AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

among

M-WAVE, INC.

("Parent")

OCEAN MERGER SUB, INC.

("Merger Sub")

SUNFUELS, INC.

(the "Company")

and

BLUE SUN BIODIESEL LLC

("Blue Sun")

Dated as of January 26, 2007

TABLE OF CONTENTS

-i-

-ii-

-iii-

-iv-

EXHIBITS

SCHEDULES

-v-

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER is made as of January 26, 2007, by and among M-Wave, Inc., a Delaware corporation (" Parent "), Ocean Merger Sub, Inc., a Delaware corporation (" Merger Sub "), SunFuels, Inc., a Colorado corporation (the " Company ") and Blue Sun Biodiesel LLC, a Colorado limited liability company (" Blue Sun "). Certain capitalized terms used herein are defined in Article I .

W I T N E S S E T H:

WHEREAS, Parent is a Delaware corporation having an authorized capital of (i) 200,000,000 sh ares of Common Stock, par value $0.005 per share (the " Parent Common Stock "), of which, as of the date hereof, 1,763,150 shares are issued and outstanding, and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share (" Parent Preferred Stock "), (x) 30,000 shares of which have been designated as Series A Convertible Preferred Stock (the " Parent Series A Preferred Stock ) of which, as of the date hereof, 12,500 shares are issued and outstanding, and (y) 70,000 shares of which have been designated as Series B Convertible Preferred Stock (the " Parent Series B Preferred Stock ) of which, as of the date hereof, 69,648 shares are issued and outstanding.

WHEREAS, Merger Sub is a Delaware corporation having an authorized capital of 1,000 shares of Common Stock, par value $0.01 per share (the " Merger Sub Common Stock ") of which, as of the date hereof, 100 shares are issued and outstanding, all of which are owned of record and beneficially by Parent; and

WHEREAS, the Company is a Colorado corporation having an authorized capital of (i) 100,000,000 shares of common stock, no par value per share (the " Company Common Stock "), of which, as of the date hereof, 4,447,759 shares are issued and outstanding, and (ii) 25,000,000 shares of preferred stock, no par value per share (" Company Preferred Stock "), 2,000,000 shares of which have been designated as Series A Convertible Preferred Stock (the " Company Series A Preferred Stock ) of which, as of the date hereof, 750,000 shares will be issued and outstanding;

WHEREAS, Blue Sun is a Colorado limited liability company having an authorized capital of 200,000 membership units (the " Blue Sun Units "), 100,000 units of which have been designated Class A Units (" Blue Sun Class A Units ") of which, as of the date hereof, 5,068 Blue Sun Units Class A Units are issued and outstanding and are owned by the Company and the other members of Blue Sun set forth on Exhibit A (the " Members ") and 100,000 units of which have been designated Class B Units, of which, as of the date hereof, no units are issued and outstanding;

WHEREAS, the Boards of Directors of the Company and Merger Sub have approved the merger of Merger Sub into the Company (the " Company Merger ") pursuant to the terms and conditions of this Agreement;

WHEREAS, the Board of Directors of the Company and the Board of Mangers of Blue Sun have approved the merger of Blue Sun into the Company (the " Blue Sun Merger " and, together with the Company Merger, the " Mergers ", each of which shall individually be referred to herein as a " Merger "), which Blue Sun Merger, would occur immediately after the Company Merger, pursuant to the terms and conditions of this Agreement;

WHEREAS, the Boards of Directors of Parent, the Company and the Board of Managers of Blue Sun, have directed that this Agreement be submitted to the stockholders of the Company and Parent and the Members for adoption;

WHEREAS, the parties hereto intend the Mergers to constitute a tax-free exchange under Section 351 of the Internal Revenue Code of 1986, as amended from time to time (the " Code ") whereby at the Effective Time (a) the stockholders of Company Common Stock will be deemed to contribute their Company Common Stock to Parent in exchange for shares of Parent Common Stock, and (b) the holders of Company Series A Preferred Stock will be deemed to contribute their Company Series A Preferred Stock to Parent in exchange for shares of Parent Series C Preferred Stock, and at the Blue Sun Effective Time the holders of Blue Sun Units other than the Company will be deemed to contribute their Blue Sun Units to Parent in exchange for shares of Parent Common Stock; and

WHEREAS, the parties hereto desire to make certain representations, warranties and agreements in connection with the Mergers and also to prescribe various conditions to the Mergers;

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

ARTICLE I

DEFINITIONS

1.1     Definitions . The following terms have the following meanings for the purposes of this Agreement:

" Acquisition Proposal " has the meaning provided in Section 8.14 .

" Affiliate " means, with respect to any specified Person, (i) any other Person that, directly or indirectly, owns or controls, is under common ownership or control with, or is owned or controlled by, such specified Person, (ii) any other Person which is a director, officer or partner or member or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, of the specified Person or a Person described in clause (i) of this paragraph, (iii) another Person of which the specified Person is a director, officer, or partner or member or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, (iv) another Person in which the specified Person has a substantial beneficial interest or as to which the specified Person serves as trustee or in a similar capacity, or (v) any relative or spouse of the specified Person or any of the foregoing Persons, any relative of such spouse or any spouse of any such relative.

" Agreement " means this Agreement and Plan of Merger, including all exhibits and schedules hereto, as it may be amended from time to time in accordance with its terms.

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" Blue Sun " has the meaning provided in the Preamble .

" Blue Sun Effective Date " and " Blue Sun Effective Time " have the respective meanings provided in Section 5.2

" Blue Sun Exchange Ratio " means the exchange ratio for Blue Sun Units into Parent Common Stock, as determined in accordance with the calculations set forth in Exhibit B .

" Blue Sun Fully-Diluted Units " means the outstanding Blue Sun Units determined as of the Measurement Date. For purposes of determining the Blue Sun Fully-Diluted Units it shall be assumed that all outstanding options and warrants, if any, to purchase Blue Sun Units have been exercised in full for the maximum number of Blue Sun Units that could be purchased thereunder as if all such options and warrants were vested in full.

" Blue Sun Units " has the meaning provided in the Recitals .

" Blue Sun Member Meeting " has the meaning provided in Section 8.4 .

" Blue Sun Merger " has the meaning provided in the Recitals .

" Blue Sun Merger Shares " has the meaning provided in Section 4.2(c) .

" Business Day " means any day of the year other than (i) any Saturday or Sunday or (ii) any other day on which banks located in New York, New York generally are closed for business.

" CBCA " means the Colorado Business Corporations Act, as amended.

" CCAA " means the Colorado Corporations and Associations Act, as amended.

" Certificate of Designations " has the meaning provided in Section 2.4(a) .

" CLLCA " means the Colorado Limited Liability Company Act, as amended.

" Class A Units " has the meaning provided in the Recitals .

" Closing " has the meaning provided in Section 5.1 .

" Closing Date " has the meaning provided in Section 5.1 .

" Closing Price " means the average closing price quotation of Parent Common Stock reported on the National Association of Securities Dealers, Inc. Automated Quotation System for the ten (10) consecutive days on which the Nasdaq Capital Market is open for trading immediately preceding the Measurement Date.

" Code " means the United States Internal Revenue Code of 1986, as amended.

" Company " has the meaning provided in the Preamble .

" Company Benefit Plans " has the meaning provided in Section 6.14(b) .

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" Company Breakup Fee " has the meaning provided in Section 11.3 .

" Company Capitalization " has the meaning provided in Section 6.4 .

" Company Common Stock " has the meaning provided in the Recitals .

" Company Exchange Ratio " means the exchange ratio for shares of Company Common Stock and Company Preferred Stock into Parent Common Stock and Parent Preferred Stock, as determined in accordance with the calculations set forth in Exhibit B .

" Company Financial Statements " means all of the following:

(a)    The audited consolidated financial statements of the Company as of December 31, 2004, and December 31, 2005 (including all notes thereto), which are set forth on Schedule 1.1(a) , consisting of the consolidated balance sheets at such dates and the related consolidated statements of earnings and retained earnings and cash flows for the twelve-month periods then ended, and all notes thereto;

(b)    The unaudited consolidated financial statements of the Company as of December 31, 2003, and March 31, June 30 and September 30, 2006, which are set forth on Schedule 1.1(b) , consisting of the consolidated balance sheets at such dates and the related consolidated statements of earnings and retained earnings and cash flows for the six-month periods then ended, and all notes thereto; and

(c)    The Latest Balance Sheet, which is set forth on Schedule 1.1(c) .

