AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) is dated March 1, 2007, by and among SFG Financial Corporation, a Delaware corporation ("SFG"), COESfx Acquisition Corp., a New York , corporation and wholly-owned subsidiary of SFG ("Merger Subsidiary"), and COESfx Holdings, Inc., a New York corporation ("COESfx").

The Boards of Directors for COESfx, SFG and Merger Subsidiary, have approved the merger of the Merger Subsidiary with and into COESfx (the "Merger") upon the terms and subject to the conditions set forth herein.

As a result of the Merger, COESfx will be a wholly-owned subsidiary of SFG, and the shareholders of COESfx will, in the aggregate, own approximately 97% of the outstanding shares of SFG common stock immediately following the Effective Time of the Merger (subject to adjustment in accordance with the terms of this Agreement).

For federal income tax purposes, it is intended that the Merger will qualify as a reorganization within the meaning of Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code").

The parties desire to make certain representations, warranties, and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

Certain terms used in this Agreement are defined and attached in Exhibit "A."

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1.1 The Merger. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.2), the Merger Subsidiary will be merged with and into COESfx in accordance with the provisions of the Business Corporation Law of the State of New York (the "BCL"), whereupon the separate corporate existence of the Merger Subsidiary will cease, and COESfx will continue as the surviving corporation (the "Surviving Corporation"). From and after the Effective Time, the Surviving Corporation will possess all the rights, privileges, powers, and franchises and be subject to all the restrictions, disabilities, and duties of COESfx and Merger Subsidiary, all as more fully described in the BCL.

1.2 Effective Time. As soon as practicable after each of the conditions set forth in Sections 6.1 and 6.2 have been satisfied or waived, COESfx and Merger Subsidiary will file, or cause to be filed, with the Department of State of the State of New York, Articles of Merger for the Merger, in the form required by, and executed in accordance with, the applicable provisions of the BCL. The Merger will become effective at the time of the filing or, if agreed to by SFG and COESfx, such later time or date set forth in the Articles of Merger (the "Effective Time").

1.3 Conversion of Interests. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger, and without any action of the part of COESfx and/or the Merger Subsidiary:

(a) All of the (i) shares of COESfx Common Stock ("COESfx Common Stock") and (ii) all stock options, warrants, convertible debt, other convertible securities, or other rights to acquire COESfx Common Stock at an exercise or conversion, as applicable, price of less than $0.20 per share of COESfx Common Stock (collectively the “Non-Exempt COESfx Convertible Securities”) issued and outstanding immediately prior to the Effective Time (except for COESfx Common Stock owned by dissenting shareholders of COESfx) will be converted into the right to receive an aggregate of 356,562,688 shares common stock of SFG, par value $0.001 per share ("SFG Shares"). The SFG Shares into which shares of COESfx Common Stock, whether owned presently or receivable after the Closing upon exercise or conversion, as appropriate, of the Non-Exempt COESfx Convertible Securities, are converted as a result of the Merger are referred to herein as the "Merger Consideration". As a result of the Merger, each share of COESfx Common Stock will be converted into the right to receive 8.0808554 SFG Shares. SFG has the authorization to issue only 100,000,000 shares of common stock of which 5,513,856 presently shown as owed and outstanding. Accordingly SFG will be required to amend its Certificate of Corporation as soon as practicable after the Closing, to allow the issuance of all of the Merger Consideration. Accordingly at the Effective Time, COESfx Shareholders shall be issued 94,486,144 SFG shares and the irrevocable right to receive an additional 262,076,544 SFG Shares (“Irrevocable Rights”) immediately upon the filing of the Amended COI

(b) All Non-Exempt COESfx Convertible Securities and stock options, warrants, convertible debt, other convertible securities or other rights to acquire COESfx Common Stock at an exercise or conversion, as applicable, price of no less than $0.20 per share (collectively, the “COES Convertible Securities”) outstanding at the Effective Time, whether or not vested (all of which are listed on Schedule 1.3(b) hereto), shall remain outstanding following the Effective Time but shall be assumed by SFG. Non-Exempt COESfx Convertible Securities and COESfx Convertible Securities shall continue to have, and be subject to, the same terms and conditions as set forth in the documents underlying such Non-Exempt COESfx Convertible Securities and COESfx Convertible Securities. Non-Exempt COESfx Convertible Securities will be convertible into SFG Shares at the rate of 8.0808554 SFG Shares for each share of COESfx Common Stock to which they would otherwise be entitled, which shares shall be issued from a reserve set aside for such purpose from the Merger Consideration, as described in Schedule 1.3(b). COESfx Convertible Securities will be exercisable or convertible, as appropriate, as set forth in the underlying documents and shall be an obligation of SFG without regard to the reserve set aside from the Merger Consideration.

(c) At the Effective time, irrevocable rights to receive 5,513,856 SFG Shares shall be issued to Concord Management Associates LLC or its designee(s) (“Concord”) as consideration for its contributions in conjunction with the Merger. These shares will be issued to Concord upon the filing of the Amended COI and will be subject to the Reverse Split.

