlords and like
      Persons that are not yet due and payable and (C) those Liens set forth on
Schedule 2.1(u)(iii)
      hereto,
      all of which Liens shall be released on or prior to the
      Closing (collectively, “Permitted
      Liens”).

     

    (iv)  written
      off as uncollectible any notes or Accounts Receivable, except for write-offs
      in
      the ordinary course of business and consistent with past practice, none of
      which
      is material and all of which together do not exceed $10,000 in the
      aggregate;

     

    (v)  canceled
      any debts or waived or suffered to lapse any claims or rights of material value,
      or sold, transferred or otherwise disposed of any of its tangible properties
      or
      assets, except in the ordinary course of business and consistent with past
      practice;

     

    (vi)  made
      any
      single capital expenditure or commitment in excess of Ten Thousand
      Dollars ($10,000)
      for additions to property, equipment or intangible assets or made aggregate
      capital expenditures or commitments in excess of Twenty-Five Thousand
      Dollars ($25,000) for additions to property, equipment or intangible
      assets;

     

    (vii)  issued,
      granted, redeemed or repurchased any shares of its capital stock or any options,
      warrants or other rights to acquire its capital stock, or declared, paid or
      set
      aside for payment any dividend or other distribution in respect of any of its
      capital stock;

     

    
      
        
        

      

      
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    (viii)  made
      any
      change in any of its methods of accounting or accounting practices or
      principles;

     

    (ix)  paid,
      loaned or advanced any amount, or sold, transferred or leased any properties
      or
      assets (real, personal or mixed, tangible or intangible) to, or entered
      into any agreement or arrangement with, any Affiliate or Associate;

     

    (x)  disposed
      of or suffered to lapse any right to use any domain name, web address or item
      of
      Intellectual Property, or disposed of or disclosed to any Person any trade
      secret, formula, process or know-how or any other confidential information
      relating to the Company;

     

    (xi)  acquired
      any assets or properties other than in the ordinary course of its
      business;

     

    (xii)  suffered
      any material adverse change in its Business, operations, assets or
      condition (financial or otherwise);

     

    (xiii)  granted
      any increase in the compensation (including any increase pursuant to any
      bonus, pension, profit-sharing or other plan) payable or to become payable
      to
      any officer or employee, and no such increase is customary or required by any
      agreement or understanding;

     

    (xiv)  agreed,
      in writing or otherwise, to take any action described in this
      Section 2.1(u).

     

    (v)  Brokers.
      No
      agent,
      broker, firm or other Person acting on behalf of the Company, or under the
      authority of any of the foregoing, is or shall be entitled to a brokerage
      commission, finder’s fee or similar payment in connection with any of the
      transactions contemplated hereby from the Company. 

     

    (w)  Disclosure.
      No
      representation or warranty made by the Company herein contains or will contain
      any untrue statement of a material fact or omits a material fact necessary
      in
      order to make the statements herein or therein not misleading.

     

    (x)  Affiliated
      Transactions.
      Except
      as
      set forth on Schedule 2.1(x)
      hereto,
      no director or officer of the Company (or any of their respective
      Affiliates) (i) is a party to or otherwise a beneficiary of any agreement,
      transaction or arrangement (oral or written) with or involving the Company
      or (ii) has any claim, monetary or otherwise, against the
      Company.

     

    (y)  Disclosure
      Schedules.
      The
      Schedules are integral parts of this Agreement. Nothing in a Schedule shall
      be deemed adequate to disclose an exception to a representation or warranty
      made
      herein, unless the Schedule identifies the exception with reasonable
      particularity, including by explicit cross-reference to another Schedule to
      this Agreement. Without limiting the generality of the foregoing, the mere
      listing, or inclusion of a copy, of a document or other item shall not be deemed
      adequate to disclose an exception to a representation or warranty made herein,
      unless the representation or warranty is being made as to the existence of
      the
      document or other item itself. The Company is responsible for preparing and
      arranging the Schedules corresponding to the lettered and numbered sections
      contained herein. Disclosure made in a specific Schedule shall be deemed
      not to have been disclosed with respect to any other Schedule unless an
      explicit cross-reference is appropriately made.

     

    
      
        
        

      

      
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    (z)  Issuance
      of Shares.
      The
      Preferred Shares to be issued at the Closing have been duly authorized by all
      necessary corporate action and the Preferred Shares, when paid for or issued
      in
      accordance with the terms hereof, shall be validly issued and outstanding,
      fully
      paid and nonassessable and entitled to the rights and preferences set forth
      in
      the Certificate of Designation. When the Conversion Shares are issued and paid
      for in accordance with the terms of the Certificate of Designation, such shares
      will be duly authorized by all necessary corporate action and validly issued
      and
      outstanding, fully paid and nonassessable, and the holders shall be entitled
      to
      all rights accorded to a holder of Common Stock.

     

    Section
      2.2  Representations
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants as of the date hereof and as of the
      Closing Date to the Company as follows:

     

    (a)  Capacity;
      Validity; No Conflicts.
      The
      Purchaser has the legal capacity to execute and deliver this Agreement and
      to
      consummate the transactions contemplated hereby. Neither the execution and
      delivery by the Purchaser of this Agreement nor the consummation of the
      transactions contemplated hereby, nor the performance by the Purchaser (to
      the extent that they are parties thereto) of its obligations hereunder,
      shall (or, with the giving of notice or the lapse of time or both,
      would) (i) give rise to a conflict or default, or any right of termination
      or cancellation, under the provisions of any note, bond, mortgage, indenture,
      license, agreement or other instrument or obligation to which the Purchaser
      is a
      party or by which the Purchaser is otherwise bound; (ii) violate any order,
      writ, injunction, decree, law, statute, rule or regulation applicable to
      the Purchaser; or (iii) result in the creation or imposition of any
      Lien upon any of the properties or assets of the Purchaser.

     

    (b)  Organization;
      Authority.
      The
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the State of Delaware with full right, corporate power and
      authority to enter into and to consummate the transactions contemplated by
      this
      Agreement and otherwise to carry out its obligations hereunder. The execution,
      delivery and performance by the Purchaser of the transactions contemplated
      by
      the Agreement have been duly authorized by all necessary corporate or similar
      action on the part of the Purchaser. The Agreement has been duly executed by
      the
      Purchaser, and when delivered by the Purchaser in accordance with the terms
      hereof, will constitute the valid and legally binding obligation of the
      Purchaser, enforceable against it in accordance with its terms, except (i)
      as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by
      laws relating to the availability of specific performance, injunctive relief
      or
      other equitable remedies and (iii) insofar as indemnification and
      contribution provisions may be limited by applicable law.