" Company Fully-Diluted Common Stock " means the outstanding shares of Company Common Stock determined as of the Measurement Date. For purposes of determining the Company Fully-Diluted Common Stock it shall be assumed that (i) all shares of Company Series A Preferred Stock outstanding on the Measurement Date and any shares of Company Series A Preferred Stock to be issued on the Closing Date pursuant to the Subscription Agreements are converted into the maximum number of shares of Company Common Stock into which they may be converted on the Measurement Date at the then effective conversion price. In addition, for purposes determining the Company Fully-Diluted Common Stock it shall be assumed that all outstanding options and warrants to purchase shares of Company Common Stock have been exercised in full for the full number of shares of Company Common Stock that could be purchased thereunder at the then effective exercise price as if all such options and warrants were vested in full; provided that up to 750,000 warrants to purchase Company Common Stock that are issued to purchasers of Company Series A Preferred Stock shall be excluded from such calculation. Finally, for purposes determining the Company Fully-Diluted Common Stock it shall be assumed that all shares of Company Common Stock that could be issued pursuant to preemptive rights have been issued.

" Company Group " shall mean any "affiliated group" (as defined in Section 1504(a) of the Code without regard to the limitations contained in Section 1504(b) of the Code) that, at any time on or before the Closing Date, includes or has included (1) the Company or any Subsidiary or any predecessor of or successor to the Company or any Subsidiary (or another such predecessor or successor), (2) any other group of corporations that, at any time on or before the Closing Date, files or has filed Tax Returns on a combined, consolidated or unitary basis with the Company or any Subsidiary or any predecessor of or successor to the Company or any Subsidiary (or another such predecessor or successor) or (3) any Affiliate of the Company or any Subsidiary.

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" Company Merger " has the meaning provided in the Recitals .

" Company Merger Shares " has the meaning provided in Section 4.1(c) .

" Company Preferred Stock " has the meaning provided in the Recitals .

" Company Required Consents " has the meaning provided in Section 9.4 .

" Company Series A Preferred Stock " has the meaning provided in the Recitals .

" Company Stockholder Meeting " has the meaning provided in Section 8.3 .

" Company Stock Option Plan " has the meaning provided in Section 4.1(d) .

" Company Warrant " has the meaning provided in Section 4.1(e) .

" Confidentiality Agreement " has the meaning provided in Section 8.13 .

" Contract " means any contract, lease, commitment, understanding, sales order, purchase order, agreement, indenture, mortgage, note, bond, right, warrant, instrument, plan, permit or license, whether written or verbal, that is intended or purports to be binding and enforceable.

" DGCL " means the Delaware General Corporation Law, as amended.

" Disclosure Documents " means the Company’s Confidential Private Placement Memorandum dated October 6, 2006 and the Supplement thereto dated January 18, 2007 (including exhibits thereto).

" Effective Date " and " Effective Time " have the respective meanings provided in Section 5.2 .

" Environmental Law " means any Law which relates to or otherwise imposes liability or standards of conduct concerning discharges, emissions, releases or threatened releases of noises, odors or any pollutants, contaminants or hazardous or toxic wastes, substances or materials, whether as matter or energy, into ambient air, water, or land, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of pollutants, contaminants, or hazardous or toxic wastes, substances or materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any so-called "Superfund" or "Superlien" Law (including those already referenced in this definition) and any other Law of any Governmental Authority having a similar subject matter.

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" Environmental Permit " means any permit, license, approval, consent or other authorization required by or pursuant to any applicable Environmental Law.

" ERISA " means the Employee Retirement Income Security Act of 1974, as amended.

" ERISA Affiliate " means, with respect to any Person, each corporation, trade or business that is, along with such Person, part of the same controlled group of corporations, trades or businesses under common control within the meaning of sections 414(b) or (c) of the Code.

" Exchange Act " means the Securities Exchange Act of 1934, as amended.

" Fair Market Value " means the Closing Price multiplied by the applicable number of shares of Parent Common Stock.

" GAAP " means U.S. generally accepted accounting principles at the time in effect.

" Governmental Authority " means the government of the United States or any foreign country or any state or political subdivision thereof and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government.

" Hazardous Substance " means any material or substance which (i) constitutes a hazardous substance, toxic substance or pollutant (as such terms are defined by or pursuant to any Environmental Law) or (ii) is regulated or controlled as a hazardous substance, toxic substance, pollutant or other regulated or controlled material, substance or matter pursuant to any Environmental Law.

" HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

" Indemnified Parties " has the meaning provided in Section 12.2 .

" Injunction " has the meaning provided in Section 9.5 .

" Intellectual Property " has the meaning provided in Section 12.2 .

" Knowledge of the Company " means the actual knowledge of Jeff Probst, Justin Bzdek or Sean Lafferty.

" Knowledge of the Parent " means the actual knowledge of Joe Turek or Jeff Figlewicz.

" Latest Balance Sheet " means the unaudited consolidated balance sheet of the Company dated as of November 30, 2006, set forth on Schedule 1.1(c) .

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" Law " means any Law, statute, regulation, ordinance, rule, order, decree, judgment, consent decree, settlement agreement or governmental requirement enacted, promulgated, entered into, agreed or imposed by any Governmental Authority.

" Lien " means any mortgage, lien (except for any lien for taxes not yet due and payable), charge, restriction, pledge, security interest, option, lease or sublease, claim, right of any third party, easement, encroachment or encumbrance.

" License Agreements " has the meaning provided in Section 6.10 .

" Loss " or " Losses " means any and all liabilities, losses, costs, claims, damages, penalties and expenses (including attorneys’ fees and expenses and costs of investigation and litigation). In the event any of the foregoing are indemnifiable hereunder, the terms "Loss" and "Losses" shall include any and all reasonable and documented attorneys’ fees and expenses and costs of investigation and litigation incurred by the Indemnified Party in enforcing such indemnity.

" Material Adverse Change " means a change (or circumstance involving a prospective change) in (i) the business, operations, assets, liabilities, results of operations, cash flows, condition (financial or otherwise) or prospects of a specified Person which is materially adverse or (ii) the ability of a specified Person to perform its obligations under this Agreement or any of its Related Agreements or to consummate the transactions contemplated hereby or thereby on a timely basis, except that none of the following shall be deemed in themselves to constitute a Material Adverse Change (x) any changes in Laws of general applicability or interpretations thereof by Governmental Authorities that do not disproportionately affect the specified Person and (y) any changes in general economic conditions that do not disproportionately affect the specified Person.

" Material Adverse Effect " means an effect (or circumstance involving a prospective effect) on (i) the business, operations, assets, liabilities, results of operations, cash flows, condition (financial or otherwise) or prospects of a specified Person which is materially adverse or (ii) the ability of a specified Person to perform its obligations under this Agreement or any of its Related Agreements or to consummate the transactions contemplated hereby or thereby on a timely basis, except that none of the following shall be deemed in themselves to have a Material Adverse Effect (x) any changes in Laws of general applicability or interpretations thereof by Governmental Authorities that do not disproportionately affect the specified Person and (y) any changes in general economic conditions that do not disproportionately affect the specified Person.

" Measurement Date " means the third Business Day prior to the Closing Date.

" Members " has the meaning provided in the Recitals .

" Merger " and " Mergers " has the meaning provided in the Recitals .

" Merger Shares " has the meaning provided in Section 4.2(c) .

" Merger Sub " has the meaning provided in the Preamble .

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" Merger Sub Common Stock " has the meaning provided in the Recitals .

" Parent " has the meaning provided in the Preamble .

" Parent Benefit Plans " has the meaning provided in Section 7.11(b) .

" Parent Capitalization " has the meaning provided in Section 7.4 .

" Parent Common Stock " has the meaning provided in the Recitals .

" Parent Financial Statements " has the meaning provided in Section 7.5 .

