AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

SUPERIOR OFFSHORE INTERNATIONAL, INC.

OFI ACQUISITION LLC

OCEAN FLOW INTERNATIONAL, L.L.C.

and

KARL WINTER

TABLE OF CONTENTS
(continued)

				Page
ARTICLE I DEFINITIONS					1
Section 1.1		Definitions			1
Section 1.2		Rules of Interpretation			9
ARTICLE II THE MERGER					10
Section 2.1		The Merger			10
Section 2.2		Conversion of Securities			10
Section 2.3		The Merger Consideration and the Escrow Agreement			11
Section 2.4		The Surviving Company			11
ARTICLE III CLOSING					11
Section 3.1		Closing			11
Section 3.2		Deliveries by Parent to Seller			11
Section 3.3		Deliveries by Seller to Parent			12
ARTICLE IV REPRESENTATIONS AND WARRANTIES AS TO SELLER AND THE COMPANY					13
Section 4.1		Representations and Warranties as to Seller			13
Section 4.2		Representations and Warranties as to the Company			15
ARTICLE V REPRESENTATIONS AND WARRANTIES AS TO PARENT					30
Section 5.1		Existence			30
Section 5.2		Power and Authority; Authorization; Enforceability			30
Section 5.3		No Conflicts; Consents			30
Section 5.4		Capital Stock of Parent			31
Section 5.5		SEC Documents			31
Section 5.6		Securities Act			31
Section 5.7		Litigation; Orders			31
ARTICLE VI COVENANTS OF SELLER					32
Section 6.1		Access			32
Section 6.2		Ordinary Conduct			32
Section 6.3		Company Confidential Information			33
Section 6.4		Assignment of Confidentiality Agreements			34

TABLE OF CONTENTS
(continued)

				Page
Section 6.5		Exclusive Dealing			34
Section 6.6		Employment Agreement; Liquidated Damages			35
Section 6.7		Maintenance of Employees			36
Section 6.8		Certain Licenses and Permits			36
Section 6.9		Records			36
Section 6.10		Seller Disclosure Schedules, Updated Disclosures; Breaches			36
Section 6.11		Assignment of Company Intellectual Property			37
Section 6.12		Closing Date Debt			37
Section 6.13		Publicity			38
Section 6.14		Further Actions			38
ARTICLE VII COVENANTS OF BUYER					38
Section 7.1		Confidentiality			38
Section 7.2		Notice, Breaches			38
ARTICLE VIII MUTUAL COVENANTS					39
Section 8.1		Cooperation			39
Section 8.2		Commercial Efforts			39
Section 8.3		Transfer Restrictions			39
Section 8.4		Legend			40
Section 8.5		401(k) Plan			40
ARTICLE IX TAX MATTERS					40
Section 9.1		Taxable Period Ending on or Before Closing Date			40
Section 9.2		Taxable Period Beginning on or Before Closing Date and Ending After the Closing Date			41
Section 9.3		Franchise Tax			41
Section 9.4		Other State and Local Taxes			41
Section 9.5		Cooperation			41
Section 9.6		Interest			42
Section 9.7		Reorganization under Section 368(a) of the Code			42
ARTICLE X CONDITIONS PRECEDENT TO PARENT’S OBLIGATIONS					42
Section 10.1		Accuracy of Representations and Warranties			42

TABLE OF CONTENTS
(continued)

				Page
Section 10.2		Seller Consents			42
Section 10.3		Parent Consents			42
Section 10.4		Parent Investigation			43
Section 10.5		Recent Events			43
Section 10.6		No Law			43
Section 10.7		No Order			43
ARTICLE XI CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS					43
Section 11.1		Accuracy of Representations and Warranties			43
Section 11.2		No Law			43
Section 11.3		No Order			43
ARTICLE XII TERMINATION					44
Section 12.1		Termination of Agreement			44
Section 12.2		Investigation			44
Section 12.3		Effect of Termination			44
ARTICLE XIII INDEMNIFICATION					44
Section 13.1		In General			44
Section 13.2		Method of Asserting Claims, Etc.			45
Section 13.3		Satisfaction of Claims from Escrow			46
Section 13.4		Survival of Representations and Warranties			47
Section 13.5		Instructions to Escrow Agent			47
Section 13.6		Tax Related Adjustments			47
Section 13.7		Recovery			47
Section 13.8		No Waiver as to Certain Claims			48
Section 13.9		Express Negligence			48
Section 13.10		Waiver and General Release			48
ARTICLE XIV MISCELLANEOUS					49
Section 14.1		Amendments			49
Section 14.2		Notices			49
Section 14.3		Assignment			50
Section 14.4		Severability			50

TABLE OF CONTENTS
(continued)

				Page
Section 14.5		Entire Agreement			50
Section 14.6		Governing Law			50
Section 14.7		Expenses			50
Section 14.8		Attorneys Fees			50
Section 14.9		Binding Effect; No Third Party Beneficiaries			51
Section 14.10		Counterparts			51
Section 14.11		Forum Selection and Consent to Jurisdiction			51
Section 14.12		Time			51

Exhibits

Exhibit A		Form of Escrow Agreement
Exhibit B		Form of Employment Agreement
Exhibit C		Form of Restricted Stock Agreement
Exhibit D		Accredited Investor Certificate

Schedules

3.2(e)		Key Employees and Restricted Stock Awards
4.2(e)		Financial Statements
4.2(h)		Bank Accounts
4.2(j)		Contracts
4.2(k)(ii)		Tax Matters
4.2(m)(ii)		Leased Real Property
4.2(n)		Company Intellectual Property
4.2(q)		Permits
4.2(r)(i)		Employees
4.2(r)(ii)		Independent Contractors and Consultants
4.2(t)(i)		Benefit Plans
4.2(u)		Insurance
4.2(v)(i)		Transactions with Affiliates
5.2		Parent’s Corporate Approvals
5.3		Parent’s Conflicts and Consents
6.4		Confidentiality Agreements

AGREEMENT AND PLAN OF MERGER

     This Agreement and Plan of Merger (this “ Agreement ”), dated as of October 18, 2007, is by and among Superior Offshore International, Inc., a Delaware corporation (“ Parent ”), OFI Acquisition LLC, a Texas limited liability company (“ Merger Sub ”), Ocean Flow International, L.L.C., a Texas limited liability company (the “ Company ”), and Karl Winter, an individual resident of the State of Texas (“ Seller ”).