     

    (c)  Investment
      Intent.
      The
      Purchaser is acquiring the Shares as principal for its own account for
      investment purposes only and not with a view to or for distributing or reselling
      the Shares or any part thereof, without prejudice, however, to the Purchaser’s
      right at all times to sell or otherwise dispose of all or any part of the Shares
      in compliance with applicable federal and state securities laws.  Subject
      to the immediately preceding sentence, nothing contained herein shall be deemed
      a representation or warranty by the Purchaser to hold the Shares for any period
      of time.  The Purchaser is acquiring the Shares hereunder in the ordinary
      course of its business. The Purchaser does not have any agreement or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Shares.

     

    
      
        
        

      

      
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    (d)  Experience
      of the Purchaser.
      The
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Shares, and has so evaluated the merits and risks of such investment.
      The
      Purchaser is able to bear the economic risk of an investment in the Shares
      and,
      at the present time, is able to afford a complete loss of such
      investment.

     

    (e)  General
      Solicitation.
      The
      Purchaser is not purchasing the Shares as a result of any advertisement,
      article, notice or other communication regarding the Shares published in any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    (f)  Accredited
      Investor.
      The
Purchaser
      is an "accredited investor" as defined in Rule 501 of Regulation D promulgated
      under the Securities Act. 

     

    ARTICLE
      III 

     

    COVENANTS

     

    Section
      3.1  Company
      Covenants.
      The
      Company covenants with the Purchaser as follows, which covenants are for the
      benefit of the Purchaser and its permitted assignees:

     

    (a)  Securities
      Compliance.
      The
      Company shall notify the Commission in accordance with its rules and
      regulations, of the transactions contemplated by this Agreement, including
      filing a Form D with respect to the Preferred Shares and Conversion Shares
      as
      required under Regulation D, and shall take all other necessary action and
      proceedings as may be required and permitted by applicable law, rule and
      regulation, for the legal and valid issuance of the Preferred Shares and the
      Conversion Shares to the Purchaser or subsequent holders.

     

    (b)  Inspection
      Rights.
      The
      Company shall permit, during normal business hours and upon reasonable request
      and reasonable notice, the Purchaser or any employees, agents or representatives
      thereof, so long as the Purchaser shall be obligated hereunder to purchase
      the
      Preferred Shares or shall beneficially own any Preferred Shares, or shall own
      Conversion Shares which, in the aggregate, represent more than 20% of the total
      combined voting power of all voting securities then outstanding, for purposes
      reasonably related to the Purchaser’s interests as a stockholder, to examine and
      make reasonable copies of and extracts from the records and books of account
      of,
      and visit and inspect the properties, assets, operations and business of the
      Company and any subsidiary, and to discuss the affairs, finances and accounts
      of
      the Company and any subsidiary with any of its officers, consultants, directors,
      and key employees. Any such examination, inspection, copying or interviews
      shall
      be at the sole cost of the Purchaser. 

     

    
      
        
        

      

      
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    (c)  Compliance
      with Laws.
      The
      Company shall comply, and cause each subsidiary to comply, with all applicable
      laws, rules, regulations and orders, noncompliance with which could have a
      Material Adverse Effect.

     

    (d)  Keeping
      of Records and Books of Account.
      The
      Company shall keep and cause each subsidiary to keep adequate records and books
      of account, in which complete entries will be made in accordance with GAAP
      consistently applied, reflecting all financial transactions of the Company
      and
      its subsidiaries, and in which, for each fiscal year, all proper reserves for
      depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
      purposes in connection with its business shall be made.

     

    (e)  Amendments.
      So long
      as the Preferred Shares remain outstanding or the Company has the right to
      require the Purchaser to purchase Preferred Shares pursuant to the Agreement,
      the Company shall not amend or waive any provision of the Certificates of
      Incorporation or Bylaws in any way that would adversely affect the liquidation
      preferences, dividends rights, conversion rights, voting rights or redemption
      rights of the Preferred Shares; provided, however, that any creation and
      issuance of another series of Junior Stock (as defined in the Certificate of
      Designation) shall not be deemed to materially and adversely affect such rights,
      preferences or privileges.

     

    (f)  Other
      Agreements.
      The
      Company shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability to perform of the Company or
      any
      subsidiary.

     

    (g)  Distributions.
      So long
      as any Preferred Shares remain outstanding, the Company agrees that it shall
      not
      (i) declare or pay any dividends or make any distributions to any holder(s)
      of
      Common Stock or (ii) purchase or otherwise acquire for value, directly or
      indirectly, any Common Stock or other equity security of the Company, except
      with the unanimous approval of its Board in connection with the exercise of
      a
      right of first refusal pursuant to the Stockholders’ Agreement.

     

    (h)  Use
      of
      Proceeds.
      The
      proceeds from the sale of the Preferred Shares will be used by the Company
      for
      general corporate purposes as determined by the Board of Directors of the
      Company, including, without limitation, acquisitions.

     

    (i)  Reservation
      of Shares.
      So long
      as any of the Preferred Shares remain outstanding, the Company shall take all
      action necessary to at all times have authorized, and reserved for the purpose
      of issuance, no less than the aggregate number of shares of Common Stock needed
      to provide for the issuance of the Conversion Shares.

     

    (j)  Disposition
      of Assets.
      So long
      as the Preferred Shares remain outstanding, neither the Company nor any of
      its
      subsidiaries shall sell, transfer or otherwise dispose of any of its properties,
      assets and rights including, without limitation, its software and to any person
      except for sales in the ordinary course of business or with the prior written
      consent of the holders of a majority of the Preferred Shares then
      outstanding.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (k)  Board
      of Directors.
      Until
      such time as the Company’s securityholders (other than the Purchaser or any
      transferee of the Purchaser) are holders of a majority of the outstanding shares
      of Common Stock (on an as converted basis and excluding any unreleased Earn
      Out
      Shares or unvested Restricted Shares (as defined in the Merger Agreement (as
      defined below)), a majority of the holders of the Preferred Shares shall have
      the right to appoint a majority of the directors to the Board; provided, however
      that the initial designees of the Purchaser to the Board shall be C. Thomas
      McMillen and William LaPointe. Notwithstanding the above, the Purchaser (or
      its
      assignees) shall not replace William LaPointe (or his successor) as its designee
      to the Board without the consent of the holders of a majority of the Common
      Stock so long as the Company achieves eighty percent (80%) of Revenue (as
      defined in the Merger Agreement) and eighty percent (80%) of EBITDA (as defined
      in the Merger Agreement) set forth in the Forecast (as defined in the Merger
      Agreement) during each fiscal year of the Company. 

     

    Section
      3.2  Purchaser
      Covenants.

     

    (a)  The
      Purchaser covenants with the Company that prior to making any disclosures
      relating to the Company in its SEC filings, the Purchaser will use its
      reasonable best efforts to provide to the Company’s Chief Executive Officer and
      counsel of his choice at a time permitting, for their reasonable review and
      comment, a copy of such proposed disclosures, and to seek confidential treatment
      from the SEC for any proprietary information proposed to be included therein
      including, but not limited to, the terms and names of the parties set forth
      in
      any document filed as a “Material Contract”. 