" Parent Fully-Diluted Common Stock " means the outstanding shares of Parent Common Stock determined as of the Measurement Date. For purposes of determining the Parent Fully-Diluted Common Stock it shall be assumed that (i) all shares of Parent Preferred Stock outstanding on the Measurement Date are converted into the maximum number of shares of Parent Common Stock into which they may be converted on the Measurement Date at the then effective conversion price and (ii) any shares of Parent Preferred Stock that are the subject of (i) a notice of redemption issued by Parent on or prior to the Measurement Date or (ii) a put notice issued by the holder of such shares of Parent Preferred Stock on or prior to the Measurement Date are no longer outstanding. In addition, for purposes determining the Parent Fully-Diluted Common Stock it shall be assumed that all outstanding options and warrants to purchase shares of Parent Common Stock with an exercise price less than the Closing Price are exercised as if all such options and warrants were vested in full on the Measurement Date for the full number of shares of Parent Common Stock that could be purchased upon exercise thereof on a cashless basis so that the holders thereof would receive the number of shares of Parent Common Stock for which such options and warrants could be exercised less a number of shares of Parent Common Stock having an aggregate Fair Market Value on the Measurement Date equal to the aggregate exercise price for all such options and warrants.

" Parent Preferred Stock " has the meaning provided in the Recitals .

" Parent Representatives " has the meaning provided in Section 8.14(b) .

" Parent Required Consents " has the meaning provided in Section 10.4 .

" Parent SEC Reports " has the meaning provided in Section 7.5(b) .

" Parent Series A Preferred Stock " has the meaning provided in the Recitals .

" Parent Series B Preferred Stock " has the meaning provided in the Recitals .

" Parent Series C Preferred Stock " means the Series C Convertible Preferred Stock, no par value per share of Parent, as designated pursuant to the Certificate of Designations.

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" Parent Stockholder Approvals " means the approval by the holders of the requisite number of shares of Parent Common Stock attending, in person or by proxy, the Parent Stockholder Meeting of this Agreement and the transactions contemplated herein to the extent required to be approved by Parent stockholders by the DGCL, the rules and regulations of Nasdaq Capital Market, Parent’s Certificate of Incorporation, Bylaws and any other applicable Laws, which may include, without limitation, approval of (i) the adoption of the Certificate of Designations described herein, (ii) the issuance of the Merger Shares, (iii) a reverse stock split to take effect immediately after the Blue Sun Effective Time if necessary to cause Parent to satisfy the initial listing requirements of the Nasdaq Capital Market immediately after the Effective Time or as otherwise agreed to by the parties hereto, (iv) the election of directors of Parent pursuant to Section 2.4(c) and (v) the adoption of an amendment to Parent’s 2003 Stock Incentive Plan to authorize an additional 4,000,000 shares of Parent Common Stock for issuance thereunder (subject to adjustment for any stock split, reverse stock split, stock dividend, recapitalization or similar transaction).

" Parent Stockholder Meeting " has the meaning provided in Section 8.5(b) .

" PBGC " means the Pension Benefit Guaranty Corporation.

" Permits " has the meaning provided in Section 6.12 .

" Person " means any individual, corporation, proprietorship, firm, partnership, limited partnership, trust, association or other entity or any Governmental Authority.

" Proxy Statement " has the meaning provided in Section 8.2(a) .

" Real Property " has the meaning provided in Section 6.9(a) .

" Real Property Lease " has the meaning provided in Section 6.9(a) .

" Related Agreement " means any Contract which is or is to be entered into at the Closing or otherwise pursuant to this Agreement. The Related Agreements executed by a specified Person shall be referred to as "such Person’s Related Agreements," "its Related Agreements" or another similar expression.

" Registration Statement " has the meaning provided in Section 8.2(a) .

" SEC " means the United States Securities and Exchange Commission.

" Securities Act " means the Securities Act of 1933, as amended.

" Stock Option " has the meaning provided in Section 4.1(d) .

" Subsidiaries " has the meaning provided in Section 6.1(a) .

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" Superior Proposal " means any Takeover Proposal made by any Person prior to the conclusion of the Parent Stockholder Meeting on terms that are more favorable from a financial point of view to the stockholders of Parent than the terms set forth in this Agreement, including, without limitation, with respect to conditions to consummation, financing and the percentage of outstanding equity securities to be issued as consideration, as determined by the Board of Directors of Parent in its good faith judgment (based on the advice of an independent financial advisor or such other matters as Parent’s Board of Directors deems relevant).

" Surviving Corporation " has the meaning set forth in Section 2.1 .

" Takeover Proposal " means any inquiry, proposal or offer from any Person relating to any direct or indirect acquisition or purchase of business that constitutes 10% or more of the voting securities of Parent, any tender offer or exchange offer that if consummated would result in any Person beneficially owning 10% or more of the voting securities of Parent or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Parent, other than the transactions contemplated by this Agreement; provided , that a Takeover Proposal shall not include any inquiry, proposal or offer to acquire the existing business of Parent in any asset sale or similar transaction.

" Tax Return " means any report, return or other information required to be supplied to a Governmental Authority in connection with any Taxes (including any attached schedules), including, without limitation, any information return, claim for refund or amended return.

" Tax Sharing Arrangement " shall mean any written or unwritten agreement or arrangement providing for the allocation or payment of Tax liabilities or payment for Tax benefits between the Company or any Subsidiary, on the one hand, and any other Person including, but not limited to, members of any Company Group other than the Company and the Subsidiaries), on the other.

" Taxes " shall mean (i) all taxes, charges, fees, duties (including customs duties), levies or other assessments, including income, gross receipts, net proceeds, ad valorem, turnover, real and Personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance, license, payroll, environmental, capital stock, disability, employee’s income withholding, other withholding, unemployment and Social Security taxes, which are imposed by any Governmental Authority, and such term shall include any interest, penalties or additions to tax attributable thereto, and (ii) any liability of the Company or any Subsidiary for the payment of amounts determined by reference to amounts described in clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group, or as a result of any obligation of the Company or any Subsidiary under any Tax Sharing Arrangement.

" Termination Date " has the meaning provided in Section 11.1 .

" Trade Secrets " has the meaning provided in Section 6.10 .

" Working Capital " means current assets less (i) accounts payable and (ii) accrued expenses.

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1.2     Interpretation . The headings preceding the text of Articles and Sections included in this Agreement and the headings to Schedules attached to this Agreement are for convenience only and may not be deemed part of this Agreement or be given any effect in interpreting this Agreement. The use of the masculine, feminine or neuter gender or the singular or plural form of words herein may not limit any provision of this Agreement. The use of the terms "including" or "include" shall in all cases herein mean "including, without limitation" or "include, without limitation," respectively. Reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by the terms of any applicable agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually. Reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof. Reference to any Law means as amended, modified, codified, replaced or re-enacted, in whole or in part, and in effect on the date hereof, including rules, regulations, enforcement procedures and any interpretations promulgated thereunder. Underscored references to Articles, Sections, clauses, Exhibits or Schedules refer to those portions of this Agreement, and any underscored references to a clause, unless otherwise identified, refers to the appropriate clause within the same Section in which such reference occurs. The use of the terms "hereunder", "hereof", "hereto" and words of similar import refer to this Agreement as a whole and not to any particular Article, Section, or clause of or Exhibit or Schedule to this Agreement. No specific representation, warranty or covenant contained herein limits the generality or applicability of a more general representation, warranty or covenant contained herein. A breach of or inaccuracy in any representation, warranty or covenant is not affected by the fact that any more general or less general representation, warranty or covenant was not also breached or inaccurate. The parties expressly disclaim the holding of, and any interpretative conclusions or determinations reached in, IBP, Inc. v. Tyson Foods, Inc. , No. CIV.A. 18373, 2001 Del. Ch. LEXIS 81 (Del. Ch. June 15, 2001) as they would be applicable to this Agreement, including any requirement that a Material Adverse Change or Material Adverse Effect be "durationally significant" or measured over a period of years rather than months.

ARTICLE II

THE COMPANY MERGER

2.1     Surviving Corporation . Subject to the conditions contained herein and in accordance with the provisions of this Agreement, the DGCL and the CCAA, at the Effective Time, Merger Sub shall be merged with and into the Company, which, as the corporation surviving in the Company Merger (the " Surviving Corporation "), shall continue unaffected and unimpaired by the Company Merger to exist under and be governed by the Laws of the State of Colorado. Upon the effectiveness of the Company Merger, the separate existence of Merger Sub shall cease except to the extent provided by Law in the case of a corporation after its merger into another corporation.