RECITALS

     WHEREAS, it is proposed that Parent acquire the Company pursuant to a merger of Merger Sub with and into the Company with the Company surviving as a wholly-owned subsidiary of Parent (the “ Merger ”), and that Seller’s 100% Membership Interest in the Company be immediately canceled and converted into shares of common stock, par value $0.01 per share, of Parent (“ Parent Common Stock ”), on the terms and subject to the conditions set forth herein; and

     WHEREAS, Seller, in his capacity as the sole manager and sole member of the Company, has (i) approved this Agreement and the transactions contemplated hereby, including the Merger, and (ii) approved the “plan of merger” set forth in this Agreement, in each case in accordance with the Texas Limited Liability Company Act (the “ TLLCA ”); and

     WHEREAS, Parent, in its capacity as the sole member of Merger Sub, has (i) approved this Agreement and the transactions contemplated hereby, including the Merger, and (ii) approved the “plan of merger” set forth in this Agreement, in each case in accordance with the Texas Limited Liability Company Law (the “ TLLCL ”);

     NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     Section 1.1 Definitions . As used in this Agreement, the terms set forth below shall have the following respective meanings unless the context clearly requires otherwise:

     “ Affiliate ” means, with respect to a person, another person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with such person. In addition, in the case of a person who is a natural person, the term Affiliate shall also include all members of such person’s Immediate Family and any relative who has the same primary residence as such person.

     “ Agreement ” has the meaning set forth in the Preamble of this Agreement.

     “ Articles of Merger ” has the meaning set forth in Section 2.1(a) .

     “ Average Closing Price ” means, with respect to a particular date of determination, the average of the closing prices for a share of Parent Common Stock on the NASDAQ Global Market (“ NASDAQ ”) (as reported in The Wall Street Journal or, if not reported thereby, another alternative source as chosen by Parent) for the twenty trading days immediately preceding, but not including, the date two days prior to such date.

     “ Balance Sheet ” has the meaning set forth in Section 4.2(e ).

     “ Balance Sheet Date ” has the meaning set forth in Section 4.2(e ).

     “ Business ” has the meaning set forth in Section 4.2(l)(ii) .

     “ Capital Stock ” means (i) with respect to a corporation, any and all shares, interests, participations, rights or other equivalents (however designated) of equity or ownership interests in such corporation, (ii) with respect to any other entity, any and all partnership, limited partnership, limited liability company or other equity or ownership interests of such entity however denominated and (iii) any right or security convertible into or exercisable or exchangeable for any of the foregoing.

     “ Claim ” means any suit, demand, claim or action of any type, however styled.

     “ Claim Notice ” has the meaning set forth in Section 13.2(a) .

     “ Closing ” has the meaning set forth in Section 3.1 .

     “ Closing Date ” has the meaning set forth in Section 3.1 .

     “ Closing Shares ” has the meaning set forth in Section 2.3 .

     “ Code ” means the Internal Revenue Code of 1986, as amended.

     “ Commonly Controlled Entity ” means any corporation, trade, business or entity under common control with the Company (but not including the Company) within the meaning of Section 414(b), (c), (m), or (o) of the Code or Section 4001 of ERISA.

     “ Company ” has the meaning set forth in the Preamble of this Agreement.

     “ Company Confidential Information ” has the meaning set forth in Section 6.3 .

     “ Company Employee Benefit Plan ” means each Employee Benefit Plan that is sponsored, maintained, or contributed to by the Company or any Commonly Controlled Entity for the benefit of the employees, former employees, independent contractors or agents of the Company or its subsidiaries at any time within six years prior to the Closing Date.

     “ Company Intellectual Property ” means all Intellectual Property used, held for use, or required for use in the conduct of the Business and owned by, licensed to, or otherwise used by the Company or Seller (excluding any proprietary rights, ownership rights or other interests of

any clients or customers of the Company to any plans, prints, technical drawings, procedures or other items designed, fabricated or produced by the Company for such clients and customers).

     “ Company Personal Property ” has the meaning set forth in Section 4.2(l)(i) .

     “ Competing Transaction ” has the meaning set forth in Section 6.5 .

     “ Confidential Information ” has the meaning set forth in Section 7.1 .

     “ Contract ” means any written or oral contract, agreement, indenture, note, bond, loan, lease, conditional sale contract, mortgage or insurance policy.

     “ Control ” means the possession, directly or indirectly through one or more intermediaries, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

     “ Controlled Entity Employee Benefit Plan ” means each Employee Benefit Plan (other than the Company Employee Benefit Plans) that is sponsored, maintained, or contributed to by any Commonly Controlled Entity, or has been so sponsored, maintained, or contributed to by any Commonly Controlled Entity at any time within six years prior to the Closing Date.

     “ Court ” means (i) any court established and functioning under the Laws of any nation or state, or any political subdivision thereof, including the United States of America, Canada, any state of the United States of America and any province of Canada and (ii) any arbitrator, arbitration panel or similar body.

     “ Damages ” has the meaning set forth in Section 13.1 .

     “ Effective Time ” has the meaning set forth in Section 2.1(a) .

     “ Employment Agreement ” has the meaning set forth in Section 3.2(d) .

     “ Employee Benefit Plan ” means (i) each employee benefit plan within the meaning of Section 3(3) of ERISA and (ii) each personnel policy, stock option plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, workers’ compensation program, vacation policy, voluntary employees’ beneficiary association, severance pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment agreement, and any other employee benefit plan, agreement, arrangement, program, practice, or understanding.

     “ Environmental Laws ” means any and all Laws and Orders, all common law theories (at law or in equity) and all notices and other binding agreements issued, promulgated or entered into by any Governmental Authority, relating to pollution, preservation, remediation or protection of health, safety or the environment, the preservation or reclamation of natural resources, or to the management, Release or threatened Release of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, the Federal Water

Pollution Control Act, as amended by the Clean Water Act of 1977, the Clean Air Act of 1970, as amended, the Toxic Substances Control Act of 1976, as amended, the Occupational Safety and Health Act of 1970, as amended, the Emergency Planning and Community Right-to-Know Act of 1986, as amended, the Safe Drinking Water Act of 1974, as amended, the Hazardous Materials Transportation Act, as amended, and any similar or implementing state or local Laws and all amendments or regulations promulgated thereunder.