     

    (b)  In
      the
      event the employment of C. Thomas McMillen with the Company is terminated (a
      “Termination”) for any reason other than death or Disability (as defined in that
      certain Employment Agreement dated August 19, 2005, executed by and between
      the
      Purchaser and C. Thomas McMillen), at the option of the holders of a majority
      of
      the outstanding shares of Common Stock (other than Homeland and holders of
      the
      Earn Out Shares and the Restricted Shares), the Purchaser shall sell its
      Preferred Stock (or Common Stock to which Preferred Stock has been converted)
      to
      the holders of the Common Stock at a purchase price equal to the greater of:
      (i)
      300% of the price the Purchaser paid by the Purchaser for such Preferred Shares;
      and (ii) the per share Equity Value of the Company as determined through a
      Valuation (as defined in the Merger Agreement) at the expense of the Purchaser.
      In the event of a Termination, the holders of the Common Stock (other than
      Homeland) shall have thirty (30) days from the date of the Termination (the
      “Exercise Period”) to provide notice to the Purchaser of their election to
      purchase their pro-rata portion of the Preferred Stock (or Common Stock to
      which
      Preferred Stock has been converted) held by the Purchaser. In the event the
      holders of Common Stock elect to purchase such stock, the closing shall take
      place at the offices of the Purchaser on or before 90 days from the expiration
      of the Exercise Period. The purchase price for such stock shall be payable
      as
      follows: (i) 33% in cash on the closing date, and (ii) the balance of the
      purchase price shall be in the form of a promissory note payable within one
      year
      from the date of such closing. 

     

    (c)  The
      Purchaser agrees to bear the costs incurred by the Company as a result of SEC
      compliance activities requested by the Purchaser that would not otherwise be
      required in the ordinary course of the Company’s business.

     

    
      
        
        

      

      
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    Section
      3.3  Non-Competition;
      Non-Solicitation.

     

    (a)  Non-Competition.
      Following
      the date of the execution hereof and for a period of eighteen (18) months
      thereafter (the “Restricted
      Period”),
      the
      Purchaser shall not:

     

    (i)  directly
      or indirectly, own, manage, operate, join, control or participate in the
      ownership, management, operation or control of, or be employed or retained
      by,
      render services to, provide financing (equity or debt) or advice to, or
      otherwise be connected in any manner with any business that engages in the
      supply and manufacture of RFID tags (the “Business”)
      anywhere in North America; provided, however, that nothing contained herein
      shall prevent the purchase or ownership by the Purchaser of less than 5% of
      the
      outstanding equity securities of any class of securities of a company registered
      under Section 12 of the Exchange Act; or

     

    (ii)  for
      any
      reason, (i) induce any customer or supplier of the Business of the Company
      or
      any of its Affiliates to patronize or do business with any business directly
      or
      indirectly in competition with the Business in any market in which the Company
      or any of its Affiliates engages in the Business; (ii) canvass, solicit or
      accept from any customer or supplier of the Company or any of its Affiliates
      any
      such competitive business; or (iii) request or advise any customer or vendor
      of
      the Company or any of its Affiliates to withdraw, curtail or cancel any such
      customer’s or vendor’s business related to the Business as conducted by the
      Company or any of its Affiliates; or

     

    (iii)  for
      any
      reason, employ, or knowingly permit any company or business directly or
      indirectly controlled by the Purchaser, to employ, any person who was employed
      by the Company or any of its Affiliates at or within the prior one
      (1)
      year,
      or
      in any
      manner seek to induce any such person to leave his or her
      employment.

     

    (b)  No
      Competing Interests. The
      Purchaser hereby represents and warrants to the Company that
      neither it nor any of its Affiliates, has any material ownership or other
      material interest in any business or activity that competes or can reasonably
      be
      expected to compete, directly or indirectly, with the Business of the Company
      or
      any of its Affiliates. 

     

    (c)  Remedies
      upon Breach. The
      Purchaser acknowledges and agrees that: (i) the Company would be
      irreparably injured in the event of a breach by the Purchaser of any of the
      obligations under this Section 3.3; (ii) monetary damages would not be
      an adequate remedy for such breach; (iii) the Company shall be entitled to
      injunctive relief, without the necessity of the posting of a bond, in addition
      to any other remedy that the Company may have, in the event of any such breach;
      and (iv) the existence of any claims that the Purchaser may have against
      the Company, whether under this Agreement or otherwise, shall not be a defense
      to (or reason for the delay of) the enforcement by the Company of any of its
      rights or remedies under this Agreement.

     

    (d)  Judicial
      Modifications. In
      the
      event that any court finally holds that the time or territory or any other
      provision stated in this Section 3.3 constitutes an unreasonable
      restriction, then the parties hereto hereby expressly agree that the provisions
      of this Agreement shall not be rendered void, but shall apply as to time and
      territory or to such other extent as such court may judicially determine or
      indicate constitutes a reasonable restriction under the circumstances
      involved.

     

    
      
        
        

      

      
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    (e)  Tolling
      of Time Periods.
      In
      the
      event that the Purchaser violates the provisions of this Section 3.3, the
      Restricted Period shall toll during any period of non-compliance, and shall
      not
      continue to elapse until the Purchaser is in full compliance with this Section
      3.3.

     

    (f) Confirmation
      as to Scope.
      The
      parties hereto acknowledge and confirm that: (i) the length of the term of
      the
      restrictions and the geographical restrictions contained in this
      Section 3.3 are fair and reasonable and are not the result of overreaching,
      duress or coercion of any kind; (ii) the full, uninhibited and faithful
      observance of each of the covenants contained in this Section 3.3 shall not
      cause any undue hardship, financial or otherwise; and (iii) the Purchaser’s
      special knowledge of the business of the Company is such as would cause the
      Company serious injury and loss if the Purchaser uses such knowledge to benefit
      a competitor of the Company or to compete with the Company. The parties hereto
      acknowledge and agree that the provisions of this Section 3.3 are essential
      to protect the Company’s legitimate business interest as contemplated under
      Delaware law and are in addition to any rights the Company may have to enforce
      its rights with respect to the trade secrets of the Company pursuant to Delaware
      law. 

     

    (g) Lock-Up;
      Hold Back.
      The
      Purchaser agrees to become subject to any reasonable and customary lock-up
      or
      hold back provision contained in any underwriting agreement executed by the
      Company that would limit the marketability of the Common Stock obtained or
      obtainable through the exercise of the Preferred Stock.

     

    Covenants
      in this Section 3 and contained elsewhere in this Agreement which by their
      terms
      are intended to be performed by or available to any party to this Agreement
      after the Closing Date shall survive the Closing Date. 