2.2     Effects of the Merger . The Company Merger shall have the effects set forth in Sections 259 through 261 of the DGCL, Section 7-90-204 of the CCAA and this Agreement.

2.3     Articles of Incorporation, Bylaws, Directors and Officers of Surviving Corporation . The Articles of Incorporation and Bylaws of the Company, as in effect immediately prior to the Effective Time, shall continue in full force and effect as the Articles of Incorporation and Bylaws of the Surviving Corporation. The members of the Board of Directors of the Surviving Corporation immediately prior to the Effective Time shall be the initial members of the Board of Directors of the Surviving Corporation until their respective successors are duly elected and qualified. The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation until their respective successors are duly elected and qualified. At the Effective Time and thereafter until changed as provided by law, the name of the Company shall be "Blue Sun Biodiesel, Inc."

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2.4     Certificate of Incorporation, Bylaws, Directors and Officers of Parent . As of the Effective Time, Parent shall take the following actions:

(a)    Parent shall adopt a Certificate of Designations for the Parent Series C Preferred Stock, each in the form attached hereto as Exhibit C (the " Certificate of Designations ") by filing the same in the office of the Secretary of State of the State of Delaware;

(b)    The Bylaws of Parent shall be amended and restated in a form and substance acceptable to the parties and shall become the Bylaws of Parent at the Effective Time, until thereafter amended as provided by the DGCL, the Certificate of Incorporation of Parent and such Bylaws;

(c)    Such individuals as are specified by the Company prior to the filing of the definitive Proxy Statement by Parent shall be appointed to and constitute the entire Board of Directors of Parent; provided that (i) such individuals are reasonably acceptable to Parent’s Board of Directors and (ii) after the appointment of such individuals Parent’s Board of Directors would satisfy all Nasdaq and legal requirements regarding the composition of a Nasdaq Capital Market listed company. Unless otherwise agreed to by the Company and Parent, each existing director of Parent shall submit a written resignation from the Board Directors of Parent on the Closing Date which shall be effective as of the Effective Time;

(d)    The individuals listed on Exhibit E shall be appointed as the executive officers of Parent. Each existing executive officer of Parent shall submit a written resignation from his or her position as an executive officer of Parent on the Closing Date which shall be effective as of the Effective Time; and

(e)    At the Effective Time and thereafter until changed as provided by law, the name of the Parent shall be "Blue Sun Holdings, Inc."

ARTICLE III

THE BLUE SUN MERGER

3.1     Surviving Corporation . Subject to the conditions contained herein and in accordance with the provisions of this Agreement and the CCAA, immediately after the Effective Time, Blue Sun shall be merged with and into the Surviving Company, which, as the corporation surviving in the Blue Sun Merger, shall continue unaffected and unimpaired by the Blue Sun Merger to exist under and be governed by the Laws of the State of Colorado. Upon the effectiveness of the Merger, the separate existence of Blue Sun shall cease except to the extent provided by Law in the case of a limited liability company after its merger into a corporation.

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3.2     Effects of the Merger . The Blue Sun Merger shall have the effects set forth in Section 7-90-204 of the CCAA and this Agreement.

3.3     Articles of Incorporation, Bylaws, Directors and Officers of Surviving Corporation . The Articles of Incorporation and Bylaws of the Surviving Corporation, as in effect immediately prior to the Blue Sun Effective Time, shall continue in full force and effect as the Articles of Incorporation and Bylaws of the Surviving Corporation. The members of the Board of Directors of the Surviving Corporation immediately prior to the Blue Sun Effective Time shall be the initial members of the Board of Directors of the Surviving Corporation until their respective successors are duly elected and qualified. The officers of the Surviving Corporation immediately prior to the Blue Sun Effective Time shall be the initial officers of the Surviving Corporation until their respective successors are duly elected and qualified.

3.4     Intercompany Loans . At the Blue Sun Effective Time, all intercompany loans between the Company and Blue Sun shall be deemed to be cancelled in full.

ARTICLE IV

CONVERSION OF SHARES AND INTERESTS

4.1     Company Merger Conversion Terms . As of the Effective Time, by virtue of the Company Merger and without any action on the part of any stockholder of the Company or Merger Sub:

(a)    Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be cancelled.

(b)    All shares of Company Common Stock that immediately prior to the Effective Time are held in the treasury of the Company shall be cancelled and revert to the status of an authorized but unissued shares and no capital stock of Parent, capital stock of the Surviving Corporation, cash or other consideration shall be paid or delivered in exchange therefor.

(c)    Subject to the provisions of Section 4.3 , all of the shares of Company Common Stock and Company Preferred Stock included in the Company Fully-Diluted Common Stock issued and outstanding immediately prior to the Effective Time (after taking into account the cancellation of shares of Company Common Stock pursuant to Section 4.1(b)) shall be converted into and become a number of equity securities of Parent determined by multiplying such shares of Company Common Stock and Company Preferred Stock by the Company Exchange Ratio (the " Company Merger Shares "). For purposes of the foregoing sentence, shares of Company Common Stock shall be converted into and become shares of Parent Common Stock and shares of Company Series A Preferred Stock shall be converted into and become shares of Parent Series C Preferred Stock. All such shares of Company Common Stock and Company Series A Preferred Stock, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and each holder of a certificate theretofore representing any such shares shall cease to have any rights with respect thereto, except the right to receive, upon surrender of such certificate in accordance with Section 4.3 , shares of Parent Common Stock and, in the case of Company Common Stock only, cash in lieu of fractional shares as contemplated by Section 4.5 . All calculations made pursuant to this Section 4.1(c) shall be made in the manner set forth in Exhibit B , which is based on the Blue Sun Fully-Diluted Units, the Company Fully-Diluted Common Stock and the Parent Fully-Diluted Common Stock as of the date hereof and assuming the Closing Price is equal to $4.00 per share.  

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(d)     Stock Options .

(i)     At the Effective Time, each outstanding option to purchase Company Common Stock granted under the Company’s 2005 Stock Option Plan (the " Company Stock Option Plan ") or otherwise granted (a " Stock Option "), whether vested or unvested, shall be deemed assumed by Parent and (i) each Stock Option assumed by Parent may be exercised only for shares of Parent Common Stock on the same terms and conditions as were in effect prior to the Effective Time, including, without limitation, any vesting periods, (ii) the number of shares of Parent Common Stock subject to each such Stock Option shall be adjusted to the number of whole shares of Parent Common Stock (omitting any fractional share) determined by multiplying the number of shares of Parent Common Stock subject to each Stock Option by the Company Exchange Ratio (not taking into account whether or not such option was in fact exercisable), and (iii) the per share exercise price under each such Stock Option shall be adjusted by dividing the exercise price thereof by the Company Exchange Ratio and such exercise price shall be rounded up to the nearest cent.

(ii)    As soon as practicable after the Effective Time, Parent shall deliver to each holder of an outstanding Stock Option an appropriate notice setting forth such holder’s rights pursuant thereto, and such Stock Option shall continue in effect on the same terms and conditions.

(iii)   Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery pursuant to the terms set forth in this Section 4.1(d) .

(iv)   Subject to any applicable limitations under the Securities Act, and the rules and regulations thereunder, Parent shall file a Registration Statement on Form S-8 (or any successor form), as soon as reasonably practicable following the Effective Time, with respect to the shares of Parent Common Stock issuable upon exercise of the Stock Options, and Parent shall use all reasonable efforts to maintain the effectiveness of such registration statement(s) (and maintain the current status of the prospectus or prospectuses relating thereto) for so long as such options shall remain outstanding.

(e)    Company Warrants .

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(i)     At the Effective Time, each outstanding warrant to purchase Company Common Stock (a " Company Warrant ") shall be deemed assumed by Parent and (i) each Company Warrant assumed by Parent may be exercised only for shares of Parent Common Stock on the same terms and conditions as were in effect prior to the Effective Time, (ii) the number of shares of Parent Common Stock subject to each such Warrant shall be adjusted to the number of whole shares of Parent Common Stock (omitting any fractional share) determined by multiplying the number of shares of Parent Common Stock subject to each Warrant by the Company Exchange Ratio (not taking into account whether or not such warrant was in fact exercisable), and (iii) the per share exercise price under each such Warrant shall be adjusted by dividing the exercise price thereof by the Company Exchange Ratio and such exercise price shall be rounded up to the nearest cent.