     “ Environmental Permits ” means any Permit required under Environmental Laws.

     “ Environmental Reports ” has the meaning set forth in Section 4.2(w)(viii) .

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

     “ Escrow Agent ” has the meaning set forth in Section 2.3 .

     “ Escrow Agreement ” has the meaning set forth in Section 2.3 .

     “ Escrow Shares ” has the meaning set forth in Section 2.2 .

     “ Exchange Act ” means the Securities and Exchange Act of 1934, as amended.

     “ Financial Statements ” has the meaning set forth in Section 4.2(e) .

     “ GAAP ” means generally accepted accounting principles in the United States of America.

     “ Governmental Authority ” means any government of, or any authority, agency, regulatory body, commission, official, or other instrumentality of any government of, the United States of America or Canada or any other foreign country, or any domestic or foreign state, province, county, city, local, or other political subdivision thereof (other than a Court).

     “ GUST ” has the meaning set forth in Section 4.2(t)(ii) .

     “ Hazardous Materials ” means: (i) any chemical, material, waste, or substance at any time defined or regulated by, or forming the basis of liability under, any Environmental Law including any “hazardous waste,” “solid waste,” “extremely hazardous waste,” “hazardous material,” “hazardous substance,” “toxic substance,” “hazardous material,” “contaminant,” “pollutant” or any other comparable term or expression intended to define or classify substances by reason of properties harmful to health, safety, or the indoor or outdoor environment, (ii) any oil, petroleum hydrocarbon, petroleum product or petroleum substance (including crude oil, any petroleum fraction or any petroleum derivative substance), (iii) any drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (iv) any flammable substances or explosives, (v) any radioactive materials, polychlorinated biphenyls, asbestos-containing materials, radon, or urea formaldehyde foam insulation, (vi) pesticides and (vii) any other chemical, material, waste, substance, or noxious odor, exposure to which is prohibited or regulated under Environmental Laws.

     “ Immediate Family ” means a person’s spouse, parents, siblings, children, mothers and fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law.

     “ Indemnified Party ” has the meaning set forth in Section 13.1 .

     “ Indemnifying Party ” has the meaning set forth in Section 13.1 .

     “ Indemnity Notice ” has the meaning set forth in Section 13.2(b) .

     “ Intellectual Property ” means all of the following as they exist in all jurisdictions throughout the world, in each case, and further including all rights of priority thereto and rights to sue thereon:

     (i) patents, patent applications, and other patent or industrial property rights (including any divisions, continuations, continuations-in-part, substitutions, re-examinations or reissues thereof, whether or not patents are eventually issued on any such applications, and whether or not any such applications are in interference or opposition proceedings, or are modified, withdrawn or resubmitted);

     (ii) trademarks, service marks, trade dress, trade names, brand names, designs, logos or corporate names, whether registered or unregistered, and all registrations and applications for registration thereof and all goodwill associated therewith and symbolized thereby;

     (iii) copyrights and mask works, registrations therefor and applications for registration thereof;

     (iv) trade secrets, designs, layouts, software, electronic files, research, processes, procedures, techniques, methods, confidential information, shop rights, know-how, data, works made for hire by others, inventions, works of authorship (whether published or unpublished) and other proprietary and intangible rights (whether or not patentable or subject to copyright, mask work, or trade secret protection);

     (v) domain names (including registrations and reservations thereof and rights of priority thereto), URLs and web site content (regardless of form, to the extent not included elsewhere in this definition of Intellectual Property); and

     (vi) rights of privacy, performance rights, rights of publicity, rights of attribution and integrity and other moral rights.

     “ IRS ” means the Internal Revenue Service.

     “ Key Employees ” has the meaning set forth in Section 3.2(e) .

     “ Knowledge ” means, with respect to a person, the knowledge, after due inquiry of a reasonable person in a similar position (which due inquiry includes the obligation to ask questions regarding such matter to the persons who are reasonably likely to have knowledge of such matter), of such person.

     “ Law ” means any applicable constitutional provision, statute, act, code (including the Code), law, regulation, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment, decision, declaration, treaty or interpretive or advisory opinion of a Governmental Authority.

     “ Leased Real Property ” has the meaning set forth in Section 4.2(m)(ii ).

     “ Legal Proceeding ” means any judicial, administrative or arbitral action, hearing, charge, complaint, suit or proceeding (public or private) by or before any Court or Governmental Authority.

     “ Lien ” means any lien, claim, encumbrance, security interest, mortgage, deed of trust, option, charge or restriction of any kind.

     “ Material Adverse Effect ” means an event, change or occurrence that has or could reasonably be expected to have (i) a material adverse effect on the business, condition (financial or otherwise), prospects, properties or results of operations of the Company or (ii) a material adverse effect on the ability of Seller or the Company to consummate the transactions contemplated hereby in accordance with the terms.

     “ Material Contract ” means, with respect to any person, (i) any Contract to which such person is a party or by which such person is in any way bound as to which the remaining benefit to, or obligation of, such person under any such Contract (a) in any case in which the benefit or obligation can be reasonably reduced to monetary terms, equals or exceeds $10,000 or (b) in any case in which it cannot reasonably be reduced to monetary terms, is material to such person or (ii) any of the following types of Contracts to which such person is a party or by which such person is in any way bound:

               (i) any Contract under which indebtedness for borrowed money or the deferred purchase price of property or services is outstanding;

               (ii) any Contract that constitutes a lease, whether operating or capital;

               (iii) any Contract that constitutes a guaranty or other agreement of suretyship;

               (iv) except for those Contracts entered into in the ordinary course of business, any Contract containing an agreement of indemnification;

               (v) any Contract that includes any covenant or agreement of such person that purports to restrict the business activity of such person or limit the freedom of any such person to compete with any other person;

               (vi) any joint venture, partnership, investment or other Contract (A) involving a sharing of profits or losses relating to all or any portion of the business of such person or (B) requiring any such person to invest funds in or make loans to, or purchase any securities of, another person, venture or other business enterprise;

               (vii) any Contract in which such person has granted to a third person a right of first refusal to acquire assets;

               (viii) any Contract providing for commissions, fees or royalties or other payments by or to a person based on sales, purchases or profits, other than direct payments for goods, materials, supplies or services;

               (ix) any Contract relating to the acquisition, development, co-development, licensing, sublicensing or use of software, firmware or Intellectual Property (other than “off the shelf” and similar software program licenses that provide for the payment of a license fee of less than $5,000 per year);

               (x) any Contract relating to or providing for the creation of a Lien on any assets of such person; and

               (xi) any Employee Benefit Plan and any other employment, severance, compensation or similar Contract and any Contract for management, consulting or other similar services.