(d) At the Effective Time, one hundred (100) shares of COESfx Common Stock shall be issued to SFG to result in SFG owing 100% of the issued and outstanding shares of COESfx.

(e) Each share of Merger Subsidiary common stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time, will be canceled as of the Effective Time.

1.4 Exchange of COESfx Stock.

(a) At the Closing, COESfx will arrange for each holder of record ("COESfx Shareholder") of COESfx Common Stock outstanding immediately prior to the Effective Time to deliver to SFG appropriate evidence of such COESfx Shareholder's shares ("COESfx Certificates"), together with an appropriate assignment signed by the COESfx Shareholder, in exchange for the number of whole SFG Shares into which such COESfx Shares have been converted and the Irrevocable Rights as provided in Section 1.3(a), and the surrendered COESfx Certificate(s) will be canceled.

(b) All SFG Shares issued upon the surrender and exchange of shares of COESfx Common Stock in accordance with the terms of this Agreement will be deemed to have been issued in full satisfaction of all rights pertaining to such COESfx Common Stock.

(c) As of the Effective Time, the holders of shares of COESfx Common Stock will cease to have any rights as shareholders of COESfx, except for those rights, if any, that they may have pursuant to the BCL. Except as provided in Section 1.8 of this Agreement, until such COESfx Certificates are surrendered for exchange, each COESfxCertificate will, after the Effective Time, represent for all purposes only the right to receive certificates representing the number of whole SFG Shares and Irrevocable Rights into which COESfx Common Stock shall have been converted pursuant to the Merger as provided in Section 1.3(a).

(d) No fractional SFG Shares will be issued in the Merger. Any fractional share otherwise required as Merger Consideration will be rounded up to the nearest whole share.

(e) Immediately prior to the Effective Time, SFG will have no more than 5,513,856 shares of SFG common stock outstanding. Immediately prior to the Closing, SFG will have no stocks, options, warrants, convertible debt, other convertible securities or other rights to acquire any equity of SFG shares outstanding other than rights granted to COESfx shareholders and Concord pursuant to this Agreement, rights to receive the Preferred Stock described in Section 6.2(m), the irrevocable rights to Concord in Section 1.3(c), rights to Concord as described Section 6.2(m) upon completion of the Financing and warrants issued to Concord and SFG as described in Section 6.2(n). Immediately after the Closing, there will be approximately 367,590,400 common shares of SFG Shares issued and outstanding (including shares to be issued under the Irrevocable Rights) and the Concord rights described in Section 1.3(c) exclusive of shares held in a reserve for issuance in connection with the exercise or conversion, as appropriate, of the COESfx Convertible Securities, the warrants issued pursuant to Section 6.2(n) and the Preferred Stock. In addition, upon the filing of the Amend COI, additional shares will be issued to Concord pursuant to Section 6.2(m).

1.5 Articles of Incorporation of the Surviving Corporation. The Articles of Incorporation of COESfx in effect immediately prior to the Effective Time will be the Articles of Incorporation of the Surviving Corporation.

1.6 Bylaws of the Surviving Corporation. The bylaws of COESfx in effect immediately prior to the Effective Time will be the bylaws of the Surviving Corporation, until such time, if any, as they are amended in accordance with applicable law.

1.7 Directors and Officers of the Surviving Corporation and SFG.

(a) Directors and Officers of the Surviving Corporation. The current directors and officers of COESfx, as of the Effective Time, shall resign and the persons listed in Sections 6.1(i) and 6.2(q) shall be appointed as officers and directors of the Surviving Corporation.

(b) Directors of SFG. At the Effective Time, the current officers and directors of the SFG shall resign and those persons listed n Sections 6.1(i) and 6.2(q) shall be appointed as officers and directors of SFG.

1.8 Dissenting Interests. As a condition to Closing, there shall be no dissenting COESfx Shareholders under the BCL which account for more than 5% of the issued and outstanding shares of COESfx immediately prior to the Effective Time.

1.9 Amendments to SFG’s Articles of Incorporation. As soon as practicable after the Effective Time, SFG shall amend its Articles of Incorporation to (i) change its name to XLFX Inc. (ii) increase its authorized capital stock from 100,000,000 to 400,000,000 common shares; (iii) approve a 1 for 7.351808 reverse split of the issued and outstanding SFG shares outstanding immediately after the Effective Time (“Reverse Split”) and (iv) authorize the issuance of preferred stock necessary to complete the Financing (as described in Section 6.2(m) below). The Articles of Amendment to be filed pursuant to this. Section 1.9 shall be substantially in the form of Exhibit B attached hereto (the “Amended COI”).