     

           
      ARTICLE IV 

     

    CONDITIONS

     

    Section
      4.1  Conditions
      Precedent to the Obligation of the Company to Sell the Preferred
      Shares.
      The
      obligation hereunder of the Company to issue and sell the Preferred Shares
      to
      the Purchaser is subject to the satisfaction or waiver, at or before any of
      the
      Closings, of each of the conditions set forth below. These conditions are for
      the Company’s sole benefit and may be waived by the Company at any time in its
      sole discretion.

     

    (a)  Accuracy
      of the Purchaser’s Representations and Warranties.
      The
      representations and warranties of the Purchaser shall be true and correct in
      all
      material respects as of the date when made and as of the applicable Closing
      Date
      as though made at that time, except for representations and warranties that
      are
      expressly made as of a particular date, which shall be true and correct in
      all
      material respects as of such date. 

     

    (b)  Performance
      by the Purchaser.
      The
      Purchaser shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Purchaser at or prior to a
      Closing.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  Delivery
      of Purchase Price.
      The
      applicable purchase price for the Preferred Shares, including the Note, shall
      have been delivered to the Company on or prior to the applicable Closing
      Date.

     

    Section
      4.2  Conditions
      Precedent to the Obligation of the Purchaser to Purchase the Preferred
      Shares.
      The
      obligation hereunder of the Purchaser to acquire and pay for the Preferred
      Shares is subject to the satisfaction or waiver, at or before any of the
      Closings, of each of the conditions set forth below. These conditions are for
      the Purchaser’s sole benefit and may be waived by the Purchaser at any time in
      its sole discretion.

     

    (a)  Accuracy
      of the Company’s Representations and Warranties.
      Except
      for any breaches of representations and warranties of the Company that would
      not
      in the aggregate result in a Material Adverse Effect on the business,
      operations, or financial condition of the Company, each of the representations
      and warranties of the Company in this Agreement shall be true and correct in
      all
      material respects as of the date when made and as of the applicable Closing
      Date
      as though made at that time (except for representations and warranties that
      are
      expressly made as of a particular date), which shall be true and correct in
      all
      material respects as of such date.

     

    (b)  Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all respects with all
      covenants, agreements and conditions required by this Agreement to be performed,
      satisfied or complied with by the Company at or prior to a Closing.

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any governmental authority
      shall have been commenced, and no investigation by any governmental authority
      shall have been threatened, against the Company or any subsidiary, or any of
      the
      officers, directors or affiliates of the Company or any subsidiary seeking
      to
      restrain, prevent or change the transactions contemplated by this Agreement,
      or
      seeking damages in connection with such transactions.

     

    (e)  Certificate
      of Designation of Rights and Preferences.
      Prior
      to the Closing for the First Tranche, the Certificate of Designation shall
      have
      been executed by the Company and filed with the Secretary of State of
      Delaware.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (f)  Certificates.
      The
      Company shall have executed and delivered to the Purchaser the certificates
      (in
      such denominations as the Purchaser shall request) for the Preferred Shares
      being acquired by the Purchaser at such Closing.

     

    (g)  Reservation
      of Shares.
      As of
      each Closing Date, the Company shall have reserved out of its authorized and
      unissued Common Stock, solely for the purpose of effecting the conversion of
      the
      Preferred Shares, a number of shares of Common Stock equal to one hundred twenty
      percent (120%) of the aggregate number of Conversion Shares issuable upon
      conversion of the Preferred Shares issued on the Closing Date.

     

    (h)  Material
      Adverse Effect.
      No
      Material Adverse Effect shall have occurred with respect to the business,
      assets, liabilities, operations, or financial condition of the Company at or
      before the applicable Closing Date. 

     

    (i)  Effectiveness
      of Company Merger.
      The
      transactions contemplated by that certain Agreement and Plan of Merger, dated
      August __, 2006, executed by and among Security Holding Enterprises, Inc.,
      the
      Company and the sellers listed therein (the “Merger
      Agreement”)
      shall
      have been consummated.

     

    ARTICLE
      V  

     

    STOCK
      CERTIFICATE LEGEND

     

    Section
      5.1  Legend.
      Each
      certificate representing the Shares shall be stamped or otherwise imprinted
      with
      a legend substantially in the following form (in addition to any legend required
      by applicable state securities or “blue sky” laws):

     

    THESE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR SECURITY HOLDING CORP. SHALL HAVE RECEIVED AN OPINION
      OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
      UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED.

     

    ARTICLE
      VI

     

    INDEMNIFICATION 

     

    Section
      6.1  General
      Indemnity.
      The
      Company agrees to indemnify and hold harmless the Purchaser (and its respective
      directors, officers, affiliates, agents, successors and assigns) from and
      against any and all losses, liabilities, deficiencies, costs, damages and
      expenses (including, without limitation, reasonable attorneys’ fees, charges and
      disbursements) incurred by the Purchaser or any such other persons as a result
      of any inaccuracy in or breach of the representations, warranties or covenants
      made by the Company herein. The Purchaser agrees to indemnify and hold harmless
      the Company and its directors, officers, affiliates, agents, successors and
      assigns from and against any and all losses, liabilities, deficiencies, costs,
      damages and expenses (including, without limitation, reasonable attorneys’ fees,
      charges and disbursements) incurred by the Company as result of any inaccuracy
      in or breach of the representations, warranties or covenants made by the
      Purchaser herein. The maximum aggregate liability of either party pursuant
      to
      its indemnification obligations under this Article VI shall not exceed the
      portion of the aggregate purchase price paid by the Purchaser
      hereunder.

     

    
      
        
        

      