(ii)    After the Effective Time, each holder of an outstanding Company Warrant may deliver to Parent its outstanding Company Warrant with an appropriate instrument of transfer and Parent shall thereafter deliver to each such holder (i) a new warrant reflecting the conversion provisions of Section 4.1(e)(i) and (ii) an appropriate notice setting forth such holder’s rights pursuant thereto.

(iii)   Parent shall take all corporate action necessary to reserve for issuance a sufficient number of Parent Common Stock for delivery pursuant to the terms set forth in this Section 4.1(e) .

4.2     Blue Sun Merger Conversion Terms . Immediately after the Effective Time, by virtue of the Blue Sun Merger and without any action on the part of Parent or any Member:

(a)    Each of the Blue Sun Units issued and outstanding immediately prior to the Effective Time shall be cancelled.

(b)    All Blue Sun Units that immediately prior to the Effective Time are held by the Surviving Corporation shall be cancelled and no capital stock of Parent, capital stock of the Surviving Corporation, cash or other consideration shall be paid or delivered in exchange therefor.

(c)    Subject to the provisions of Section 4.4 , all of the equity securities included in the Blue Sun Fully-Diluted Units issued and outstanding immediately prior to the Effective Time (after taking into account the cancellation of Blue Sun Units pursuant to Section 4.2(b)) shall be converted into and become a number of shares of Parent Common Sock determined by multiplying such Blue Sun Units by the Blue Sun Exchange Ratio (the " Blue Sun Merger Shares " and, together with the Company Merger Shares, the " Merger Shares "). All such Blue Sun Units, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and each Member shall cease to have any rights with respect thereto, except the right to receive, in accordance with Section 4.4 , shares of Parent Common Stock and cash in lieu of fractional shares as contemplated by Section 4.5 . All calculations made pursuant to this Section 4.2(c) shall be made in the manner set forth in Exhibit B , which is based on the Blue Sun Fully-Diluted Units, the Company Fully-Diluted Common Stock and the Parent Fully-Diluted Common Stock as of the date hereof and assuming the Closing Price is equal to $4.00 per share.

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4.3     Delivery of Certificates and Payment of Cash to Stockholders of the Company . Immediately after the Effective Time, each holder of a certificate or certificates representing issued and outstanding shares of record of Company Common Stock or Company Series A Preferred Stock immediately prior to the Effective Time, other than any holder whose shares of Company Common Stock are cancelled in accordance with Section 4.1(b) , may surrender such certificate or certificates to Parent or, in the case of certificates for Company Common Stock, Parent’s exchange agent, and, subject to the last two sentences of this Section 4.3 , Parent or its exchange agent, as applicable, shall immediately deliver or cause to be delivered, in exchange therefor, one or more certificates representing the aggregate number of whole shares of Parent Common Stock into which the Company Common Stock represented by the certificate or certificates so surrendered shall have been converted pursuant to Section 4.1(c) and a check payable to such holder to effect the payment of cash in lieu of any fractional share pursuant to Section 4.5 , and the aggregate number of whole shares of Parent Series C Preferred Stock into which the Company Series A Preferred Stock represented by the certificate or certificates so surrendered shall have been converted pursuant to Section 4.1(c) . Until so surrendered, each outstanding certificate representing issued and outstanding shares of record of Company Common Stock or Company Series A Preferred Stock immediately prior to the Effective Time shall not be transferable on the books of the Surviving Corporation or Parent, but is shall be deemed for all corporate purposes to evidence the right to receive such ownership of the number of whole shares of Parent Common Stock, Parent Series C Preferred Stock and cash, as the case may be, into which the shares of Company Common Stock or Company Series A Preferred Stock, as applicable, which immediately prior to the Effective Time were represented thereby shall have been converted pursuant to Section 4.1 and Section 4.5 . At the close of business on the Business Day next preceding the Effective Date, the stock transfer books of the Company must be closed and no transfer of Company Common Stock or Company Series A Preferred Stock may thereafter be made or consummated. 

4.4     Delivery of Certificates and Payment of Cash to the Members . Immediately after the Blue Sun Effective Time, Parent shall cause its exchange agent to deliver or cause to be delivered to the each Member, other than any Member whose Blue Sun Units are cancelled in accordance with Section 4.2(b) , without any action on their part, in exchange for their Blue Sun Units, one or more certificates representing the aggregate number of whole shares of Parent Common Stock into which Blue Sun Units held by them have been converted pursuant to Section 4.2 and a check payable to such holder to effect the payment of cash in lieu of any fractional share pursuant to Section 4.5 . No transfer of Blue Sun Units may be made or consummated after the close of business on the Business Day next preceding the Blue Sun Effective Date.

4.5     Fractional Shares . No certificates for fractions of shares of Parent Common Stock and no scrip or other certificates evidencing fractional interests in such shares shall be issued pursuant to Section 4.1 or Section 4.2 . If the conversion of a Person’s aggregate holdings of Company Common Stock or Blue Sun Units at any time results in a fractional share of Parent Common Stock or interest therein, such Person shall, in lieu thereof, be paid cash in an amount equal to the value of such fractional share or interest based on the Closing Price of Parent Common Stock. Any Person otherwise entitled to a fractional share or interest shall not be entitled by reason thereof to any voting, dividend or other rights as a stockholder of Parent.

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4.6     Delivery of Merger Shares to Exchange Agent . At or prior to the Effective Time, Parent shall supply, or shall cause to be supplied, to or for the account of its exchange agent, in trust for the benefit of the holders of Company Common Stock and Blue Sun Units, for exchange in accordance with Section 4.1(c) and Section 4.2(c) , through the exchange agent, certificates evidencing Merger Shares issuable pursuant to Section 4.1(c) and Section 4.2(c) in exchange for outstanding shares of Company Common Stock and outstanding Blue Sun Units. Parent agrees to make available to its exchange agent, from time to time as needed, cash sufficient to pay cash in lieu of fractional shares and any dividends and distributions. Notwithstanding the foregoing, nothing in this Section 4.6 shall obligate Parent to (i) declare any dividends or distributions with respect to its capital stock or (ii) deliver any cash to its exchange agent prior to the Blue Sun Effective Time.

4.7     Lost, Stolen or Destroyed Certificates . In the event any certificates representing Company Common Stock, Company Series A Preferred Stock or Blue Sun Units shall have been lost, stolen or destroyed, the Exchange Agent shall issue such Merger Shares as may be required pursuant to Sections 4.1 or 4.2 in exchange for such lost, stolen or destroyed certificates, upon the making of an affidavit of that fact by the holder thereof and delivery of bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent or its exchange agent with respect to the certificates alleged to have been lost, stolen or destroyed.

4.8     No Liability . At any time following six months after the Blue Sun Effective Time, Parent shall be entitled to require its exchange agent to deliver to Parent any Merger Shares that had been made available to its exchange agent by or on behalf of Parent and which has not been disbursed to holders of Company Common Stock or Blue Sun Units, and thereafter such holders shall be entitled to look to Parent only as general creditors thereof with respect to the Merger Shares issuable in exchange for the shares of Company Common Stock or Blue Sun Units. Notwithstanding the foregoing, neither Parent, Merger Sub, the Company nor Blue Sun shall be liable to any holder of Company Common Stock or Blue Sun Units for any Merger Shares delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any shares of Parent Common Stock or other amounts remaining unclaimed by holders of Company Common Stock or Blue Sun Units two years after the Blue Sun Effective Time (or such earlier date immediately prior to such time as such amounts would otherwise escheat to or become property of any governmental authority) shall, to the extent permitted by applicable law, become the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.

4.9     Withholding Rights . Parent or its exchange agent shall be entitled to deduct and withhold from the Merger Shares otherwise payable pursuant to this Agreement such amounts as Parent or the exchange agent is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax Law. To the extent that amounts are so withheld by Parent or its exchange agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock or Blue Sun Units in respect of which such deduction and withholding was made by Parent or its exchange agent.

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4.10       Dissenting Shares .