2.1 Closing Date and Place. Subject to the satisfaction of the conditions herein described, the closing of the Merger (the "Closing") shall take place on such date (the “Closing Date”) as the Parties may mutually agree following the satisfaction (or waiver) of the conditions to Closing set forth in Article VI at the offices of ____________________________.

3.1 Obligations of the Parties. The Parties shall apply for and diligently prosecute all applications for, and shall use commercially reasonable efforts promptly to obtain, such Consents, authorizations, and approvals from such Persons as shall be necessary to permit the consummation of the Merger, and shall use commercially reasonable best efforts to bring about the satisfaction as soon as practicable of all the conditions contained in Article VI and to effect the consummation of the Merger.

3.2 Conduct of Business Prior to Closing. From the date of this Agreement and until the Closing, except as contemplated by this Agreement, as set forth on Schedule 3.2 or as otherwise consented to by the Parties in writing, such consent not to be unreasonably withheld, conditioned or delayed, each of SFG and COESfx agrees to:

(a) Carry on its business only in the Ordinary Course of Business and use commercially reasonable efforts to preserve intact its present business organization, keep available the services of its executive officers and key employees and preserve its relationships with customers, clients, service providers and others having material business dealings with it;

(b) Timely file all Tax Returns and timely withhold and pay all Taxes;

(c) Maintain in full force and effect all Governmental Authorizations reasonably required for the operation of its business as presently conducted;

(d) Comply with all obligations contained in this Agreement;

(e) Comply in all material respects with all Legal Requirements and Governmental Authorizations applicable to them;

(f) Except as contemplated herein, not amend its articles of incorporation or bylaws;

(g) Except as contemplated herein, not merge or consolidate with, or agree to merge or consolidate with, or purchase substantially all of the assets of, or otherwise acquire any business of, or enter into any joint venture or partnership with, any Person;

(h) Not take any action or omit to take any action that would result in a Breach of any of the representations warranties and/or covenants set forth in this Agreement at, or prior to, the Closing;

(i) Except as contemplated on Schedule 3.2(i), not issue, reissue, sell, deliver, pledge, authorize, or propose the issuance, reissuance, sale, delivery or pledge of shares of capital stock of any class, or securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock;

(j) Except as contemplated hereby, not adjust, split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities;

(k) Not declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, redeem or otherwise acquire any shares of its capital stock or other securities, or alter any term of any of its outstanding securities;

(l) Except as required under any employment agreement, not increase in any manner the compensation of any of its directors, officers, or other employees; (ii) not pay, or agree to pay, any pension, retirement allowance or other employee benefit not required or permitted by any existing plan, agreement or arrangement to any such director, officer or employee, whether past or present; or (iii) not commit itself to any additional pension, profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or to any employment agreement or consulting agreement (arising out of prior employment ) with or for the benefit of any person, or, except to the extent required to comply with applicable law, amend any of such plans or any of such agreements in existence on the date of this Agreement;

(m) Not terminate, enter into or amend in any material respect any contract, agreement, lease, license or commitment, or take any action, or omit to take any action that will cause a breach, violation or default (however defined) under any contract, except in the ordinary course of business and consistent with past practice;

(n) Not permit any of its current insurance (or reinsurance) policies to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage equal to or greater than coverage remaining under those cancelled, terminated or lapsed policies are in full force and effect;

(o) Not enter into other material agreements, commitments or contracts not in the ordinary course of business;

(p) Not maintain its books of account and records in other than its usual, regular and ordinary manner, consistent with its past practice; and

(q) Promptly advise the other Party, in writing, of any fact, condition, occurrence or change known to the Party that reasonably could be expected to have, individually or in the aggregate, a Material Adverse Effect on such Party, as the case may be, or cause a Breach of this Article III or require an amendment to a Party’s Disclosure Schedule.

3.3 Access; Cooperation. Each Party shall provide the other Party and its Representatives the right, upon reasonable notice and during normal business hours, permission to enter into its offices to inspect its records and business operations and to consult with its management, executives and legal and accounting advisors and, subject to mutually agreed upon timing and procedures, to consult with any personnel that report to any of the management or executives of such Party to complete the other Party's due diligence investigation. Each Party shall cooperate with the other Party and its Representatives and, generally, do all other acts and things in good faith as may be reasonable to timely effectuate the purposes of this Agreement and the consummation of the transactions contemplated herein.

3.4 Notice Regarding Dissenters’ Rights Actions. COESfx shall give SFG prompt notice of any written shareholder demand received by it prior to the Closing Date, under which COESfx will be required to purchase shares of capital stock pursuant to the dissenting rights provisions of the BCL.