      
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    Section
      6.2  Indemnification
      Procedure.
      Any
      party entitled to indemnification under this Article VI (an “Indemnified
      Party”)
      will
      give written notice to the indemnifying party of any matters giving rise to
      a
      claim for indemnification; provided, that the failure of any party entitled
      to
      indemnification hereunder to give notice as provided herein shall not relieve
      the indemnifying party of its obligations under this Article VI except to the
      extent that the indemnifying party is actually prejudiced by such failure to
      give notice. In case any action, proceeding or claim is brought against an
      Indemnified Party in respect of which indemnification is sought hereunder,
      the
      indemnifying party shall be entitled to participate in and, unless in the
      reasonable judgment of the Indemnified Party a conflict of interest between
      it
      and the Indemnifying Party may exist with respect of such action, proceeding
      or
      claim, to assume the defense thereof with counsel reasonably satisfactory to
      the
      Indemnified Party. In the event that the indemnifying party advises an
      Indemnified Party that it will contest such a claim for indemnification
      hereunder, or fails, within thirty (30) days of receipt of any indemnification
      notice to notify, in writing, such person of its election to defend, settle
      or
      compromise, at its sole cost and expense, any action, proceeding or claim (or
      discontinues its defense at any time after it commences such defense), then
      the
      Indemnified Party may, at its option, defend, settle or otherwise compromise
      or
      pay such action or claim. In any event, unless and until the indemnifying party
      elects in writing to assume and does so assume the defense of any such claim,
      proceeding or action, the Indemnified Party’s costs and expenses arising out of
      the defense, settlement or compromise of any such action, claim or proceeding
      shall be losses subject to indemnification hereunder. The Indemnified Party
      shall cooperate fully with the indemnifying party in connection with any
      negotiation or defense of any such action or claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the Indemnified Party which relates to such action or claim. The indemnifying
      party shall keep the Indemnified Party fully apprised at all times as to the
      status of the defense or any settlement negotiations with respect thereto.
      If
      the indemnifying party elects to defend any such action or claim, then the
      Indemnified Party shall be entitled to participate in such defense with counsel
      of its choice at its sole cost and expense. The indemnifying party shall not
      be
      liable for any settlement of any action, claim or proceeding effected without
      its prior written consent. Notwithstanding anything in this Article VI to the
      contrary, the indemnifying party shall not, without the Indemnified Party’s
      prior written consent, settle or compromise any claim or consent to entry of
      any
      judgment in respect thereof which imposes any future obligation on the
      Indemnified Party or which does not include, as an unconditional term thereof,
      the giving by the claimant or the plaintiff to the Indemnified Party of a
      release from all liability in respect of such claim. The indemnification
      required by this Article VI shall be made by periodic payments of the amount
      thereof during the course of investigation or defense, as and when bills are
      received or expense, loss, damage or liability is incurred, so long as the
      Indemnified Party irrevocably agrees to refund such moneys if it is ultimately
      determined by a court of competent jurisdiction that such party was not entitled
      to indemnification. The indemnity agreements contained herein shall be in
      addition to (a) any cause of action or similar rights of the Indemnified Party
      against the indemnifying party or others, and (b) any liabilities the
      indemnifying party may be subject to pursuant to the law. The indemnification
      procedures set forth in this Section 6.2 shall govern all indemnification
      matters arising pursuant to Section 7.5.

     

    
      
        
        

      

      
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    ARTICLE
      VII

     

    REGISTRATION
      RIGHTS

     

    Section
      7.1  Registration
      Rights.
      The
      Company hereby grants the following registration rights to holders of the
      Preferred Shares.

     

    (a)
      On
      one occasion subsequent to the date the Company has completed an offering of
      securities pursuant to a registration statement declared effective under the
      Securities Act by the SEC, upon a written request therefor from holders of
      more
      than 50% of the Conversion Shares issued or issuable upon conversion of the
      outstanding Preferred Shares, the Company shall use reasonable best efforts
      to
      prepare and file with the Commission a registration statement under the
      Securities Act (on Form SB-2 registration statement or such other form that
      it
      is eligible to use) registering the Registrable Securities which are the
      subject of such request for unrestricted public resale by the holder thereof.
      Upon the receipt of such request, the Company shall promptly give written notice
      to all other record holders of the Registrable Securities that such registration
      statement is to be filed and shall include in such registration statement
      Registrable Securities for which it has received written requests within ten
      (10) days after the Company gives such written notice. The Company will
      register not less than a number of shares of Common Stock in the aforedescribed
      registration statement that is equal to 120% (or if such percentage is not
      permitted under the Securities Act, the maximum amount permitted under the
      Securities Act) of the Conversion Shares (collectively the “Registrable
      Securities”)
      for
      which registration is requested pursuant to this Section 7. In addition, the
      Company may defer a registration under this Section 7.1 (a) for up to six (6)
      months if (i) the Board determines it would not be in the best interests of
      the
      Company to register such Common Stock at this time or (ii) the Company is
      advised by its counsel that undertaking the registration under this Section
      7.1(a) would accelerate the disclosure of a material development involving
      the
      Company.

     

    (b)
      If the
      Company at any time proposes to register any of its securities under the
      Securities Act for sale to the public, whether for its own account or for the
      account of other security holders or both, except with respect to registration
      statements on Forms S-4, S-8 or another form not available for registering
      the
      Registrable Securities for sale to the public, provided the Registrable
      Securities are not otherwise registered for resale by the Purchaser pursuant
      to
      an effective registration statement, each such time it will give at least
      fifteen (15) days’ prior written notice to the record holder of the
      Registrable Securities of its intention so to do. Upon the written request
      of
      the holder, received by the Company within ten (10) days after the giving
      of any such notice by the Company, to register any of the Registrable Securities
      not previously registered, the Company will use its reasonable best efforts
      to
      cause such Registrable Securities as to which registration shall have been
      so
      requested to be included with the securities to be covered by the registration
      statement proposed to be filed by the Company, all to the extent required to
      permit the sale or other disposition of the Registrable Securities so registered
      by the holder of such Registrable Securities (the “Seller”
or
      “Sellers”).
      In
      the event that any registration pursuant to this Section 7.1(b) shall be,
      in whole or in part, an underwritten public offering of common stock of the
      Company, the number of shares of Registrable Securities to be included in such
      an underwriting may be reduced by the managing underwriter if and to the extent
      that the Company and the underwriter shall reasonably be of the opinion that
      such inclusion would adversely affect the marketing of the securities to be
      sold
      by the Company therein; provided, however, that the Company shall notify the
      Seller in writing of any such reduction. Notwithstanding the foregoing
      provisions, or Section 7.4 hereof, the Company may withdraw or delay or suffer
      a
      delay of any registration statement referred to in this Section
      7.1(b) without thereby incurring any liability to the Seller. The rights to
      effect a piggyback registration pursuant to this Section 7.1(b) shall only
      be
      exercisable on one occasion by the holders of Registrable Securities and the
      exercise of such rights by any one holder shall extinguish the rights of that
      holder and any other holder of Registrable Securities from exercising any rights
      under this Section 7.1(b).

     

    
      
        
        

      

      
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    (c)
      If, at
      the time any written request for registration is received by the Company
      pursuant to Section 7.1(a), the Company has determined to proceed with the
      actual preparation and filing of a registration statement under the Securities
      Act in connection with the proposed offer and sale for cash of any of its
      securities for the Company’s own account and the Company actually does file such
      other registration statement, such written request shall be deemed to have
      been
      given pursuant to Section 7.1(b) rather than Section 7.1(a), and the rights
      of the holders of Registrable Securities covered by such written request shall
      be governed by Section 7.1(b).