     “ Membership Interest ” means an interest representing all of a member’s ownership rights in a limited liability company, including a member’s voting, management and economic rights therein.

     “ Merger ” has the meaning set forth in the Recitals of this Agreement.

     “ Merger Sub ” has the meaning set forth in the Preamble of this Agreement.

     “ Order ” means any order, judgment, injunction, ruling or decree of any Court or Governmental Authority.

     “ Organizational Documents ” means (i) with respect to a corporation, the articles or certificate of incorporation and bylaws thereof, or any comparable governing instruments, together with any other governing agreements or instruments of such corporation or the shareholders thereof, each as amended, (ii) with respect to a limited liability company, the certificate of formation or articles of organization and the operating agreement, limited liability company agreement or regulations of the limited liability company, or any comparable governing instruments, each as amended, (iii) with respect to a partnership, the certificate of formation and the partnership agreement of the partnership and, if applicable, the Organizational Documents of such partnership’s general partner, or any comparable governing instruments, each as amended and (iv) with respect to any other person the organizational, constituent and/or governing documents and/or instruments of such person.

     “ Parent ” has the meaning set forth in the Preamble of this Agreement.

     “ Parent Common Stock ” has the meaning set forth in the Recitals of this Agreement.

     “ Permit ” means any permit, license, certificate, variance, exemption, approval, franchise, registration or authorization.

     “ Permitted Liens ” means (i) Liens that are caused or created by Parent; (ii) Liens for Taxes not yet due or payable; (iii) mechanics’, carriers’, workers’, repairmen’s or other similar Liens attaching by operation of Law and arising or incurred in the ordinary course of business relating to liabilities that are not overdue; and (iv) Liens that arise under zoning, land use and other similar Laws, none of which, individually or in the aggregate, would have a Material Adverse Effect or materially interfere with the conduct of the business of the Company following the Closing.

     “ Person ” or “ person ” means any natural person, firm, corporation, partnership, limited liability company, trust, joint venture, association, or other organization which has a legal existence under the Laws of its jurisdiction of formation which is separate from its owner or owners and any Governmental Authority or Court.

     “ Pre-Closing Tax ” has the meaning set forth in Section 9.2 .

     “ Proceeding ” has the meaning set forth in Section 9.5 .

     “ Qualified Employee Benefit Plan ” has the meaning set forth in Section 4.2(t)(ii) .

     “ Records ” has the meaning set forth in Section 6.1 .

     “ Release ” means any actual or threatened spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, emanation or migration of any Hazardous Materials in, into, onto, or through the environment (including ambient air, surface water, ground water, soils, land surface, subsurface strata, building, workplace, or structure).

     “ Representatives ” has the meaning set forth in Section 6.1 .

     “ Restricted Stock Agreements ” has the meaning set forth in Section 3.2(e) .

     “ SEC ” has the meaning set forth in Section 5.5 of this Agreement

     “ SEC Documents ” has the meaning set forth in Section 5.5 .

     “ Securities Act ” has the meaning set forth in Section 4.1(f) .

     “ Seller ” has the meanings set forth in the Preamble of this Agreement.

     “ Seller Disclosure Schedules ” has the meaning set forth in Section 6.10 .

     “ Survival Periods ” has the meaning set forth in Section 13.4 .

     “ Tax ” or “ Taxes ” means any unclaimed property and escheat obligations, taxes, assessments, fees and other governmental charges imposed by any Governmental Authority, including income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, real property (including assessments, fees or other charges imposed by any Governmental Authority that are based on the use or ownership of real property), value added, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp,

leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, including any item for which liability arises by contract or as a transferee or successor.

     “ Tax Items ” has the meaning set forth in Section 4.2(k)(i) .

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

     “ Taxing Authority ” means, with respect to any Tax, the Governmental Authority that imposes such Tax or is charged with the collection of such Tax, including any governmental or quasi-governmental entity or agency that imposes, or is charged with collecting, social security or similar charges or premiums.

     “ Third Party Claim ” has the meaning set forth in Section 13.2(a) .

     “ TLLCA ” has the meaning set forth in the Recitals of this Agreement.

     “ TLLCL ” has the meaning set forth in the Recitals of this Agreement.

     “ Transaction Documents ” means this Agreement, the Articles of Merger, the Escrow Agreement, the Employment Agreement and the Restricted Stock Agreements.

     “ Transfer ” has the meaning set forth in Section 8.3 .

     “ Treasury Regulations ” has the meaning set forth in Section 4.2(k)(x) .

     Section 1.2 Rules of Interpretation . The following provisions shall be applied wherever appropriate herein:

          (a) “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and other equivalent words shall refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used;

          (b) “including” means “including without limitation” and is a term of illustration and not of limitation;

          (c) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;

          (d) wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders;

          (e) this Agreement and the other Transaction Documents have been jointly prepared by the parties hereto and thereto, and neither this Agreement nor any other agreement,

document or instrument referred to herein or executed and delivered in connection herewith shall be construed against any Person as the principal draftsperson hereof or thereof;

          (f) the section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section, or in any way affect this Agreement;

          (g) any references herein to a particular Section, Article, Exhibit or Schedule means a Section or Article of, or an Exhibit or Schedule to, this Agreement unless otherwise expressly stated herein;

          (h) the Exhibits and Schedules attached hereto are incorporated herein by reference and shall be considered part of this Agreement; and

          (i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, and all determinations with respect to accounting matters hereunder shall be made, in accordance with GAAP, applied on a consistent basis.

ARTICLE II
THE MERGER

     Section 2.1 The Merger .