3.5 No Negotiations.   (a) During the period after execution of this Agreement and prior to the Closing, SFG agrees the neither it nor any of its Affiliates (collectively “SFG Affiliates”) shall engage in any negotiations with any Entity other than COESfx regarding a Prohibited Transaction and SFG shall not permit any SFG Affiliate to:

(i) directly or indirectly solicit, respond to, or accept any inquiries or offers from, or engage in communications, negotiations or discussions with any Person other than COESfx and its professional advisers with respect to any Prohibited Transaction;

(ii) enter into any agreement (whether or not legally binding) with any Person other than COESfx with respect to a Prohibited Transaction;

(iii) allow any Person (other than COESfx and its professional advisers) known or believed by SFG to be considering or evaluating a Prohibited Transaction to have access to any information relating to SFG or to any information relating to SFG or to any SFG or any SFG’s properties.

(c) In addition to seeking all other legal rights, remedies and monetary damages with respect to COESfx’s rights pursuant to this Section 3.5, COESfx shall be entitled to seek injunctive relief in the event of a breach and/or anticipatory breach by SFG and/or any SFG Affiliates of this Section, without the posting of any bond or indemnity.

3.6 Best Efforts to Obtain Shareholder Approval. Each party shall promptly upon execution of this Merger Agreement use its best efforts, to the extent required by this Agreement, to prepare all documents and prepare all filings necessary to obtain the approval of its respective shareholders of the transactions contemplated by this Agreement and the approval of the Amended COI. SFG shall promptly prepare and file with the United States Securities and Exchange Commission (“SEC”) a preliminary proxy statement with respect to seeking approval of the shareholders of SFG of this Merger Agreement and the Amended COI. Each party will as soon as possible hold a shareholders’ meeting of its respective shareholders to approve the transactions and other requirements of each party contemplated by this Agreement.

3.7 Disclosure of Certain Matters. Each party shall promptly advise the other party orally and in writing if there exists a material breach of any representation warranty or covenant contained herein or if there occurs any change or event which results in the executive officers of such party having a good faith belief that such change or event has resulted in, or is reasonably likely to result in, a material breach of a representation warranty or covenant contained herein.

Subject to the exceptions set forth in the Disclosure Schedule of COESfx, attached as Schedule IV, COESfx represents and warrants to SFG as follows:

4.1 Due Organization. COESfx and each of its Subsidiaries are duly organized, validly existing, and in good standing under the laws of the State of New York. Neither COESfx nor its Subsidiaries are required to be qualified, authorized, registered, or licensed to do business as a foreign corporation in any jurisdiction other than the jurisdictions in which it is so licensed, qualified, or registered, or where the failure to be so licensed, qualified or registered would not have a Material Adverse Effect on its business and operations.

4.2 Books and Records. The books and records of COESfx delivered to SFG prior to the Closing fully and fairly reflect the transactions to which COESfx is a party or by which its assets are bound.

4.3 Capitalization. The authorized capital stock of COESfx consists of (i) 100,000,000 shares of common stock, $0.001 par value, of which 43,478,874 shares are issued and outstanding, and (ii) 5,071,816 shares to be issued upon the exercise of outstanding warrants and options. No shares of COESfx preferred stock have been issued. All of the issued and outstanding shares of COESfx capital stock are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. At the Effective Time, all of the issued and outstanding shares of COESfx Common Stock will be converted into the right to receive SFG Shares issued or issuable as part of the Merger Consideration. There are no voting trusts or any other agreements or understandings with respect to the voting of COESfx's capital stock except as contemplated in this Agreement.

4.4 Financial Statements.

(a) COESfx has provided SFG with a copy of the audited balance sheets of COESfx as of December 31, 2005, 2004 and 2003, and the related statements of operations, stockholders' deficiency, and cash flows for the three years then ended, together with the report thereon (except with respect to its continuation as a going concern) of certified public accountant ("CPA"), independent auditors (collectively, "COESfx's Audited Financials").

(b) Prior to the closing, COESfx will provide to SFG unaudited balance sheets of COESfx as of December 31, 2006, and the related unaudited statement of operations, stockholders' deficiency and cash flows for the twelve months then ended, ("COESfx's Unaudited Financials").

(c) COESfx's Audited Financials, and COESfx's Unaudited Financials, (collectively "COESfx's Financial Statements") are (i) in accordance with the books and records of COESfx, (ii) correct and complete in all material respects, (iii) fairly present the financial position and results of operations of COESfx as of the dates indicated, and (iv) prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) (except that (x) unaudited financial statements may not be in accordance with GAAP because of the absence of footnotes normally contained therein, and (y) COESfx Uunaudited Financial Statements are subject to normal year-end audit adjustments that in the aggregate will not have a Material Adverse Effect on COESfx, its business, financial condition, or the results of operations).

