AGREEMENT AND PLAN OF MERGER

EXHIBIT 10.13

EXECUTION COPY

EXHIBIT 10.13

AGREEMENT AND PLAN OF MERGER

dated October 15, 2007

by and among

BEACON ENTERPRISE SOLUTIONS GROUP, INC.,

BELL-HAUN SYSTEMS, INC.

BH ACQUISITION SUB, INC.

and

all of the Shareholders of Bell-Haun Systems, Inc.

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TABLE OF CONTENTS

Exhibits

Exhibit A - Escrow Agreement

Exhibit B - Opinion of Company's counsel

Schedules

Schedule 1.5(a) - Shareholder Liabilities

Schedule 2.8 - Scheduled Liabilities

Disclosure Schedule

(i)

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AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this "Agreement") is entered into as of

October 15, 2007 by and among BEACON ENTERPRISE SOLUTIONS GROUP, INC., an

Indiana corporation (the "Buyer"), BH ACQUISITION SUB, INC., a Nevada

corporation ("Acquisition Sub"), BELL-HAUN SYSTEMS, INC., an Ohio corporation

(the "Company"), and Thomas O. Bell and Michael Haun, the shareholders of the

Company (the "Shareholders").

Capitalized terms used in this Agreement shall have the meanings ascribed

to them in Article IX.

The Boards of Directors of the Buyer, the Acquisition Sub and the Company

have, in accordance with the laws of the States of Indiana, Nevada and Ohio,

respectively, approved the merger of the Company with and into the Acquisition

Sub, pursuant to which all of the shares of the capital stock of the Company

will be converted into Buyer Common Stock and the Company will merge with and

into the Acquisition Sub, with the Acquisition Sub being the surviving

corporation (the "Surviving Corporation"); and

It is the intention of the parties that the merger shall qualify as a

reorganization within the meaning of Section 368(a) of the Internal Revenue Code

of 1986, as amended (hereinafter the "Code") and in particular qualify as a

forward triangular merger under Code Sections 368(a)(1)(A) and 368(a)(2)(D) and

that this Agreement shall constitute a "plan of reorganization" for the purposes

of Section 368 of the Code; and

Each of the parties to the Agreement desires to make certain

representations, warranties, and agreements in connection with the transaction

between the parties and to prescribe various conditions thereto.

NOW, THEREFORE, in consideration of the mutual covenants and agreements

herein contained, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereto agree as

follows:

In consideration of the representations, warranties and covenants herein

contained, the Parties agree as follows.

ARTICLE I

THE MERGER

1.1 The Merger. (a) Subject to and upon the terms and conditions of this

Agreement, at the effective time of the merger of the Company with and into the

Acquisition Sub, and pursuant to the laws of the States of Nevada and Ohio

corporate law, the Company will be merged with and into the Acquisition Sub (the

"Merger") and the separate existence of the Company shall thereupon cease, in

accordance with the applicable provisions of the laws of the States of Ohio and

Nevada. As a result of the Merger, the Acquisition Sub will be the surviving

corporation. The Articles of Incorporation and Bylaws of the surviving

corporation shall be that of the Acquisition Sub as it is in existence

immediately prior to the Merger. The separate

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corporate existence of the Acquisition Sub with all its rights, privileges,

powers, and franchises shall continue unaffected by the Merger. On or

immediately following the Closing Date, the parties shall cause Articles of

Merger meeting the requirements of the corporate laws of the States of Ohio and

Nevada to be promptly executed and filed. The Merger shall become effective at

the time (the "Effective Time") and on the date that the filings of the Articles

of Merger with the Secretary of State for the State of Ohio and with the

Secretary of State for the State of Ohio have been completed.

(b) Within thirty (30) days after the Effective Time of the Merger, the

Acquisition Sub shall be merged with and into Buyer, and the separate existence

of the Acquisition Sub shall cease in accordance with the laws of the State of

Nevada.

1.2 Officers and Directors. The officers and directors of the Acquisition

Sub immediately prior to the Effective Time shall be the officers and directors

of the Surviving Corporation and will hold office until their successors are

duly elected and qualified in the manner provided in the Articles of

Organization or as otherwise provided by law, or until their earlier death,

resignation, or removal.

1.3 Conversion of Shares. The manner of converting the shares of the

capital stock of the Corporation shall, by virtue of the Merger and without any

action on the part of the Shareholders, be as follows: all of the issued and

outstanding shares of capital stock (the "Company Shares"), no par value per

share, of the Company shall be converted into an aggregate of 500,000 shares of

the Buyer Common Stock (the "Shares").

1.4 Exchange of Certificates. (a) From and after the Effective Time, each

holder of a certificate which previously represented Company Shares shall be

entitled to receive in exchange therefor, upon surrender thereof to the Buyer,

on a pro rata basis based on the number of Company Shares held by such

Shareholder immediately prior to the Effective Time, (i) a certificate or

certificates representing the ratable number of shares of Buyer Common Stock

into which the Company Shares shall have been converted, subject to the

provisions of Section 1.7 below regarding escrow; and (ii) a ratable portion of

the Earnout, as described more fully in Section 1.6 below. Until so surrendered

to the Buyer, each certificate formerly representing Company Shares shall be

deemed for all corporate purposes to evidence only the right to receive the

number of shares of Buyer Common Stock and the Earnout determined in accordance

with Section 1.3, this Section 1.4, and Section 1.6. Notwithstanding the

foregoing, certain of the Shares shall be placed into escrow in accordance with

the provisions of Section 1.7 below.

(b) All of the Company Shares, by virtue of the Merger and upon surrender

at the Closing, shall no longer be outstanding and shall be canceled and retired

and shall cease to exist, and the Shareholders shall cease to have any rights

with respect to the Company Shares other than as set forth in this Agreement.

All Company Shares, if any, held in the treasury of the Company on the Closing

Date shall be canceled and retired and shall cease to exist, and no

consideration shall be paid with respect thereto.

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1.5 Treatment of Liabilities. (a) Effective at the Closing, the

Shareholders shall assume the Shareholder Liabilities from the Company,

including without limitation those liabilities and obligations as are set forth

on Schedule 1.5(a).

(b) The Company and its successors (including the Buyer upon the

merger of the Acquisition Sub into the Buyer as set forth in Section 1.1(b))

will retain the Scheduled Liabilities set forth on Schedule 2.8 of the

Disclosure Schedule, including the Lease, and the Buyer shall indemnify the

Shareholders from the Scheduled Liabilities as set forth in Section 7.2 hereof.