          (a) On the Closing Date, the Company and Merger Sub shall file with the Secretary of State of the State of Texas an instrument satisfying the applicable requirements of articles of merger under the TLLCA and a certificate of merger under the TLLCL (the “ Articles of Merger ”) and make all other filings or recordings required by the TLLCA or the TLLCL in connection with the Merger. The Merger shall become effective at such time (the “ Effective Time ”) as is specified in the Articles of Merger.

          (b) At the Effective Time, Merger Sub shall be merged with and into the Company in accordance with the TLLCA and the TLLCL, whereupon the separate existence of Merger Sub shall cease, and the Company shall be the sole surviving entity (the “ Surviving Company ”). From and after the Effective Time, the Surviving Company shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Sub, all as provided under the TLLCA and the TLLCL.

     Section 2.2 Conversion of Securities . At the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof:

          (a) Seller’s 100% Membership Interest in the Company shall be converted into and become 1,283,587 shares of Parent Common Stock (the “ Merger Consideration ”); and

          (b) Parent’s 100% Membership Interest in Merger Sub shall be converted into and become a 100% Membership Interest in the Surviving Company and shall constitute the only outstanding Membership Interests of the Surviving Company.

     Section 2.3 The Merger Consideration and the Escrow Agreement .

          (a) Merger Consideration . The Merger Consideration shall consist of 1,283,587 shares of Parent Common Stock, of which (i) 962,690 shares (the “ Closing Shares ”) shall be delivered to Seller at the Closing and (ii) 320,897 shares (the “ Escrow Shares ”) shall be deposited with Wells Fargo Bank, National Association (the “ Escrow Agent ”), in escrow pursuant to the terms and conditions of an escrow agreement, substantially in the form attached hereto as Exhibit A (the “ Escrow Agreement ”).

          (b) Escrow Agreement. The Escrow Shares shall be held in escrow for a period of two years following the Closing for the satisfaction of Seller’s indemnification obligations to Parent pursuant to Article XIII . Any Escrow Shares remaining under the Escrow Agreement shall be delivered to the Seller on the second anniversary of the Closing unless the Escrow Agent shall have received notice from Parent of any pending indemnification claim, in which event such remaining Escrow Shares shall be delivered only in accordance with joint written instructions from Parent and Seller or an award of a Court of competent jurisdiction.

     Section 2.4 The Surviving Company .

          (a) Organizational Documents . The articles of organization of the Company shall be amended at the Effective Time as set forth in the Certificate of Merger and, as so amended, shall be the articles of organization of the Surviving Company until amended in accordance with applicable Law. The regulations of the Company shall be amended at the Effective Time in such manner as may be approved by Parent in its sole discretion and, as so amended, shall be the regulations of the Surviving Company until amended in accordance with applicable Law.

          (b) Managers and Officers . At the Effective Time, the manager and each of the officers of the Company shall immediately be removed from office. From and after the Effective Time, the Surviving Company shall be managed by Parent as the sole member in accordance with the amended Organizational Documents of the Company and the officers of the Surviving Company shall be those specified or elected in accordance with the amended Organizational Documents of the Company.

ARTICLE III
CLOSING

     Section 3.1 Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall be held at the offices of Bracewell & Giuliani LLP, 711 Louisiana Street, Suite 2300, Houston, Texas, at 10:00 a.m. on October 26, 2007 or such other time and date as the parties may agree. The date on which the Closing shall occur is hereinafter referred to as the “ Closing Date .”

     Section 3.2 Deliveries by Parent to Seller . At the Closing, Parent shall deliver or cause to be delivered:

          (a) to Seller, a duly executed stock certificate representing the Closing Shares, which certificate shall bear the restrictive legend set forth in Section 8.4 ;

          (b) to Seller, a duly executed counterpart to the Escrow Agreement, accompanied by evidence of receipt by the Escrow Agent of the Escrow Shares;

          (c) to Seller, a duly executed counterpart to the Articles of Merger;

          (d) to Seller, a duly executed counterpart to an employment agreement among Parent, the Surviving Company and Seller, substantially in the form attached hereto as Exhibit B (the “ Employment Agreement ”);

          (e) to the employees of the Company identified on Schedule 3.2(e) (the “ Key Employees ”), duly executed counterparts to restricted stock agreements between the Company and such Key Employee substantially in the form attached hereto as Exhibit C (the “ Restricted Stock Agreements ”), which Restricted Stock Agreements grant each Key Employee the number of shares of restricted Parent Common Stock set forth opposite his or her name on Schedule 3.2(e) ;

          (f) to the Escrow Agent, a duly executed stock certificate representing the Escrow Shares, which certificate shall bear the restrictive legend set forth in Section 8.4 ; and

          (g) to the Seller, the officer’s certificate referenced in Section 11.1 .

     Section 3.3 Deliveries by Seller to Parent . At the Closing, Seller shall deliver or cause to be delivered to Parent:

          (a) a duly executed counterpart to the Escrow Agreement;

          (b) a duly executed counterpart to the Articles of Merger;

          (c) a duly executed counterpart to the Employment Agreement;

          (d) duly executed counterparts of each Key Employee to the applicable Restricted Stock Agreement;

          (e) a certificate of non-foreign status of Seller which meets the requirements of Treasury Regulation Section 1.1445-2(b)(2); and

          (f) the certificate of Seller referenced in Section 10.1 .

          (g) all other documents, instruments and writings required to be delivered by Seller at or prior to the Closing pursuant to this Agreement or otherwise reasonably requested by Parent or Merger Sub in connection herewith.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
AS TO SELLER AND THE COMPANY

     Section 4.1 Representations and Warranties as to Seller . Seller, in recognition that Parent and Merger Sub are relying hereon as a material inducement to entering into this Agreement and performing their obligations hereunder, hereby represents and warrants to Parent and Merger Sub as follows as of the date hereof and as of the Closing Date:

          (a) Authorization; Enforceability . Seller has full right, power, legal capacity and authority to enter into and perform his obligations under this Agreement and the other Transaction Documents to which he is a party and to consummate the transactions contemplated hereby and thereby. This Agreement, each of the other Transaction Documents and each of the other instruments, certificates and documents executed and delivered or to be executed and delivered by Seller in connection with this Agreement have been duly executed and delivered or will, at Closing, be duly executed and delivered by Seller and constitute or will, upon the execution and delivery thereof, constitute valid and binding obligations of Seller, enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

          (b) No Conflicts; Consents . The execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which he is a party do not, and the consummation by Seller of the transactions contemplated hereby and thereby will not, conflict with, result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation under, or result in the creation of any Lien upon any of the properties or assets of the Company under, any provision of (i) the Organizational Documents of the Company, (ii) any Contract or other commitment, agreement or arrangement to which Seller is a party or by which his properties or assets are bound or (iii) any Permit, Order or Law applicable to Seller or any of his properties or assets. No Permit of, or registration, declaration or filing with, any Governmental Authority or any other person is required to be obtained or made by or with respect to Seller or any of his Affiliates in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents or the consummation of the transactions contemplated hereby and thereby.