4.5 Absence of Changes. Except (i) as set forth in Part 4.5 of the Disclosure Schedule, since December 31, 2006; and (ii) in furtherance of the Merger:

(a) There has not been any adverse change to COESfx, and no event has occurred that would reasonably be expected to have a Material Adverse Effect on COESfx;

(b) There has not been any loss, damage, or destruction to, or any interruption in the use of, any of the assets of COESfx (whether or not covered by insurance) that would be expected to have a Material Adverse Effect on COESfx;

(c) COESfx has not purchased or otherwise acquired any asset from any other Person, except for Contracts entered into, and assets acquired, by COESfx in the Ordinary Course of Business;

(e) COESfx has made no capital expenditures outside of the Ordinary Course of Business;

(f) COESfx has not sold or otherwise transferred, or leased or licensed, any asset to any other Person except in the Ordinary Course of Business;

(g) COESfx has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness;

(h) COESfx has not made any loan or advance to any other Person;

(i) COESfx has not (i) established or adopted any Employee Benefit Plan, or (ii) paid any bonus or made any profit-sharing or similar payment to, or increased the amount of the wages, salary, commissions, fees, fringe benefits or other compensation or remuneration payable to, any of its directors, officers, members, employees, or independent contractors;

(j) No Contract by which COESfx (or any of the assets owned or used by COESfx) is or was bound, or under which COESfx has or had any rights or interests, has been amended or terminated;

(k) COESfx has not incurred, assumed, or otherwise become subject to any Liability, other than accounts payable incurred by COESfx in bona fide transactions entered into in the Ordinary Course of Business;

(l) COESfx has not discharged any Encumbrance or discharged or paid any indebtedness or other Liability, except for accounts payable paid in bona fide transactions in the Ordinary Course of Business;

(m) COESfx has not forgiven any debt or otherwise released or waived any right or claim;

(n) COESfx has not changed any of its methods of accounting or accounting practices in any respect;

(o) COESfx has not entered into any transaction or taken any other action outside the Ordinary Course of Business; and

(p) COESfx has not agreed, committed, or offered (in writing or otherwise) to take any of the actions referred to in the clauses above.

4.6 Title to Assets. COESfx owns, and has good and valid title to, all assets it purports to own, including all assets reflected on COESfx Unaudited Financials; all assets acquired by COESfx since December 31, 2006; all rights of COESfx under the COESfx Contracts; and all other assets reflected in the books and records of COESfx as being owned by COESfx. Except as set forth in Part 4.6 of the Disclosure Schedule, all of its assets are owned by COESfx free and clear of any Encumbrances.

4.7 Receivables. COESfx’s Unaudited Financials provide an accurate summary of all accounts receivable, notes receivable, and other receivables of COESfx as of December 31, 2006. All existing COESfx accounts receivable represent valid obligations of COESfx customers arising from bona fide transactions entered into in the Ordinary Course of Business.

4.8 Equipment. Part 4.8 of the Disclosure Schedule accurately identifies all material equipment, materials, prototypes, tools, supplies, vehicles, furniture, fixtures, improvements, and other tangible assets owned by COESfx. Part 4.8 of the Disclosure Schedule also accurately identifies all material tangible assets leased to COESfx. Each asset identified or required to be identified in Part 4.8 of the Disclosure Schedule is adequate and appropriate for the uses to which it is being put. The assets identified in Part 4.8 of the Disclosure Schedule are adequate for the conduct of the business of COESfx in the manner in which such business is currently being conducted.

4.9 Real Property. COESfx owns no real property or any interest in real property, except for the leaseholds created under the real property leases identified in Part 4.9 of the Disclosure Schedule.

4.10 Proprietary Assets.

(a) Part 4.10(a) of the Disclosure Schedule sets forth each Proprietary Asset owned by COESfx, including, but not limited to, any Proprietary Asset registered with any Governmental Body or for which an application has been filed with any Governmental Body.

(b) COESfx’s use of any Proprietary Asset in the Ordinary Course of Business does not materially violate, conflict with, or infringe on the rights of any other Person in a manner that would have a Material Adverse Effect on its business operations or this Agreement.

(c) COESfx is the owner of all right, title and interest, or has otherwise obtained sufficient rights, in and to each of its Proprietary Assets necessary for COESfx to use such Proprietary Assets in the Ordinary Course of Business, free and clear of Encumbrances and other adverse claims.

(d) To the knowledge of COESfx, no COESfx employee has entered into any Contract that restricts or limits in any way the scope or type of work in which the employee may be engaged, or requires the employee to transfer, assign, or disclose information concerning his work to anyone other than COESfx.

4.11 Contracts.

(a) Part 4.11 of the Disclosure Schedule identifies each COESfx Contract, except for any COESfx Immaterial Contract (the "COESfx Contracts"). COESfx has delivered or made available to SFG accurate and complete copies of all COESfx Contracts identified in Part 4.11 of the Disclosure Schedule, including all material contract amendments. Each COESfx Contract is valid and in full force and effect.