In particular, within thirty (30) days after the Closing, the Buyer shall either

pay off or refinance the outstanding balances of the loans with Huntington

National Bank ("HNB") and Fifth Third Bank ("5/3") in the approximate amounts of

$160,000 and $250,000, respectively, or obtain one or more standby letter(s) of

credit in favor of HNB and 5/3 as beneficiaries upon which HNB and 5/3 may draw

with respect to such loans. The parties acknowledge and agree that the Buyer is

to be directly responsible for the HNB and 5/3 loans hereunder.

1.6. Earnout. (a) If, during the first twelve months after the Closing,

the Adjusted Gross Profits (as defined on Exhibit 1.6 attached hereto) reaches

or exceeds the planned amount of $1,094,114.00, then the Buyer shall issue and

deliver to the Shareholders promissory notes in the aggregate principal amount

of $240,187.00 (subject to adjustments as set forth below), to bear interest at

the rate of eight percent (8%) per annum, to be paid in equal installments of

principal and interest, beginning in the thirteenth month after the Closing and

over the following sixty (60) months.

(b) If the Adjusted Gross Profits exceed $1,094,114.00, then the aggregate

principal amount of the promissory notes shall be increased by $0.22 per $1.00

of such excess, up to a maximum aggregate principal amount of $480,374.00.

(c) If the Adjusted Gross Profits are less than $1,094,114.00 but more

than $853,927.00, then the aggregate principal amount of the promissory notes

shall be reduced by the amount of the shortfall.

(d) If the Adjusted Gross Profits are less than $853,927.00, then the

Buyer shall not issue the promissory notes.

1.7 Escrow. At the Closing, the Buyer shall deliver to the Escrow Agent a

stock certificate registered in the name of the Escrow Agent (or its nominee)

representing the Escrow Shares for the purpose of securing the indemnification

obligations of the Shareholders set forth in this Agreement. The Escrow Shares

shall be held by the Escrow Agent as part of the Escrow Fund under the Escrow

Agreement pursuant to the terms thereof. The Escrow Fund shall be held as a

trust fund and shall not be subject to any lien, attachment, trustee process or

any other judicial process of any creditor of any party, and shall be held and

disbursed solely for the purposes of and in accordance with the terms of the

Escrow Agreement. Until the termination of the escrow in accordance with the

terms of the Escrow Agreement, the Shareholders shall have the right, in its

sole discretion, to direct the sale for cash of all or any portion of the Escrow

Shares (if any then make up a portion of the Escrow Fund) in one or more

transactions provided that (i) the price per share for the sale of the Escrow

Shares is not less than $1.00, (ii) the proceeds from any such sale(s) shall be

held in escrow by the Escrow Agent pursuant to the

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terms of the Escrow Agreement, and (iii) the Shareholders may not direct any

such sale during any blackout period under any insider trading policy or

blackout policy of Buyer, and the Buyer shall promptly execute any and all

required joint instructions to the Escrow Agent to facilitate any and all such

sales of the Escrow Shares. Further, the Shareholders shall have the sole

discretion to direct the investment of amounts held in the Escrow Fund pursuant

to the investment options specified in, and in accordance with the restrictions

of, the Escrow Agreement, and Buyer agrees to promptly execute any and all joint

instructions to the Escrow Agent to facilitate any and all such investments.

Notwithstanding the foregoing, in the event that the Buyer or its successor

entity is not a public company subject to the reporting requirements of the

Securities Exchange Act of 1934, then the Escrow Agent shall submit to the

Company for cancellation certificates of the number of Escrow Shares that

represents the value of the claim based on an assumed valuation of $1.00 per

Escrow Share.

1.8 The Closing.

(a) The Closing shall take place at the offices of Frost Brown Todd

LLC in Louisville, Kentucky commencing at 9:00 a.m. local time on the Closing

Date, or at such other place as the parties may mutually agree. All transactions

at the Closing shall be deemed to take place simultaneously, and no transaction

shall be deemed to have been completed and no documents or certificates shall be

deemed to have been delivered until all other transactions are completed and all

other documents and certificates are delivered.

(b) At the Closing:

(i) the Company and the Shareholders shall deliver to the

Buyer the various certificates, instruments and documents referred to in Section

5.1;

(ii) the Buyer shall deliver to the Company and the

Shareholders the various certificates, instruments and documents referred to in

Section 5.2;

(iii) the Shareholders shall have tendered certificates

representing the Company Shares owned by the Shareholders, duly endorsed in

blank or accompanied by the appropriate stock powers, in proper form for

transfer, with all transfer taxes paid;

(iv) the Company shall tender the resignations of and releases

from each person serving as a director or officer of the Company, effective as

of the Closing;

(v) the Buyer shall deliver to the Shareholders stock

certificates registered in the names of the Shareholders representing a number

of shares of Buyer Common Stock that in the aggregate is equal to the number of

Shares minus the number of Escrow Shares;

(vi) the Buyer, the Shareholders and the Escrow Agent shall

execute and deliver the Escrow Agreement and the Buyer shall deposit a stock

certificate representing the Escrow Shares with the Escrow Agent in accordance

with Section 1.7;

(vii) the Shareholders shall provide to the Buyer satisfactory

evidence of the assumption of the Shareholder Liabilities; and

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(viii) the Buyer, the Company and the Shareholders shall

execute and deliver to each other a cross-receipt evidencing the transactions

referred to above.

1.9 Withholding. Notwithstanding any other provision of this Agreement,

each of the Buyer and the Escrow Agent shall be entitled to deduct and withhold

from the payments to be made pursuant to this Agreement and/or the Escrow

Agreement such amounts as it reasonably determines after consultation with its

Tax advisors that it is required to deduct. To the extent that amounts are so

withheld by the Buyer, such withheld amounts shall be treated for all purposes

of this Agreement as having been paid to the recipient in respect of which such

deduction and withholding was made by the Buyer or Escrow Agent.

1.10 Tax-Free Transaction. It is the intention of the Parties that the

Merger shall qualify as a "reorganization" within the meaning of Section 368(a)

of the Internal Revenue Code of 1986, as amended (hereinafter the Code) and in

particular qualify as a so-called "forward triangular merger" under Code

Sections 368(a)(1)(A) and 368(a)(2)(D) and that this Agreement shall constitute

a "plan of reorganization" for the purposes of Section 368 of the Code. All

aspects of the transactions contemplated by this Agreement shall be implemented

in a manner consistent with this intent.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS

The Company and the Shareholders, jointly and severally, represent and

warrant to the Buyer that, except as set forth in the Disclosure Schedule, the

statements contained in this Article II are true and correct as of the date of

this Agreement and will be true and correct as of the Closing as though made as

of the Closing, except to the extent such representations and warranties are

specifically made as of a particular date (in which case such representations

and warranties will be true and correct as of such date). The Disclosure

Schedule shall be arranged in sections and subsections corresponding to the

numbered and lettered sections and subsections contained in this Article II.