     

    Section
      7.2  Registration
      Procedures.
      If and
      whenever the Company is required by the provisions of Section 7.1(a) to effect
      the registration of any Registrable Securities under the Securities Act, the
      Company will, as expeditiously as possible: 

     

    (a)
      subject to the timelines provided in this Agreement, prepare and file with
      the
      Commission a registration statement required by Section 7, with respect to
      such
      Registrable Securities and use its reasonable best efforts to cause such
      registration statement to become and remain effective for the period of the
      distribution contemplated thereby (determined as herein provided, and subject
      to
      the matters for which the Board of Directors could delay the filing of such
      registration statement pursuant to the last sentence of Section 7.1(a)),
      promptly provide to the holders of the Registrable Securities copies of all
      filings and Commission letters of comment and notify the Purchaser (by
      telecopier and by e-mail addresses provided by the Purchaser)  on or before
      6:00 PM EST on the same business day that the Company receives notice that
      (i) the Commission has no comments or no further comments on the
      Registration Statement, and (ii) the registration statement has been
      declared effective;

     

    (b)
      prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective until such registration
      statement has been effective for a period of nine (9) months, and comply
      with the provisions of the Securities Act with respect to the disposition of
      all
      of the Registrable Securities covered by such registration statement in
      accordance with the Sellers’ intended method of disposition set forth in such
      registration statement for such period; 

     

    
      
        
        

      

      
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    (c)
      furnish
      to the Sellers, at the Company’s expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or their disposition of the securities covered by
      such registration statement or make them electronically available;

     

    (d)
      use its
      commercially reasonable best efforts to register or qualify the Registrable
      Securities covered by such registration statement under the securities or “blue
      sky” laws of New York and such jurisdictions as the Sellers shall request in
      writing, provided, however, that the Company shall not for any such purpose
      be
      required to qualify generally to transact business as a foreign corporation
      in
      any jurisdiction where it is not so qualified or to consent to general service
      of process in any such jurisdiction;

     

    (e)
      if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock is then
      listed;

     

    (f)
      notify
      the Seller within one (1) business day of the Company’s becoming aware that a
      prospectus relating thereto that is required to be delivered under the
      Securities Act, of the happening of any event of which the Company has knowledge
      as a result of which the prospectus contained in such registration statement,
      as
      then in effect, includes an untrue statement of a material fact or omits to
      state a material fact required to be stated therein or necessary to make the
      statements therein not misleading in light of the circumstances then existing
      or
      which becomes subject to a Commission, state or other governmental order
      suspending the effectiveness of the registration statement covering any of
      the
      Shares; and

     

    (g)
      provided
      same would not be in violation of the provision of Regulation FD under the
      Exchange Act, make available for inspection by the Sellers, and any attorney,
      accountant or other agent retained by the Seller or underwriter, all publicly
      available, non-confidential financial and other records, pertinent corporate
      documents and properties of the Company, and cause the Company’s officers,
      directors and employees to supply all publicly available, non-confidential
      information reasonably requested by the Seller, attorney, accountant or agent
      in
      connection with such registration statement.

     

    (h)
      In
      order to have their shares included in any Registration Statement pursuant
      to
      this Section 7, each Seller must agree to the terms of any underwriting
      agreement executed by the Company in connection therewith, including but not
      limited to the terms of any lock-ups, holdbacks and prohibitions on the use
      of
      any free writing prospectuses.

     

    Section
      7.3  Provision
      of Documents.
      In
      connection with each registration described in this Section 7, each Seller
      will
      furnish to the Company in writing such information and representation letters
      with respect to itself and the proposed distribution by it as reasonably shall
      be necessary in order to assure compliance with federal and applicable state
      securities laws.

     

    Section
      7.4  Expenses.
      All
      expenses incurred by the Company in complying with Section 7, including, without
      limitation, all registration and filing fees, printing expenses (if required),
      fees and disbursements of counsel and independent public accountants for the
      Company, fees and expenses (including reasonable counsel fees) incurred in
      connection with complying with state securities or “blue sky” laws, fees of the
      National Association of Securities Dealers, Inc., transfer taxes, and fees
      of
      transfer agents and registrars, are called “Registration
      Expenses.”
All
      underwriting discounts and selling commissions applicable to the sale of
      Registrable Securities are called “Selling
      Expenses.”
All
      Registration Expenses arising in connection with a registration pursuant to
      Section 7(a) will be paid by the Purchaser. In the event of a registration
      pursuant to this Section 7(b), the Company will pay all Registration Expenses
      in
      connection with such registration statement. In either case, each Seller shall
      be responsible for the Selling Expenses related to the Registrable Securities
      it
      owns.

     

    
      
        
        

      

      
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    Section
      7.5  Indemnification
      and Contribution.

     

    (a)
      In
      the event of a registration of any Registrable Securities under the Securities
      Act pursuant to Section 7, the Company will, to the extent permitted by law,
      indemnify and hold harmless the Seller, each officer of the Seller, each
      director of the Seller, each underwriter of such Registrable Securities
      thereunder and each other person, if any, who controls such Seller or
      underwriter within the meaning of the Securities Act, against any losses,
      claims, damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the Securities Act
      or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or
      alleged untrue statement of any material fact contained in any registration
      statement under which such Registrable Securities was registered under the
      Securities Act pursuant to Section 7, any preliminary prospectus or final
      prospectus contained therein, or any amendment or supplement thereof, or arise
      out of or are based upon the omission or alleged omission to state therein
      a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances when made, and will subject
      to the provisions of Section 7.6(c) reimburse the Seller, each such
      underwriter and each such controlling person for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability or action; provided, however, that the
      Company shall not be liable to any Seller to the extent that any such damages
      arise out of or are based upon an untrue statement or omission (A) made in
      any
      preliminary prospectus if (i) the Seller failed to send or deliver a copy
      of the final prospectus delivered by the Company to the Seller with or prior
      to
      the delivery of written confirmation of the sale by the Seller to the person
      asserting the claim from which such damages arise and (ii) the final
      prospectus would have corrected such untrue statement or alleged untrue
      statement or such omission or alleged omission, or (B) to the extent that
      any such loss, claim, damage or liability arises out of or is based upon an
      untrue statement or alleged untrue statement or omission or alleged omission
      so
      made in conformity with information furnished by any such Seller, or any such
      controlling person in writing specifically for use in such registration
      statement or prospectus.

     

    (b)
      In the
      event of a registration of any of the Registrable Securities under the
      Securities Act pursuant to Section 7, the Seller will, to the extent permitted
      by law, indemnify and hold harmless the Company, and each person, if any, who
      controls the Company within the meaning of the Securities Act, each officer
      of
      the Company who signs the registration statement, each director of the Company,
      each underwriter and each person who controls any underwriter within the meaning
      of the Securities Act, against all losses, claims, damages or liabilities,
      joint
      or several, to which the Company or such officer, director, underwriter or
      controlling person may become subject under the Securities Act or otherwise,
      insofar as such losses, claims, damages or liabilities (or actions in respect
      thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in the registration statement
      under which such Registrable Securities were registered under the Securities
      Act
      pursuant to Section 7, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading,
      and will reimburse the Company and each such officer, director, underwriter
      and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, provided, however, that the Seller will be liable hereunder
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon an untrue statement or alleged untrue
      statement or omission or alleged omission made in reliance upon and in
      conformity with information pertaining to such Seller, as such, furnished in
      writing to the Company by such Seller specifically for use in such registration
      statement or prospectus, and provided, further, however, that the liability
      of
      the Seller hereunder shall be limited to the net proceeds actually received
      by
      the Seller from the sale of Registrable Securities covered by such registration
      statement.