(b) Except as set forth in Part 4.11 of the Disclosure Schedule: (i) to the best knowledge of COESfx, no Person has violated or breached, or declared or committed any default under, any COESfx Contract; (ii) to the best knowledge of COESfx, no event has occurred, and no circumstance or condition exists, that might (with or without notice or lapse of time) (A) result in a violation or breach of any of the provisions of any COESfx Contract, (B) give any Person the right to declare a default or exercise any remedy under any COESfx Contract, (C) give any Person the right to accelerate the maturity or performance of any COESfx Contract, or (D) give any Person the right to cancel, terminate, or modify any COESfx Contract; (iii) COESfx has not received any notice or other communication (in writing or otherwise) regarding any actual, alleged, possible, or potential violation or breach of, or default under, any COESfx Contract; and (iv) COESfx has not waived any right under any COESfx Contract.

(c) The performance of COESfx Contracts will not result in any violation of or failure to comply with any Legal Requirement.

(d) COESfx Contracts identified in Part 4.11 of the Disclosure Schedule (together with COESfx Immaterial Contracts) collectively constitute all of the Contracts necessary to enable COESfx to conduct its business in the manner that it currently conducts its business.

4.12 Liabilities

(a) Except as may be set forth in Part 4.12 of the Disclosure Schedule, COESfx has no Liabilities, except for (i) liabilities identified as such in the COESfx Unaudited Financials; (ii) accounts payable incurred by COESfx in bona fide transactions entered into in the Ordinary Course of Business since December 31, 2006; and (iii) obligations under the Contracts listed in Part 4.11 of the Disclosure Schedule, to the extent that the existence of such obligations is ascertainable solely by reference to the COESfx Contracts.

(b) Part 4.12 of the Disclosure Schedule (i) provides an accurate and complete breakdown and aging of COESfx accounts payable as of December 31, 2006 and (ii) provides an accurate and complete breakdown of all notes payable, and other indebtedness of COESfx, as of the date of this Agreement.

(c) Except as set forth in Part 4.12 of the Disclosure Schedule, COESfx has not, at any time, (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against it, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of its assets, (iv) admitted in writing its inability to pay its debts as they become due, (v) been convicted of, or pleaded guilty or no contest to, any felony, or (vi) taken or been the subject of any action that may have an adverse effect on its ability to comply with or perform any of its covenants or obligations contemplated under this Agreement.

4.13 Compliance with Legal Requirements. Except as set forth in Part 4.13 of the Disclosure Schedule: (a) COESfx is in material compliance with each Legal Requirement that is applicable to it or to the conduct of its business or the ownership or use of any of its assets; (b) to the best of its knowledge, COESfx has at all times been in material compliance with each Legal Requirement that is or was applicable to it, or to the conduct of its business, or the ownership or use of any of its assets; (c) no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) constitute or result directly or indirectly in a material violation by COESfx of, or a failure on the part of COESfx to comply with, any Legal Requirement; and (d) COESfx has not received, at any time, any notice or other communication (in writing or otherwise) from any Governmental Body or any other Person regarding (i) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement, or (ii) any actual, alleged, possible, or potential obligation on the part of COESfx to undertake, or to bear all or any portion of the cost of, any cleanup or any remedial, corrective or response action of any nature.

4.14 Government Authorizations. Part 4.14 of the Disclosure Schedule identifies: (i) each material Governmental Authorization that is held by COESfx; and (ii) each other material Governmental Authorization that, to the knowledge of COESfx, is held by any employee of COESfx and relates to, or is useful in connection with, COESfx's business. Each material Governmental Authorization identified or required to be identified in Part 4.14 of the Disclosure Schedule is valid and in full force and effect.

(a) Except as set forth in Part 4.14 of the Disclosure Schedule: (i) COESfx is, and has at all times been, in material compliance with all of the terms and requirements of each material Governmental Authorization identified or required to be identified in Part 4.14 of the Disclosure Schedule; (ii) no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) (A) constitute or result directly or indirectly in a material violation any material Governmental Authorization identified, or required to be identified, in Part 4.14 of the Disclosure Schedule, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, termination, or modification of any material Governmental Authorization identified, or required to be identified, in Part 4.14 of the Disclosure Schedule; (iii) COESfx has never received any notice or other communication (in writing or otherwise) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any material Governmental Authorization, or (B) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination, or modification of any material Governmental Authorization.

(b) The Governmental Authorizations identified in Part 4.14 of the Disclosure Schedule constitute all of the material Governmental Authorizations necessary (i) to enable COESfx to conduct its business in the manner in which it currently conducts such business, and (ii) to permit COESfx to own and use its assets in the manner in which they are currently owned and used.

4.15 Tax Matters.

(a) Each Tax Return required to be filed by COESfx has been duly filed with the appropriate Governmental Body. To the best knowledge of COESfx, each Tax that COESfx was required to have paid, or that was claimed by any Governmental Body to be payable by COESfx, has been duly paid in full. Any Tax required to have been withheld or collected by COESfx has been duly withheld and collected; and (to the extent required) each such Tax has been paid to the appropriate Governmental Body.

(b) There has been no examination or audit of any Tax Return of COESfx that has been conducted since December 31, 1999.