Disclosures in any section or subsection of the Disclosure Schedule shall

qualify such other sections or subsections of the Disclosure Schedule to the

extent it is reasonably apparent from the content of such disclosure that such

disclosure is relevant to such other sections or subsections.

2.1 Organization, Qualification and Corporate Power. The Company is a

corporation validly existing and in good standing under the laws of the State of

Ohio. The Company is duly qualified to conduct business and is in good standing

under the laws of each jurisdiction listed in Section 2.1 of the Disclosure

Schedule, which jurisdictions constitute the only jurisdictions in which the

failure of the Company to be so qualified would have a material adverse effect.

The Company has all requisite power and authority to carry on the business in

which it is engaged and to own and use the properties owned and used by it. The

Company has furnished to the Buyer complete and accurate copies of its Articles

of Incorporation and Bylaws. The Company is not in default under or in violation

of any provision of its Articles of Incorporation or Bylaws. There are no other

agreements or instruments setting forth (i) rights, preferences and privileges

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of the Shareholders with respect to the Company and/or among the Shareholders,

or (ii) matters relating to the operation and governance of the Company.

2.2 Capitalization. Section 2.2 of the Disclosure Schedule sets forth a

complete and accurate list, as of the date of this Agreement, of (i) all

Shareholders, indicating the number of shares of the Company held by each

Shareholder and (ii) all outstanding options, warrants or other instruments

giving any party the right to acquire any shares or equity securities of the

Company There are no outstanding agreements or commitments to which the Company

is a party or which are binding upon the Company for the redemption of any of

its equity. The Company has only one class of shares outstanding. There are no

outstanding options, warrants or similar rights relating to the Company or its

equity securities.

Each Shareholder is the true and lawful owner of, and has good title to,

that number of shares of the Company set forth beside his or her name on Section

2.2 of the Disclosure Schedule, free and clear of all liens, security interests

and other encumbrances.

2.3 Authorization of Transaction. The Company has all requisite power and

authority to execute and deliver this Agreement and the Ancillary Agreements and

to perform its obligations hereunder and thereunder. The performance by the

Company of this Agreement and the Ancillary Agreements and the consummation by

the Company of the transactions contemplated hereby and thereby have been duly

and validly authorized by all necessary actions on the part of the Company.

This Agreement has been duly and validly executed and delivered by the

Company and constitutes, and each of the Ancillary Agreements, upon its

execution and delivery by the Company, will constitute, a valid and binding

obligation of the Company, enforceable against the Company in accordance with

its terms, except as enforceability may be limited by bankruptcy, insolvency,

reorganization, moratorium, arrangement or other similar laws from time to time

in effect and except as to the remedy of specific performance which may not be

available under the laws of various jurisdictions.

2.4 Noncontravention. Neither the execution and delivery by the Company of

this Agreement or the Ancillary Agreements, nor the consummation by the Company

of the transactions contemplated hereby or thereby, will (a) conflict with or

violate any provision of the Articles of Incorporation or Bylaws of the Company,

(b) require on the part of the Company any notice to or filing with, or any

permit, authorization, consent or approval of, any Governmental Entity, (c)

conflict with, result in a breach of, constitute (with or without due notice or

lapse of time or both) a default under, result in the acceleration of

obligations under, create in any party the right to terminate, modify or cancel,

or require any notice, consent or waiver under, any contract or instrument to

which the Company is a party or by which the Company is bound or to which any of

its assets is subject, except with respect to contracts that are not customer

contracts listed on Section 2.4 of the Disclosure Schedules, for any such

conflict, breach, default, acceleration, or right to terminate, modify or

cancel, or failure to notify or obtain consent or waiver that would not have a

Company Material Adverse Effect, (d) result in the imposition of any Security

Interest upon any asset or assets of the Company or (e) violate any order, writ,

injunction, decree, statute, rule or regulation applicable to the Company or any

of its properties or assets.

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2.5 Subsidiaries. The Company has no Subsidiaries. The Company does not

control directly or indirectly or have any direct or indirect equity

participation or similar interest in any corporation, partnership, limited

liability company, joint venture, trust or other business association or entity.

2.6 Financial Statements. The Company has provided to the Buyer the

Financial Statements. The Financial Statements (i) were prepared on a consistent

basis throughout the periods covered thereby (except as may be indicated in the

notes to such financial statements) and, in the case of the balance sheet and

statement of income, changes in shareholder's equity and cash flows of the

Company as of the end of and for the year ended December 31, 2006, in accordance

with reasonable accounting principles, and (ii) fairly present the financial

position of the Company as of the dates thereof and the results of its

operations and cash flows for the periods indicated, consistent with the books

and records of the Company, except that the unaudited interim financial

statements are subject to normal and recurring year-end adjustments which will

not be material in amount or effect and do not include footnotes.

2.7 Absence of Certain Changes. Except as set forth in Section 2.7 of the

Disclosure Schedules, since the Most Recent Balance Sheet Date, (a) to the

knowledge of the Shareholders there has occurred no event or development which,

individually or in the aggregate, has had, or could reasonably be expected to

have in the future, a Company Material Adverse Effect, and (b) the Company has

not taken any of the actions set forth in paragraphs (a) through (n) of Section

4.4.

2.8 Undisclosed Liabilities. Neither the Company nor any Shareholder has

any knowledge of any liability (whether known or unknown by the Buyer, whether

absolute or contingent, whether liquidated or unliquidated and whether due or to

become due), except for (a) liabilities shown on the Most Recent Balance Sheet,

(b) contractual and other liabilities incurred in the Ordinary Course of

Business are not material, and (c) liabilities which have arisen since the Most

Recent Balance Sheet Date in the Ordinary Course of Business and which are

listed on Schedule 2.8.

2.9 Tax Matters.

(a) The Company has properly filed on a timely basis all material

Tax Returns that it is and was required to file, and all such Tax Returns were

true, correct and complete in all material respects. The Company has properly

paid on a timely basis all material Taxes, whether or not shown on its Tax

Returns, that were due and payable. All material Taxes that the Company is or

was required by law to withhold or collect have been withheld or collected and,

to the extent required, have been properly paid on a timely basis to the

appropriate Governmental Entity. The Company has complied with all information

reporting and back-up withholding requirements in all material respects,

including maintenance of the required records with respect thereto, in

connection with amounts paid to any employee, independent contractor, creditor

or other third party.