(a)    Notwithstanding any provision of this Agreement to the contrary, any shares of Company Common Stock or Company Series A Preferred Stock that are outstanding immediately prior to the Effective Time and which are held by holders of the Company Common Stock or Company Series A Preferred Stock who have not voted in favor of the Company Merger or consented thereto in writing and who have demanded properly to exercise its rights in accordance with Sections 7-113-101 to 7-113-302 of the CBCA (collectively, the " Dissenting Shares ") will not be converted into or represent the right to receive the Merger Shares. Such shareholders are entitled to receive payment of the value of such shares held by them in accordance with the provisions of such Sections 7-113-101 to 7-113-302 of the CBCA, except that all Dissenting Shares held by shareholders who have failed to perfect or who effectively have withdrawn or lost their rights under Sections 7-113-101 to 7-113-302 of the CBCA are thereupon deemed to have been converted into and to have become exchangeable for, as of the Effective Time or the Blue Sun Effective Time, as applicable, the right to receive the Merger Shares without any interest thereon, upon surrender, in the manner provided in Section 4.3 , of the certificate or certificates that formerly evidenced such shares.

(b)    The Company shall give Parent prompt notice of any demands under Sections 7-113-101 to 7-113-302 of the CBCA received by the Company, withdrawals of such demands, and any other instruments served pursuant to the CBCA and received by the Company. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands made under Sections 7-113-101 to 7-113-302 of the CBCA or offer to settle or settle any such demand.

ARTICLE V

CLOSING

5.1     Closing; Closing Date . Unless this Agreement has been terminated pursuant to Section 11.1 , and subject to the satisfaction or waiver of the conditions set forth in Article IX and Article X , the closing of the Mergers (the " Closing ") shall take place at 10:00 a.m. on a date to be specified by the parties (the " Closing Date ") that must be no later than the third Business Day after the satisfaction or waiver of the conditions set forth in Article IX and Article X , at the offices of Sidley Austin LLP, 555 West Fifth Street, Los Angeles, California 90013, unless another time, date or place is agreed to in writing by the parties hereto.

5.2     Filing Certificate of Merger and Effectiveness . Subject to the fulfillment or waiver of the conditions to the respective obligations of each of the parties set forth in Article IX or Article X , as the case may be, at the Closing the parties shall cause the Merger to be consummated by filing in the following order (i) the Certificate of Designations, executed and acknowledged in accordance with the DGCL, in the office of the Secretary of State of the State of Delaware, (ii) a Certificate of Merger for the Company Merger (which shall be in form and substance reasonably satisfactory to the parties hereto), executed and acknowledged in accordance with the DGCL, in the office of the Secretary of State of the State of Delaware and a Statement of Merger for the Company Merger (which shall be in form and substance reasonably satisfactory to the parties hereto), executed and acknowledged in accordance with the CCAA, in the office of the Secretary of State of the State of Colorado, and (iii) a Statement of Merger for the Blue Sun Merger (which shall be in form and substance reasonably satisfactory to the parties hereto), executed and acknowledged in accordance with the CCAA, in the office of the Secretary of State of the State of Colorado. The Company Merger shall become effective upon the filing specified in clause (ii) above as provided by the DGCL and the CCAA. The Blue Sun Merger shall become effective upon the filing specified in clause (iii) above as provided by the CCAA. The date and time on such date of effectiveness of the Company Merger are herein called, respectively, the " Effective Date " and the " Effective Time ". The date and time on such date of effectiveness of the Blue Sun Merger are herein called, respectively, the " Blue Sun Effective Date " and the " Blue Sun Effective Time ".

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5.3     Parent’s Deliveries . At the Closing, Parent shall deliver to the Company all of the following:

(a)    A copy of the Certificate of Designations, certified as of a recent date by the Secretary of State of the State of Delaware;

(b)    A certificate of good standing of Parent, issued as of the Effective Date by the Secretary of State of the State of Delaware;

(c)    A certificate of the Secretary or an Assistant Secretary of Parent, dated the Effective Date, in form and substance reasonably satisfactory to the Company, as to (i) no amendments to Parent’s Certificate of Incorporation other than as contemplated by this Agreement; (ii) the Bylaws of Parent; (iii) the resolutions of the Board of Directors of Parent authorizing the execution and performance of this Agreement and the transactions contemplated herein; and (iv) the incumbency and signatures of the officers of Parent executing this Agreement and any Parent Related Agreement;

(d)    Evidence in form and substance reasonably satisfactory to the Company, that all Parent Required Consents have been obtained;

(e)    Duly executed copies of the agreement of each holder of Parent Series A Preferred Stock or Parent Series B Preferred Stock outstanding immediately prior to the Effective Time to convert its Parent Series A Preferred Stock or Parent Series B Preferred Stock, as applicable, into Parent Common Stock;

(f)     Resignations of each of the officers and directors of Parent, effective as of the Effective Time;

(g)   An opinion of Ellenoff, Grossman and Schole LLP, counsel to Parent and Merger Sub, dated the Effective Date and in form and substance reasonably satisfactory to the Company, substantially in the form contained in Exhibit E ;

(h)   A certificate dated as of the Effective Date, duly executed by the President or any Vice President of Parent, certifying as to the compliance by Parent with Section 9.1 and Section 9.2 .

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5.4     Merger Sub’s Deliveries . At the Closing, Merger Sub shall deliver to the Company all of the following:

(a)    A copy of the Certificate of Incorporation of Merger Sub certified as of a recent date by the Secretary of State of the State of Delaware;

(b)    A certificate of good standing of Merger Sub, issued as of a recent date by the Secretary of State of the State of Delaware;

(c)    A certificate of the Secretary or an Assistant Secretary of Merger Sub, dated the Effective Date, in form and substance reasonably satisfactory to the Company, as to (i) no amendments to the Certificate of Incorporation of Merger Sub; (ii) the Bylaws of Merger Sub; (iii) the resolutions of the Board of Directors of Merger Sub authorizing the execution and performance of this Agreement and the transactions contemplated herein and the written consent of Parent adopting this Agreement in accordance with Section 251 of the DGCL; and (iv) the incumbency and signatures of the officers of Merger Sub executing this Agreement and any Merger Sub Related Agreement; and

(d)   A certificate dated as of the Effective Date, duly executed by the President or any Vice President of Parent, certifying as to the compliance by Merger Sub with Section 9.1 and Section 9.2 .

5.5     The Company’s Deliveries . At the Closing, the Company shall deliver to Parent all of the following:

(a)    A copy of the Articles of Incorporation of the Company, certified as of a recent date by the Secretary of State of the State of Colorado;

(b)    a certificate of good standing of the Company, issued as of a recent date by the Secretary of State of the State of Colorado;

(c)    a certificate of the Secretary or an Assistant Secretary of the Company, dated the Effective Date, in form and substance reasonably satisfactory to Parent, as to (i) no amendments to the Articles of Incorporation of the Company; (ii) the Bylaws of the Company; (iii) the resolutions of the Board of Directors of the Company authorizing the execution and performance of this Agreement and the transactions contemplated herein and the resolutions of the stockholders of the Company adopting this Agreement in accordance with Section 70-90-203 of the CCAA; and (iv) the incumbency and signatures of the officers of the Company executing this Agreement and any Company Related Agreement;

(d)    Evidence in form and substance reasonably satisfactory to Parent, that all Company Required Consents have been obtained;

(e)    an opinion of Faegre & Benson LLP, counsel to the Company, dated the Effective Date and in form and substance reasonably satisfactory to Parent, substantially in the form contained in Exhibit F ; and

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(f)    A certificate dated as of the Effective Date, duly executed by the President or any Vice President of the Company, certifying as to the compliance by the Company with Section 10.1 and Section 10.2 .