(c) No claim or other Proceeding is pending or has been threatened against COESfx in respect to any Tax. There are no unsatisfied Liabilities for Taxes (including liabilities for interest, additions to tax, and penalties thereon, or related expenses) with respect to any notice of deficiency or similar document received by COESfx.

4.16 Employee and Labor Matters.

(a) Part 4.16 of the Disclosure Schedule sets forth the employees of COESfx.

(b) Except as set forth in Part 4.16 of the Disclosure Schedule, COESfx is not a party to or bound by, and has never been a party to or bound by, any employment contract or any union contract, collective bargaining agreement, or similar Contract.

(c) Except as set forth in Part 4.16 of the Disclosure Schedule, the employment of the employees of COESfx is terminable by COESfx at will and no employee is entitled to severance pay or other benefits following termination or resignation, except as otherwise provided by law.

(d) Except as provided for in Sec. 6.2(j), to the knowledge of COESfx (i) no employee of COESfx intends to terminate his employment (including, by reason of the consummation of the transactions contemplated herein, SFG's assumption of the employment arrangements COESfx holds with its employees prior to Closing in connection with SFG's assumption of COESfx's Contract obligation and rights); and (ii) no employee of COESfx is a party to, or is bound by, any confidentiality agreement, noncompetition agreement, or other Contract (with any Person) that may have an adverse effect on the employee's performance of any of his duties or responsibilities as an employee of the Surviving Corporation upon and after the consummation of the transactions contemplated in this Agreement.

4.17 Benefit Plans; ERISA.

(a) Part 4.17 of the Disclosure Schedule identifies each of COESfx's Employee Benefit Plans. Except as set forth in Part 4.17 of the Disclosure Schedule, COESfx has never established, adopted, maintained, sponsored, contributed to, participated in, or incurred any Liability with respect to any Employee Benefit Plan. COESfx has never provided or made available any fringe benefit, or other benefit of any nature, to any of its employees. Each contribution or other payment that is required to have been accrued or made under or with respect to any Employee Benefit Plan has been duly accrued and made on a timely basis.

(b) No Employee Benefit Plan (i) provides or provided any benefit guaranteed by the Pension Benefit Guaranty Corporation; (ii) is or was a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA; or (iii) is or was subject to the minimum funding standards of Section 412 of the Code or Section 302 of ERISA. There is no Person that (by reason of common control or otherwise) is, or has at any time been, treated together with COESfx as a single employer within the meaning of Section 414 of the Code.

4.18 Environmental Matters.

(a) COESfx is not liable, or to the best knowledge of COESfx, potentially liable, for any response cost or natural resource damages under Section 107(a) of CERCLA, or under any of the other so-called "superfund" or "super lien" laws or similar Legal Requirements, at or with respect to any site.

(b) COESfx has never received any notice or other communication (in writing or otherwise) from any Governmental Body or other Person regarding any actual, alleged, possible, or potential Liability arising from, or relating to, the presence, generation, manufacture, production, transportation, importation, use, treatment, refinement, processing, handling, storage, discharge, release, emission, or disposal of any Hazardous Material. No Person has ever commenced, or to the best knowledge of COESfx threatened to commence, any contribution action or other Proceeding against COESfx in connection with any such actual, alleged, possible, or potential Liability; and no event has occurred, and to the best knowledge of COESfx, no condition or circumstance exists, that may directly or indirectly give rise to, or result in COESfx

becoming subject to, any such Liability.

(c) Except as set forth in Part 4.18 of the Disclosure Schedule, COESfx has never generated, manufactured, produced, transported, imported, used, treated, refined, processed, handled, stored, discharged, released, or disposed of any Hazardous Material (whether lawfully or unlawfully). Except as set forth in Part 4.18 of the Disclosure Schedule, COESfx has never permitted (knowingly or otherwise) any Hazardous Material to be generated, manufactured, produced, used, treated, refined, processed, handled, stored, discharged, released, or disposed of (whether lawfully or unlawfully) (i) on or beneath the surface of any real property that is, or that has at any time been, owned by, leased to, controlled by or used by COESfx, (ii) in or into any surface water, groundwater, soil or air associated with or adjacent to any such real property; or (iii) in or into any well, pit, pond, lagoon, impoundment, ditch, landfill, building, structure, facility, improvement, installation, equipment, pipe, pipeline, vehicle, or storage container that is or was located on or beneath the surface of any such real property, or that is or has at any time been owned by, leased to, controlled by, or used by COESfx.

4.19 Insurance.

(a) Part 4.19 of the Disclosure Schedule accurately sets forth, with respect to each insurance policy maintained by or at the expense of, or for the direct or indirect benefit of, COESfx, the name of the insurance carrier that issued the policy and the policy number. Each of the policies identified in Part 4.19 of the Disclosure Schedule is valid, enforceable, and in full force and effect.