(b) The unpaid Taxes of the Company for periods through the date of

the Most Recent Balance Sheet Date do not materially exceed the accruals and

reserves for Taxes (excluding accruals and reserves for deferred Taxes

established to reflect timing differences

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between book and Tax income) set forth on the Most Recent Balance Sheet. All

Taxes attributable to the period from and after the Most Recent Balance Sheet

Date and continuing through the Closing Date are, or will be, attributable to

the conduct by the Company of its operations in the Ordinary Course of Business.

(c) No examination or audit of any Tax Return of the Company by any

Governmental Entity is currently in progress or, to the knowledge of the

Shareholders, threatened or contemplated. Section 2.9(c) of the Disclosure

Schedule sets forth each jurisdiction (other than United States federal) in

which the Company files, or is required to file or has been required to file a

material Tax Return or is or has been liable for material Taxes on a "nexus"

basis. The Company has not been informed by any jurisdiction that the

jurisdiction believes that the Company was required to file any Tax Return that

was not filed.

(d) The Company is, and has been since its inception, validly

classified and treated as a "corporation" for federal income tax purposes and

has been validly treated in a similar manner for purposes of the income Tax laws

of all states in which it has been subject to taxation.

(e) Except as set forth in Section 2.9(e) of the Disclosure

Schedules, the Company has delivered or made available to the Buyer (i) complete

and correct copies of all Tax Returns of the Company relating to Taxes for all

Taxable periods for which the applicable statute of limitations has not yet

expired and (ii) complete and correct copies of all private letter rulings,

revenue agent reports, information document requests, notices of assessment,

notices of proposed deficiencies, deficiency notices, protests, petitions,

closing agreements, settlement agreements, pending ruling requests and any

similar documents submitted by, received by or agreed to by or on behalf of the

Company relating to Taxes for all Taxable periods for which the applicable

statute of limitations has not yet expired.

(f) The Company has not (i) waived any statute of limitations with

respect to Taxes or agreed to extend the period for assessment or collection of

any Taxes, (ii) requested any extension of time within which to file any Tax

Return, which Tax Return has not yet been filed, or (iii) executed or filed any

power of attorney relating to Taxes with any Governmental Entity.

(g) The Company is not a party to any litigation regarding Taxes.

(h) There are no Security Interests with respect to Taxes upon any

of the assets of the Company, other than with respect to Taxes not yet due and

payable. To the Company's and Shareholders' knowledge, there is no basis for the

assertion of any claim relating or attributable to Taxes, which, if adversely

determined, would result in any Security Interest on the assets of the Company,

or would reasonably be expected to have, individually or in the aggregate, a

Company Material Adverse Effect.

(i) The Company has maintained complete and accurate records,

including all applicable exemption, resale or other certificates, of (i) all

sales to purchasers claiming to be exempt from sale and use Taxes based on the

exempt status of the purchaser, and (ii) all other sales for which sales Tax or

use Tax was not collected by the Company and as to which the

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Seller is required to receive and retain resale certificates or other

certificates relating to the exempt nature of the sale or use or

non-applicability of the sale and use Taxes.

(j) The Company is not bound by any Tax indemnity, Tax sharing or

Tax allocation agreement.

(k) The Company is not a "foreign person" within the meaning of

Section 1445 of the Code.

(l) The Company has not filed a consent under Section 341(f)(1) of

the Code or agreed under Section 341(f)(3) of the Code to have the provisions of

Section 341(f)(2) of the Code apply to a sale of any of its assets.

(m) The Company has not elected under Section 1362 of the Code to be

taxed as an S corporation and has qualified as an S corporation in all

applicable jurisdictions which recognize S status since January 1, 2005.

2.10 Ownership and Condition of Assets.

(a) The Company is the true and lawful owner, and has good title to,

all of its assets, free and clear of all Security Interests, except for (i)

statutory liens for Taxes not yet due and payable and (ii) those liens,

encumbrances and security interests listed on Section 2.10(a) of the Disclosure

Schedule.

(b) The assets of the Company are sufficient for the conduct of the

Company's business as presently conducted and as presently proposed to be

conducted and constitute all assets used by the Company in such business. Each

tangible asset of the Company is free from material defects, has been maintained

in accordance with normal industry practice, is in good operating condition and

repair (subject to normal wear and tear) and is suitable for the purposes for

which it presently is used.

(c) Section 2.10(c) of the Disclosure Schedule lists individually

(i) each asset of the Company which is a fixed asset (within the meaning of

GAAP) having a book value greater than $1,000, indicating the cost, accumulated

book depreciation (if any) and the net book value of each such fixed asset as of

the Most Recent Balance Sheet Date, (ii) each asset of the Company that is of a

tangible nature (other than inventories) the book value of which exceeds $5,000;

and (iii) each asset that is a Company Contract that involves payments or

liabilities in excess of $5,000. Section 2.10(c) of the Disclosure Schedule

specifically identifies all customer contracts.

(d) Each item of equipment, motor vehicle and other asset that the

Company has possession of pursuant to a lease agreement or other contractual

arrangement is in such condition that, if returned to its lessor or owner under

the applicable lease or contract on the Closing Date (without regard to any

early termination fees), the obligations of the Company to such lessor or owner

would have been discharged in full.

2.11 Owned Real Property. The Company does not own, and has never owned,

any real property.

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2.12 Real Property Leases. Section 2.12 of the Disclosure Schedule lists

all Leases and lists the term of such Lease, any extension and expansion

options, and the rent payable thereunder. The Company has delivered to the Buyer

complete and accurate copies of the Leases. With respect to each Lease and

except as set forth in Section 2.12 of the Disclosure Schedule:

(a) such Lease is legal, valid, binding, enforceable and in full

force and effect;

(b) such Lease is assignable by the Company to the Buyer with the

consent or approval of the landlord and such Lease will continue to be legal,

valid, binding, enforceable and in full force and effect immediately following

the Closing in accordance with the terms thereof as in effect immediately prior

to the Closing;

(c) neither the Company nor, to the knowledge of the Shareholders,

any other party, is in breach or violation of, or default under, any such Lease,

and no event has occurred, is pending or, to the knowledge of the Shareholders,

is threatened, which, after the giving of notice, with lapse of time, or

otherwise, would constitute a material breach or default by the Company or, to

the knowledge of the Shareholders, any other party under such Lease;

(d) the Company is not a party to any dispute, oral agreement or

forbearance program as to such Lease, and to Company's knowledge no other person

is party to such dispute, oral agreement or forbearance program relating to or

affecting the Lease;

(e) the Company has not assigned, transferred, conveyed, mortgaged,

deeded in trust or encumbered any interest in the leasehold or subleasehold;

(f) to the knowledge of the Shareholders, all facilities leased or

subleased thereunder are supplied with utilities and other services adequate for

the operation of said facilities; and

(g) the Company is not aware of any Security Interest, easement,

covenant or other restriction applicable to the real property subject to such

Lease which would reasonably be expected to materially impair the current uses

or the occupancy by the Company of the property subject thereto.