     

    
      
        
        

      

      
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    (c)
      In order
      to provide for just and equitable contribution in the event of joint liability
      under the Securities Act in any case in which either (i) a Seller, or any
      controlling person of a Seller, makes a claim for indemnification pursuant
      to
      this Section 7.5 but it is judicially determined (by the entry of a final
      judgment or decree by a court of competent jurisdiction and the expiration
      of
      time to appeal or the denial of the last right of appeal) that such
      indemnification may not be enforced in such case notwithstanding the fact that
      this Section 7.5 provides for indemnification in such case, or
      (ii) contribution under the Securities Act may be required on the part of
      the Seller or controlling person of the Seller in circumstances for which
      indemnification is not provided under this Section 7.5; then, and in each such
      case, the Company and the Seller will contribute to the aggregate losses,
      claims, damages or liabilities to which they may be subject (after contribution
      from others) in such proportion so that the Seller is responsible only for
      the portion represented by the percentage that the public offering price of
      its
      securities offered by the registration statement bears to the public offering
      price of all securities offered by such registration statement, provided,
      however, that, in any such case, (y) the Seller will not be required to
      contribute any amount in excess of the public offering price of all such
      securities sold by it pursuant to such registration statement; and (z) no
      person or entity guilty of fraudulent misrepresentation (within the meaning
      of
      Section 11(f) of the Securities Act) will be entitled to
      contribution from any person or entity who was not guilty of such fraudulent
      misrepresentation.

    

    Section
      7.6  Effect
      of Registration.
      For
      purposes of determining the value of the Company in connection with the vesting
      of Restricted Shares or the release of Earn Out Shares, the fair market value
      of
      the Company shall be deemed to be equal upon the closing of the sale of the
      registered offering, to the product of (i) the volume weighted average per
      share
      price of the Common Stock (as quoted by Bloomberg, L.P.) for the first five
      Trading Days for Common Stock and (ii) the number of shares of Common Stock
      issued and outstanding as of the fifth Trading Day after such closing, on a
      fully diluted basis (which shall not include any unvested Restricted Shares,
      unreleased Earn Out Shares or unvested convertible securities), and after such
      date shall be valued in the same manner except the price per share on any day
      shall equal the volume weighted average price per share of the Common Stock
      for
      the previous five Trading Days. A Valuation of the Company shall be deemed
      to
      occur on the close of business on the fifth Trading Day after the closing of
      the
      sale of the registered offering and on an ongoing basis thereafter (each a
      “Valuation Time”). Any shares of Common Stock that would be eligible to vest at
      the Valuation Time shall immediately vest and shall vest accordingly on an
      ongoing basis thereafter. “Trading Day” shall mean any day during which the
      principal exchange or quotation system on which the Common Stock is traded
      or
      quoted shall be open for business.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

     

    MISCELLANEOUS

     

    Section
      8.1  Fees
      and Expenses.
      Except
      as otherwise set forth in Section 7.4, the Company shall pay (i) its fees and
      expenses, (ii) the reasonable fees and expenses of the Purchaser, and its
      respective advisors, counsel, accountants and other experts, if any, incurred
      by
      such parties, incident to the negotiation, preparation, execution, delivery
      and
      performance of this Agreement; provided, however, that such fees and expenses
      payable pursuant to subsections (i) and (ii) above shall not exceed $50,000.
      In
      addition, the Company shall pay all reasonable fees and expenses incurred by
      the
      Purchaser in connection with the enforcement of this Agreement, including,
      without limitation, all attorneys’ fees and expenses, if any, and to the extent
      the Purchaser is successful in such action. The Company shall pay all stamp
      or
      other similar taxes and duties levied in connection with issuance of the Shares
      pursuant hereto.

     

    Section
      8.2  Specific
      Enforcement, Consent to Jurisdiction.

     

    The
      Company and the Purchaser acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement or the
      Certificate of Designation were not performed in accordance with their specific
      terms or were otherwise breached. It is accordingly agreed that the parties
      shall be entitled to an injunction or injunctions to prevent or cure breaches
      of
      the provisions of this Agreement and to enforce specifically the terms and
      provisions hereof or thereof, this being in addition to any other remedy to
      which any of them may be entitled by law or equity.

     

    Each
      of
      the Company and the Purchaser (i) hereby irrevocably submits to the jurisdiction
      of the United States District Court sitting in Delaware and the courts of the
      State of Delaware located in Kent County for the purposes of any suit, action
      or
      proceeding arising out of or relating to this Agreement or the transactions
      contemplated hereby or thereby and (ii) hereby waives, and agrees not to assert
      in any such suit, action or proceeding, any claim that it is not personally
      subject to the jurisdiction of such court, that the suit, action or proceeding
      is brought in an inconvenient forum or that the venue of the suit, action or
      proceeding is improper. Each of the Company and the Purchaser consents to
      process being served in any such suit, action or proceeding by mailing a copy
      thereof to such party at the address in effect for notices to it under this
      Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing in this Section 8.2 shall affect
      or limit any right to serve process in any other manner permitted by
      law.

     

    
      
        
        

      

      
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    Section
      8.3  Entire
      Agreement; Amendment.
      This
      Agreement, the Note and the Certificate of Designation contain the entire
      understanding and agreement of the parties with respect to the matters covered
      hereby and, except as specifically set forth herein or in the Certificate of
      Designation, neither the Company nor the Purchaser makes any representations,
      warranty, covenant or undertaking with respect to such matters and they
      supersede all prior understandings and agreements with respect to said subject
      matter, all of which are merged herein. No provision of this Agreement may
      be
      waived or amended other than by a written instrument signed by the Company,
      holders (excluding the Purchaser) of at least a majority of the Common Stock
      and
      the holders of a majority of the Preferred Shares, and no provision hereof
      may
      be waived other than by an a written instrument signed by the party against
      whom
      enforcement of any such amendment or waiver is sought. No such amendment shall
      be effective to the extent that it applies to less than all of the holders
      of
      the Preferred Shares then outstanding.

     

    Section
      8.4  Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, telecopy or facsimile at the address or number designated below (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business day during normal business hours where such notice
      is
      to be received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or upon
      actual receipt of such mailing, whichever shall first occur. The addresses
      for
      such communications shall be:

     

    
      	
              If
                to the Company:

            	
               

            	
              Security
                Holding Corp.