(b) To the knowledge of COESfx, no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) directly or indirectly give rise, to or serve as a basis for, any insurance claim. COESfx has not received: (i) any notice or other communication (in writing or otherwise) regarding the actual or possible cancellation or invalidation of any of the policies identified in Part 4.19 of the Disclosure Schedule or regarding any actual or possible adjustment in the amount of the premiums payable with respect to any of said policies; (ii) any notice or other communication (in writing or otherwise) regarding any actual or possible refusal of coverage under, or any actual or possible rejection of any claim under, any of the policies identified in Part 4.19 of the Disclosure Schedule; or (iii) any indication that the issuer of any of the policies identified in Part 4.19 of the Disclosure Schedule may be unwilling or unable to perform any of its obligations there under.

4.20 Related Party Transactions. Except as set forth in Part 4.20 of the Disclosure Schedule (a) no Related Party has any direct or indirect interest of any nature in any of the assets of COESfx; (b) no Related Party is, or has been at any time since December 31, 2002, indebted to COESfx; (c) since December 31, 2002, no Related Party has entered into, or has had any direct or indirect financial interest in, any COESfx Contract, transaction, or business dealing of any nature involving COESfx; (d) no Related Party is competing, or has at any time since December 31, 2002, competed, directly or indirectly, with COESfx.

4.21 Certain Payments, Etc. Neither COESfx nor any officer, employee, agent or other Person associated with or acting for or on behalf of COESfx has, at any time, directly or indirectly: (a) used any entity funds (i) to make any unlawful political contribution or gift, or for any other unlawful purpose related to any political activity, (ii) to make any unlawful payment to any governmental official or employee, or (iii) to establish or maintain any unlawful or unrecorded fund or account of any nature; (b) made any false or fictitious entry, or failed to make any entry that should have been made, in any of the books of account or other COESfx records; (c) made any payoff, influence payment, bribe, rebate, kickback, or unlawful payment to any Person; (d) performed any favor or given any gift that was not deductible for federal income tax purposes; (e) made any payment (whether or not lawful) to any Person, or provided (whether lawfully or unlawfully) any favor or anything of value (whether in the form of property or services, or in any other form) to any Person, for the purpose of obtaining or paying for (i) favorable treatment in securing business, or (ii) any other special concession; or (f) agreed, committed, or offered (in writing or otherwise) to take any of the actions described in clauses "(a)" through "(e)" above.

4.22 Proceedings; Orders. Except as set forth in Part 4.22 of the Disclosure Schedule, to the knowledge of COESfx, there is no pending Proceeding, and no Person has threatened in writing to commence any Proceeding: (i) that involves COESfx or that otherwise relates to or might affect the business of COESfx or any assets of COESfx material to its business operations (whether or not COESfx is named as a party thereto); or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the transactions contemplated hereby. Except as set forth in Part 4.22 of the Disclosure Schedule, no event has occurred, and no claim, dispute, or other condition or circumstance exists, that might directly or indirectly give rise to, or serve as a basis for, the commencement of any such Proceeding. There is no Order to which COESfx is subject; and no Related Party is subject to any Order that relates to COESfx’s business. To the knowledge of COESfx, no COESfx employee is subject to any Order that may prohibit that employee from engaging in, or continuing, any conduct, activity, or practice relating to the business of COESfx.

4.23 Authority; Binding Nature of Agreements. Subject to the approval of the COESfx Shareholders under the BCL, COESfx has the right, power, and authority to enter into and to perform its obligations under this Agreement, to which it is or may become a party; and the execution, delivery, and performance of this Agreement by COESfx have been duly authorized by all necessary action on the part of COESfx. Subject to the approval of COESfx Shareholders, this Agreement constitutes the legal, valid, and binding obligation of COESfx, enforceable against COESfx in accordance with its terms.

4.24 Non-Contravention; Consents. Neither the execution, nor the delivery of this Agreement, nor the consummation or performance of the Merger, will directly or indirectly (with or without notice or lapse of time):

(a) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge the Merger or to exercise any remedy or obtain any relief under any Legal Requirement or any Order to which COESfx is subject;

(b) contravene, conflict with or result in a violation of any of the terms or requirements of any Governmental Authorization, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization;

(c) contravene, conflict with, or result in a violation or breach of, or result in a default under, any provision of any Contract; or

(d) give any Person the right to (i) declare a default or exercise any remedy under any COESfx Contract, (ii) accelerate the maturity or performance of any COESfx Contract, or (iii) cancel, terminate, or modify any COESfx Contract.

COESfx is not required to make any filing with, or give any notice to, or to obtain any Consent from any Person, other than its board of directors and shareholders, in connection with the execution and delivery of this Agreement or the consummation or performance of the Merger.

4.25 Brokers. COESfx has not agreed to pay, nor has it taken any action that might result in any Person claiming to be entitled to receive, any brokerage commission, finder's fee, or similar commission or fee in connection with the Merger.

4.26 Full Disclosure. To the knowledge of COESfx, the representations and warranties contained in this Ar