2.13 Intellectual Property.

(a) Company Registrations. There are no Company Registrations.

(b) Prosecution Matters. Company has no Patent Rights.

(c) Ownership; Sufficiency. Except as otherwise identified in

Section 2.13 of the Disclosure Schedule, each item of Company Intellectual

Property will be owned or available for use by the Buyer immediately following

the Closing on substantially identical terms and conditions as it was

immediately prior to the Closing. The Company is the sole and exclusive owner of

all Company Owned Intellectual Property, free and clear of any Security

Interests and all joint owners of the Company Owned Intellectual Property are

listed in Section 2.13(c) of the Disclosure Schedule. Except as otherwise

identified in Section 2.13 of the Disclosure Schedule, the Company Intellectual

Property constitutes all Intellectual Property necessary (i) to Exploit

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the Customer Offerings in the manner so done currently by the Company, (ii) to

Exploit the Internal Systems as they are currently used by the Company, and

(iii) otherwise to conduct the Company's business in all material respects in

the manner currently conducted by the Company. Company has not licensed the

Software included in the Customer Offerings, or any portion thereof, to any

third party. Company has Exploited the Software solely in connection with

Company's internal use and makes no representation and warranty that the

Software can be made available to third parties (whether by license or

otherwise), except in the manner so done currently by the Company.

(d) Protection Measures. To the Shareholders' knowledge, the Company

has taken reasonable measures to protect the proprietary nature of each item of

Company Owned Intellectual Property, and to maintain in confidence all trade

secrets and confidential information comprising a part thereof. The Company has

substantially complied with all applicable contractual and legal requirements

pertaining to information privacy and security. No complaint relating to an

improper use or disclosure of, or a breach in the security of, any such

information has been made or, to the knowledge of the Shareholders, threatened

against the Company. To the knowledge of the Shareholders, there has been no:

(i) unauthorized disclosure of any third party proprietary or confidential

information in the possession, custody or control of the Company or (ii) breach

of the Company's security procedures wherein confidential information has been

disclosed to a third person.

(e) Infringement by Company. To the knowledge of the Shareholders,

none of the Customer Offerings, or the Exploitation thereof by the Company or by

any reseller, distributor, customer or user thereof, or any other activity of

the Company, infringes or violates, or constitutes a misappropriation of, any

Intellectual Property rights of any third party. To the knowledge of the

Shareholders, none of the Internal Systems, or the Company's past, current or

currently contemplated Exploitation thereof, or any other activity undertaken by

them in connection with the Business, infringes or violates, or constitutes a

misappropriation of, any Intellectual Property rights of any third party. The

Company has not received any complaint, claim or notice, or threat of any of the

foregoing (including any notification that a license under any patent is or may

be required), alleging any such infringement, violation or misappropriation and

any request or demand for indemnification or defense received by the Company

from any reseller, distributor, customer, user or any other third party; and the

Company has not received any legal opinions, studies, market surveys and

analyses relating to any alleged or potential infringement, violation or

misappropriation.

(f) Infringement of Rights. To the knowledge of the Shareholders, no

person (including, without limitation, any current or former employee or

consultant of Company) is infringing, violating or misappropriating any of the

Company Owned Intellectual Property or any Company Licensed Intellectual

Property.

(g) Outbound IP Agreements. Company has not assigned, transferred,

licensed, distributed or otherwise granted any right or access to any person

(except for access to customers necessary to Exploit the Customer Offerings), or

covenanted not to assert any right, with respect to any past, existing or future

Company Intellectual Property. The Company has not agreed to indemnify any

person against any infringement, violation or misappropriation of any

Intellectual Property rights with respect to any Customer Offerings or any third

party Intellectual

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<PAGE>

Property rights. The Company is not a member of or party to any patent pool,

industry standards body, trade association or other organization pursuant to the

rules of which it is obligated to license any existing or future Intellectual

Property to any person.

(h) Inbound IP Agreements. Section 2.13(h) of the Disclosure

Schedule identifies each item of Company Licensed Intellectual Property and the

license or agreement pursuant to which the Company Exploits it (excluding

currently available, off the shelf software programs that are part of the

Internal Systems and are licensed by the Company pursuant to "shrink wrap"

licenses, the total fees associated with which are less than $2,500). There is

no agreement, contract, assignment or other instrument pursuant to which the

Company has obtained any joint or sole ownership interest in or to any item of

Company Owned Intellectual Property. Except as disclosed in Section 2.13(h) of

the Disclosure Schedule, no third party inventions, methods, services,

materials, processes or Software are included in or required to Exploit the

Customer Offerings or Internal Systems in the manner so done currently by

Company. None of the Customer Offerings or Internal Systems includes

"shareware," "freeware" or other Software or other material that was obtained by

the Company from third parties other than pursuant to the license agreements

listed in Section 2.13(h) of the Disclosure Schedule.

(i) Source Code. The Company has not licensed, distributed or

disclosed, and knows of no distribution or disclosure by others (including its

employees and contractors) of, the Company Source Code to any person, and the

Company has taken reasonable security measures to prevent disclosure of such

Company Source Code. To the knowledge of the Shareholders, no event has

occurred, and no circumstance or condition exists, that (with or without notice

or lapse of time, or both) will, or would reasonably be expected to, nor will

the consummation of the transactions contemplated hereby, result in the

disclosure or release of such Company Source Code by the Company, or escrow

agent(s) or any other person to any third party.

(j) Intentionally Deleted.

(k) Open Source Code. Section 2.13(k) of the Disclosure Schedule

lists all Open Source Materials that the Company has either incorporated into

the Customer Offering or Internal Systems, and/or those Customer Offerings

and/or Internal Systems (or portions thereof) that are derivative works of Open

Source Materials. Except as identified in Section 2.13(k) of the Disclosure

Schedules, the Company has not (i) incorporated Open Source Materials into, or

combined Open Source Materials with, the Customer Offerings; or (ii) used Open

Source Materials that create, or purport to create, obligations for the Company

with respect to the Customer Offerings or grant, or purport to grant, to any

third party, any rights or immunities under Intellectual Property rights

(including, but not limited to, using any Open Source Materials that require, as

a condition of Exploitation of such Open Source Materials, that other Software

incorporated into, derived from or distributed with such Open Source Materials

be (x) disclosed or distributed in source code form, (y) licensed for the

purpose of making derivative works, or (z) redistributable at no charge or

minimal charge). Company has no distributed Open Source Materials in conjunction

with any other software developed or distributed by the Company.