            
	
               

            	
               

            	
              10125
                South 52nd
                Street

            
	
               

            	
               

            	
              Franklin,
                WI 53132

            
	
               

            	
               

            	
              Attn:
                Chief Executive Officer

            
	
               

            	
               

            	
              Telephone:
                414-858-9413

            
	
               

            	
               

            	
              Facsimile:
                414-858-9443

            
	
               

            	
               

            	
               

            
	
              With
                a copy to: 

            	
               

            	
              Quarles
                & Brady, LLP

            
	
               

            	
               

            	
              411
                E. Wisconsin

            
	
               

            	
               

            	
              Milwaukee,
                WI 53202

            
	
               

            	
               

            	
              Attn:
                Douglas Tucker, Esq.

            
	
               

            	
               

            	
              Telephone:
                414-277-5161

            
	
               

            	
               

            	
              Facsimile:
                414-978-8744

            

    

    

    
      	
              If
                to the Purchaser:

            	
               

            	
              Homeland
                Security Capital Corporation

            
	
               

            	
               

            	
              4100
                Fairfax Drive, Suite 1150

            
	
               

            	
               

            	
              Arlington,
                Virginia 22203

            
	
               

            	
               

            	
              Attn:
                C. Thomas McMillen

            
	
               

            	
               

            	
              Telephone:
                (703) 528-7073

            
	
               

            	
               

            	
              Facsimile:
                (703) 528-0956

            
	
               

            	
               

            	
               

            
	
              With
                a Copy to: 

            	
               

            	
              Kirkpatrick
                & Lockhart Nicholson Graham, LLP

            
	
               

            	
               

            	
              201
                S. Biscayne Blvd., Suite 2000

            
	
               

            	
               

            	
              Miami,
                Florida 33131

            
	
               

            	
               

            	
              Attn:
                Clayton E. Parker, Esq.

            
	
               

            	
               

            	
              Telephone:
                (305) 539-3306

            
	
               

            	
               

            	
              Facsimile:
                (305) 358-7095

            

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Any
      party
      hereto may from time to time change its address for notices by giving at least
      ten (10) days written notice of such changed address to the other party
      hereto.

     

    Section
      8.5  Waivers.
      No
      waiver by either party of any default with respect to any provision, condition
      or requirement of this Agreement shall be deemed to be a continuing waiver
      in
      the future or a waiver of any other provisions, condition or requirement hereof,
      nor shall any delay or omission of any party to exercise any right hereunder
      in
      any manner impair the exercise of any such right accruing to it
      thereafter.

     

    Section
      8.6  Headings.
      The
      article, section and subsection headings in this Agreement are for convenience
      only and shall not constitute a part of this Agreement for any other purpose
      and
      shall not be deemed to limit or affect any of the provisions
      hereof.

     

    Section
      8.7  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. Any assignee of this Agreement shall be bound
      by
      the terms of this Agreement including, without limitation, Section 3.2
      herein.

     

    Section
      8.8  No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    Section
      8.9  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of Delaware, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. This Agreement shall not be interpreted or construed
      with
      any presumption against the party causing this Agreement to be
      drafted.

     

    Section
      8.10  Waiver
      of Jury Trial.
      Each
      party hereto hereby waives to the fullest extent permitted by applicable law,
      any right it may have to a trial by jury in respect of any litigation directly
      or indirectly arising out of, under, or in connection with, this Agreement.
      Each
      party hereto (A) certifies that no representative, agent or attorney of any
      other party has represented expressly or otherwise, that such other party would
      not, in the event of litigation, seek to enforce the foregoing waiver and (B)
      acknowledges that it and the other parties hereto have been induced to enter
      into this Agreement, by among other things, the mutual waivers and
      certifications in this Section 8.10.

     

    Section
      8.11  Survival.
      The
      representations and warranties of the Company contained in Sections 2.1(a),
      (p)
      and (q) should survive indefinitely and those contained in Article II, with
      the
      exception of Sections 2.1(a), (p), (q) and (v), shall survive the execution
      and
      delivery hereof and the Closing until the date eighteen (18) months from the
      Closing Date, and the agreements and covenants set forth in Articles I, III,
      VI,
      VII and VIII of this Agreement shall survive the execution and delivery hereof
      and the Closing hereunder; provided, that Sections 3.1, (a), (b), (d), (e),
      (g),
      (h), (i), (j) and (k) shall not expire until the registration statement filed
      pursuant to Section 7 is no longer required to be effective under the terms
      and
      conditions of this Agreement.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Section
      8.12  Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one and the same instrument and shall become effective
      when counterparts have been signed by each party and delivered to the other
      parties hereto, it being understood that all parties need not sign the same
      counterpart. In the event any signature is delivered by facsimile transmission,
      the party using such means of delivery shall cause four additional executed
      signature pages to be physically delivered to the other parties within five
      days
      of the execution and delivery hereof.

     

    Section
      8.13  Severability.
      The
      provisions of this Agreement and the Certificate of Designation are severable
      and, in the event that any court of competent jurisdiction shall determine
      that
      any one or more of the provisions or part of the provisions contained in this
      Agreement or the Certificate of Designation shall, for any reason, be held
      to be
      invalid, illegal or unenforceable in any respect, such invalidity, illegality
      or
      unenforceability shall not affect any other provision or part of a provision
      of
      this Agreement or the Certificate of Designation shall be reformed and construed
      as if such invalid or illegal or unenforceable provision, or part of such
      provision, had never been contained herein, so that such provisions would be
      valid, legal and enforceable to the maximum extent possible.

     

    Section
      8.14  Further
      Assurances.
      From
      and after the date of this Agreement, upon the request of the Purchaser or
      the
      Company, each of the Company and the Purchaser shall execute and deliver such
      instrument, documents and other writings as may be reasonably necessary or
      desirable to confirm and carry out and to effectuate fully the intent and
      purposes of this Agreement, the Preferred Shares, the Conversion Shares and
      the
      Certificate of Designation.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officer as of the date first above
      written.

     

    
      	 	 	 
	 	
              SECURITY
                HOLDING CORP.

            
	 
 	 
 	 
 
	 	By:  	/s/
              C. Thomas McMillen
	 	
              Name: 
                

            	C.
              Thomas McMillen
	 	
              Title:

            	President
	 	 	 

    

    
       

      
        	 	 	 
	 	
                
                  HOMELAND
                    SECURITY CAPITAL CORPORATION

                

              
	 
 	 
 	 
 
	 	By:  	/s/
                C. Thomas McMillen
	 	
                Name: 
                  

              	C.
                Thomas McMillen
	 	
                Title:

              	Chief
                Executive Officer
	 	 	 
	 	
              
	 	 

      

       

    

    
      
        
        

      

      
        32

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