5.6     Blue Sun’s Deliveries . At the Closing, Blue Sun shall deliver to Parent all of the following:

(a)    A copy of the Articles of Organization of Blue Sun, certified as of a recent date by the Secretary of State of the State of Colorado;

(b)    a certificate of good standing of Blue Sun, issued as of a recent date by the Secretary of State of the State of Colorado;

(c)    a certificate of the Secretary or an Assistant Secretary of Blue Sun, dated the Effective Date, in form and substance reasonably satisfactory to Parent, as to (i) no amendments to the Articles of Organization of Blue Sun; (ii) the Operating Agreement of Blue Sun; (iii) the resolutions of the Board of Managers of Blue Sun authorizing the execution and performance of this Agreement and the transactions contemplated herein and the resolutions of the Members adopting this Agreement in accordance with Section 70-90-203 of the CCAA; and (iv) the incumbency and signatures of the officers of Blue Sun executing this Agreement and any Blue Sun Related Agreement;

(d)    Evidence in form and substance reasonably satisfactory to Parent, that all Blue Sun Required Consents have been obtained;

(e)    an opinion of Faegre & Benson LLP, counsel to Blue Sun, dated the Effective Date and in form and substance reasonably satisfactory to Parent, substantially in the form contained in Exhibit G ; and

(f)    A certificate dated as of the Effective Date, duly executed by the President or any Vice President of the Subsidiary, certifying as to the compliance by Blue Sun with Section 10.1 and Section 10.2 .

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND BLUE SUN

The Company and Blue Sun, jointly and severally, represent and warrant to Parent and Merger Sub, as of the date of this Agreement and as of the Closing Date (as if such representations and warranties were remade on the Closing Date), as follows:

6.1     Due Incorporation, etc.; Subsidiaries .

(a)     Schedule 6.1(a) sets forth a complete list of the subsidiaries of the Company (the " Subsidiaries "). Except as set forth on Schedule 6.1(a) , (i) the Company does not have any direct or indirect subsidiaries, either wholly or partially owned, or own directly or indirectly any of the capital stock or other equity or long-term debt securities of or have any direct or indirect economic, voting, equity or management interest in any other Person or directly or indirectly own any security issued by any Person, and (ii) all of the outstanding equity securities of the Subsidiaries are owned, directly or indirectly, by the Company. The Company and the Subsidiaries are duly organized, validly existing and in good standing under the Laws of their respective jurisdictions of organization, with all requisite corporate power and authority to own, lease and operate their respective properties and to carry on their respective businesses as they are now being owned, leased, operated and conducted.

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(b)    The jurisdictions in which the Company and each Subsidiary are licensed or qualified to do business as foreign companies are set forth on Schedule 6.1(b) . The Company and each Subsidiary are licensed or qualified to do business and are in good standing as foreign corporations or limited liability companies, as applicable, in each jurisdiction where the nature of the properties owned, leased or operated by them and the businesses transacted by them require such licensing or qualification.

(c)    True, accurate and complete copies of the articles of incorporation, articles of organization, limited liability company agreement and bylaws (or similar organizational instruments), as amended, and all minutes of all meetings (or written consents in lieu of meetings) of the members, stockholders, boards of directors, board of managers (and all committees thereof) of the Company and the Subsidiaries have been delivered to Parent.

(d)    The Disclosure Documents as of their respective dates did not, and will not (after giving effect to any updated disclosures therein) as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

6.2     Due Authorization . The Company and Blue Sun each have full power and authority to enter into this Agreement and its respective Related Agreements and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company and Blue Sun of this Agreement and its respective Related Agreements have been duly and validly approved by its Board of Directors, board of managers or other governing board, and no other actions or proceedings on the part the Company or Blue Sun are necessary to authorize this Agreement, its respective Related Agreements and the transactions contemplated hereby and thereby. The Company and Blue Sun have duly and validly executed and delivered this Agreement and have duly and validly executed and delivered (or prior to or at the Closing will duly and validly execute and deliver) its respective Related Agreements. This Agreement constitutes legal, valid and binding obligations of the Company and Blue Sun and each of their respective Related Agreements upon execution and delivery by the Company or Blue Sun, as applicable, will constitute their legal, valid and binding obligations, in each case, enforceable in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws in effect which affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies.

6.3     Consents and Approvals; No Conflicts, etc.

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(a)    Except for the Company Required Consents set forth on Schedule 6.3(a) , no consent, authorization or approval of, notice to, filing or registration with, or cooperation from, any Governmental Authority or any other Person not a party to this Agreement is necessary in connection with the execution, delivery and performance by the Company or Blue Sun of this Agreement and the execution, delivery and performance by the Company or Blue Sun of its respective Related Agreements or the consummation of the transactions contemplated hereby or thereby.

(b)    Except as set forth on Schedule 6.3(b) , the execution, delivery and performance by the Company and Blue Sun of this Agreement and the execution, delivery and performance by the Company and Blue Sun of any of their respective Related Agreements do not and will not (i) violate any Law applicable to the Company, any Subsidiary or any of their respective properties or assets; (ii) violate or conflict with, result in a breach or termination of, constitute a default or give any third party any additional right (including a termination right) under, permit cancellation of, result in the creation of any Lien upon any of the respective assets or properties of the Company or any Subsidiary under, or result in or constitute a circumstance which, with or without notice or lapse of time or both, would constitute any of the foregoing under, any Contract to which the Company or any Subsidiary is a party or by which any of their respective assets or properties are bound; (iii) permit the acceleration of the maturity of any indebtedness of the Company or any Subsidiary or indebtedness secured by any of the respective assets or properties of the Company or any Subsidiary; or (iv) violate or conflict with any provision of any of the articles of incorporation, articles of organization, limited liability company agreement, bylaws or similar organizational instruments of the Company or any Subsidiary.

6.4     Capitalization .

(a)    The Company has the authorized, issued and outstanding capitalization set forth on Schedule 6.4 (the " Company Capitalization "). In addition, at the Closing Date the Company will have up to an additional 750,000 shares of Company Series A Preferred Stock outstanding. The Company has also reserved an aggregate of 260,000 shares of Company Common Stock for issuance to directors, officers, employees and consultants pursuant to the Company’s 2005 Stock Option Plan, 92,250 shares of which remain available for future grant. All of the outstanding shares of capital stock of the Company and each Subsidiary (i) have been duly authorized, validly issued, and are fully paid and nonassessable, (ii) are, and when issued were, free of preemptive or similar rights and (iii) are owned (legally and beneficially) free and clear of any and all Liens, encumbrances, equities, and restrictions on transferability (other than those imposed by the Securities Act and the state securities or "Blue Sky" Laws) or voting.

(b)    Except as set forth on Schedule 6.4 , there are no membership interests, shares of capital stock or other securities (whether or not such securities have voting rights) of the Company or any Subsidiary issued or outstanding or any subscriptions, options, warrants, calls, rights, convertible securities or other agreements or commitments of any character (i) obligating any shareholder or member of the Company or any Subsidiary, the Company or any Subsidiary or any of their respective Affiliates, (ii) obligating any shareholder or member of the Company any Subsidiary or any of its Affiliates to cause the Company or any Subsidiary, or (iii) obligating the Company to cause any Subsidiary, in each case to issue, transfer or sell, or cause the issuance, transfer or sale of, any membership interests, shares of capital stock or other securities (whether or not such securities have voting rights) of the Company or any Subsidiary.

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(c)    Except as set forth on Schedule 6.4, no options, warrants or other rights to purchase from the Company or any Subsidiary, agreements or other obligations of the Company or any Subsidiary to issue or other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in the Company or any Subsidiary are outstanding; and, there is no agreement, understanding or arrangement among the Company or any Subsidiary and each of their respective stockholders or members or any other Person relating to the ownership or disposition of any capital stock of the Company or any Subsidiary or the election of directors or managers of the Company or any Subsidiary or the governance of the Company's or any Subsidiary's affairs, and such agreements, understandings and arrangements, if any, will not be breached or violated as a result of the execution and delivery of, or the consummation of the transactions contemplated by this Agreement or any Related Agreement.