(l) Intentionally Deleted.

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<PAGE>

(m) Quality. To the knowledge of the Shareholders, the Customer

Offerings and the Internal Systems are free from significant defects in design,

workmanship and materials and conform in all material respects to the written

Documentation and specifications therefor. To the knowledge of the Shareholders,

the Customer Offerings and the Internal Systems do not contain any disabling

device, virus, worm, back door, Trojan horse or other disruptive or malicious

code that may or are intended to impair their intended performance or otherwise

permit unauthorized access to, hamper, delete or damage any computer system,

software, network or data. The Company has not received any warranty claims,

contractual terminations or requests for settlement or refund due to the failure

of the Customer Offerings to meet their specifications or otherwise to satisfy

end user needs or for harm or damage to any third party.

(n) Support and Funding. The Company has neither sought, applied for

nor received any support, funding, resources or assistance from any federal,

state, local or foreign governmental or quasi-governmental agency or funding

source in connection with the Exploitation of the Customer Offerings, the

Internal Systems or any facilities or equipment used in connection therewith.

(o) Certifications. Section 2.13(o) of the Disclosure Schedule

identifies all channel partner certifications, accreditations or similar

qualifications with third party technology providers held by the Company or its

employees. Except as disclosed on Section 2.13(o), all such certifications,

accreditations and similar qualifications may be transferred or assigned to the

Buyer without the consent of such third parties.

2.14 Contracts.

(a) Section 2.14 of the Disclosure Schedule lists the following

agreements (written or oral) to which the Company is a party as of the date of

this Agreement (other than this Agreement and the Ancillary Agreements):

(i) any agreement (or group of related agreements) for the

lease of personal property from or to third parties providing for lease payments

in excess of $5,000 per annum or having a remaining term longer than three

months;

(ii) any agreement (or group of related agreements) for the

purchase or sale of products or for the furnishing or receipt of services (A)

which calls for performance over a period of more than one year, (B) which

involves more than the sum of $5,000, or (C) in which the Company has granted

manufacturing rights, "most favored nation" pricing provisions or marketing or

distribution rights relating to any products or territory or has agreed to

purchase a minimum quantity of goods or services or has agreed to purchase goods

or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation

of a partnership, joint venture or limited liability company;

(iv) any agreement (or group of related agreements) under

which it has created, incurred, assumed or guaranteed (or may create, incur,

assume or guarantee) indebtedness (including capitalized lease obligations)

involving more than $5,000 or under which it has imposed (or may impose) a

Security Interest on any of its assets, tangible or intangible;

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<PAGE>

(v) any agreement for the disposition of any significant

portion of the assets or business of the Company (other than sales of products

in the Ordinary Course of Business) or any agreement for the acquisition of the

assets or business of any other entity (other than purchases of inventory or

components in the Ordinary Course of Business);

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer,

manager or Shareholder or an Affiliate thereof;

(ix) any agreement under which the consequences of a default

or termination would reasonably be expected to have a Company Material Adverse

Effect;

(x) any agreement which contains any provisions requiring the

Company to indemnify any other party (excluding indemnities contained in

agreements for the purchase, sale or license of products entered into in the

Ordinary Course of Business);

(xi) any agreement that could reasonably be expected to have

the effect of prohibiting or impairing the conduct of the business of the

Company or of the Buyer or any of its subsidiaries as currently conducted and as

currently proposed to be conducted;

(xii) any agreement under which the Company is restricted from

selling, licensing or otherwise distributing any of its technology or products,

or providing services to, customers or potential customers or any class of

customers, in any geographic area, during any period of time or any segment of

the market or line of business;

(xiii) any agreement which would entitle any third party to

receive a license or any other right to intellectual property of the Buyer or

any of the Buyer's Affiliates following the Closing; and

(xiv) any other agreement (or group of related agreements)

either involving more than $10,000 or not entered into in the Ordinary Course of

Business.

(b) The Company will deliver to the Buyer a complete and accurate

copy of each agreement listed in Section 2.13 or Section 2.14 of the Disclosure

Schedule. With respect to each agreement so listed and except as disclosed in

Section 2.14 of the Disclosure Schedules: (i) the agreement is legal, valid,

binding and enforceable and in full force and effect; (ii) for those agreements

to which the Company is a party, the agreement is assignable by the Company by

operation of law to the Buyer without the consent or approval of any party and

will continue to be legal, valid, binding and enforceable and in full force and

effect immediately following the Closing in accordance with the terms thereof as

in effect immediately prior to the Closing; and (iii) neither the Company nor,

to the knowledge of the Shareholders, any other party, is in breach or violation

of, or default under, any such agreement, and no event has occurred, is pending

or, to the knowledge of the Shareholders, is threatened, which, after the giving

of notice, with lapse of time, or otherwise, would constitute a breach or

default by the Company or, to the knowledge of the Shareholders, any other party

under such agreement.

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<PAGE>

2.15 Accounts Receivable. To the knowledge of the Shareholders, all

accounts receivable of the Company reflected on the Most Recent Balance Sheet

(other than those paid since such date) are valid receivables subject to no

setoffs or counterclaims and are current and collectible (within 90 days after

the date on which it first became due and payable), net of the applicable

reserve for bad debts on the Most Recent Balance Sheet. A complete and accurate

list of the accounts receivable reflected on the Most Recent Balance Sheet,

showing the aging thereof, is included in Section 2.15 of the Disclosure

Schedule. To the knowledge of the Shareholders, all accounts receivable of the

Company that have arisen since the Most Recent Balance Sheet Date are valid

receivables subject to no setoffs or counterclaims and are current and

collectible (within 90 days after the date on which it first became due and

payable), net of a reserve for bad debts in an amount proportionate to the

reserve shown on the Most Recent Balance Sheet. The Company has not received any

written notice from an account debtor stating that any account receivable in an

amount in excess of $5,000 is subject to any contest, claim or setoff by such

account debtor.

2.16 Insurance. Section 2.16 of the Disclosure Schedule lists each

insurance policy (including fire, theft, casualty, comprehensive general

liability, workers compensation, business interruption, environmental, product

liability, errors and omissions, professional liability, and automobile

insurance policies and bond and surety arrangements) to which the Company is a

party, all of which are in full force and effect. There is no material claim

pending under any such policy as to which coverage has been questioned, denied

or disputed by the underwriter of such policy. All premiums due and payable

under all such policies have been paid, the Company may not be liable for

retroactive premiums or similar payments, and the Company is otherwise in

compliance in all material respects with the terms of such policies. The Company

has no knowledge of any threatened termination of, or premium increase with

respect to, any such policy. Upon payment of amounts required to obtain tail

coverage on Company's professional liability (errors and omissions) insurance

policy, such policy will be in full force and effect immediately following the

Closing for a period of twelve (12) months in accordance with the terms thereof

as in effect immediately prior to the Closing.