          (c) Litigation; Orders . There are no Orders or Legal Proceedings, whether completed, pending or, to the Knowledge of Seller, threatened, that question the validity of this Agreement or any action taken or to be taken by Seller in connection with, or which seek to enjoin or to obtain monetary damages in respect of, this Agreement or the consummation by Seller of the transactions contemplated hereby or which otherwise threaten Seller’s ability to consummate the transactions contemplated hereby.

          (d) Title to Company Securities . Seller owns beneficially and of record a 100% Membership Interest of the Company, free and clear of all Liens, other than the restrictions applicable to the Membership Interests of the Company under the Securities Act.

Such Membership Interest is not subject to any voting trust agreement or other Contract, including any Contract or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Membership Interests of the Company.

          (e) Fees . Neither Seller nor the Company has paid or become obligated to pay any fee or commission to any broker, finder or intermediary in connection with the transactions contemplated hereby for which Parent, Merger Sub or the Company shall have any liability or responsibility.

          (f) Private Offering of Membership Interests . None of Seller, his Affiliates, nor anyone acting on their behalf has issued, sold or offered any security of the Company to any person under circumstances that would cause the sale of the Membership Interests of the Company, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”).

          (g) Investment Representations .

               (i) Seller understands that the offering and sale of the Parent Common Stock making up the Merger Consideration pursuant to this Agreement has not been registered under the Securities Act and will be issued by Parent pursuant to an exemption from the registration requirements of the Securities Act. Seller further understands that the shares of Parent Common Stock will be characterized as “restricted securities” under the Securities Act and may be resold without registration under the Securities Act only in limited circumstances. In connection with the foregoing, Seller is familiar with Rule 144 under the Securities Act and understands the resale limitations imposed thereby on the Parent Common Stock.

               (ii) Seller is an “accredited investor” (as defined in Regulation D under the Securities Act) and has truthfully and accurately completed the certificate attached hereto as Exhibit D and delivered same to Parent as of the date of execution hereof indicating the basis on which he is representing his status as an “accredited investor.”

               (iii) Seller is acquiring the Parent Common Stock making up the Merger Consideration for his own account, for investment and not with a view to the public resale or distribution thereof in violation of any securities Law.

               (iv) Seller (A) has been furnished with or has had full access to all of the information that he considers necessary or appropriate to make an informed investment decision with respect to the Parent Common Stock making up the Merger Consideration and that he has requested from Parent, (B) has had an opportunity to discuss with management of Parent the intended business and financial affairs of Parent and to obtain information (to the extent Parent possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to him or to which he had access, (C) can bear the economic risk of (i) an investment in the Parent Common Stock making up the Merger Consideration indefinitely and (ii) a total loss in respect of such investment and (D) has, either alone or together with his advisors, such knowledge and experience in business and financial matters so as to enable him to understand and evaluate the risks of and form an investment

decision with respect to his investment in the Parent Common Stock making up the Merger Consideration and to protect his own interest in connection with such investment.

     Section 4.2 Representations and Warranties as to the Company . The Company and the Seller, in recognition that Parent and Merger Sub are relying hereon as a material inducement to entering into this Agreement and performing their obligations hereunder, hereby represent and warrant to Parent and Merger Sub as follows as of the date hereof and as of the Closing Date:

          (a) Existence; Power and Authority; Books and Records .

               (i) The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas. The Company has full limited liability company power and authority and possesses all Permits necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified or licensed and in good standing to do business in the State of Texas and in each other jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification or licensing necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Material Adverse Effect.

               (ii) Seller and the Company have, prior to the execution of this Agreement, delivered to Parent true and complete copies of the Organizational Documents of the Company, each as amended to date. Seller and the Company have made available to Parent true and complete copies of the minute books and membership interest transfer records of the Company. Such minute books and membership interest transfer records correctly reflect all actions taken at all meetings of, or by written consents of, the members and managers of the Company (including any committees thereof), including but not limited to actions taken at such meetings relating to the organization of the Company and the issuance of Membership Interests of the Company and options or rights to purchase Membership Interests of the Company or other securities of the Company. All organizational records of the Company (copies of which have been made available for inspection by Parent prior to the date hereof) are true and complete.

          (b) No Conflicts; Consents . The execution, delivery and performance by Seller and the Company of this Agreement and the other Transaction Documents to which Seller and/or the Company is a party do not, and the consummation of the transactions contemplated hereby and thereby will not, conflict with, result in any violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination, cancellation or acceleration of any obligation under, or result in the creation of any Lien upon any of the properties or assets of the Company under, any provision of (i) the Organizational Documents of the Company, (ii) any Contract or other commitment, agreement or arrangement to which the Company is a party or by which any of its properties or assets are bound or (iii) any Permit, Order or Law applicable to the Company or its properties or assets. Other than the filing of the Articles of Merger with the Secretary of State of the State of Texas, no Permit of, or registration, declaration or filing with, any Governmental Authority or any other person is required to be obtained or made by or with respect to the Company or its Affiliates in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents or

the consummation of the transactions contemplated hereby and thereby. Neither the execution, delivery and performance by Seller and the Company of this Agreement and the other Transaction Documents to which Seller and/or the Company is a party nor the retention or termination of any employee in connection with such transactions, will trigger, result in or give rise to any change of control, retention or severance payments or benefits, or other payments, benefits or other rights to or in respect of any employee, consultant, contractor, Affiliate, customer, supplier or other Person, and neither Seller, the Company or any of their respective Affiliates have promised or suggested the possibility of any such payments, benefits or other rights to any Person.