6.5     Company Financial Statements; No Undisclosed Liabilities .

(a)    The Company Financial Statements present fairly the consolidated financial position, assets and liabilities of the Company and the Subsidiaries as of the dates thereof and the consolidated revenues, expenses, results of operations and cash flows of the Company and the Subsidiaries for the periods covered thereby and changes in financial position of the Company and the Subsidiaries as of the dates and for the periods covered thereby, in each case in conformity with GAAP applied consistently during such periods in accordance with the past accounting practices of the Company, subject (in the case only of any unaudited, interim financial statements included in the Company Financial Statements) to normal year-end audit adjustments required by the independent auditors of the Company in conformance with GAAP. The Company Financial Statements are in accordance with the books and records of the Company and the Subsidiaries, do not reflect any transactions which are not bona fide transactions and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

(b)    The Company Financial Statements, including the notes thereto, make full and adequate disclosure of, and provision for, all material obligations and liabilities of the Company and the Subsidiaries as of the dates thereof. The Company and the Subsidiaries have no liabilities, debts, claims or obligations (including "off-balance sheet" liabilities, debts, claims or obligations), whether accrued, absolute, contingent or otherwise, and whether due or to become due, other than (i) as set forth on Schedule 6.5 or in the Latest Balance Sheet, (ii) trade payables and accrued expenses incurred in the ordinary course of business since the date of the Latest Balance Sheet and (iii) liabilities incurred in connection with this Agreement or the transactions contemplated hereby.

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(c)    Neither the Company nor Blue Sun has ever paid a distribution to its stockholders or members in respect of their equity securities in the Company or Blue Sun.

6.6     No Adverse Effects or Changes . Except as set forth on Schedule 6.6 , since December 31, 2005, the Company and the Subsidiaries have conducted their respective businesses and operations in all respects only in the ordinary course and consistent with past practices. Without limiting the foregoing, except as set forth on Schedule 6.6 , since December 31, 2005, neither the Company nor any Subsidiary has:

(a)    suffered any Material Adverse Effect;

(b)    suffered any damage, destruction or Loss to any of its assets or properties (whether or not covered by insurance);

(c)    incurred any obligation or entered into any Contract which either (i) required a payment by any party in excess of, or a series of payments which in the aggregate exceed, $50,000 or provides for the delivery of goods or performance of services, or any combination thereof, having a value in excess of $50,000 or (ii) has a term, or requires the performance of any obligations by the Company or any Subsidiary over a period, in excess of six months;

(d)    taken any action, or entered into or authorized any Contract or transaction other than in the ordinary course of business;

(e)    sold, transferred, conveyed, assigned or otherwise disposed of any of its assets or properties, except sales of inventory in the ordinary course of business;

(f)    waived, released or cancelled any claims against third parties or debts owing to it, or any rights which have any value;

(g)    made any changes in its accounting systems, policies, principles or practices;

(h)    entered into, authorized, or permitted any transaction with any Affiliate of any stockholder or any member of the Company or any Subsidiary;

(i)    authorized for issuance, issued, sold, delivered or agreed or committed to issue, sell or deliver (whether through the issuance or granting of options, warrants, convertible or exchangeable securities, commitments, subscriptions, rights to purchase or otherwise) any membership interests, shares of its capital stock or any other securities, or amended any of the terms of any such securities;

(j)    declared, set aside or paid any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its membership interests or capital stock, or redeemed or otherwise acquired any securities of the Company or any Subsidiary;

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(k)    made any borrowing, incurred any debt (other than trade payables in the ordinary course of business and consistent with past practice), or assumed, guaranteed, endorsed (except for the negotiation or collection of negotiable instruments in transactions in the ordinary course of business and consistent with past practice) or otherwise become liable (whether directly, contingently or otherwise) for the obligations of any other Person, or made any payment or repayment in respect of any indebtedness (other than trade payables and accrued expenses in the ordinary course of business and consistent with past practice);

(l)     made any loans, advances or capital contributions to, or investments in, any other Person;

(m)   entered into, adopted, amended or terminated any bonus, profit sharing, compensation, termination, equity option, equity appreciation right, restricted equity, performance unit, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer, consultant or employee, or increased in any manner the compensation or fringe benefits of any director, officer, consultant or employee or paid any benefit not required by any existing plan and arrangement or entered into any contract, agreement, commitment or arrangement to do any of the foregoing;

(n)    except for capital expenditures contemplated by clause (o) , acquired, leased or encumbered any assets outside the ordinary course of business or any assets which are material to the Company or any Subsidiary;

(o)    authorized or made any capital expenditures which individually or in the aggregate are in excess of $50,000;

(p)    made any Tax election or settled or compromised any federal, state, local or foreign Tax liability, or waived or extended the statute of limitations in respect of any such Taxes;

(q)    paid any amount, performed any obligation or agreed to pay any amount or perform any obligation, in settlement or compromise of any suits or claims of liability against the Company, any Subsidiary or any of their respective directors, officers, employees or agents; or

(r)    terminated, modified, amended or otherwise altered or changed any of the terms or provisions of any Contract, or paid any amount not required by Law or by any Contract.

6.7     Title to Properties . Except as set forth on Schedule 6.7 , the Company and the Subsidiaries have good and valid record and marketable title to, and are the lawful owners of, all of the tangible and intangible assets, properties and rights used in connection with their respective businesses and all of the tangible and intangible assets, properties and rights reflected in the Company Financial Statements (other than assets disposed of in the ordinary course of business since the dates of such Company Financial Statements), free and clear of any Lien.

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6.8     Condition and Sufficiency of Assets . Except as set forth on Schedule 6.8 , all of the tangible assets and properties of the Company, whether real or Personal, owned or leased, have been well maintained and are in good operating condition and repair (with the exception of normal wear and tear), and are free from defects other than such minor defects as do not interfere with the intended use thereof in the conduct of normal operations or adversely affect the resale value thereof. Immediately after the Closing, the Company and the Subsidiaries shall own or have a valid right to use all the assets, properties, rights, know-how, key personnel, processes and ability which are required for or currently used in connection with the operation of their respective businesses as they are presently conducted. Such assets, properties, rights, know-how, key personnel, processes and ability were sufficient to produce the consolidated revenue of the Company and the Subsidiaries prior to the Closing Date, as shown on the income statement for that year set forth on Schedule 1.1(a) . 

6.9     Real Property .

(a)     Schedule 6.9 sets forth true, accurate, and complete and insurable legal descriptions of all of the real estate (i) owned by the Company or any Subsidiary (the " Real Property ") and (ii) held or used by the Company or any Subsidiary under real property leases (the " Real Property Leases "). The Real Property and the land subject to the Real Property Leases constitute all of the land owned, held or used by the Company and the Subsidiaries in the conduct of their respective businesses. Seller has delivered to the Company true, accurate and complete copies of the Real Property Leases and the most recent title insurance policies and surveys (if any) for the Real Property in the possession of Seller, the Company or any Subsidiary, together with copies of all reports (if any) of any engineers, environmental consultants or other consultants in its possession relating to any of the Real Property or land subject to a Real Property Lease.

(b)    The activities carried on in all buildings, plants, facilities, installations, fixtures and other structures or improvements included as part of, or located on or at, the Real Property or the land subject to a Real Property Lease, and the buildings, plants, facilities, installations, fixtures and other structures or improvements themselves, are not in violation of, or in conflict with, any applicable zoning, environmental or health regulations or ordinance or any other similar Law.

(c)    No parcel of land included in the Real Property or subject to a Real Property Lease relies on or regularly makes use of access to the nearest public road or right-of-way over land owned by others, except where such access is by means of one or more valid recorded easements not subject to divestiture, the terms of which have been disclosed in writing to Parent prior to the date hereof. All covenants or other restrictions (if any) to which any of the Real Property is subject or to which any land subject to a Real Property Lease is subject are being in all respects properly performed and observed and, except for covenants contained in the Real Property Leases, do not provide for forfeiture or reversion of title if violated, and neither the Company nor any Subsidiary has received any notice of violation (or claimed violation) thereof.

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(d)    Each separate parcel of land included in the Real Property or subject to a Real Property Lease has adequate water supply, storm and sanitary sewer facilities, access to telephone, gas and electrical connections, fire protection, drainage and other public utilities, and has adequate parking facilities that meet all requirements imposed by applicable Laws. None of the Real Property is subject to any Lien, easement, right-of-way, building or use restriction, exception, variance, reservation or limitation as might in any material respect interfere with or impair the present and continued use thereof in the usual and normal conduct of the business of the Company or any Subsidiary.

(e)    Except as set forth on Schedule 6.9 , there is no pending or, to the Knowledge of the Company, threatened or proposed proceeding or governmental action to modify the zoning classification of, or to condemn or take by the power of eminent domain (or to purchase in lieu thereof), or to classify as a landmark, or to impose special assessments on, or otherwise to take or restrict in any way the right to use, devel