2.17 Litigation. Except as set forth in Section 2.17 of the Disclosure

Schedule, there is no Legal Proceeding which is pending or has been threatened

in writing against the Company. There are no judgments, orders or decrees

outstanding against the Company.

2.18 Warranties. No service or product delivered, made, sold, leased or

licensed by the Company is subject to any guaranty, warranty, right of return,

right of credit or other indemnity.

2.19 Employees.

(a) Section 2.19 of the Disclosure Schedule contains a list of all

employees of the Company, their position with Company and their annual rate of

compensation. Except as set forth on Section 2.19 of the Disclosure Schedule,

each current employee of the Company and each past employee of the Company has

entered into a confidentiality and assignment of inventions agreement with the

Company, a copy or form of which has previously been delivered to the Buyer.

Section 2.19 of the Disclosure Schedule contains a list of all employees of the

Company who are a party to a non-competition agreement with the Company; copies

of such agreements have previously been delivered to the Buyer. Each such

agreement referenced in the

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<PAGE>

two preceding sentences to which the Company is a party is assignable by the

Company by operation of law to the Buyer without the consent or approval of any

party and will continue to be legal, valid, binding and enforceable and in full

force and effect immediately following the Closing in accordance with the terms

thereof as in effect immediately prior to the Closing. Section 2.19 of the

Disclosure Schedule contains a list of all employees of the Company who are not

citizens of the United States. To the knowledge of the Shareholders, no key

employee or group of employees has any plans to terminate employment with the

Company (other than for the purpose of accepting employment with the Buyer

following the Closing) or not to accept employment with the Buyer. The Company

is in compliance with all applicable laws relating to the hiring and employment

of employees.

(b) The Company is not a party to or bound by any collective

bargaining agreement, nor has it experienced any strikes, grievances, claims of

unfair labor practices or other collective bargaining disputes. To the knowledge

of the Shareholders, no organizational effort has been made or threatened,

either currently or within the past two years, by or on behalf of any labor

union with respect to employees of the Company.

2.20 Employee Benefits.

(a) Section 2.20(a) of the Disclosure Schedule contains a complete

and accurate list of all Company Plans. Complete and accurate copies of (i) all

Company Plans which have been reduced to writing, (ii) written summaries of all

unwritten Company Plans, (iii) all related trust agreements, insurance contracts

and summary plan descriptions, and (iv) all annual reports filed on IRS Form

5500, 5500C or 5500R and (for all funded plans) all plan financial statements

for the last five plan years for each Company Plan, have been delivered to the

Buyer.

(b) Each Company Plan has been administered in all material respects

in accordance with its terms and each of the Company and the ERISA Affiliates

has in all material respects met its obligations with respect to each Company

Plan and has made all required contributions thereto. The Company, each ERISA

Affiliate and each Company Plan are in compliance in all material respects with

the currently applicable provisions of ERISA and the Code and the regulations

thereunder (including Section 4980B of the Code, Subtitle K, Chapter 100 of the

Code and Sections 601 through 608 and Section 701 et seq. of ERISA). All filings

and reports as to each Company Plan under this Agreement required to have been

submitted to the Internal Revenue Service or to the United States Department of

Labor have been duly submitted. No Company Plan has assets that include

securities issued by the Company or any ERISA Affiliate.

(c) There are no Legal Proceedings (except claims for benefits

payable in the normal operation of the Company Plans and proceedings with

respect to qualified domestic relations orders) against or involving any Company

Plan or asserting any rights or claims to benefits under any Company Plan that

could give rise to any material liability.

(d) Neither the Company nor any ERISA Affiliate has ever maintained

an Employee Benefit Plan subject to Section 412 of the Code or Title IV of

ERISA.

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<PAGE>

(e) At no time has the Company or any ERISA Affiliate been obligated

to contribute to any "multiemployer plan" (as defined in Section 4001(a)(3) of

ERISA).

(f) There are no unfunded obligations under any Company Plan

providing benefits after termination of employment to any employee of the

Company (or to any beneficiary of any such employee), including but not limited

to retiree health coverage and deferred compensation, but excluding continuation

of health coverage required to be continued under Section 4980B of the Code or

other applicable law and insurance conversion privileges under state law.

(g) No act or omission has occurred and no condition exists with

respect to any Company Plan that would subject the Company, the Buyer or any

Affiliate of Buyer to (i) any material fine, penalty, tax or liability of any

kind imposed under ERISA or the Code or (ii) any contractual indemnification or

contribution obligation protecting any fiduciary, insurer or service provider

with respect to any Company Plan.

(h) No Company Plan is funded by, associated with or related to a

"voluntary employee's beneficiary association" within the meaning of Section

501(c)(9) of the Code.

(i) Each Company Plan is amendable and terminable unilaterally by

the Company at any time without liability or expense to the Company or such

Company Plan as a result thereof (other than for benefits accrued through the

date of termination or amendment and reasonable administrative expenses related

thereto) and no Company Plan, plan documentation or agreement, summary plan

description or other written communication distributed generally to employees by

its terms prohibits the Company from amending or terminating any such Company

Plan.

(j) Section 2.20 of the Disclosure Schedule discloses each: (i)

agreement with any Shareholder, manager, executive officer or other key employee

of the Company (A) the benefits of which are contingent, or the terms of which

are altered, upon the occurrence of a transaction involving the Company of the

nature of any of the transactions contemplated by this Agreement, (B) providing

any term of employment or compensation guarantee or (C) providing severance

benefits or other benefits after the termination of employment of such manager,

executive officer or key employee; (ii) agreement, plan or arrangement under

which any person may receive payments from the Company that may be subject to

the tax imposed by Section 4999 of the Code or included in the determination of

such person's "parachute payment" under Section 280G of the Code; and (iii)

agreement or plan binding the Company, including any stock option plan, stock

appreciation right plan, restricted stock plan, stock purchase plan, severance

benefit plan or Company Plan, any of the benefits of which will be increased, or

the vesting of the benefits of which will be accelerated, by the occurrence of

any of the transactions contemplated by this Agreement or the value of any of

the benefits of which will be calculated on the basis of any of the transactions

contemplated by this Agreement.