          (c) Capitalization of the Company . The authorized capital of the Company consists of a 100% Membership Interest owned beneficially and of record by Seller. Such Membership Interest has been duly authorized, has been issued in accordance with the terms of the Organizational Documents of the Company, is fully paid and non-assessable, is uncertificated and represents the only outstanding Membership Interest of the Company. The Membership Interests of the Company have the rights, privileges and preferences stated in the Organizational Documents of the Company. Except for the Membership Interests of the Company, the Company has no other authorized or outstanding limited liability company interests or other securities. The Membership Interests of the Company have not been issued in violation of, and are not subject to, any purchase option, call, right of first refusal, preemptive, subscription or similar rights under any provision of (i) applicable Law, (ii) the Organizational Documents of the Company or (iii) any Contract to which Seller or the Company is subject, bound or a party or otherwise. There are no outstanding warrants, options, rights, “phantom” rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) pursuant to which Seller or the Company is obligated to issue, sell, purchase, return or redeem or cause the Company to issue, sell, purchase, return or redeem any of the Membership Interests of the Company or other limited liability company interests or other securities of the Company. There are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any matters on which members of the Company may vote.

          (d) Subsidiaries . The Company does not own, directly or indirectly, and has never owned, directly or indirectly, any Capital Stock or other equity interests in any other person.

          (e) Financial Statements. Schedule 4.2(e) contains true and complete copies of (i) the statement of revenues collected and expenses paid for the twelve months ended December 31, 2006 (the “ Balance Sheet Date ”) and (ii) statement of assets and liabilities as of the Balance Sheet Date (the “ Balance Sheet ” and, together with the statement of revenues collected and expenses paid referred to in clause (i), the “ Financial Statements ”). The Financial Statements have been prepared from the books and records of the Company and present fairly and accurately the financial condition, results of operations and cash flows of the Company.

          (f) Absence of Changes or Events . Since the Balance Sheet Date there has not been any event, change or occurrence that could reasonably be expected to have a Material Adverse Effect, the Business has been conducted in the ordinary and usual course consistent with past practices and the Company (and, where applicable, the Seller) has not taken any of the

actions or engaged in any of the conduct that is proscribed during the period from the date of this Agreement to the Closing Date by Section 6.2 .

          (g) Accounts Receivable . All customer accounts receivable of the Company have arisen from bona fide transactions in the ordinary course of business and are collectible in the normal course of the Business. The Company has good and marketable title to its accounts receivable, free and clear of all Liens. The Company’s accounts receivable that have been billed and are less than 60 days old constitute no less than $1,146.892.

          (h) Bank Accounts . Schedule 4.2(h) sets forth (i) the name of each financial institution with which the Company has borrowing or investment agreements, deposit or checking accounts or safe deposit boxes, (ii) the types of those arrangements and accounts, including the names in which the accounts or boxes are held, the account or box numbers and the name of each person authorized to draw thereon or have access thereto, and (iii) the account balance of each such account as of a recent date. The Company’s cash on hand and located in the bank accounts identified in Schedule 4.2(h) constitute no less than $33,372.24.

          (i) Customers and Suppliers . The relationships of the Company with its customers, suppliers, dealers and employees are satisfactory, and no unresolved disputes, other than immaterial disputes occurring in the ordinary course of business, with any of such customers, suppliers, dealers and employees exist. Since January 1, 2006, no material customer, supplier or dealer has terminated, cancelled, limited or notified the Company or Seller of its intent to terminate, cancel or materially limit its relationship with the Company. To the Knowledge of Seller and the Company, no customers, suppliers or dealers of the Company with which the Company has an ongoing relationship intend to cease purchasing from, selling to, renting from, or dealing with the Company, and, to the Knowledge of Seller and the Company, no such customer, supplier or dealer intends to materially alter in any respect the amount of such purchases, sales, rentals or the extent of dealings with the Company or to materially alter in any respect such purchases, sales, rentals or dealings in the event of the consummation of the transactions contemplated hereby.

          (j) Contracts . Except as set forth in Schedule 4.2(j) , (i) the Company is not a party to or bound by any Material Contract, (ii) all Material Contracts to which the Company is a party or is otherwise bound are valid, binding and in full force and effect and are enforceable by the Company in accordance with their respective terms, (iii) and the Company has performed all obligations required to be performed by it to date under each Material Contract, and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, and Seller nor the Company has received notice or has Knowledge that any counterparty to a Material Contract is alleging that the Company is in breach or default under any Material Contract, (iv) to the Knowledge of Seller and the Company, no counterparty to any Material Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default in any respect thereunder and (v) a true and correct copy of each Material Contract has been delivered to Parent. Except as set forth on Schedule 4.2(j) , neither Seller nor any Affiliate of the Company or Seller is a party to or bound by any Material Contract used in or related to the operation of the Business.

          (k) Tax Matters .

               (i) (A) All Tax Returns required to be filed by or with respect to the Company have been duly and timely filed, (B) all items of income, gain, loss, deduction and credit or other items (“ Tax Items ”) required to be included in each such Tax Return have been so included and all such Tax Items and any other information provided in each such Tax Return are true, correct and complete, (C) all Taxes owed by the Company (whether or not shown on any Tax Return) which are or have become due have been timely paid in full, (D) no assessment, penalty, interest or other charge is or will become due with respect to the late filing of any such Tax Return or late payment of any such Tax, (E) all Tax withholding and deposit requirements imposed on or with respect to the Company have been satisfied in full in all respects, (F) there are no Liens on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax and (G) all of the assets of the Company have been properly listed and described on the property tax rolls for all periods prior to and including the Closing Date, and no portion of such assets constitutes omitted property for property Tax purposes.

               (ii)  Schedule 4.2(k)(ii) lists all federal, state, local and foreign income Tax Returns filed with respect to the Company or any Affiliates, domestic of foreign (as applicable) for the six taxable years ending prior to the date hereof, indicates those Tax Returns that have been audited, indicates those Tax Returns that are currently the subject of audit and indicates those Tax Returns whose audits have been closed. No Tax audits or administrative or judicial proceedings are pending, being conducted or, to the Knowledge of Seller and the Company, are threatened with respect to the Company.

               (iii) There is no Claim against the Company for any Taxes, and no assessment, deficiency or adjustment has been asserted, proposed or threatened with respect to any Tax Return of or with respect to the Company.