(k) Section 2.20 of the Disclosure Schedule sets forth the policy of

the Company with respect to accrued vacation, accrued sick time and earned time

off and the amount of such liabilities as of October 31, 2007.

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<PAGE>

(l) No insurance policy that provides medical or dental benefits

under a Company Plan provides for any retrospective premium increases.

(m) No Company Plan that provides medical or dental benefits is

providing to any individual any continuation coverage mandated by Section 4980B

of the Code (or any similar law).

2.21 Environmental Matters.

(a) To the knowledge of the Shareholders, the Company has complied

with all applicable Environmental Laws except where failure to do so would not

have a Company Material Adverse Effect. There is no pending or, to the knowledge

of the Shareholders, threatened civil or criminal litigation, written notice of

violation, formal administrative proceeding, or investigation, inquiry or

information request by any Governmental Entity, relating to any Environmental

Law involving the Company.

(b) To the knowledge of the Shareholders, the Company does not have

any liabilities or obligations arising from the release of any Materials of

Environmental Concern into the environment.

(c) The Company is not a party to or bound by any court order,

administrative order, consent order or other agreement with any Governmental

Entity entered into in connection with any legal obligation or liability arising

under any Environmental Law.

(d) The Company does not have possession of, or access to, or

knowledge of, any documents (whether in hard copy or electronic form) that

contain any environmental reports, investigations and audits relating to

premises currently or previously owned or operated by the Company (whether

conducted by or on behalf of the Company or a third party, and whether done at

the initiative of the Company or directed by a Governmental Entity or other

third party).

(e) The Company is not aware of any material environmental liability

of any solid or hazardous waste transporter or treatment, storage or disposal

facility that has been used by the Company.

2.22 Legal Compliance. Except as set forth in Section 2.22 of the

Disclosure Schedule, the Company is currently conducting, and has at all times

conducted, its business in material compliance with each applicable law

(including rules and regulations thereunder) of any federal, state, local or

foreign government, or any Governmental Entity, and Company has had valid

Permits to conduct such business with respect to each jurisdiction (and at such

times) for which it has been required to have such Permits except where the

failure to comply with applicable laws or the lack of any such Permit would not

have a Company Material Adverse Effect. The Company has not received any notice

or communication from any Governmental Entity alleging noncompliance with any

applicable law, rule or regulation.

2.23 Customers and Suppliers. Section 2.23 of the Disclosure Schedule sets

forth a list of (a) each customer or supplier arrangement that accounted for

more than 1% of the revenues of the Company during the last full fiscal year or

the interim period through the Most Recent Balance Sheet Date and the amount of

revenues accounted for by such customer or supplier

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<PAGE>

arrangement during each such period and (b) each other supplier of services or

goods that is a critical or sole supplier of any significant aspect of Company's

business. No person identified in the foregoing sentence has provided written or

verbal notice to Company within the past year that it will stop, or materially

reduce its activity below historic levels in connection with any contract or

arrangement on which Company currently derives revenue.

2.24 Permits. Section 2.24 of the Disclosure Schedule sets forth a list of

all Permits issued to or held by the Company. To the knowledge of the

Shareholders such listed Permits are the only Permits that are required for the

Company to conduct its business as presently conducted. Each such Permit is in

full force and effect; the Company is in material compliance with the terms of

each such Permit; and, to the knowledge of the Shareholders, no suspension or

cancellation of such Permit is threatened.

2.25 Certain Business Relationships With Affiliates. No Affiliate of the

Company (a) owns any property or right, tangible or intangible, which is used in

the business of the Company, (b) has any claim or cause of action against the

Company, or (c) owes any money to, or is owed any money by, the Company, except

as disclosed in Section 2.25 of the Disclosure Schedule which describes any

transactions or relationships between the Company and any Affiliate thereof

which occurred or have existed since the beginning of the time period covered by

the Financial Statements.

2.26 Brokers' Fees. The Company does not have any liability or obligation

to pay any fees or commissions to any broker, finder or agent with respect to

the transactions contemplated by this Agreement except to GBQ Partners and such

fee will be paid by the Shareholders at Closing.

2.27 Books and Records. The minute books and other similar records of the

Company contain complete and accurate records of all actions taken at any

meetings of the Company's Shareholders, managers or any committee thereof and of

all written consents executed in lieu of the holding of any such meeting. The

books and records of the Company accurately reflect, in all material respects,

the assets, liabilities, business, financial condition and results of operations

of the Company. Section 2.27 of the Disclosure Schedule contains a list of all

bank accounts and safe deposit boxes of the Company and the names of persons

having signature authority with respect thereto or access thereto.

2.28 Disclosure. No representation or warranty by the Company contained in

this Agreement, and no statement contained in the Disclosure Schedule or any

other document, certificate or other instrument delivered or to be delivered by

or on behalf of the Company pursuant to this Agreement, contains or will contain

any untrue statement of a material fact or omits or will omit to state any

material fact necessary, in light of the circumstances under which it was or

will be made, in order to make the statements herein or therein not misleading.

2.29 Projections. The projections included in Section 2.29 of the

Disclosure Schedule were prepared by the Company in good faith using the best

information available to management of the Company and represent Company

management's good faith estimates of the future performance of the Company for

the periods referred to therein. The Buyer acknowledges that

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<PAGE>

the projections are estimates and Company makes no representation or warranty as

to actual future performance.

2.30 Government Contracts.

(a) The Company has not been suspended or debarred from bidding on

contracts or subcontracts with any Governmental Entity; and to the knowledge of

the Shareholders no such suspension or debarment has been threatened or

initiated; and the consummation of the transactions contemplated by this

Agreement will not result in any such suspension or debarment of the Company or

the Buyer (assuming that no such suspension or debarment will result solely from

the identity of the Buyer). The Company has not been or is not now being audited

or investigated by the United States Government Accounting Office, the United

States Department of Defense or any of its agencies, the Defense Contract Audit

Agency, the contracting or auditing function of any Governmental Entity with

which it is contracting, the United States Department of Justice, the Inspector

General of the United States, or any prime contractor with a Governmental

Entity; nor, to the knowledge of the Shareholders, has any such audit or

investigation been threatened. To the knowledge of the Shareholders, there is no

valid basis for (i) the suspension or debarment of the Company from bidding on

contracts or subcontracts with any Governmental Entity or (ii) any claim

(including any claim for return of funds to the Government) pursuant to an audit

or investigation by any of the entities named in the foregoing sentence. The

Company has no agreements, contracts or commitments which require it to obtain

or maintain a security clearance with any Governmental Entity.

(b) To the knowledge of the Shareholders, no basis exists fo