               (iv) No Claim has ever been made by a Taxing Authority with respect to the Company in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to Taxation or required to file a Tax Return in that jurisdiction nor, to the Knowledge of Seller and the Company, has any such Claim been threatened.

               (v) There is not in force any extension of time with respect to the due date for the filing of any Tax Return of or with respect to the Company or any waiver or agreement for any extension of time for the assessment or payment of any Tax of or with respect to the Company.

               (vi) There are no written (or unwritten) Tax allocation or sharing agreements or other arrangements affecting the Company. No payments are due or will become due by the Company pursuant to any such agreement or arrangement or any Tax indemnification agreement, and all such agreements or arrangements shall terminate immediately prior to the Closing and shall have no further force or effect.

               (vii) None of the property of the Company is held in an arrangement that could be classified as a partnership for Tax purposes, and the Company does not own any interest in any controlled foreign corporation (as defined in former Section 957 of the Code),

former foreign personal holding company (as defined in Section 552 of the Code), passive foreign investment company (as defined in Section 1297 of the Code) or other entity the income of which is or could be required to be included in the income of the Company.

               (viii) None of the property of the Company is “tax-exempt use property” (within the meaning of Section 168(h) of the Code) or “tax-exempt bond financed property” (within the meaning of Section 168(g)(5) of the Code).

               (ix) The Company will not be required to include any amount in income for any taxable period beginning on or after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending on or prior to the Closing Date; (B) “closing agreement” as described in Code Section 7121 (or any similar provision of another Law) executed on or prior to the Closing Date; (C) installment sale or open transaction disposition made on or prior to the Closing Date; (D) application of the completed contract, long-term contract, or cash methods of accounting; or (E) prepaid amount received on or prior to the Closing Date.

               (x) The Company has not been a member of an affiliated, consolidated, combined or unitary group and has no liability for the Taxes of any person under Section 1.1502-6 of the Treasury Regulations promulgated under the Code (the “ Treasury Regulations ”) (or any similar provision of another Law), as a transferee or successor, by contract or otherwise.

               (xi) Neither the Company nor Seller has engaged in a transaction that would be reportable by or with respect to the Company pursuant to Sections 6011, 6111, or 6112 of the Code, the Treasury Regulations, or any predecessors thereto.

               (xii) The Company has properly and in a timely manner documented its transfer pricing methodology in compliance with Section 6662(e) (and any related sections) of the Code and the Treasury Regulations promulgated thereunder and any similar provision of another Law.

               (xiii) Neither the Company nor Seller is subject to any assessment or penalty pursuant to Section 6672 of the Code related to failure to collect and pay over Tax, or attempt to evade or defeat Tax nor taken positions on any Tax Return that may give rise to a Section 6672 assessment, penalty or interest.

               (xiv) None of the transactions contemplated by this Agreement will result in any Tax liability or the recognition of any item of income or gain to the Company.

               (xv) The Company has not entered into any agreement or arrangement with any Taxing Authority that requires the Company to take any action or to refrain from taking any action.

               (xvi) The Company has not distributed the stock of another person, or had its stock distributed by another person, in a transaction that purported or was intended to be governed in whole or in part by Sections 355 or 361 of the Code.

               (xvii) The Company is not a party to any agreement, Contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of (A) any “excess parachute payment” within the meaning of Code Section 280G (or any similar provision of another Law) and (B) any amount that will not be fully deductible as a result of Code Section 162(m) (or any similar provision of another Law). The Company has not been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). The Company has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662.

               (xviii) The Company operates at least one historic business line, or owns at least a significant portion of its historic business assets, in each case within the meaning of Treasury Regulation 1.368-1(d); and immediately following the Closing and the Merger, the Company will hold “substantially all of its properties” within the meaning of Section 368(a)(2)(E) of the Code (that is, at least 90% of the fair market value of the net assets and at least 70% of the gross assets held by the Company immediately prior to the Closing). For purposes of the preceding sentence, amounts paid by the Company to dissenters, amounts paid by the Company to shareholders who receive cash or other property and the Company assets used to pay its reorganization expenses and all redemptions and distributions (except for normal dividends) made by the Company immediately preceding the Closing, pursuant to this Agreement or otherwise as part of the plan of Merger provided for herein, will be included as assets of the Company held immediately prior to the Merger.

          (l) Personal Property .

               (i) The Company has good and valid title to all non-real property assets used in the Business or located on its premises, except those sold or otherwise disposed of prior to Closing in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case free and clear of all Liens. The Company has valid and enforceable leasehold interests in all such assets that are leased by the Company. The assets described in this Section 4.2(l) are referred to herein as the “ Company Personal Property .”

               (ii) All Company Personal Property has, as applicable, been installed, operated and maintained in accordance with accepted industry practice, conforms in all material respects with all requirements of Law, is suitable for the purposes for which it has been and is being employed in the operation of the business of the Company (the “ Business ”) as presently conducted, consistent with past practice. The Company Personal Property that is necessary to the continued operation of the Business, consistent with past practice, is in good operating condition and repair, ordinary wear and tear excepted. Nothing has occurred to the Company Personal Property since the Balance Sheet Date that would have any material adverse effect on its value or its suitability for the purposes for which it has been and is being employed in the operation of the Business, ordinary wear and tear excepted. In the aggregate, the Company Personal Property provides the capacity for the Company to engage in the Business on a continuous basis (subject to maintenance and repair outages in the normal course).

          (m) Real Property .

               (i) The Company does not own and has never owned any real property.

               (ii)  Schedule 4.2(m)(ii) sets forth a complete list of all real property and interests in real property currently leased by the Company or used in the Business (a “ Leased Real Property ”) and identifies any material leases and reciprocal easement or operating agreements relating thereto, in each case, setting forth the lessor and lessee thereof. Except as described in Schedule 4.2(m)(ii), neither the Company nor its predecessors has leased any other real property.

               (iii) The Company has good and valid title to the leasehold estates in all Leased Real Property, in each case free and clear of all Liens, except for Permitted Liens. None of the Permitted Liens, individually or in the aggregate, materially impairs or could reasonably be expected to materially impair, the continued use and operation of the Leased Real Property in the conduct of the Business as presently conducted.

               (iv) With respect to the Leased Real Property, (A) there are no pending or, to the Knowledge of Seller and the Company, threatened condemnation proceedings or other Legal Proceedings relating to any